The court considered the Bresco decision in detail and the extent to which there could be an exception to the general principle that a company in liquidation could not pursue adjudication to enforcement (in the face of a cross-claim by the other party). The court concluded that an exception to this general principle was likely to arise where: • the adjudication brought or to be brought determines the final net position between the parties under the relevant contract, • satisfactory security is provided in respect of the sum awarded in the adjudication and in respect of any adverse order for costs made against the company in liquidation, • satisfactory security is a question of fact but it is likely to be a combination of an undertaking to the court to ring fence the sum, a third party guarantee or bond and / or ATE insurance, and • any agreement to provide funding or security for the claim could not amount to an abuse of process. Balancing these principles, the court refused summary judgement on the basis that there was not an adequate security in place and there was no real degree of certainty that should the guarantee be called Pythagoras would have the financial ability to pay. The court considered that strong security was required to allow the exception to apply, such as a payment into court, a bank guarantee, or an ATE insurance policy in relation to costs. Another significant factor in the court’s decision was the potential for Pythagoras’ terms of engagement to be an abuse of process. As the terms had not been disclosed, the court could not determine whether they breached the Damages Based Agreements Regulations (2013) i.e. that Meadowside would not receive less than 50% of the recovered money. Assuming the regulations had been breached, there was a reasonable prospect that the terms were champertous and an abuse of process, although that could not be decided definitively due to the lack of disclosure. Conclusions and implications This decision appears to leave open the path for liquidators to use adjudication as a tool for recovering sums due to an insolvent company, subject to conditions as to security and the ability of third parties to pursue those rights on their behalf. It remains to be seen whether the conditions imposed by the court will be commercially acceptable to those considering such action in the future. This decision also provides an interesting example of abuse of process being raised in relation to a funding agreement and makes it clear that the scope of the 2013 Regulations is not limited to funding agreements made in relation to court proceedings but also embraces adjudication proceedings themselves. Claims consultants will now need to review any damages-based funding practices and satisfy themselves that their agreements are compliant with the Regulations. This is not likely to be the end of the discussion on these issues, as the decision in Bresco v Lonsdale is being appealed to the Supreme Court with a decision expected in 2020. Reference http://www.bailii.org/ew/cases/EWHC/TCC/2019/2651.html