Solicitor issuing claim without authority (Collatory Case)

Van Minh

In Van Minh v Da Guang Tankers (Private) Ltd (In Liquidation) [2026] EWHC 793 (Admiralty)('Van Minh'), Admiralty Registrar Davison (sitting in the High Court, King's Bench Division, Business and Property Courts of England and Wales, Admiralty Court) said, at paragraph 13, under the heading 'The Law'[1]:

(1) Solicitors who issue proceedings thereby warrant that they have authority to do so: Yonge v Toynbee [1910] 1 KB 215.

(2) As a matter of public policy, it is an abuse of the process of the court for solicitors to issue proceedings in the name of a person who has not given them authority to do so. If they do not in fact have such authority, they are in breach of warranty and may be liable for the costs of such proceedings: Jalla v Shell [2024] EWHC 578 (TCC) at [73]. Skylight Maritime SA v Ascot Underwriting Ltd & Ors, Wurttembergische-Und Badische Versicherung AG, Houlder Insurance Services (Marine) Limited [2005] EWHC 15 (Comm) at [6] – [8].

(3) The liability for acting in breach of warranty is strict. It is not necessary to prove that the solicitor knew or should have known of the want of authority: Zoya Ltd v Ahmed [2016] 4 WLR 174 at [29].

...

(5) The usual damages awarded comprise the sum of costs thrown away by the promisee on the proceedings - Skylight Maritime SA v Ascot Underwriting Ltd & Ors, Wurttembergische-Und Badische Versicherung AG, Houlder Insurance Services (Marine) Limited [2005] EWHC 15 (Comm) at [16]. [Here I interpose that this is a departure from the normal measure of damages, which would be to put the claimant into the position they would have been in if the warranty had been true; see generally McGregor on Damages, 22 nd Ed at 37-021.]'

A few additional observations can be made in relation to Van Minh:

(a) the application before the Registrar, was an application for a wasted costs order, against a firm of solicitors ('C&C'), for issuing a claim without authority. The allegation being that the C&C had issued a claim based on an alleged collision between two vessels, without '...authority of either the claimant or the claimant’s insurers to commence and maintain it.' (paragraph 1). That the C&C '...had expressly warranted that they were instructed by the claimant’s hull and machinery underwriters, ... (“PVI”), when (as they have admitted) they were not and (2) that they did not have instructions or authority from the claimant either.'

(b) the wasted costs order applicants were the defendants in the underlying action. 

(c) as indicated, the breach of warranty of authority was admitted by the C&C. The C&C though, disputed that this had caused no loss to the wasted costs order applicant/defendants (wrongly, as the Registrar later held (paragraph 17));

(d) in respect to the wasted costs regime and the breach of warranty of authority jurisdiction, the Registrar included two further points:

'(4) If a solicitor has failed to take proper steps to check the source of his instructions this is likely to be held to be improper and unreasonable within the meaning of PD46 even if he acted in good faith throughout: Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1687 (Ch) and Trehan v Liverpool Victoria [2017] 10 WLUK 21.

...

(6) The wasted costs jurisdiction and the breach of warranty of authority jurisdiction are separate jurisdictions. However, they will almost always lead to the same result – see: Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1687 (Ch) at [24].'

Other authorities

It might be helpful to set out some passages from the authorities referred to above (not just the paragraphs referred to above).

(1) in Skylight Maritime SA v Ascot Underwriting Ltd [2005] EWHC 15 (Comm); [2005] PNLR 25 ('Skylight), Colman J, under the heading 'The procedure', said, at paragraphs 6 to 20:

'It is clear from the authorities that if a solicitor commences or pursues proceedings without the authority of his apparent client, the court has a jurisdiction to make a summary order against that solicitor for costs incurred by the opposite party caused by the solicitor's unauthorised conduct. In Yonge v Toynbee [1910] 1 K.B. 215 the Court of Appeal approved such summary procedure and identified the conceptual basis for such summary orders as breach of an implied contract or warranty given by the solicitor that he was authorised so to act by his client: see Buckley L.J. at p.229 and Swinfen Eady L.J.at p.231. The nature of the remedy was confirmed to be a claim for damages and the measure of damages the costs thrown away by the opposite party.

The exercise of this summary jurisdiction, without the need for the opposite party to start new proceedings against the solicitor, emanates from the solicitor being an officer of the court with a duty to act in the proceedings before it only with appropriate authority.

In most cases of a solicitor acting without the authority of a client the lack of authority will be clearly established and the consequences of that solicitor acting or continuing to act without such authority will also be very clear. The opposite party will normally have incurred expenditure on legal costs which he cannot recover by means of an order for costs against the apparent client who had never authorised the solicitor to act. In such cases there is likely to be little dispute as to the facts, either as to the lack of authority of the solicitor or loss suffered by the opposite party.

However, there may be cases where the factual position is less clear. Thus, in Yonge v Toynbee, supra, Vaughan Williams L.J.. stated at p.235:

“I have only to add that, if there had been a contest as to facts before us, as there seems to have been at chambers, I should have thought it a better course to leave the plaintiff to her action rather than dispose of the matter on a summary disciplinary order.”

The “action” referred to was clearly an action against the solicitors for breach of warranty of authority of the nature identified in Collen v Wright (1857) 8 E&B 647.

In Babury Ltd v London Industrial plc (1989) 139 N.L.J. 1596 Steyn J. stated at, p.1596:

“Our courts have for many years exercised a summary jurisdiction to order solicitors, who acted without authority on behalf of a plaintiff or a defendant, to pay the costs needlessly incurred by the opposing party. That jurisdiction, although exercisable in summary fashion rather than in the shape of a fully blown action against the solicitor, has always been exercised only after the solicitor has been given a fair opportunity to put his case before the court. It has never been considered to be a bar to the exercise of this jurisdiction that the solicitor acted bona fide and in reasonable reliance upon instructions.”

and at p.1597:

“On the other hand, the general rule may sometimes have to yield to special circumstances, for example in a case where the opposing party's solicitor is informed that there was a doubt about the solicitor's authority, in which case there is no unequivocal representation of authority. Corderey at p.94, gives further illustrations of special circumstances where the court did not order a solicitor to pay costs. It might, for example, sometimes in less than clear-cut cases be right to leave the aggrieved party to his remedy in an action in damages for breach of warranty of authority against the solicitor. Having made clear that there is no inflexible rule, it is nevertheless right, in my view, to emphasise that a solicitor who clearly acted without authority, causing by his representation of authority the opposing party to incur wasted costs, must usually expect to be ordered to pay the costs in the exercise of the court's summary jurisdiction.”

In the course of his judgment, Steyn J. also pointed out by reference to the judgment of Kekewich J. in In re Margetson & Jones [1897] 2 Ch 318, the importance for the administration of the courts that, when a solicitor appeared to act with the authority of a party to litigation, that implied representation could be relied upon by the opposite party.

The result of the authorities and the demands of the twin objectives of making solicitors accountable for their unauthorised conduct of litigation and yet of protecting them against untested allegations of want of authority is that, whereas in clear cases of breach of warranty of authority and consequent recoverable loss, the court can summarily determine the solicitors' liability for damages, in cases where there are real issues as to the facts or law, the courts should not do so but should leave the opposite party to start proceedings by issuing a claim for breach of warranty of authority.

It is, however, important to keep in mind that, although the court can exercise a summary jurisdiction by reason of its special supervisory jurisdiction over solicitors, the underlying purpose of that jurisdiction is compensatory and not punitive. It follows that proof of loss is essential before there can be recovery of damages.

The question that then arises is what is the appropriate measure of loss?

It is important not to lose sight of the fact that the relevant breach of warranty is the non-existence of the authority that was warranted. Therefore, the opposite party or promisee has lost the benefit of the position he would have been in had the warranty been true. In other words, the court is concerned to quantify what benefit has been lost by reason of the fact that the supposed client is not after all a party to the proceedings. In the ordinary case, the promisee will have lost the ability to recover from that client the costs of the proceedings in the event of a costs order in the promisee's favour. This is usually quantified as the amount of costs thrown away by the promisee in relation to the proceedings from the first participant in them of the solicitor until the promisee is apprised of the solicitor's lack of authority.

In Firbank's Executors v Humphreys (1886) 18 QBD 54, Lord Esher M.R. stated at p.60:

“The damages under the general rule are arrived at by considering the difference in the position he [the person acting in reliance on the warranty] would have been in had the representation been true and the position he is actually in consequence of its being untrue.”

In Re National Coffee Palace Company (1883) 24 Ch D 367 there are observations by Brett M.R. at p.372 and by Bowen L.J. at p.375 to the effect that if the supposed principal is insolvent the promisee will not be entitled to recover substantial damages from the warrantor of authority because he would not have been able to recover from the suppose principal if the warranty had been true.

In Habton Farms v Nimmo [2004] Q.B. 1 Clarke L.J.. in the Court of Appeal, with whom Auld L.J.. agreed, approved the following passage in McGregor on Damages (16th ed.) in relation to breach of warranty of an agent's authority to contract on behalf of an apparent party to the contract at p.18:

“1311. Given an enforceable contract had the agent had authority and given a solvent principal, the damages will be based on the measure of damages that the plaintiff could have recovered in an action for breach of contract against the principal had the principal been bound, and this will generally give him damages for the loss of his bargain. The particular measure falls to be judged in accordance with the particular type of contract that the defendant had warranted his authority to negotiate, and illustrations in the cases range over a variety of contract types.”

Accordingly, a claim for breach of warranty of authority cannot be deployed to put the promisee in a better position than if the warranty had been true. Thus, if a supposed client is insolvent, substantial damages for breach of a solicitor's warranty of authority will not normally be recoverable because the promisee would not have been able to recover costs against the client even if the solicitor had authority to act.'

The facts in Skyline were that:

(a) Skylight Marine ('SM') issued a claim in respect to loss of a yacht, against first and second defendants insurers (paragraph 1); JP were SM's solicitors; 

'[SM] was a one-yacht Panamanian company. The vessel was ... stolen from its anchorage, was wrecked off ... in the Aegean. The company had a board of three Panamanian directors but it was apparently subject to a large measure of control by one George Sigalas who claimed to be the sole beneficial owner of [SM]. Mr Sigalas died at the end of February 2004. At the time of the loss, apart from its claim for insurance proceeds it appears that [SM] had no or at least no significant assets.' (paragraph 3)

(b) JP, apparently for SM, joinder Houlder ('H'), some insurance brokers, as third defendants, claiming against them breach of duty and/or contract as the claimants' placing brokers (paragraph 1)

(c) subsequently, at a CMC, a Judge 'struck out [SM's] claim against the insurers on the grounds that [SM] had not given JP authority to commence the proceedings.' (paragraph 4)

(d) H (alone) applied '...for an order, that JP should pay their entire costs of the proceedings on the grounds that the claim against them was commenced by JP without the authority of [SM]' (paragraph 5). The application commenced summary proceedings against JP. 

On the facts, Colman J in Skyline refused to make a summary order against J[6].

(2) in Adams v Ford [2012] 1 WLR 3211, Toulson LJ (with whom Black LJ and Arden LJ agreed) said, at paragraph 39:

'It is unquestionably a sound general proposition that it is a misuse of the process of the court for a law firm to issue proceedings in the name of a person who has not given it authority to do so. There are public interest considerations. It is not in the public interest that a law firm should use the justice system to initiate litigation in a way which amounts to meddling in matters which are not its proper professional concern.'

(3) In Bao Xiang International Garment Centre v British Airways plc [2015] EWHC 3071 Rose J  said, at paragraph 31:

'An important element of the judgments in Adams concerns the emphasis that the Court placed on the need for transparency on the part of the solicitors issuing the proceedings disclosing to the defendants the problems existing with authorisation by the purported claimants. The Court found that in the light of the letter sent by the claimants’ solicitors before service of the claim form, there had been no attempt by the statement of truth to deceive the defendants into thinking that all the claimants had authorised the issue of proceedings. The Court stressed that the question of which clients had or had not instructed the solicitor to bring proceedings was not confidential - the defendants were entitled to know who had authorised the issue of the claim form and who had not. Toulson LJ set out the steps that the solicitors should have taken, making phased statements of truth in respect of claimants as and when they signed up. Arden LJ in Adams also stressed the need for transparency, summing up the judgments given in the case as holding that “there are cases where it will be acceptable to start proceedings without authority provided that it is openly done”. There may be justification for issuing proceedings without authority and that must be judged in the light of the circumstances prevailing at the time of the issue of the proceedings.'

(4) in Zoya Ltd v Ahmed [2016] 4 WLR 174 ('Zoya'), William Trower QC (sitting as a Deputy High Court Judge), paragraph 28, turn to the applicable principles. He said, at paragraphs 28 to 41:

'They were established in their modern form by the decision of the Court of Appeal in Yonge v Toynbee [1910] 1 KB 215, a case in which the want of authority arose because the defendant was of unsound mind, but the solicitors none the less entered an appearance on his behalf. The proceedings were then struck out and an issue arose as to whether the solicitors should pay the plaintiff's costs. Argument revolved around the question of whether there was a difference in principle between the case in which the agent never had authority but believed that he had (which is the situation in the present case), and the case in which the agent originally had authority but it had come to an end without his knowledge. It had been thought that the law was that in the former case there was liability, while in the latter case there was not.

The Court of Appeal held that this understanding of the law was incorrect and that, in all cases, the liability was strict and that it was not necessary to prove that the agent knew or should have known of the want of authority. Buckley LJ explained the position as follows, at pp 225 and 226:

“I can see no distinction in principle between the case where the agent never had authority and the case where the agent originally had authority, but that authority has ceased without his knowledge or means of knowledge. … In my opinion he is then liable on an implied contract that he had authority, whether there was fraud or not.”

“His liability arises from an implied undertaking or promise made by him that the authority which he professes to have does in point of fact exist. I can see no difference of principle between the case in which the authority never existed at all and the case in which the authority once existed and has ceased to exist.”

One of the consequences of the contractual basis for the jurisdiction is that the implied contract may be excluded by the facts of a particular case. Thus, as Buckley LJ explained in Yonge v Toynbee at p 227:

“If, for instance, the agent proved that at the relevant time he told the party with whom he was contracting that he did not know whether the warrant of attorney under which he was acting was genuine or not, and would not warrant its validity, or that his principal was abroad and he did not know whether he was still living, there will have been no representation upon which the implied contract will arise.”

This statement was made when Buckley LJ was describing the characteristics of a warranty of authority given by a solicitor when acting outside the context of litigation, but it is plain from his description of the application of the principle at p 228: “They proved no facts addressed to shew that implied contract was excluded” that he considered it to be equally applicable where the question is whether a solicitor has given a warranty when purporting to act for a client in legal proceedings.

Swinfen Eady J at p 234 seems to have been more doubtful about a solicitor's ability to exclude or limit the warranty when acting in legal proceedings, but does not conclude that it is not possible:

“It is in my opinion essential to the proper conduct of legal business that a solicitor should be held to warrant the authority which he claims of representing the client; if it were not so, no one would be safe in assuming that his opponent's solicitor was duly authorized in what he said or did, and it would be impossible to conduct legal business upon the footing now existing; and, whatever the legal liability may be, the court, in exercising the authority which it possesses over its own officers, ought to proceed upon the footing that a solicitor assuming to act, in an action, for one of the parties to the action warrants his authority.”

There is no doubt that the principle described in Yonge v Toynbee continues to be applicable, although more recently the courts have stressed its limitations. Thus in Nelson v Nelson [1997] 1 WLR 233, 235, when confirming the existence (but limited nature) of the warranty, McCowan LJ said as follows:

“I see nothing in these authorities to contradict the contention of [counsel] for the solicitors, that a solicitor who lends his name to the commencement of proceedings is saying (1) that he has a client, (2) that the client bears the name of the party to the proceedings and (3) that client has authorised the proceedings. He does not represent that the client has a good cause of action”

The nature and limitations of the warranty were explained in similar but not identical terms by Buxton LJ in SEB Trygg Liv Holdings AB v Manches [2005] EWCA Civ 1237; [2006] 1 WLR 2276 at [66] and [67], a case concerned with the difference between a warranty of authority and a warranty as to the name of the client, as follows:

“66. In considering these submissions it is important to bear in mind that generally a solicitor conducting proceedings does not warrant what he says or does on behalf of his client. Thus he does not warrant that his client, the named party to the proceedings, has title to sue, is solvent, has a good cause of action or defence or has any other attribute asserted on his behalf. … There is an obvious distinction between such matters and the solicitor's own authority to act because the solicitor will usually know whether he has such authority or not. The imposition of strict liability on a solicitor for breach of warranty of authority is justified because otherwise the opposing party will be left without remedy against his supposed client.”

“67. The warranty which a solicitor gives is that he has a client who has instructed him to assert or deny the claims made in the proceedings against the opposing party. We do not think he warrants that the client has the name by which he appears in the proceedings.”

The liability which arises out of the implied undertaking is for the costs of the opposing party where they have been incurred on what Buckley LJ in Yonge v Toynbee at p 228 called: “the faith of [the solicitors’] representation that they had authority to act for the defendant.” As is apparent from the judgment of Swinfen Eady J at p 231, the person with a claim is the person “misled to his prejudice” by the misrepresentation of another that he has authority to do a particular act. This description seems to contemplate that some form of inducement is normally required, confirmed by the fact that Swinfen Eady J also cites the decision of Lord Esher in Firbank's Executors v Humphreys (1887) 18 QBD 54, 60 to the effect that the inducement by the agent does not have to cause the other party to enter into a contract; it is sufficient if he enters into any transaction which he would not have entered into but for that assertion, and thereby suffers loss.

As [counsel for the defendant] points out in his skeleton argument, there is some controversy on the question of whether or not this means that reliance by, or inducement of, the affected party (in this case Mr Ahmed) is always required: see Tuckey LJ in Donsland Ltd v Van Hoogstraten [2002] EWCA Civ 253; [2002] PNLR 26 at [14], cited as authority for this proposition in Jackson & Powell on Professional Liability 7th ed (2011), para 11–080 and 11–081. This, however, was not part of the reasoning necessary for the decision, and the prevailing view, which in my judgment is consistent with Yonge v Toynbee, seems to be that some form of reliance has to be shown in order to justify the relief sought: Excel Securities plc v Masood [2009] EWHC 3912 (QB) at [54] and [5], where the warranty was given outside the context of litigation, and Padhiar v Patel [2001] Lloyd's Rep PN 328 and In re The Sherlock Holmes International Society Ltd [2016] EWHC 1392 (Ch); [2016] 4 WLR 173, where the warranties were said to have been given when purporting to act for the claimant/petitioner in legal proceedings.

The approach to inducement adopted by Hilary Heilbron QC in Padhiar v Patel is particularly instructive. She approved the following passage in the judgment of Sholl J sitting in the Supreme Court of Victoria in Schlieske v Overseas Construction Co Pty Ltd [1960] VicRp 33; [1960] VR 195, in which it was held that inducement was required, although it would often be implied:

“It is unnecessary … to prove that the plaintiff believed the assertion of authority … But there must be inducement. In the case of solicitors purporting and professing to act for a party to litigation, there is a continuing representation, or series of representations of their authority to do so. Expressed in the language of contract, the position is that solicitors continually say to the opposing solicitors or party, ‘if you will deal with us, and otherwise act, on the basis that we are authorized agents of our client, we will in consideration therefore promise you, as a matter of contract, that we have such authority’. Each time the opposite party so deals or acts, because of that promise, and with the intention of accepting it, there is a contract, made upon good consideration. The promise or warranty is enforceable.”

“The inducement of the plaintiff is prima facie to be implied from the making of the representation and the subsequent entry by the plaintiff into the relevant transaction, … There is thus simply a rebuttable presumption or inference of fact. If when all the evidence is in, inducement is not proved on the balance of probabilities, because the force of the presumption is repelled or neutralized by other evidence, the plaintiff should fail. In my opinion, it follows that there may be a failure to prove inducement even in a case where it does not appear that the plaintiff knew the full truth as to the defendant's solicitor's absence of authority.”

The remedy for breach of the warranty is damages, which will normally be the costs thrown away in the action (per Buckley LJ in Yonge v Toynbee at p 229), a liability which Swinfen Eady J characterised as being one “to pay the costs of the party misled” (at p 231). In Adams v Ford at para 31, Toulson LJ identified the nature of the recoverable loss as follows: “a solicitor who acts in litigation without authority to act on behalf of the supposed client is responsible for the costs thereby incurred by the other party.”

In my view the way in which the characteristics of the liability are described in Yonge v Toynbee and Adams v Ford, makes clear that there must be both reliance and a causal link between the breach of the warranty and the loss which is claimed from the solicitor who gives the warranty in the first place. This is why Swinfen Eady J talks about the “party misled ” and why Toulson LJ uses the phrase “costs thereby incurred”.

A similar point is made by Colman J in Skylight Maritime SA v Ascot Underwriting Ltd [2005] EWHC 15 (Comm); [2005] PNLR 25 at [16], when explaining why the recoverable loss is the difference between the position which the promisee now finds itself in, and the better position which he would have been in if the warranty had been true:

“It is important not to lose sight of the fact that the relevant breach of warranty is the non-existence of the authority that was warranted. Therefore, the opposite party or promisee has lost the benefit of the position he would have been in had the warranty been true. In other words, the court is concerned to quantify what benefit has been lost by reason of the fact that the supposed client is not after all a party to the proceedings. In the ordinary case, the promisee will have lost the ability to recover from that client the costs of the proceedings in the event of a costs order in the promisee's favour. This is usually quantified as the amount of costs thrown away by the promisee in relation to the proceedings from the first participant in them of the solicitor until the promisee is apprised of the solicitor's lack of authority.”

In a straightforward case the remedy is exercised under the court's inherent jurisdiction over its officers (see the procedure adopted in Yonge v Toynbee and see also Nelson v Nelson [1997] 1 WLR 233, 239F–G per Waller LJ), although if there are substantial points of law or fact to be resolved it may be appropriate to leave the issue to be resolved through the commencement of separate proceedings (see the Skylight Maritime case at paras 6–14).'

(5) in Jalla v Shell [2024] EWHC 578 (TCC) ('Jalla'), an issue arose as 'Whether, as a matter of Nigerian law, the claimants' solicitors have authority to act for the claimants in proceedings HT-2020-000143.' (paragraph 37). The claimants' (apparent) solicitors were 'RBL' and the claim was labelled 'Jalla 2', and there were 27,830 (apparent) individual claimants, allegedly claimants through the authority, it was said, of community leaders and Kings. The respective parties position are set out in a footnote[7]. On this issue, the court made findings[8], and declared that 'save for [5 named individuals] RBL Law Ltd does not have authority to act for the claimants in Jalla 2 in respect of individual claims or private individual rights.' (paragraph 41(2)). The defendant's sought various costs order (paragraph 42-43), including '...a wasted costs order against RBL for acting in breach of warranty.' (paragrph 43). RBL resisted, contending that 'there is no proper basis on which to make a wasted costs order against RBL in respect of the authority issue.' (paragraph 44)

Under the heading 'Application for Costs Against RBL', O'Farrell J in Jalla said, at paragraph 63 to 70:

'The defendants seek the costs of the authority issue against RBL on the ground that it was the real party to that issue; alternatively, the defendants seek an order for wasted costs against RBL for acting in breach of warranty of authority pursuant to s 51 of the Senior Courts Act 1981 or the inherent jurisdiction of the court.

The defendants' case, that RBL was a party to the proceedings on the authority issue and therefore liable for the costs of such issue, is based on RBL's letter dated 21 June 2023 in which it wrote:

"The authority issue that was determined in the [Date of Damage Judgment] arose as between this firm and your clients, and not as between the claimants and your clients. Thus, the claimants are not concerned with the costs of that issue and should not have any liability in respect of it."

The letter on its own is not sufficient to amount to an admission, either that RBL was the true party to that part of the litigation or acceptance of liability for the costs of the authority issue. The court would have to look at the substance of RBL's role in the round, rather than just what was said in correspondence, as a legal representative for the claimants and acting in their interests. This is addressed further when considering the wider application regarding costs against RBL.

"(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in – …

(b) the High Court …

shall be in the discretion of the court. …

(6) In any proceedings mentioned in subsection (1), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court.

(7) In subsection (6), 'wasted costs' means any costs incurred by a party –

(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or

(b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay."

CPR 46.8 provides that where the court is considering whether to make an order for wasted costs under s 51 of the Senior Courts Act 1981, the court will give the legal representative a reasonable opportunity to make written submissions or, if the legal representative prefers, to attend a hearing before it makes such an order.

Practice Direction 46, para 5.3 provides that a court may make a wasted costs order on its own initiative; alternatively a party may apply for a wasted costs order by filing an application in accordance with CPR 23 or by making an application orally in the course of any hearing. The court will give directions about the procedure to be followed in each case in order to ensure that the issues are dealt with in a way which is fair and as simple and summary as the circumstances permit.

Paragraph 5.5 of the practice direction provides that:

"It is appropriate for the court to make a wasted costs order against a legal representative, only if –

(a) the legal representative has acted improperly, unreasonably or negligently;

(b) the legal representative's conduct has caused a party to incur unnecessary costs, or has meant that costs incurred by a party prior to the improper, unreasonable or negligent act or omission have been wasted;

(c) it is just in all the circumstances to order the legal representative to compensate that party for the whole or part of those costs."

Paragraph 5.7 sets out the general procedure that will usually be adopted by the court:

"As a general rule the court will consider whether to make a wasted costs order in two stages –

(a) at the first stage the court must be satisfied -

(i) that it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made; and

(ii) the wasted costs proceedings are justified notwithstanding the likely costs involved;

(b) at the second stage, the court will consider, after giving the legal representative an opportunity to make representations in writing or at a hearing, whether it is appropriate to make a wasted costs order in accordance with paragraph 5.5 above."'

On the facts in Jalla, in respect to stage 1 of the wasted costs application, O'Farrell J said, at paragraph 71 to 76:

'In this case no formal application has been issued but the defendants have raised the matter in their written and oral submissions and the court has jurisdiction to consider it.

Having considered the matter, I am satisfied that there is evidence and other material before the court which, if unanswered, would be likely to lead to a wasted costs order being made, and that the wasted costs proceedings are justified notwithstanding the likely costs involved for the following reasons.

First, the court has found that RBL did not have authority to act on behalf of the vast majority of the claimants in Jalla 2. As accepted by RBL, a solicitor acting without authority is vulnerable to a wasted costs order. Solicitors who issue proceedings thereby warrant that they have authority to do so: Yonge v Toynbee [1910] 1 KB 215. As a matter of public policy, it is an abuse of the process of the court for solicitors to issue proceedings in the name of a person who has not given them authority to do so: Adams v Ford [2012] 1 WLR 3211 per Toulson LJ at [39]. If they do not in fact have such authority, they are in breach of warranty and may be liable for the costs of such proceedings.

Second, if, as is now suggested, RBL did in fact obtain letters of authority from individual claimants, it is arguable that it acted improperly, unreasonably or negligently in failing to notify the defendants of this fact or produce them. In Bao Xiang International Garment Centre v British Airways plc [2015] EWHC 3071 Rose J (as she then was) at [31] emphasised the need for transparency on the part of the solicitors issuing the proceedings disclosing to the defendants any problems existing with authorisation by the purported claimants. If such letters had been produced in advance of the Date of Damage hearing, even if not the full complement, the authority issue might have become academic and the costs of the issue could have been avoided.

Third, the costs of the authority issue are substantial, in excess of £1 million, justifying a discrete hearing to resolve the costs dispute.

In those circumstances, the court will give RBL an opportunity to show cause why a wasted costs order should not be made in respect of the authority issue. Therefore, the court will order that RBL should be added as a defendant to Jalla 2 for the purpose of costs pursuant to CPR 46.2(1).'

Collatory Case Series

The Collatory Case Series, is an series of bulletins, designed to report that one case (perhaps, as here, with a few extra authorities), which collates the essential principles/propositions of law, for a particular doctrine/area of law. It is not designed as a deep and comprehensive review of an area of law, but to provide that quick 'go to' case.

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