A warning to always seek authority

A recent decision by HHJ Matthews in the case of Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1687 (Ch) (4 July 2022) provides a stark warning to solicitors to check the authority of those who are instructing them.

 

In this case, a company was unsuccessful with its application to restrain a winding-up petition, as the director who sought to provide authority for the application had no authority to do so on his own. He was one of two directors.

 

As a result, the Court ordered the company to pay the respondent’s costs. The respondent applied for a wasted costs order against the company’s solicitors.

 

It was decided by HHJ Matthews that it was unreasonable for solicitors to be aware of the disagreement between the two directors yet accept instructions from one without the necessary authority from the other. This in itself amounted to prima facie evidence of negligence. Therefore, a wasted costs order was granted against the solicitors, ordering them to pay a sum equal to the costs the company was initially ordered to pay.  Obiter, the judge also indicated that he would have made an order under the breach of warranty of authority jurisdiction.

 

This case should serve as a reminder that any reasonably competent solicitor should check the authority of those instructing them.

 

If you need assistance with a potential, or ongoing, legal dispute, please feel free to contact Guy Davis at [email protected] to assist you.