Allan Reason & Ben Fairhead highlight the dangers of acting without requisite authority
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The need to ensure that a corporate client provides proper authority to a firm of solicitors to act in proceedings is a point that can be easily overlooked, despite it being of crucial importance. A recent application for costs serves as a powerful illustration of what can happen when a firm acts without establishing the existence of that authority.
Recent scenario
The story starts in 2001 when a company (Company JV), until that point controlled exclusively by an individual (Mr K) at board and shareholder level, became a joint venture company. This followed the sale by one of the other companies controlled by Mr K (Company A) of its shareholding in Company JV to a separate company (Company B). Company B was a member of a different group of companies managed by a Mr D. Mr K and Mr D became the directors of Company JV, with Company A and Company B
