Mr Dam Van Minh v Da Guang Tankers and Ocean Tankers The Ocean Unicorn
DMC/SandT/26/10
England
Mr Dam Van Minh v Da Guang Tankers (Private) Limited (in liquidation) and Ocean Tankers (Private) Limited (in liquidation) (The “Ocean Unicorn”)
English Admiralty Court: Admiralty Registrar Davison: [2026] EWHC 793 (Admlty): 2 April 2026
Judgment Available on BAILII @ https://www.bailii.org/ew/cases/EWHC/Admlty/2026/793.html
Dominic Happé (instructed by Clyde & Co) for Mr Minh (Fishing Boat Owner)
John Kimbell KC (instructed by CJC) for Da Guang Tankers and Ocean Tankers (together, Ocean Unicorn Owners)
COLLISION CLAIM: SOLICITORS’ AUTHORITY TO ACT: COSTS INCURRED UNNECESSARILY OR WASTED: BREACH OF WARRANTY OF AUTHORITY: WHETHER UNTRUE REPRESENTATION BY SOLICITORS THAT THEY HAD AUTHORITY TO ACT FOR BOTH FISHING BOAT OWNER AND HIS INSURERS CAUSED OCEAN UNICORN OWNERS AND THEIR P&I CLUB TO ADOPT A STRATEGY THAT LED THEM TO INCUR COSTS THAT WERE, IN THE EVENT, WASTED
Summary
Following an alleged collision between the “OCEAN UNICORN” and a fishing boat, Clyde & Co (an international law firm experienced in maritime and commercial affairs) wrote to Ocean Unicorn Owners asserting that they were appointed by both the Fishing Boat Owner and his insurers. It later transpired that Clyde & Co had assumed that this was the case and that they had not confirmed that this was so, where in truth Clyde & Co had only had the authority of the Fishing Boat Owner to act.
On the basis that Ocean Unicorn Owners, and their P&I Club, had adopted a strategy and incurred substantial costs in response to the Fishing Boat Owner’s insurers also ostensibly being involved, which they would not have adopted had Clyde & Co said that they only acted for the Fishing Boat Owner, the High Court awarded wasted costs to the Ocean Unicorn Owners for Clyde & Co’s breach of warranty of authority.
Case note contributed by Sheridan Steiger, LLM (International Trade and Commercial Law), LLB (Hons), BA (Hons), Solicitor of England & Wales, and International Contributor to DMC’s CaseNotes
Background
Mr Minh (the “Fishing Boat Owner”), as the owner of fishing vessel “CM-99596-TS” (the “Fishing Boat”), alleged that it collided with Da Guang Tankers (Private) Limited’s (“Ocean Unicorn Owners”) vessel “OCEAN UNICORN” on 22 June 2019 in the South China Sea.
Ocean Unicorn Owners, and their P&I Club (the “Club”), investigated, and found no contemporaneous record of a collision.
The Club explained to the High Court that fraudulent collision claims are not uncommon, and they tailor their response to suit the facts:
1. For claims brought by fishing boat owners who are self-representing, it is normal to adopt a “wait and see” approach; but
2. For claims brought by the fishing boat’s insurers, the Club is typically more engaged, given international law firms are often involved and have funds available, through insurers, to arrest their members’ vessels.
In this instance, Clyde & Co wrote to the lawyers instructed on behalf of the “Ocean Unicorn” (CJC, Campbell Johnstone Clark, a firm similarly experienced) on 30 August 2019 categorically confirming that they acted for both the Fishing Boat Owner and his underwriters (“PVI”). Again, on 25 November 2019, Clyde & Co repeated that they were “instructed by the owners and insurers” of the Fishing Boat.
As a result of Clyde & Co’s involvement and assertions that they were instructed by both the Fishing Boat Owner and PVI, English law and jurisdiction was agreed and a Letter of Undertaking (“LOU”) for USD1,303,079 was provided to the Fishing Boat Owner and PVI.
Subsequently, on 21 June 2021, Clyde & Co issued a High Court claim form in respect of the collision. In response, Ocean Unicorn Owners applied to the High Court for security for costs. The High Court made an order for security for costs in the sum of USD250,000 which went unpaid. The Club, therefore, approached PVI directly and received a response that: “we would like to confirm that Clyde & Co was NOT authorized to bring legal proceedings before the High Court in London by PVI on behalf of hull and machinery interests.”
Asked for an explanation, Clyde & Co responded:
“We are typically instructed at the outset and before the claim is subrogated… We believed we were acting for both…
We very much regret the error on our part which was inadvertent and unreservedly apologise.”
Further investigation showed that PVI had investigated the allegations of the Fishing Boat Owner and concluded that there was insufficient evidence to prove that a collision had occurred.
The claim brought against Ocean Unicorn Owners was struck out and an application made for Clyde & Co to pay Ocean Unicorn Owners’ wasted costs.
Whilst Clyde & Co admitted a breach of warranty of their authority to act for both the Fishing Boat Owner and PVI, they asserted that it had caused no loss.
Clyde & Co also argued that the claim for wasted costs could only be pursued by Ocean Unicorn Owners, who were in liquidation, and who had not, in any event, paid any costs. They further said that the Club’s “pay to be paid” principle prevented them recovering as they should have insisted on Ocean Unicorn Owners paying in the first instance.
Law
The judgment helpfully summarised the English case law:
1. Solicitors who issue proceedings warrant that they have authority to do so (fn.1);
2. Public policy means that it is an abuse of process for English solicitors to issue proceedings in the name of a person who has not given them authority. If they do not have authority, they are in breach of warranty and may be liable for the costs of such proceedings (fn.2);
3. The liability for acting in breach of warranty is strict (fn.3);
4. If a solicitor fails 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 Practice Direction 46 (“PD46”) of the Civil Procedure Rules even if they acted in good faith throughout. PD46 provides the courts with the ability to make a wasted costs order in response to such a finding (fn.4);
5. The usual damages awarded comprise the costs thrown away or wasted (fn.5); and
6. Whether pursued as a breach of warranty or as a wasted costs claim, the result will nearly always be the same; a potential liability on or costs order against the law firm to pay a portion of the other side’s costs (fn.6).
As Clyde & Co admitted that there had been a breach of warranty, it was only left for the Admiralty Registrar to consider and decide whether that breach had caused the defendants to incur unnecessary or wasted costs.
Judgment
The Admiralty Registrar concluded that the breach of warranty had caused costs to be incurred unnecessarily or wasted for the following reasons.
The Registrar found credible the Club’s assertion that it tailored its claim handling strategy to suit the parties involved. He went on to find that English law and jurisdiction was agreed, and an LOU provided, on the belief that PVI were involved and would have financed arrest attempts against the “OCEAN UNICORN”.
The Registrar also rejected the argument that the Club was unable to claim wasted costs on account of the “pay to be paid” principle. He noted that payment of legal costs where an LOU has been given is typically treated as an exception to the “pay to be paid” principle by P&I clubs and, even if it were not, he would have permitted the Club to be joined to the proceedings in order to permit a direct claim.
The costs incurred by Ocean Unicorn Owners and the Club in defending the claim were assessed as £141,752.45. The Registrar applied a 10% discount to reflect costs that may have been incurred had the breach of warranty of authority not occurred and the Club had been content to adopt a “wait and see” approach. Accordingly, Clyde & Co was ordered to pay £127,577.
Comment
In the aftermath of a collision or loss of cargo, it is common for recovery agents (or solicitors) to purport to be instructed to act for a principal (be it a vessel owner or a range of cargo interests, from shippers through to receivers) as well as their insurers.
In return, those facing the claim often ask the recovery agents (or solicitors) to provide a Letter of Authority (“LoA”) to evidence the latter’s assertion. The recovery agents (or solicitors) will often say that they are not required to do so. Solicitors in such circumstances often assert that they are entitled to rely on their having warranted that they are so instructed. There is no such rule and nothing in English procedure prevents a defendant from making further enquiries and asking for further proof or a recovery agent (or solicitor) from volunteering such proof to reassure the defendant.
Indeed, this recent claim reminds us of the need to be clear as to who has given authority and whether solicitors (and recovery agents) have satisfied themselves of the full extent of their authority and not simply made any unverified assumptions.
In relation to solicitors in particular, liability for a breach of warranty is strict and PD46 provides the High Court with a mechanism to issue an order for wasted costs, the consequences of which can be very costly, particularly if unsuccessfully contested.
Defendants may request LoAs from cargo recovery agents and solicitors when presented with any claims. Whether they choose to do so and refuse to provide security absent provision of a LoA will always need to be weighed against the potential downside of possibly leading recovery agents, solicitors and their clients to feel compelled to take formal steps to seek security for their claim when it may otherwise, through cooperation, have been possible to agree to a more cost-effective solution.
The above said, a failure to take the simple step of providing a LoA, as a matter of comfort to give clarity to defendants and their insurers, to avoid the need for a standoff or formal steps to be taken (at substantial time, effort and cost) to secure a claim, may count against claimants when it later comes to the determination of costs.
Footnote 1: Yonge v Toynbee [1910] 1 KB 215
Footnote 2: 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]
Footnote 3: Zoya Ltd v Ahmed [2016] 4 WLR 174 at [29]
Footnote 4: Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1687 (Ch)
Footnote 5: Skylight Maritime SA v Ascot Underwriting Ltd & Ors, Wurttembergische-Und Badische Versicherung AG, Houlder Insurance Services (Marine) Limited [2005] EWHC 15 (Comm) at [16]
Footnote 6: Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1687 (Ch)
