On 18.3.26 the Admiralty Court considered an application for wasted costs due to inaccurate information provided on representation. Minh v Da Guang Tankers (Private) Ltd and another [2026] EWHC 793 (Admlty) concerned an alleged collision between the Claimant’s fishing vessel and the Defendant’s oil tanker, the Ocean Unicorn. The Defendant sought an order for wasted costs of the action from the Claimant’s legal representatives, Clyde & Co, on the basis that they had inaccurately confirmed that they were instructed by both the Claimant and his insurer. The Court found in favour of the Defendant and made an order for wasted costs, subject to a 10% reduction to reflect the costs that would have been incurred in any event.
Background
On 22 June 2019 an alleged collision took place between the charter vessels however there was no contemporaneous record of the collision; there was no physical evidence on the oil tanker and the crew denied all knowledge. It is worth noting that a statement from the Defendant’s insurer commented that fraudulent collisions are commonplace in the industry. On 8 July 2019 Clyde & Co sent a Letter of Claim to the Defendant and their insurers. The Defendant provided a response to the Letter of Claim on 30 August 2019 and on the Defendant’s request, Clyde & Co confirmed they were instructed by both the Claimant and his insurer. The Defendant’s initial position was that Singapore was the correct jurisdiction however agreed to English Law, which was Clyde & Co’s position.
Proceedings were issued on 21 June 2021. On 7 March 2022 the Defendant submitted an application for security for costs, which was ordered on 29.4.22 in the sum of $250,000. The security was not paid and the Claimant’s insurer was chased for the same, along with the costs of the application, totalling £30,000. The Claimant’s insurer confirmed that they had not authorised Clyde & Co to bring proceedings and on 24 July 2022, Clyde & Co admitted the error. The claim was struck out on 14 July 2025 and the Defendant applied for wasted costs on the basis that Clyde & Co lacked authority from both the Claimant and his insurer.
Parties’ Submissions
The Defendant submitted that a different approach would have been taken to litigation had it been clear that Clyde & Co were not instructed by the insurer. Where a claim is not backed by an insurer, the claim would usually be investigated and a suitable approach be taken. In cases such as this, where there was little evidence of the collision, the claim would have been rejected. However, where an insurer is involved a different approach is taken on the basis that the insurer has a financial ability to pursue the claim and also because the insurer will have undertaken its own investigations. Due to this, had the Defendant been aware that the insurer was not involved, there would have been no agreement to litigate the matter in London and steps would have been taken to dispose of the claim locally in Vietnam.
Clyde & Co submitted that the Court had to decide what the insurer would have done had the Defendant been aware that the insurer was not instructed and that it was the involvement of Clyde & Co, not the Claimant’s insurer, that affected the Defendant’s approach. The true basis of the wasted costs application was alleged to be the lack of instruction from the Claimant and not the insurer. The reality was that the costs would have been incurred in any event. It was further submitted that, as the Defendant was in liquidation, it could not pursue a claim for wasted costs on behalf of the insurer in any event.
Decision
The Court noted that it was an abuse of process to issue proceedings without authority and the liability for acting in breach of warranty is strict (Zoya Ltd v Ahmed [2016] 4 WLR 174). If a solicitor fails to take proper steps to determine the source of his instructions, even if acting in good faith, this conduct will likely be held to be improper (Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1687 (Ch) and Trehan v Liverpool Victoria [2017] 10 WLUK 21.) It was noted that, whilst breach of warranty and wasted costs concern separate jurisdictions, the outcome is almost always lead to the same result. In this instance, the breach was admitted and so it was simply causation that was in issue.
The evidence of the Defendant was considered to be sound and plausible; it was likely that the Defendant would have taken a different approach had it been aware that the Claimant’s insurer was not involved. Additionally, whilst it was likely the involvement of Clyde & Co that encouraged a different approach, this was likely due to the fact that it indicated the insurer was involved. It was also irrelevant that the Defendant was in administration; the warranty was provided to both the Defendant and its insurer.
The Court ordered that Clyde and Co pay costs of £127,577, which amounted to the costs as claimed, with a 10% reduction reflecting the costs that would have been incurred on the initial investigation.
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