It is well established that where a solicitor commences proceedings in the name of a client without verifying whether he has proper authority, or by erroneously assuming that he has authority, he does so at his own risk.

So long as the matter rests there, the action is not properly constituted, it can be stayed at any time and the solicitor on the record for the purported plaintiff becomes personally liable to the defendants for the costs of the action (Danish Mercantile Co Ltd v Beaumont [1951] 1 All ER 925).

Hence, where a client has not authorised the issuing of a writ and where he has no intention of pursuing the action, the solicitor may find himself personally liable for costs.

This problem is particularly acute when the client is a company, since instructions must come from a human agent who must himself have the necessary authority.

However, a client who did not authorise the issuing of a writ at the time, may, on hearing of the solicitor's conduct, decide to proceed with the action.

The question for consideration here is whether the law will allow the client (principal) to ratify the unauthorised acts of the solicitor (agent) so as to (retrospectively) authorise the issuing of the writ, and thereby properly constitute the action.

Arguably, issuing a writ without authority is a nullity and cannot be ratified (Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495).

However, there is authority that a purported principal can ratify the acts of the solicitor who started the action, and so cure the defect in the proceedings as originally constituted (Danish Mercantile Co Ltd v Beaumont).

A recent Court of Appeal decision, Presentaciones Musicales SA v Secunda [1994] 2 All ER 737, confirms this latter view and thereby closes off one potential avenue of liability for solicitors.

In April 1988, following the instructions of a director of the plaintiff Panamanian company (PMSA), a firm of English solicitors issued a writ claiming relief against the first defendant for alleged copyright infringement.

In 1991 the defendants discovered that PMSA had been 'dissolved' under Panamanian law in 1987 -- before the writ was issued.

In May 1991, three directors appointed as liquidators purported to ratify the instructions to the solicitor.

The defendant sought an order that proceedings be stayed and/or struck out as an abuse of process.

Under Panamanian law, the directors of a dissolved company were entitled to initiate and defend legal proceedings for three years after dissolution.

The plaintiffs accepted that PMSA had been dissolved in 1987, but claimed that the writ had been issued within the three-year period and that the liquidators had ratified the issue of proceedings, al beit outside the three-year period.

On hearing the preliminary issue as to whether the liquidators could ratify in these circumstances, the judge held for the plaintiffs.

The defendants appealed.

In the Court of Appeal, the defendants argued that where action must be taken within a time limit to have legal effect, any attempt to ratify, beyond that period, an act done within that period, without authority, is ineffective.

A person cannot ratify an act if at the time of the purported ratification that person could not do the act himself (Ainsworth v Creeke (1868) LR 4 CP 476, per Brett J at 487).

This proposition is supported by a long line of cases whose rationale seems to be that, if a time limit is set, whether by statute or agreement, for doing an act, the doctrine of ratification cannot be allowed to operate if it would have the effect of extending that time (Holland v King (1848) 6 CB 727 per Maule J at 740); it was accepted by Dillon and Nolan LJJ, but rejected by Roch LJ.

However, all three members of the Court of Appeal distinguished these cases and, relying on the doctrine of Bolton v Lambert (1889) 41 ChD 295, that ratification has retroactive effect, held that where a solicitor, without authority, commences proceedings on behalf of his client, the client can ratify the proceedings.

The reasoning of the majority is difficult to follow and unsatisfactory.

It appears to be as follows.

(i) In the cases where ratification was not permitted, the act sought to be ratified was a nullity unless done with authority (an explanation offered by Lindley LJ in Bolton v Lambert).

(ii) Therefore an unauthorised act done before expiry of a time limit can be ratified after expiry of the time limit, provided the original act was not a nullity.

(iii) Since a writ issued without authority can be ratified (Danish Mercantile Co Ltd v Beaumont), it is not a nullity.

(iv) Therefore a writ issued without authority can be ratified after expiry of the limitation period.

To this extent ratification is treated in the same way as an amendment to cure a procedural defect without adding a new party or cause of action (Pontin v Wood [1962] 1 All ER 294).

This approach can be justified on the grounds that: 'The defendant was at all times perfectly aware of the nature of the action which the writ was intended to initiate and the defect has caused him no difficulty whatever' (Pontin v Wood, per Holroyd Pearce LJ at 299).

However, in the broader context of agency law the decision is disturbing.

It perpetuates the distinction between void and voidable acts, which is difficult to draw and has been criticised in academic literature (see for example Markesinis & Munday, An Outline of the Law of Agency, 1992 p.78).

Moreover, it disregards the fact that the decision in Bolton v Lambert is inconsistent with earlier cases and has been doubted at the highest level (Fleming v Bank of New Zealand [1900] AC 577 PC).We would suggest that the Court of Appeal may have been too quick to dismiss the cases raised by the defendants, and that the reasoning in Bolton v Lambert is far from convincing.

However, from the point of practice, the moral of the story is to ensure, when taking instructions from clients, that the person instructing you has the necessary authority.