Solicitor’s Authority to Act in Malaysia: Risks, Challenges and Practical Safeguards

Why Authority to Act Matters

Adequate documentation of a solicitor’s authority to act in Malaysia is often treated as routine. In practice, it is rarely questioned. But when it is, the consequences can be severe. If authority is successfully challenged, steps taken in the proceedings may be set aside and, in some cases, the entire action may be rendered a nullity.

The Legal Position on a Solicitor's Authority to Act

The position in Malaysia on a solicitor's authority to act is clear:

1. a solicitor’s authority to act may be challenged at any stage of proceedings (William Jacks & Co (M) Sdn Bhd v Chemquip (M) Sdn Bhd & Anor [1991] 2 MLJ 555 @ held (2));

2. if proper authority cannot be shown, steps taken, including the issuance of a writ or entry of appearance, may be struck out (Syawal Enterprise Sdn Bhd & Anor v Dayadiri Sdn Bhd [1990] 3 MLJ 239 @ p 242 and China Commercial Foreign Trade (Singapore) Pte Ltd v KLS Diversified (M) Sdn Bhd [2021] 9 MLJ 274 @ para [30]);

3. while such challenges commonly arise in corporate disputes, the same principles apply to individuals (Supreme Finance (M) Bhd v Wing Hong How [1999] 3 MLJ 114 @ held (2)).

How Challenges to Authority Arise in Practice

In the past two years, we have encountered several cases where a solicitor’s authority was put in issue. Two illustrate the point.

First, we acted for an individual where the opposing party challenged our authority (despite us disclosing to them our warrant to act) and sought to strike out the appearance and defence. The challenge was ultimately defeated when we produced our warrant to act in Court. However, we were required to affirm an affidavit confirming our instructions and engage counsel to argue the matter, an entirely unnecessary detour.

Second, solicitors commenced proceedings on behalf of a company and obtained High Court orders exposing that company to adverse costs. The company later engaged us to set aside those orders on the basis that it had never authorised the solicitors. When challenged, the solicitors were unable to produce any evidence of authorisation. Their position was that they had acted on instructions from an individual who purported to represent the company. That individual, however, had no authority to do so. The orders were ultimately set aside.

Why This Issue is Often Overlooked

The pace of litigation often requires prioritisation. Urgent filings, interim relief and client demands tend to take precedence. In that environment, formalising authority, particularly where instructions appear clear, is often treated as administrative. And that is precisely why it is overlooked.

Practical Steps to Safeguard your Authority to Act

This is a risk that can be addressed easily at the outset. To avoid challenges to a solicitor's authority to act and as part of file opening, we typically request a signed warrant to act (individuals) or a properly passed board resolution (companies). These need not be complex. A simple one-page document will usually suffice, with sensitive terms kept separate.

A Final Thought

The key point is simple: authority is rarely the issue, until it becomes the only issue.

It is a small step at the outset, but one that can avoid unnecessary disputes, costs and complications later.

Warrant to Act & Resolution to Engage Templates

In practice, this is an easy issue to address upfront. Set out below are simple templates we commonly use as a starting point. They are intentionally short and can be adapted depending on the matter.

******

Warrant to Act (individuals)

“[header with your client’s information i.e. full name, identification number & address]

[addressed to you]

[subject matter]

This is to confirm your warrant to act for me in respect of the matter above.

This warrant extends to you acting for me in respect of all matters, including perusing all documents and materials, rendering advice and the issue of correspondence, including taking steps and doing all acts necessary as my solicitors including accepting service of process, drafting court documents, issuing proceedings, attending hearings in Court and all matters preparatory and incidental to the conduct of the matter captioned above.

Yours faithfully,

[signature]

[name]

[date]

[identification number]”

******

Board Resolution to Engage Solicitors (companies; ensure that it is regularly passed based on the constitution of the company)

[client’s resolution header with i.e. name of company, company number]

Directors’ (Circular) Resolution

[subject matter]

That pursuant to the Company’s Articles of Association, we the directors of the Company do hereby RESOLVE that:-

1. [firm] be and are hereby authorised to take all steps and do all acts necessary, including perusing all documents and materials, rendering advice, accepting service of process, issuing letters of demand, drafting court documents, initiating and/or defending any Court proceedings and attending hearings in Court, including all matters preparatory to, attendance at, and all matters incidental to and arising from the conduct of the aforementioned matters in respect of the matter captioned above. All and any steps taken by [firm] in respect thereof prior to this Resolution be and are hereby ratified by the Company.

2. Mr X be and is hereby authorised for and on behalf of the Company to liaise with, provide documents and materials to and give instructions to [firm].

3. Any director of the Company be and are hereby authorised to affirm any affidavits or documents for and on behalf of the Company for the purposes of any intended action as stated above.

4. All correspondence to the Company be sent by [mode].

[date]

[signed by sufficient number of directors]