assignment of cause of action english law

Practical Law

Assignment of a claim or cause of action

Practical law uk practice note 1-522-7861 (approx. 32 pages), get full access to this document with a free trial.

Try free and see for yourself how Practical Law resources can improve productivity, efficiency and response times.

About Practical Law

This document is from Thomson Reuters Practical Law, the legal know-how that goes beyond primary law and traditional legal research to give lawyers a better starting point. We provide standard documents, checklists, legal updates, how-to guides, and more.

650+ full-time experienced lawyer editors globally create and maintain timely, reliable and accurate resources across all major practice areas.

83% of customers are highly satisfied with Practical Law and would recommend to a colleague.

81% of customers agree that Practical Law saves them time.

Court proceedings: restructuring & insolvency
Property: restructuring & insolvency
Restructuring and Insolvency Transactions
Regulation, Powers and Duties of Insolvency Practitioners

Assignment of a claim or cause of action | Practical Law

Assignment of a claim or cause of action

Practical law uk practice note 1-522-7861 (approx. 32 pages).

Search People
PeopleBridge
View All Sectors

Champerty and Assignment of Causes of Action

public policy
Right to Litigate
Supreme Court

McCool Controls and Engineering Ltd v Honeywell Control Systems Limited [2024] IESC 5.

McCool Controls and Engineering Limited ( Company ) was the original plaintiff in proceedings against Honeywell Control Systems Ltd ( Honeywell ) for alleged breaches of an agreement between the parties. The proceedings were commenced in 2005. Mr McCool was the managing director and majority shareholder of the Company, and he brought an application to substitute him for the Company as the plaintiff in the proceedings, where the Company could no longer afford legal representation. The application was based on an assignment entered into between the Company and Mr McCool, whereby the Company assigned the cause of action to him for the nominal consideration of €1 ( First Assignment ). The First Assignment contained a clause allowing Mr McCool to reassign any or all the rights transferred ( onward transmission clause ).

Honeywell successfully applied to have the substitution order discharged. The High Court (Noonan J) found that the assignment was invalid and an abuse of process as it amounted to an impermissible attempt to circumvent the rule in Battle (as discussed in our article here ). The assignment was also found to savour of champerty (meaning it is conducive to carrying out champerty) because it expressly provided for the onward transfer of the cause of action to a disinterested third party. Mr McCool appealed the decision to the Court of Appeal ( COA ).

Despite the pending appeal, Mr McCool brought a second application to the High Court to be substituted as plaintiff. This application was grounded on a second assignment executed by the Company in favour of Mr McCool ( Second Assignment ). The Second Assignment was similar to the First Assignment, save that it omitted the onward transmission clause. Simons J refused this application on the basis that the matter was already decided by the High Court in 2018. Mr McCool also appealed this refusal to the COA.

The COA in 2022, dismissed both appeals upholding the findings of the High Court. The COA found that the First Assignment savoured of champerty because Mr McCool did not have a pre-existing legitimate interest in the transaction giving rise to the claim. Only the Company, which had entered the agreement with Honeywell, held that interest.

Mr McCool sought and obtained leave from the Supreme Court to appeal on the narrow grounds of whether an assignee of its interest in litigation by a corporate body can pursue the action by being substituted as a plaintiff in place of the company, irrespective of the purpose of the assignment.

Assignment of a bare cause of action

An assignment of a chose of action, such as a cause of action in litigation, is not enforceable under Irish law if it “savours of” maintenance or champerty. “Savours of”, as explained by Murray J, means that the assignment offends the same public policy as maintenance and champerty. Champerty means an agreement to fund or support litigation in which the party providing that support has no legitimate interest, in return for some share in the proceeds of that litigation. Maintenance occurs when a person supports litigation in which they have no legitimate interest. Both are torts and offences under Irish law.

Assignments of bare causes of action have traditionally been regarded as commercialising litigation and therefore offensive. Such assignments formed the subject of the seminal Supreme Court decision of SPV Osus v HSBC International Trust Services (Irl) Ltd [2018] IESC 44, (discussed in our article here ) which is authority for the position under Irish law that the assignment of a bare cause of action is unenforceable unless the assignee had a genuine commercial interest in the assignment.

Although leave to appeal in this case was restricted to a very narrow point around the rule in Battle, Mr Justice Hogan and Mr Justice Murray nonetheless considered the public policy behind the tort of champerty as applied to the assignment of a cause of action. Hogan J found it impossible to avoid considering the question of whether the First Assignment was champertous.

Murray J after reviewing existing authorities on the assignment of a cause of action/ right to litigate, summarised the relevant rules concerning assignments of bare causes of action as follows:

Such an assignment is prima facie champertous and therefore unenforceable unless the assignee has a genuine commercial interest in the claim that pre-existed the assignment and was independent of it (e.g. through their shareholding or debt);
However, the extent of the shareholding or debt cannot be so small that it renders their interest insubstantial.
There should be a reasonable proportion between the percentage share of the proceeds of the claim taken by the assignee and their pre-existing commercial interest in the claim.

Hogan J referring to the comments of O’Donnell J in SPV Osus , and disagreeing with the findings of the COA, concluded that the First Assignment was not champertous because Mr McCool had a clear personal interest in the outcome of the proceedings. As the principal shareholder in the Company, he had a legitimate interest in receiving the assignment of the cause of action. There was no question of him “investing in litigation”.

Whilst the validity of the assignment and the public policy issues regarding maintenance and champerty did not form part of the appeal to the Supreme Court, the comments of Murray and Hogan JJ are a welcome clarification of the principles that a court may apply in testing the validity of an assignment of a cause of action.

Notably, Hogan J applied a broader interpretation of the findings in SPV Osus than the COA had, in circumstances where Mr McCool and the Company had a shared mutual interest in the proceedings. This might suggest a growing tolerance by the courts of assignments of a right to litigate/ bare cause of action. It certainly shows that the law is continuing to develop in this area.

Regarding insolvent companies, and applying Murray J’s findings, such companies may face difficulties in establishing a pre-existing interest of sufficient substance to successfully stand over an assignment of a cause of action to their shareholders or creditors. However, in practice, large, interested creditors of insolvent companies often fund a liquidator to bring proceedings against third parties. The extent of their debt will most likely be of sufficient substance to take the assignment outside the rules against maintenance and champerty.

We will continue to monitor developments in this area. Should you wish to discuss this article or maintenance and champerty in general, please contact Ruairi Rynn , Paul Convery or Barbara Galvin .

To read more about maintenance and champerty please see our previous William Fry articles here .

Contributed by Gail Nohilly

Recommended Insights

Global directory Global directory
Product logins Product logins
Contact us Contact us

Our Privacy Statement & Cookie Policy

All Thomson Reuters websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.

Privacy Statement
Cookie Policy

assignment of cause of action english law

Back to steps

2 – Corresponding legal duty in the defendant toward the plaintiff

The second element of the cause of action corresponds to the primary right of the plaintiff. This duty may arise from a contract or may be imposed by positive law independent of the contract, or it may arise ex contractu or ex delictu (consequences from breaching the contract).

There are several ways to determine whether the defendant had a duty to act:

The defendant is engaged in the creation of the risk which resulted in the plaintiff’s harm.
Voluntary undertaking: The defendant volunteered to protect the plaintiff from harm.
Business/voluntary relationships:
Business owner and customer;
Innkeeper and guest;
Land possessor who opens her land to the public;
A person who voluntarily takes custody of another person.

Case example: Solomon v. Bates (N. C.)

In this case, the theory involves directors that are trustees for creditors, and individually owe a legal duty to them. The directors were wrong acting in a fraudulent, negligent, mismanagement affecting the creditor’s rights.

Case example: Purcell vs R.R 108 N.C 414

The court gave the verdict that the failure to discharge the duty required by the laws was a wrong caused by the defendant’s negligence -tort- and is properly united by the tort by fraud and deceit form part of the complaint.

3 – Wrong or violation of the plaintiff’s right, or breach of duty on the part of the defendant

Duty is the action which is to be done or not done by the person in obligation of it. A cause of action arises wherever there is proof that there was the existence of a duty towards the plaintiff by him which he failed to procure resulting in a breach. For instance, negligence as a Tort is a breach of duty that is not desired by the plaintiff but committed by the defendant.

The Wrongful Act or Omission forms part of the action that leads to affecting the right of the plaintiff.

A buys a horse from B.
Later he came to know that the horse is suffering from a life-threatening disease.
As a result, B’s Non-Disclosure of information is part of the Wrongful Act with his clear intention to commit fraud against A.
Here, A has full rights to bring legal action against B.

Case example: Hart v. Hanson , 14 N.D. 570, 105 N.W. 942 (1905)

The defendants were directors of the State Bank of Northwood, the plaintiff and his assignors became sureties on the such-depositary bond, and the same was delivered to and accepted by the county. County funds were thereupon deposited in the bank and were closed by the state authorities by reason of its insolvency. Here the defendant’s activities are part of the question since they acted fraudulently, as they already knew the insolvency of county funds but they remained silent . They were also the trustees in whose name the creditors invested money. Consequently, the directors were held completely liable to creditors.

When the defendant intentionally interferes with the rights of the plaintiff they lay the foundation for the lawsuit with the cause of action.

Case example: Davenport v. Underwood

The court held the defendant liable. The bank directors were held responsible for causing losses for the bank as they were directly liable to depositors on the grounds of fraud and negligence while performing the corporation’s duties.

Case example: Delano v. Case

In this case, the defendant committed a wrongful act on the ground of negligence. The court ruled that the purpose of cause of action could exist where there has been a liability in the right of the corporation to be enforced.

4 – Concurrence of right, duty, and wrong

According to Salmond “no right can exist without any corresponding duty and vice versa”.

Every person is rendered some rights which are granted to him against individuals or some against the public at large. These rights cannot be taken away. On the other hand, it’s the duty of individuals around him to let him enjoy his right by doing or restraining from doing anything which may hinder it. Rights and duties exist simultaneously.

A right is an interest protected by the law or the state, and it’s the duty that mandates the protection of the right. But when the protection is infringed by a failure to follow the duty, it gives rise to the wrong committed and hence, to a cause of action. This renders another right to claim the damage suffered for the one whose right was infringed.

5 – Damage

When the duty obliged is not performed, the right is infringed causing loss or damage and can be claimed with the cause of action that arose. Damages can be defined as the injury caused or loss incurred by the plaintiff due to the failure of the defendant and can be remedied by issuing the cause of action claiming damages.

Case example: Marzetti v. Williams (1830) 1 B & Ad 41

This case stated that every contract implies a duty to be performed by the parties and in the event of breach, cause of action arises against the party at fault mandating the use of the maxim, Ubi jus ibi remedium . Where there is action given by law, there are damages to the violated right.

6 – Concurrence of wrong and damage

The maxims damnum sine injuria and injuria sine damnum are elaborative of the relationship between the wrong and damage. Damnum sine Injuria refers to damages without injury or damages where there is no infringement of any legal right in spite of the loss which might have been incurred.

On the other hand, Injuria sine damno refers to infringement of legal right without causing any harm, loss, or damage to the plaintiff. Whenever any legal right is infringed, the plaintiff or the one who suffers can bring a cause of action against the one who infringed the right. Therefore, damages are the result of the cause of action through an actionable wrong.

Case example: Clark v. McClurg 215 Cal 279

In order to establish that there was breach of duty, the plaintiff must not only prove the existence of actionable wrong but also damages thereof. It was emphasized that the concurrence of actionable wrong and damages are important for the cause of action to be advanced.

Case example: Mogul Steamship Co Ltd v McGregor, Gow & Co [1892] AC 25

This case established that immoral acts done in a lawful manner led to no legal injury, hence no damages to be claimed by the plaintiff, and no point of the cause of action.

Last thoughts for the legal researcher

Although this guide is limited in scope and purpose, it’s clear that your own duty as a lawyer is to be well-versed with the facts of a case and to competently analyze similar cases where possible. This demands significant time and effort in both research and analysis, and understandably so. Yet the energy spent in gathering pertinent definitions and requirements don’t need to be so cumbersome.

The steps laid out above to specify causes of action serve only as basic principles so you can confidently proceed to the next phase of thorough analysis and file a lawsuit.

Originally published on 11/17/2022

1 Westlaw Precision (Definition taken from Precision Search tool feature)

The content appearing on this website is not intended as, and shall not be relied upon as, legal advice. Although this content was created to provide you with accurate and authoritative information, it was not necessarily prepared by attorneys licensed to practice law in a particular jurisdiction. It is general in nature and may not reflect all recent legal developments. Thomson Reuters is not a law firm and an attorney-client relationship is not formed through your use of this website. You should consult with qualified legal counsel before acting on any content found on this website.

Legal Topics
Practice Management

Join our community

The past, present, and future of legal research with generative AI

Legal technology has quickly evolved from a books-only exercise to outmatched AI-supported technology - with predictive analytics, precision research capabilities and powerful new citator tools.

Westlaw Precision | Harness the power of generative AI

Innovative tools deliver advanced speed and accuracy, providing you with greater confidence in your legal research

CoCounsel: The GenAI assistant for legal professionals

Bringing together generative AI, trusted content, and expert insights for a new era of work.

Build a career without boundaries

Learn more about how Thomson Reuters informs the way forward in The Power of Purpose

Legal glossary

Today’s lawyers and mental health: Mental Health Awareness Month

What are articles of incorporation what should be included, more answers.

Want to improve your law firm’s quality of work?

Generative AI in legal work – what’s fact and what’s fiction?

Sanctions list and KYC: ‘How to overcome the challenges‘

Personal Profile
See all online law products
Guided Tour
Subscriber Services

Financial Law [FBL]
International Commercial Arbitration [ICMA]
Private International Law [PRIL]
International Commercial Law [ICML]

The Law of Assignment (3rd Edition)

Marcus smith, nico leslie.

This book is the leading text on the law relating to intangible property or choses in action. Its clear and approachable structure covers all forms of intangible property (debts, rights under contract, securities, intellectual property, leases, rights/causes of action, and equitable rights), considering the nature of intangible property, how it comes into being, and how it is transferred or assigned. The first part of the book analyses the general principles regarding intangibles and their transfer, and the second examines the practical considerations relating to particular types of intangibles, securities, insurance contracts, leases, and intellectual property under the law. This new edition includes new chapters on powers of attorney and factoring, areas particularly important to legal practice. Other significant developments include the expansion of the chapter on leases to include leasing of chattels, and more material on securities, especially regarding the operation of settlement systems.

Bibliographic Information

Affiliations are at time of print publication..

Marcus Smith, author

Nico Leslie, author

Share This Facebook LinkedIn Twitter
Foreword to The Third Edition
Foreword to the Second Edition
Foreword to the First Edition
Preface to The Third Edition
Preface to the First Edition
Summary Contents
Detailed Contents
Table of Cases
Statutory Instruments
Netherlands
United States
Conventions
Regulations
International Conventions
List of References
List of Authority Abbreviations
Preliminary Material
Part III.01
[66.249.64.20|185.39.149.46]
185.39.149.46

Litigation notes

Claim assigned to spv not struck out as champertous.

This post is part of the following categories:

The High Court has refused to strike out a claim as champertous where it had been assigned to an LLP in which the assignor had a one-third interest and which had been formed to pursue the assigned claim (and other similar claims): JEB Recoveries LLP v Binstock [2015] EWHC 1063 (Ch) .

In recent years the courts have taken an increasingly liberal approach to the principles of champerty and maintenance (the ancient rules against “trafficking” in litigation) in the context of third party litigation funding . It had appeared that the principles would be applied more strictly where claims are assigned to, rather than merely funded by, a third party (as for example in the case of Simpson v Norfolk & Norwich University Hospital NHS Trust [2011] EWCA Civ 1149, outlined here ). The present decision may indicate a softening of the court’s approach in that context also.

However, the assignment of claims remains a high risk strategy, as each case will turn on its facts and the effect of a finding of champerty is that the assignment will be void and the assignee will be unable to pursue the claim. It is also worth noting that the present decision may be appealed; the court said it was prepared to grant permission, if requested, given the importance of the issue.

Legal background

The House of Lords decision in Trendtex Trading Corp v Credit Suisse (1982) AC 679 HL established that the assignment of a bare cause of action will be found champertous, and therefore void as against public policy, where the assignee does not have a “sufficient interest” to justify pursuit of the proceedings for his own benefit. (Note however that there is a statutory exception for the assignment of claims vested in an insolvent company. There is also no difficulty in assigning debts, as opposed to claims for damages or other remedies.)

In Simpson , the Court of Appeal applied Trendtex in finding that the assignment of a personal injury claim against a hospital trust was void in circumstances where the assignee, a widow whose husband had died in the care of the same hospital trust, wished to pursue the claim as part of a campaign to highlight the hospital’s failings. Although the assignee had “honourable motives” in pursuing the claim, this was not a sufficient interest of the sort required by law. The court said it was not in the public interest to encourage litigation whose principal object was to pursue some object other than obtaining a remedy for a legal wrong.

Background facts

The claim concerned an alleged debt under an alleged contract between a Mr Wilson and the defendant, under which Mr Wilson was to perform certain services relating to a proposed reverse takeover of the defendant’s business interests. Mr Wilson carried out work pursuant to the contract but no reverse takeover occurred.

Mr Wilson and two other individuals formed the claimant (JEB) as an LLP and assigned to it certain claims against the defendant, including the present claim, for the consideration of £1. (The other assigned claims are not relevant for present purposes, as the court declined to hear them on jurisdiction grounds.) Mr Wilson undertook to provide information to JEB to assist in pursuing the claim, and to pass any monies received from the defendant to JEB.

T he alleged consideration for the services provided by Mr Wilson comprised acknowledgment by the defendant of an alleged debt of £10 million said to have been due under a different contract and a monthly retainer of €10,000 plus expenses. By the Particulars of Claim, JEB sought (a) damages of £10 million; (b) amounts invoiced of €131,513.90 (after giving credit for sums paid by the defendant); and (c) “aggravated damages” of up to £2 million.

The defendant applied to strike out the claim as an abuse of the process on the grounds that it was champertous. It submitted that this was a bare assignment of a cause of action and was, or was on the brink of, litigation trafficking. The defendant also argued that to permit the claim to continue would be to allow Mr Wilson, as the subject of the claim, to “cost-proof” his litigation.

The court (HH Simon Barker QC sitting as a High Court judge) refused to strike out the claim on grounds of champerty (though the judge said he was provisionally minded, acting on the court’s own initiative, to strike out the claim for aggravated damages as groundless). He did however recognise that the application raised a point of law of some importance, and said it was therefore appropriate to grant permission to appeal if requested.

The judge accepted that a bare assignment of a cause of action has long been recognised as champertous and that, normally, an assignment of a claim in contract for damages would be likely to offend the public policy against maintenance and champerty. However, this case had a number of distinguishing features: the rights assigned were not confined to a cause of action, but included debts; and Mr Wilson remained entitled to one third of the fruits the claim, if successful, because of his one-third interest in JEB.

The position of Mr Wilson and JEB in relation to the claim was, the judge said, very different from that of the assignor and assignee in Simpson . JEB was a special purpose vehicle which had as its commercial objective the recovery of debts and claims of its partners and their families against the defendant; it had no separate purpose unconnected with the assigned claims. By contrast, in Simpson the assignee had sought to use the assigned claim to carry on a separate campaign.

Also, there was no question here of “trafficking in litigation”, as the phrase was used in Trendtex , ie a cause of action which was expected to be traded commercially between unconnected third parties. The assignors were all connected with JEB and all had a direct or indirect (through family) interest in the assigned rights or similar rights.

The judge observed that, far from the assignment cost-proofing Mr Wilson in relation to the litigation, it had made it likely that (if the claim was not struck out as champertous) the defendant would be able to get an order for security for costs against JEB, whereas Mr Wilson as an impecunious individual would not have fallen into one of the categories for which security is available. Accordingly, that should not be a matter weighing against JEB.

It was also relevant that the assignment required Mr Wilson to provide information to JEB about the rights, and Mr Wilson and his wife would be the claimant’s witnesses whether the action was brought by Mr Wilson or JEB. So it was improbable that evidence would be suppressed or exaggerated because the claim was brought by JEB.

The court concluded that permitting the claim to proceed would not put the integrity of the legal process at risk or otherwise undermine the ends of justice. Accordingly, it did not offend against the public policy underlying the prohibition of champerty.

The judge in this case cited the Court of Appeal’s observation in Simpson that the law on maintenance and champerty is open to further development as perceptions of the public interest change. He also said he bore in mind that: shortly before Simpson , the Court of Appeal (in Morris v Southwark LBC and Sibthorpe v Southwark LBC [2011] EWCA Civ 25) rejected an argument that it was champertous for solicitors acting under a conditional fee agreement (CFA) to indemnity their clients against an adverse costs order and noted that champerty was to be curtailed not expanded; and since Simpson , the rules relating to litigation funding had changed to permit damages-based agreements (DBAs) which allow lawyers to act in return for a share of damages. The judge in the present case appears to have taken the view that these developments indicate a shift in public policy, justifying a more liberal approach – particularly where (as here) the arrangement gives the defendant greater costs protection than it would have had if the claims had been brought by the original party:

“In a litigation climate where legal representatives can both share in the fruits of the claim they advance and underwrite their client’s costs risk of the claim and thereby enable an impecunious client to pursue a just claim, why should the court decline to hear, on grounds of public policy, the claim of an impecunious litigant which has been assigned to an entity in which he has an interest and which assignment creates the opportunity to open an otherwise closed door to reasonable and proportionate protection in costs on the application and for the benefit of the defendant…?”

It is not clear to what extent the decision was also influenced by the facts of the particular case, including that the assigned claims included claims in debt as well as damages, and the nature of the connection between the assignor and assignee. It would certainly be dangerous to interpret the decision as giving carte blanche to the practice of assigning claims to an SPV where they are to be pursued in the English courts – a practice which is more common in some other EU jurisdictions, such as Germany, where claims are in some cases being “bundled” in an SPV by claimants, to be pursued together.

Assignability of Causes of Action – A Divergence between the Federal and State Jurisdictions

A brief history

As a general proposition, a purported assignment of a cause of action that savours of maintenance will be void. A bare right of litigation, for example a right to recover damages in tort, has traditionally been considered not to be assignable either at law or in equity. 2 The cases have sometimes drawn a distinction between a so-called “personal right to litigate” as against an “impersonal right” in the nature of a proprietary right. 3 However, the distinction between so-called “personal rights” and “impersonal rights” is often elusive.

Historically, the courts have been reluctant to condone assignments of causes of action generally. Parker J in Glegg v. Bromley 4 observed:

“Equity on the grounds of public policy did not give validity to the assignment of what is in the cases referred to as a bare right of action, and this was so whether the bare rights were legal or equitable. I have looked at a good many authorities on that point, and I am satisfied that the real reason why equity did not allow the assignment of a bare right of action, whether legal or equitable, was on the grounds that it savoured of or was likely to lead to maintenance.”

The trial was heard by Fullagar J in the High Court. His Honour held that if there had been a tortious taking of the wool by the Commonwealth, the growers’ rights of action in tort against the Commonwealth could not be assigned at law or in equity to Mr Poulton. However, his Honour’s conclusions in that regard were obiter , given that his Honour found that the relevant regulations were valid and thus there had been no tort committed.

An appeal to the Full Court constituted by Williams, Webb and Kitto JJ was dismissed. At page 602, the Full Court said:

“. . . If it were true that the Commonwealth were guilty of conversion of the [growers’] wool, it would be the [growers] alone who could elect to waive the tort and take the proceeds of sale. This would be so, both because there was not in fact any purported assignment to the plaintiff of the right of action for the tort, and because, according to well established principle, the right was incapable of assignment either at law or in equity . . . ”.

Modern developments

In 1981, the House of Lords in Trendtex Trading Corporation v. Credit Suisse 6 liberalised the hitherto relatively strict rules against assignment of causes of action. Roskill LJ delivered the leading judgment. His Honour re-stated that it is a fundamental principle of English law that one cannot assign a bare right to litigate. However, if the assignment is of a property right or interest, or if the assignee has a genuine commercial interest in taking the assignment and in enforcing it for his or her own benefit, there is no reason why the agreement should be struck down as an assignment of a bare cause of action, or as savouring of maintenance. 7

Trendtex was a decision relating to the assignment of a contractual cause of action. In Giles v. Thompson, 8 the House of Lords extended the application of the Trendtex principle to tortious causes of action. The House of Lords determined that the question was whether there had been “wanton and officious intermeddling with the disputes of others in which the meddler has no interest whatever and where the assistance he renders to one or the other party is without justification or excuse.” 9

Australian cases post- Trendtex

There is a division in the cases that have been decided in Australia since the House of Lords decision in Trendtex as to whether the Trendtex approach is to be preferred over the stricter approach set out in the dicta of the four judges of the High Court in Poulton . Decisions that support the adoption of the Trendtex principle in Australia are largely decisions in the State Supreme Courts. 10 In contrast, a number of single judges of the Federal Court have declined to apply the Trendtex approach and, instead, have expressed the view that the dicta in Poulton ought to be followed until the High Court determines otherwise, 11 although two recent Federal Court decisions suggest that Court may also be moving towards adoption of the Trendtex approach. 12

The Federal Court decisions have generally reflected the view that it is not open to courts of first instance to depart from the considered statements of the High Court in Poulton and that, in consequence, bare rights of action in tort should be regarded as incapable of assignment, whether or not the tort is of a personal kind. This view is reflected in the observations of the authors of Equity: Doctrines and Remedies (4 th Ed, 2002) at [6-480] that “. . . it is not easy for courts below the High Court legitimately to depart from the considered dicta of three [sic] High Court justices”. In fact, the dicta in Poulton are those of four High Court justices when one includes Fullagar J, who delivered the first instance decision.

The High Court considered in some detail the history of maintenance and champerty. At para [73], Gummow, Hayne and Crennan JJ said:

“Assignment of a chose in action ‘made with the improper purpose of stirring up litigation’ would raise questions of maintenance and champerty. But the mere assignment of the proceeds of litigation would not. If the assignment stipulated that the assignee should participate in the litigation, the assignment was lawful only ‘if he have some legal interest (independent of that acquired by the assignment itself) in the property in dispute; but that where his interest is generated only by the assignment itself, such a stipulation would be improper’”. 14

Commencing at para [79] of the joint judgment, the Court referred in detail to the decision in Trendtex , without apparent approval or disapproval of the approach of the House of Lords. Gleeson CJ concurred in the reasons of Gummow, Hayne and Crennan JJ on this public policy point. Their Honours concluded that the fact that Firmstones had sought out retailers with claims and had control of the litigation and that they hoped to profit from the litigation was not sufficient to warrant condemnation of the arrangements as being contrary to public policy or as leading to any abuse of process. 15 Callinan and Heydon JJ dissented on this point and found that the arrangements did constitute an abuse of process.

The Full Court of the Federal Court in Deloitte Touche Tohmatsu v. J P Morgan Portfolio Services Ltd, 16 found the issue, like that in Fostif , was whether a litigation funding agreement constituted an abuse of process. Once again, there was no assignment of any cause of action to the litigation funder. Tamberlin and Jacobson JJ (Rares J dissenting), held that it was not an abuse of process and that the litigation funder did have a genuine commercial interest in the enforcement of the claim. Both Fostif and Trendtex were cited in support. Rares J noted that it was common ground between the parties that the causes of action in question “ were not capable of assignment to [the litigation funder]”. 17

Of the exceptions to the more restrictive approach of the Federal Court to this question are two recent cases. The first was that of Finkelstein J in TS&B Retail Systems Pty Ltd v 3 Fold Resources Pty Ltd & Ors. 18 In obiter , his Honour said:

“In Australia there is a debate whether the Trendtex principle should be adopted. The cases for and against (the latter all being decisions of the Federal Court) are collected in Rickard Constructions Pty Ltd v. Rickard Hails Moretti Pty Ltd . . . It may be that the debate is now over for the High Court in Campbells Cash and Carry Pty Ltd v. Fostif Pty Ltd . . . seems to have approved Trendtex . . . In any event, my own view is that the logic of Lord Roskill’s view [in Trendtex] is inescapable. That is especially so when, as here, the cause of action is connected with, or relates to, rights or interests owned, or that will fall into the ownership, of the assignee”.

The second recent case in the Federal Court is Tosich v Tasman Investment Management Ltd 19 where Gyles J, having noted the divergence in the cases as to the application of Trendtex , expressed his view that the approach of the High Court in Fostif supported the reasoning of Finkelstein J in TS&B Retail.

However, Heerey J as recently as October 2007 expressed a contrary view that the decision of the High Court in Poulton retains its authority, and that Trendtex is not good law in Australia. 20 Although the decision of Heerey J was appealed, the appeal was determined without reference to this point. 21

Assignment of contractual causes of action

The issue that then arises is as to whether a right to sue for unliquidated damages for breach of contract is capable of assignment. Meagher, Gummow and Lehane give a somewhat abbreviated answer in the negative, 25 and refer to cases such as Torkington v. Magee 26 and County Hotel Co v. London and Northwestern Railways. 27 Likewise, Cheshire & Fifoot’s Law of Contract suggests that a bare right to litigate for a past breach of contract is generally not assignable, 28 although there is a suggestion that there may be exceptions to this proposition as set out in Trendtex .

If the Trendtex principle is applied, then bare rights to litigate for unliquidated damages for breach of contract may be assignable provided either:

(a) they are annexed to a right of property; or

(b) the assignee has a genuine and substantial, or genuine commercial, interest in the enforcement of the cause of action.

Poulton dealt with the assignability of tortious causes of action. There is no High Court authority directly on the issue as to whether contractual causes of action may be assigned. The position so far as contractual causes of action were concerned was summarised by McDougall J in Rickard Constructions v. Rickard Hails Moretti Pty Ltd, 29 in the following terms:

“In relation to contractual causes of action, I find the distinction between liquidated and unliquidated claims difficult to follow. I have already noted that a debt is assignable even if it is overdue. As is pointed out in Meagher, Gummow and Lehane at 281 [6-480], where the debt is overdue, ‘there has been a breach of the contract to pay and . . . in fact, all that is assigned is the right to sue to recover the debt. The case of an overdue debt merely points up the problem inherent in the distinctions drawn in this breach [sic] of the law: for what is a debt but a right to sue to recover a sum certain? In what other sense is a debt to be regarded as property?’ I do not think that a rule based on public policy which encourages illogical distinctions of this sort should be applied unless there is no alternative. I do not regard the obiter statements in Poulton, limited as they are to an assignment of bare causes of action in tort, as providing a compelling reason to accept such illogical distinctions and their consequences”.

Accordingly, his Honour found that, in principle, an assignment of a cause of action in contract to recover unliquidated damages should be accepted where the assignee has a sufficient interest to support the assignment.

Assignment of causes of action in tort

A right to sue in tort is never itself property: it is a bare right of action. 30 The position of the assignability of causes of action in tort (at least non-personal causes of action) remains somewhat in a state of flux. Notwithstanding the High Court’s liberalisation of the law concerning maintenance and champerty in Fostif , the High Court has not expressly overruled the earlier strong dicta of four judges of the Court in Poulton . However, there is a sense that the march of the law is generally heading away from the strict approach exemplified by Poulton and towards a more general acceptance of the approach adopted by the House of Lords in Trendtex .

Nevertheless, the position of the majority of the Federal Court cases is exemplified generally by the approach Rares J in Boston Commercial Services Pty Ltd v. G E Capital Finance Australasia Pty Ltd 31 where it was said:

“New Boston argued that I should not follow the decision of the High Court in Poulton . . . which denied that a right of action in tort was assignable at all. It was suggested that this was the old view of the law. New Boston argued that I should follow what was said by Debelle J in South Australian Management Corp v. Sheahan . . . namely that the decision could be explained as relating to an assignment of a claim in tort where the assignee had no genuine commercial interest. However, in Garcia v. National Australia Bank Ltd (1998) 194 CLR 395 . . . at [17] Gaudron, McHugh, Gummow and Hayne JJ made it clear that the doctrine of precedent in Australia binds me to follow the decisions of the High Court unless and until that court decides that the time is right for a change in the law. I propose to do that. There is no basis to read down the considered judgment of Williams, Webb and Kitto JJ in Poulton . . . that a right of action in tort is incapable of assignment at law or in equity. I am of opinion that Debelle J was wrong not to have applied this binding authority”.

This approach seems to have been generally reflected in the Federal Court decisions (with the exception of the decisions of Finkelstein J in T S & B Retail Systems Pty Ltd 32 and Gyles J in Tosich v Tasman Investment Management Ltd 33 ). However, the almost universal approach of the State Supreme Courts has been to apply the Trendtex doctrine and to conclude that a cause of action in tort may be assigned (at least not a personal cause of action) provided that the assignee has the necessary interest in the litigation. 34

There remains some question as to whether causes of action for personal torts (such as damages for personal injury, defamation or false imprisonment) may ever be capable of being assigned. 35

Assignment of causes of action in equity

A bare right to sue in equity has traditionally been considered not able to be assigned. 36 However, one must question the appropriateness of maintaining a distinction between equitable causes of action and contractual or tortious claims. Indeed, it may be that the courts are moving towards a position that even equitable causes of action may be assigned provided that the assignee has the necessary interest in the outcome of the litigation.

Nevertheless, this matter has not been the subject of much judicial consideration in recent times.

Assignability of statutory causes of action

Whether a statutory cause of action is assignable will turn on the terms of the statute. To take but one example, there has been frequent litigation concerning the assignability of causes of action under sections 82 or 87 of the Trade Practices Act 1974. It is well established that causes of action for recovery of damages under either of those sections are not capable of assignment. 37 A cause of action under the corresponding provisions of the Fair Trading Act of the States is also not able to be assigned. 38

The necessary interest to support an assignment

It is clear that, even if Trendtex is good law in Australia, any assignee must have more than a mere personal interest in profiting from the proceedings. Cohen J in Monk v. Australia & New Zealand Banking Group Ltd 39 said:

“In my opinion [the interest claimed by the plaintiff] is not a genuine commercial interest in the way that the phrase has been used in the judgments. Examples may be given from the facts in the various cases concerned. For instance it was held that there was such an interest where the assignee was already a substantial creditor of the assignor with a right to enforce the debt (Trendtex, re Timothy’s) or where the assignee was the sole shareholder who was a guarantor of the overdraft of the assignor (re Daley) or where the assignee was a debenture holder with an interest in protecting the value of its security (First City Corporation)”.

Lindgren J in National Mutual Property Services (Australia) Pty Ltd v. Citibank Savings Limited 40 said:

“. . . The genuine commercial interest referred to in Trendtex is not a nebulous notion of the general commercial advantage of the assignee but something more specific and limited. In particular, it does not embrace an interest arising from an arrangement voluntarily entered into by the assignee of which the impugned assignment is an essential part, like the arrangement in the present case. Rather, the expression refers to a commercial interest which exists already or by reason of other matters, and which receives ancillary support from the assignment”.

These reasons were approved by Heerey J in Salfinger v. Nuigini Mining (Australia)Pty Ltd. 41

Mere personal interest of the assignee will therefore be insufficient. General commercial advantage will also be an insufficient ground to found an assignment. The assignee must have some commercial interest which the assignment may in some way protect.

The issue of the assignability of causes of action is an area of the law that has been in a state of some flux for many years. Notwithstanding this, it is somewhat surprising that there is little direct High Court or intermediate Appellate Court authority on the issues that have been explored in this paper.

There has been a clear divergence between the general approach of the Federal Court (preferring to adopt the approach in Poulton and eschewing the Trendtex approach) and that of the State Supreme Courts which have instead embraced the Trendtex position. There is a suggestion in some of the most recent Federal Court cases that that jurisdiction may be moving towards embracing Trendtex as good law, although this is certainly not a uniform phenomenon.

The effect of the divergence is that particular care should be taken when determining which court to proceed in if reliance is to be placed upon an assignment of causes of action, whether in contract, tort, or equitable causes of action. The Federal Court has shown a much more marked reluctance to uphold assignments of causes of action generally.

The inconsistencies between the various single court decisions will ultimately have to be resolved by a decision of the High Court. Given the decision in Fostif , where a rather more liberal view of the law of maintenance and champerty was expressed in the majority decision, one might expect that the Trendtex approach will ultimately prevail. However, until the High Court has given that pronouncement, practitioners should be alive to the differing approaches by the courts in this complex area of the law.

Matthew Brady

The writer acknowledges the assistance obtained from the research of Mr G Gibson QC and Mr D O’Brien of counsel in the preparation of this paper – however all errors are the writer’s alone.
See, Cheshire & Fifoot’s Law of Contract, 9 th ed, 2008, para [8.7].
See, T S & B Retail Systems Pty Ltd v. 3 Fold Resources Pty Ltd & Ors (2007) 158 FCR 444 at 465.
[1912] 2 KB 474 at 489-490.
[1953] 89 CLR 540.
[1982] AC 679.
At 696 – 697; 703.
[1994] 1 AC 142.
At p 164 per Mustill LJ, with whom the other members of the House agreed.
See, Re Timothy’s Pty Ltd and The Companies Act [1981] 2 NSWLR 706; Monk v. Australia & New Zealand Banking Group Ltd (1994) 34 NSWLR 148; South Australian Management Corporation v. Shehan (1995) 16 ACSR 45 (Debelle J); Beatty v. Brashs Pty Ltd [1998] 2 VR 201 (Smith J); Singleton v. Freehill Hollingdale & Page [2000] SASC 278 (Olsson J); Vangale Pty Ltd (In Liquidation) v. Kumagai Gumi Co Ltd [2002] QSC 137 (Mullins J); Rickard Constructions Pty Ltd v. Rickard Hails Moretti Pty Ltd (2005) 220 ALR 267 (McDougall J); Scholle Industries Pty Ltd v AEP Industries (NZ) Ltd [2007] SASC 322 (Withers J). In New Zealand see First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 (Gault J). McMurdo J in BHP Coal Pty Ltd v O & K Orenstein & Koppel AG [2008] QSC 141 at [76] and Beech J in Corporate Systems Publishing v Lingard (No 4) [2008] WASC 21 at [53] — [58] noted the diverge in the authorities but did not express a preference.
See, Park v. Allied Mortgage Corporation Ltd (1993) ATPR (Digest) 46-105 (Davies J); All State Life Insurance Co v. Australia & New Zealand Banking Group Ltd (FCA, Beaumont J, No G381 of 1994, 7 November 1994, unreported, BC 9400129); National Mutual Property Services (Aust) Pty Ltd v. Citibank Savings Ltd (1995) 132 ALR 514 (Lindgren J); Chapman v. Luminis (No 4) (2001) 123 FCR 62 (von Doussa J); Deloitte Touche Tohmatsu v. Cridlands Pty Ltd (2003) 134 FCR 474 (Selway J); Boston Commercial Services Pty Ltd v. G E Capital Finance Australasia Pty Ltd (2007) 236 ALR 720 (Rares J); Salfinger v. Nuigini Mining (Australia) Pty Ltd (No 3) [2007] FCA 1532 (Heerey J).
See TS&B Retail Systems Pty Ltd v 3-Fold Resources (2007) 229 ALR; Tosich v Tasman Investment Management [2008] FCA 377
(2006) 229 CLR 386
Footnotes omitted.
See, [88].
(2007) 158 FCR 417.
At para [134].
[2007] FCA 151.
[2008] FCA 377 at [29]-[33].
Salfinger v. Nuigini Mining (Australia) Pty Ltd (No 3) [2007] FCA 1532 at [119].
[2008] FCAFC 103
See Comfort v. Betts [1891] 1 QB 737; Fitzroy v. Cave (1905) 2 KB 364; County Hotel and Wine Co v. London & Northwestern Railway Co [1918] 2 KB 251; Re Daley; Ex parte: National Australia Bank Ltd (1992) 37 FCR 390 at 394-5.
Torkington v. Magee [1902] 2 KB 427.
Rickard Constructions v. Rickard Hails Moretti Pty Ltd (supra) at 281; Camdex International Ltd v. Bank of Zambia [1998] 2 QB 22; Re Kenneth Wright Distributors Pty Ltd (In Liquidation); W J Vine Pty Ltd v. Hall [1973] VR 161.
See, para [6-480] at p 282.
Supra .
At para [8.7].
(Supra) at [54].
Prosser v. Edmonds (1835) 160 ER 196.
(2007) 236 ALR 720 at [73].
Supra
See Supreme Court cases referred to earlier.
See, Trendtex (supra), at 702; South Australian Management Corp v. Shehan (1995) 16 ACSR 45 at 57-58; Monk v. Australia & New Zealand Banking Group (1994) 34 NSWLR 148 at 151-153.
Prosser v. Edmonds (1835) 160 ER 196; Glegg v. Bromley [1912] 3 KB 474 at 489-490.
See, Park v. Allied Mortgage Corporation Ltd (1993) ATPR (Digest) 46-105 at 53,467; Allstate Life Insurance Co v. Australia & New Zealand Banking Group Ltd [1994] FCA 814 at [18]; Pritchard v. Racecage Pty Ltd (1997) 72 FCR 203 at 218; Chapman v. Luminis (No 4) (2001) 123 FCR 62 at [204] – [207]; Boston Commercial Services Pty Ltd v. G E Capital Finance Australasia Pty Ltd (supra) at [50] – [52]; Salfinger v. Nuigini Mining (Australia) Pty Ltd (No 3) (supra) at [110].
See, Chapman v. Luminis Pty Ltd (supra).
Supra , at 153.
Supra , at 540.
Supra , at [121] – [122].

Search Menu
Browse content in Arts and Humanities
Browse content in Archaeology
Anglo-Saxon and Medieval Archaeology
Archaeological Methodology and Techniques
Archaeology by Region
Archaeology of Religion
Archaeology of Trade and Exchange
Biblical Archaeology
Contemporary and Public Archaeology
Environmental Archaeology
Historical Archaeology
History and Theory of Archaeology
Industrial Archaeology
Landscape Archaeology
Mortuary Archaeology
Prehistoric Archaeology
Underwater Archaeology
Urban Archaeology
Zooarchaeology
Browse content in Architecture
Architectural Structure and Design
History of Architecture
Residential and Domestic Buildings
Theory of Architecture
Browse content in Art
Art Subjects and Themes
History of Art
Industrial and Commercial Art
Theory of Art
Biographical Studies
Byzantine Studies
Browse content in Classical Studies
Classical History
Classical Philosophy
Classical Mythology
Classical Literature
Classical Reception
Classical Art and Architecture
Classical Oratory and Rhetoric
Greek and Roman Papyrology
Greek and Roman Epigraphy
Greek and Roman Law
Greek and Roman Archaeology
Late Antiquity
Religion in the Ancient World
Digital Humanities
Browse content in History
Colonialism and Imperialism
Diplomatic History
Environmental History
Genealogy, Heraldry, Names, and Honours
Genocide and Ethnic Cleansing
Historical Geography
History by Period
History of Emotions
History of Agriculture
History of Education
History of Gender and Sexuality
Industrial History
Intellectual History
International History
Labour History
Legal and Constitutional History
Local and Family History
Maritime History
Military History
National Liberation and Post-Colonialism
Oral History
Political History
Public History
Regional and National History
Revolutions and Rebellions
Slavery and Abolition of Slavery
Social and Cultural History
Theory, Methods, and Historiography
Urban History
World History
Browse content in Language Teaching and Learning
Language Learning (Specific Skills)
Language Teaching Theory and Methods
Browse content in Linguistics
Applied Linguistics
Cognitive Linguistics
Computational Linguistics
Forensic Linguistics
Grammar, Syntax and Morphology
Historical and Diachronic Linguistics
History of English
Language Evolution
Language Reference
Language Acquisition
Language Variation
Language Families
Lexicography
Linguistic Anthropology
Linguistic Theories
Linguistic Typology
Phonetics and Phonology
Psycholinguistics
Sociolinguistics
Translation and Interpretation
Writing Systems
Browse content in Literature
Bibliography
Children's Literature Studies
Literary Studies (Romanticism)
Literary Studies (American)
Literary Studies (Asian)
Literary Studies (European)
Literary Studies (Eco-criticism)
Literary Studies (Modernism)
Literary Studies - World
Literary Studies (1500 to 1800)
Literary Studies (19th Century)
Literary Studies (20th Century onwards)
Literary Studies (African American Literature)
Literary Studies (British and Irish)
Literary Studies (Early and Medieval)
Literary Studies (Fiction, Novelists, and Prose Writers)
Literary Studies (Gender Studies)
Literary Studies (Graphic Novels)
Literary Studies (History of the Book)
Literary Studies (Plays and Playwrights)
Literary Studies (Poetry and Poets)
Literary Studies (Postcolonial Literature)
Literary Studies (Queer Studies)
Literary Studies (Science Fiction)
Literary Studies (Travel Literature)
Literary Studies (War Literature)
Literary Studies (Women's Writing)
Literary Theory and Cultural Studies
Mythology and Folklore
Shakespeare Studies and Criticism
Browse content in Media Studies
Browse content in Music
Applied Music
Dance and Music
Ethics in Music
Ethnomusicology
Gender and Sexuality in Music
Medicine and Music
Music Cultures
Music and Media
Music and Religion
Music and Culture
Music Education and Pedagogy
Music Theory and Analysis
Musical Scores, Lyrics, and Libretti
Musical Structures, Styles, and Techniques
Musicology and Music History
Performance Practice and Studies
Race and Ethnicity in Music
Sound Studies
Browse content in Performing Arts
Browse content in Philosophy
Aesthetics and Philosophy of Art
Epistemology
Feminist Philosophy
History of Western Philosophy
Metaphysics
Moral Philosophy
Non-Western Philosophy
Philosophy of Language
Philosophy of Mind
Philosophy of Perception
Philosophy of Science
Philosophy of Action
Philosophy of Law
Philosophy of Religion
Philosophy of Mathematics and Logic
Practical Ethics
Social and Political Philosophy
Browse content in Religion
Biblical Studies
Christianity
East Asian Religions
History of Religion
Judaism and Jewish Studies
Qumran Studies
Religion and Education
Religion and Health
Religion and Politics
Religion and Science
Religion and Law
Religion and Art, Literature, and Music
Religious Studies
Browse content in Society and Culture
Cookery, Food, and Drink
Cultural Studies
Customs and Traditions
Ethical Issues and Debates
Hobbies, Games, Arts and Crafts
Lifestyle, Home, and Garden
Natural world, Country Life, and Pets
Popular Beliefs and Controversial Knowledge
Sports and Outdoor Recreation
Technology and Society
Travel and Holiday
Visual Culture
Browse content in Law
Arbitration
Browse content in Company and Commercial Law
Commercial Law
Company Law
Browse content in Comparative Law
Systems of Law
Competition Law
Browse content in Constitutional and Administrative Law
Government Powers
Judicial Review
Local Government Law
Military and Defence Law
Parliamentary and Legislative Practice
Construction Law
Contract Law
Browse content in Criminal Law
Criminal Procedure
Criminal Evidence Law
Sentencing and Punishment
Employment and Labour Law
Environment and Energy Law
Browse content in Financial Law
Banking Law
Insolvency Law
History of Law
Human Rights and Immigration
Intellectual Property Law
Browse content in International Law
Private International Law and Conflict of Laws
Public International Law
IT and Communications Law
Jurisprudence and Philosophy of Law
Law and Politics
Law and Society
Browse content in Legal System and Practice
Courts and Procedure
Legal Skills and Practice
Primary Sources of Law
Regulation of Legal Profession
Medical and Healthcare Law
Browse content in Policing
Criminal Investigation and Detection
Police and Security Services
Police Procedure and Law
Police Regional Planning
Browse content in Property Law
Personal Property Law
Study and Revision
Terrorism and National Security Law
Browse content in Trusts Law
Wills and Probate or Succession
Browse content in Medicine and Health
Browse content in Allied Health Professions
Arts Therapies
Clinical Science
Dietetics and Nutrition
Occupational Therapy
Operating Department Practice
Physiotherapy
Radiography
Speech and Language Therapy
Browse content in Anaesthetics
General Anaesthesia
Neuroanaesthesia
Clinical Neuroscience
Browse content in Clinical Medicine
Acute Medicine
Cardiovascular Medicine
Clinical Genetics
Clinical Pharmacology and Therapeutics
Dermatology
Endocrinology and Diabetes
Gastroenterology
Genito-urinary Medicine
Geriatric Medicine
Infectious Diseases
Medical Toxicology
Medical Oncology
Pain Medicine
Palliative Medicine
Rehabilitation Medicine
Respiratory Medicine and Pulmonology
Rheumatology
Sleep Medicine
Sports and Exercise Medicine
Community Medical Services
Critical Care
Emergency Medicine
Forensic Medicine
Haematology
History of Medicine
Browse content in Medical Skills
Clinical Skills
Communication Skills
Nursing Skills
Surgical Skills
Browse content in Medical Dentistry
Oral and Maxillofacial Surgery
Paediatric Dentistry
Restorative Dentistry and Orthodontics
Surgical Dentistry
Medical Ethics
Medical Statistics and Methodology
Browse content in Neurology
Clinical Neurophysiology
Neuropathology
Nursing Studies
Browse content in Obstetrics and Gynaecology
Gynaecology
Occupational Medicine
Ophthalmology
Otolaryngology (ENT)
Browse content in Paediatrics
Neonatology
Browse content in Pathology
Chemical Pathology
Clinical Cytogenetics and Molecular Genetics
Histopathology
Medical Microbiology and Virology
Patient Education and Information
Browse content in Pharmacology
Psychopharmacology
Browse content in Popular Health
Caring for Others
Complementary and Alternative Medicine
Self-help and Personal Development
Browse content in Preclinical Medicine
Cell Biology
Molecular Biology and Genetics
Reproduction, Growth and Development
Primary Care
Professional Development in Medicine
Browse content in Psychiatry
Addiction Medicine
Child and Adolescent Psychiatry
Forensic Psychiatry
Learning Disabilities
Old Age Psychiatry
Psychotherapy
Browse content in Public Health and Epidemiology
Epidemiology
Public Health
Browse content in Radiology
Clinical Radiology
Interventional Radiology
Nuclear Medicine
Radiation Oncology
Reproductive Medicine
Browse content in Surgery
Cardiothoracic Surgery
Gastro-intestinal and Colorectal Surgery
General Surgery
Neurosurgery
Paediatric Surgery
Peri-operative Care
Plastic and Reconstructive Surgery
Surgical Oncology
Transplant Surgery
Trauma and Orthopaedic Surgery
Vascular Surgery
Browse content in Science and Mathematics
Browse content in Biological Sciences
Aquatic Biology
Biochemistry
Bioinformatics and Computational Biology
Developmental Biology
Ecology and Conservation
Evolutionary Biology
Genetics and Genomics
Microbiology
Molecular and Cell Biology
Natural History
Plant Sciences and Forestry
Research Methods in Life Sciences
Structural Biology
Systems Biology
Zoology and Animal Sciences
Browse content in Chemistry
Analytical Chemistry
Computational Chemistry
Crystallography
Environmental Chemistry
Industrial Chemistry
Inorganic Chemistry
Materials Chemistry
Medicinal Chemistry
Mineralogy and Gems
Organic Chemistry
Physical Chemistry
Polymer Chemistry
Study and Communication Skills in Chemistry
Theoretical Chemistry
Browse content in Computer Science
Artificial Intelligence
Computer Architecture and Logic Design
Game Studies
Human-Computer Interaction
Mathematical Theory of Computation
Programming Languages
Software Engineering
Systems Analysis and Design
Virtual Reality
Browse content in Computing
Business Applications
Computer Security
Computer Games
Computer Networking and Communications
Digital Lifestyle
Graphical and Digital Media Applications
Operating Systems
Browse content in Earth Sciences and Geography
Atmospheric Sciences
Environmental Geography
Geology and the Lithosphere
Maps and Map-making
Meteorology and Climatology
Oceanography and Hydrology
Palaeontology
Physical Geography and Topography
Regional Geography
Soil Science
Urban Geography
Browse content in Engineering and Technology
Agriculture and Farming
Biological Engineering
Civil Engineering, Surveying, and Building
Electronics and Communications Engineering
Energy Technology
Engineering (General)
Environmental Science, Engineering, and Technology
History of Engineering and Technology
Mechanical Engineering and Materials
Technology of Industrial Chemistry
Transport Technology and Trades
Browse content in Environmental Science
Applied Ecology (Environmental Science)
Conservation of the Environment (Environmental Science)
Environmental Sustainability
Environmentalist Thought and Ideology (Environmental Science)
Management of Land and Natural Resources (Environmental Science)
Natural Disasters (Environmental Science)
Nuclear Issues (Environmental Science)
Pollution and Threats to the Environment (Environmental Science)
Social Impact of Environmental Issues (Environmental Science)
History of Science and Technology
Browse content in Materials Science
Ceramics and Glasses
Composite Materials
Metals, Alloying, and Corrosion
Nanotechnology
Browse content in Mathematics
Applied Mathematics
Biomathematics and Statistics
History of Mathematics
Mathematical Education
Mathematical Finance
Mathematical Analysis
Numerical and Computational Mathematics
Probability and Statistics
Pure Mathematics
Browse content in Neuroscience
Cognition and Behavioural Neuroscience
Development of the Nervous System
Disorders of the Nervous System
History of Neuroscience
Invertebrate Neurobiology
Molecular and Cellular Systems
Neuroendocrinology and Autonomic Nervous System
Neuroscientific Techniques
Sensory and Motor Systems
Browse content in Physics
Astronomy and Astrophysics
Atomic, Molecular, and Optical Physics
Biological and Medical Physics
Classical Mechanics
Computational Physics
Condensed Matter Physics
Electromagnetism, Optics, and Acoustics
History of Physics
Mathematical and Statistical Physics
Measurement Science
Nuclear Physics
Particles and Fields
Plasma Physics
Quantum Physics
Relativity and Gravitation
Semiconductor and Mesoscopic Physics
Browse content in Psychology
Affective Sciences
Clinical Psychology
Cognitive Psychology
Cognitive Neuroscience
Criminal and Forensic Psychology
Developmental Psychology
Educational Psychology
Evolutionary Psychology
Health Psychology
History and Systems in Psychology
Music Psychology
Neuropsychology
Organizational Psychology
Psychological Assessment and Testing
Psychology of Human-Technology Interaction
Psychology Professional Development and Training
Research Methods in Psychology
Social Psychology
Browse content in Social Sciences
Browse content in Anthropology
Anthropology of Religion
Human Evolution
Medical Anthropology
Physical Anthropology
Regional Anthropology
Social and Cultural Anthropology
Theory and Practice of Anthropology
Browse content in Business and Management
Business Ethics
Business Strategy
Business History
Business and Technology
Business and Government
Business and the Environment
Comparative Management
Corporate Governance
Corporate Social Responsibility
Entrepreneurship
Health Management
Human Resource Management
Industrial and Employment Relations
Industry Studies
Information and Communication Technologies
International Business
Knowledge Management
Management and Management Techniques
Operations Management
Organizational Theory and Behaviour
Pensions and Pension Management
Public and Nonprofit Management
Strategic Management
Supply Chain Management
Browse content in Criminology and Criminal Justice
Criminal Justice
Criminology
Forms of Crime
International and Comparative Criminology
Youth Violence and Juvenile Justice
Development Studies
Browse content in Economics
Agricultural, Environmental, and Natural Resource Economics
Asian Economics
Behavioural Finance
Behavioural Economics and Neuroeconomics
Econometrics and Mathematical Economics
Economic History
Economic Systems
Economic Methodology
Economic Development and Growth
Financial Markets
Financial Institutions and Services
General Economics and Teaching
Health, Education, and Welfare
History of Economic Thought
International Economics
Labour and Demographic Economics
Law and Economics
Macroeconomics and Monetary Economics
Microeconomics
Public Economics
Urban, Rural, and Regional Economics
Welfare Economics
Browse content in Education
Adult Education and Continuous Learning
Care and Counselling of Students
Early Childhood and Elementary Education
Educational Equipment and Technology
Educational Strategies and Policy
Higher and Further Education
Organization and Management of Education
Philosophy and Theory of Education
Schools Studies
Secondary Education
Teaching of a Specific Subject
Teaching of Specific Groups and Special Educational Needs
Teaching Skills and Techniques
Browse content in Environment
Applied Ecology (Social Science)
Climate Change
Conservation of the Environment (Social Science)
Environmentalist Thought and Ideology (Social Science)
Natural Disasters (Environment)
Social Impact of Environmental Issues (Social Science)
Browse content in Human Geography
Cultural Geography
Economic Geography
Political Geography
Browse content in Interdisciplinary Studies
Communication Studies
Museums, Libraries, and Information Sciences
Browse content in Politics
African Politics
Asian Politics
Chinese Politics
Comparative Politics
Conflict Politics
Elections and Electoral Studies
Environmental Politics
European Union
Foreign Policy
Gender and Politics
Human Rights and Politics
Indian Politics
International Relations
International Organization (Politics)
International Political Economy
Irish Politics
Latin American Politics
Middle Eastern Politics
Political Behaviour
Political Economy
Political Institutions
Political Methodology
Political Communication
Political Philosophy
Political Sociology
Political Theory
Politics and Law
Public Policy
Public Administration
Quantitative Political Methodology
Regional Political Studies
Russian Politics
Security Studies
State and Local Government
UK Politics
US Politics
Browse content in Regional and Area Studies
African Studies
Asian Studies
East Asian Studies
Japanese Studies
Latin American Studies
Middle Eastern Studies
Native American Studies
Scottish Studies
Browse content in Research and Information
Research Methods
Browse content in Social Work
Addictions and Substance Misuse
Adoption and Fostering
Care of the Elderly
Child and Adolescent Social Work
Couple and Family Social Work
Developmental and Physical Disabilities Social Work
Direct Practice and Clinical Social Work
Emergency Services
Human Behaviour and the Social Environment
International and Global Issues in Social Work
Mental and Behavioural Health
Social Justice and Human Rights
Social Policy and Advocacy
Social Work and Crime and Justice
Social Work Macro Practice
Social Work Practice Settings
Social Work Research and Evidence-based Practice
Welfare and Benefit Systems
Browse content in Sociology
Childhood Studies
Community Development
Comparative and Historical Sociology
Economic Sociology
Gender and Sexuality
Gerontology and Ageing
Health, Illness, and Medicine
Marriage and the Family
Migration Studies
Occupations, Professions, and Work
Organizations
Population and Demography
Race and Ethnicity
Social Theory
Social Movements and Social Change
Social Research and Statistics
Social Stratification, Inequality, and Mobility
Sociology of Religion
Sociology of Education
Sport and Leisure
Urban and Rural Studies
Browse content in Warfare and Defence
Defence Strategy, Planning, and Research
Land Forces and Warfare
Military Administration
Military Life and Institutions
Naval Forces and Warfare
Other Warfare and Defence Issues
Peace Studies and Conflict Resolution
Weapons and Equipment

The Modern Doctrines of Champerty and Maintenance

< Previous chapter
Next chapter >

9 Assigning ‘Bare’ Causes of Action: Proving a Genuine Commercial Interest

Published: July 2023
Cite Icon Cite
Permissions Icon Permissions

The requirement of proving that the assignee had a genuine commercial interest in the subject matter of the transaction applies particularly to where the assignor has sought to assign a cause of action, or a ‘bare right to litigate’. This approach flows from the analysis undertaken in Trendtex Trading Corp v Credit Suisse and has operated as a considerable brake upon the validity of assignments . It means that, where the assignment is challenged, the court must hunt for the ‘something more’, some genuine commercial interest over and above the assignee’s right in acquiring the cause of action and the profits that will accompany that assignment. Case law analysis reveals that several relationships between assignor and assignee have pointed to a genuine commercial interest on the assignee’s part; these are considered in this chapter. Various circumstances which show a close identity of interest between the assignor and the assignee have also proven to be important in upholding the validity of assignments. Both the categories of relationships and the identities of interest sufficient to justify an assignment are not closed but are constantly evolving. The chapter also considers the other side of the coin, viz , those matters which tend to denounce any genuine commercial interest that renders the assignment champertous. Before that, however, those things which are not assignable causes of action (causes of action that have not accrued at all, or causes of action that have been compromised) are discussed, for those are not champertous so much as ineffective.

Signed in as

Institutional accounts.

Google Scholar Indexing
GoogleCrawler [DO NOT DELETE]

Personal account

Sign in with email/username & password
Get email alerts
Save searches
Purchase content
Activate your purchase/trial code
Add your ORCID iD

Institutional access

Sign in with username/password
Recommend to your librarian
Institutional account management
Get help with access

Access to content on Oxford Academic is often provided through institutional subscriptions and purchases. If you are a member of an institution with an active account, you may be able to access content in one of the following ways:

IP based access

Typically, access is provided across an institutional network to a range of IP addresses. This authentication occurs automatically, and it is not possible to sign out of an IP authenticated account.

Sign in through your institution

Choose this option to get remote access when outside your institution. Shibboleth/Open Athens technology is used to provide single sign-on between your institutionâ€™s website and Oxford Academic.

Click Sign in through your institution.
Select your institution from the list provided, which will take you to your institution's website to sign in.
When on the institution site, please use the credentials provided by your institution. Do not use an Oxford Academic personal account.
Following successful sign in, you will be returned to Oxford Academic.

If your institution is not listed or you cannot sign in to your institutionâ€™s website, please contact your librarian or administrator.

Enter your library card number to sign in. If you cannot sign in, please contact your librarian.

Society Members

Society member access to a journal is achieved in one of the following ways:

Sign in through society site

Many societies offer single sign-on between the society website and Oxford Academic. If you see â€˜Sign in through society siteâ€™ in the sign in pane within a journal:

Click Sign in through society site.
When on the society site, please use the credentials provided by that society. Do not use an Oxford Academic personal account.

If you do not have a society account or have forgotten your username or password, please contact your society.

Sign in using a personal account

Some societies use Oxford Academic personal accounts to provide access to their members. See below.

A personal account can be used to get email alerts, save searches, purchase content, and activate subscriptions.

Some societies use Oxford Academic personal accounts to provide access to their members.

Viewing your signed in accounts

Click the account icon in the top right to:

View your signed in personal account and access account management features.
View the institutional accounts that are providing access.

Signed in but can't access content

Oxford Academic is home to a wide variety of products. The institutional subscription may not cover the content that you are trying to access. If you believe you should have access to that content, please contact your librarian.

For librarians and administrators, your personal account also provides access to institutional account management. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more.

Our books are available by subscription or purchase to libraries and institutions.

About Oxford Academic
Publish journals with us
University press partners
What we publish
New features
Open access
Rights and permissions
Accessibility
Advertising
Media enquiries
Oxford University Press
Oxford Languages
University of Oxford

Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide

Cookie settings
Cookie policy
Privacy policy
Legal notice

This Feature Is Available To Subscribers Only

This PDF is available to Subscribers Only

For full access to this pdf, sign in to an existing account, or purchase an annual subscription.

IMAGES

Assignment Cause of Action Pending Litigation Form
Cause of action
Connecticut Assignment Cause of Action Pending Litigation
Cause of Action Form
LAW602- Tutorial Question 2
1. Cause of Action

VIDEO

Lecture 4: IEA, 1872, Section 1, 2, 3, 4, 5, 6 discussed by Prof. Adv. Nusrat Shah
Cause of action। #law #advocate #viral #motivation #videos #court #reels #case #court #legaladvice
ACCA F4 1 SESSION 1 ENGLISH LEGAL SYSTEM
Cause and Effect: Causation in History- Dr Veenus Jain
Missing in Action 2 The Beginning
Negligence causation summary

COMMENTS

Assignment of a claim or cause of action
Resource ID 1-522-7861. This note explains how a claim or cause of action may be assigned, whether by legal assignment or equitable assignment. It sets out the situations in which an assignment may be effected, including assignment in the context of an administration, liquidation or bankruptcy. The note provides guidance on drafting an ...
PDF ASSIGNMENT OF CLAIMS
moreover, may be seen as one where English law has taken a more restrictive line on assignment than American law, civil law systems and uniform law instruments (See UCC Article 9-408; H Kötz and A Flessner, European Contract Law (1997), Vol 1, pp. 273-75; Unidroit Principles of International and Commercial Contracts (2004)). Given the general
Assignment of a claim or cause of action
Maintained • England, Wales. This note explains how a claim or cause of action may be assigned, whether by legal assignment or equitable assignment. It sets out the situations in which an assignment may be effected, including assignment in the context of an administration, liquidation or bankruptcy. The note provides guidance on drafting an ...
How do I assign a claim or cause of action?
We define a cause of action as '...a factual situation the existence of which entitles one person to obtain from the court a remedy against another person' ( Letang v Cooper) and a claim as the formal assertion of a cause of action by a claimant against a defendant. In the authorities, the phrases 'assigning a cause of action' and ...
In what circumstances can you assign a claim or cause of action
We define a cause of action as '...a factual situation the existence of which entitles one person to obtain from the court a remedy against another person' ( Letang v Cooper) and a claim as the formal assertion of a cause of action by a claimant against a defendant. In the authorities, the phrases 'assigning a cause of action' and 'assigning a ...
Champerty and Assignment of Causes of Action
An assignment of a chose of action, such as a cause of action in litigation, is not enforceable under Irish law if it "savours of" maintenance or champerty. "Savours of", as explained by Murray J, means that the assignment offends the same public policy as maintenance and champerty. Champerty means an agreement to fund or support ...
Rights of Recovery for Assignees of Claims
As a general rule, a cause of action (also known as a "bare right to litigate") may not be assigned under English law. Such assignment is deemed to violate the rules regarding champerty and ...
Cause of action
Negligence. Defamation. 4. Precedent cause of action. 5. Equity-related. 1. Contractual causes of action: A violation of the terms of the contract by one of the binding parties due to the failure to perform the obligations which further resulted in loss or injury to the plaintiff.
Assignment of Claims: A Comparative Analysis of the United ...
The assignment of claims. Put simply, the assignment of a claim involves the transfer of a cause of action from the company or its external administrator to a third party (commonly a litigation ...
Why It Matters (Chapter 15)
Summary. This chapter sets out a number of practical implications from the analysis in the preceding chapters. It explains how, on the model of equitable and statutory assignment set out in this book, anti-assignment clauses may have a limited effect even in connection with equitable assignments. It also explains how the 'rule' in Dearle v.
Champerty and Assignment of Causes of Action
An assignment of a chose of action, such as a cause of action in litigation, is not enforceable under Irish law if it "savours of" maintenance or champerty.
22. Assignment of choses in action
This chapter deals with the general law of assignment of choses in action. Beginning with the historically based difference between equitable and statutory assignment, it then explains what 'chose in action' and 'assignment' are before discussing the requirement that there be an existing and assignable chose in action or right as well as the requirement that a person who holds an ...
Oxford Legal Research Library: The Law of Assignment
Abstract. This book is the leading text on the law relating to intangible property or choses in action. Its clear and approachable structure covers all forms of intangible property (debts, rights under contract, securities, intellectual property, leases, rights/causes of action, and equitable rights), considering the nature of intangible ...
Claim assigned to SPV not struck out as champertous
The defendant applied to strike out the claim as an abuse of the process on the grounds that it was champertous. It submitted that this was a bare assignment of a cause of action and was, or was on the brink of, litigation trafficking. The defendant also argued that to permit the claim to continue would be to allow Mr Wilson, as the subject of ...
Assignability of Causes of Action
A brief history. As a general proposition, a purported assignment of a cause of action that savours of maintenance will be void. A bare right of litigation, for example a right to recover damages in tort, has traditionally been considered not to be assignable either at law or in equity. 2 The cases have sometimes drawn a distinction between a so-called "personal right to litigate" as ...
Assigning 'Bare' Causes of Action: Proving a Genuine Commercial
It means that, where the assignment is challenged, the court must hunt for the 'something more', some genuine commercial interest over and above the assignee's right in acquiring the cause of action and the profits that will accompany that assignment. Case law analysis reveals that several relationships between assignor and assignee have ...
A CALL FOR HARMONIZATION ACROSS COMMON
Choses in action are a creature of the English common law and equity. They have been inherited across the common law world, from the United States and Canada to Australia, and they remain relevant in England. Yet, because of their relative obscurity and dynamic history, the rules regarding choses in action now vary
Assignments
The assignment. English law distinguishes two types of assignment: legal and equitable. To assign the legal interest in something means that you have assigned simply the title to that property and ...
Assignment of Causes of Action Sample Clauses
Sample 1. Assignment of Causes of Action. At the Closing, the Company, with the written concurrence of Parent, shall assign, in their entirety, to the Shareholders any and all claims for breach of contract or other rights, claims, and causes of action that may have accrued to the benefit of the Company or the Shareholders (i) against Citizens ...
Express Versus Automatic Assignment of Section 10(b) Causes of Action
A. Assignability of Causes of Action at Common Law. "An assignment in law is a transfer or setting over of property, or some right or interest therein." ... (1927) (allowing assignment of cause of action would encourage litigiousness and violate rule against champerty and maintenance), and Atlantic & N.C.R.R. v. At-SECTION 10(b) law). OF ...
PDF Literally Taking the Case
a chose in action for breach of contract." 5 Anglo-American law traditionally defines the term "chose in action" broadly. English legal historian Sir William Searle Holdsworth explained "the category of choses in action is in English law enormously wide, and that it can only be defined in very general terms."6
(Assignment) of cause of action
English term or phrase: (Assignment) of cause of action 1. ASSIGNMENT OF CAUSE OF ACTION: Mr.C hereby assigns to Mr.D. his right, title and interest in any cause or action he/she may have against the company pursuant to the the company Policy, the state' common law and under Florida Statute §624.155, as a result of the companys refusal to provide Mr.C.

Assignment of a claim or cause of action

About Practical Law

Assignment of a claim or cause of action | Practical Law

Assignment of a claim or cause of action

Champerty and Assignment of Causes of Action

McCool Controls and Engineering Ltd v Honeywell Control Systems Limited [2024] IESC 5.

Assignment of a bare cause of action

Recommended Insights

Our Privacy Statement & Cookie Policy

Last thoughts for the legal researcher

Join our community

The past, present, and future of legal research with generative AI

Westlaw Precision | Harness the power of generative AI

CoCounsel: The GenAI assistant for legal professionals

Build a career without boundaries

Related posts

Legal glossary

Today’s lawyers and mental health: Mental Health Awareness Month

Want to improve your law firm’s quality of work?

Generative AI in legal work – what’s fact and what’s fiction?

Sanctions list and KYC: ‘How to overcome the challenges‘

Recently viewed (0)

The Law of Assignment (3rd Edition)

Bibliographic Information

Litigation notes

Share this:

Leave a Reply Cancel reply

Assignability of Causes of Action – A Divergence between the Federal and State Jurisdictions

9 Assigning ‘Bare’ Causes of Action: Proving a Genuine Commercial Interest

Signed in as

Personal account

Institutional access

IP based access

Sign in through your institution

Society Members

Sign in through society site

Sign in using a personal account

Viewing your signed in accounts

Signed in but can't access content

This Feature Is Available To Subscribers Only

IMAGES

VIDEO

COMMENTS