Assignment of a claim or cause of action

by Adam Deacock, Radcliffe Chambers

This Practice note explains how a claim or cause of action may be assigned. It examines the types of claims that can be assigned and the situations where an assignment may be desirable, such as in corporate reorganisations or insolvency. It outlines the requirements for effecting a valid legal assignment under section 136 of the Law of Property Act 1925 (LPA 1925) and distinguishes this from an equitable assignment. The note also explores the historic rules on maintenance and champerty, and the key exception where an assignee has a genuine commercial interest in the litigation. It considers the impact of contractual non-assignment clauses and the effect of the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015). It also addresses the assignment of claims within the context of insolvency, including the powers of office-holders under the Insolvency Act 1986 (IA 1986), and the practical implications for litigation costs and procedural steps following an assignment