A party had purported to sue having taken an assignment of a dishonoured letter of credit, in the context of the abolition of maintenance and champerty as crimes and torts in the 1967 Act.
Held: The assignment was struck down as champertous, creating: ‘the possibility, and indeed the likelihood, of a profit being made, [by a third party with no genuine commercial interest in the transaction] out of the cause of action . . [which] manifestly ‘savours of champerty’, since it involves trafficking in litigation – a type of transaction which, under English law, is contrary to public policy.’ Such activity is unacceptable to the court which sees its role as the administration of justice and not the provision of a market for speculators in litigation.
A bare cause of action may be assigned if the assignee has a genuine commercial interest in it. Although the purported assignment of a cause of action to a third party with no genuine and substantial interest in the success of the litigation was void for champerty, if the potential assignee had such an interest, the assignment of the bare right action would not offend the law against maintenance and champerty. The concept of an unassignable bare right of action was confined by holding that a chose of action was assignable if the assignee had a general commercial interest in it, even if it were not incidental or subsidiary to a right of property.
Lord Roskill (with the concurrence of the other Law Lords) said: ‘It is clear, when one looks at the cases upon maintenance in this century and indeed toward the end of the last, that the courts have adopted an infinitely more liberal attitude towards the supporting of litigation by a third party than had previously been the case.’
and ‘in English law an assignee who can show that he has a genuine commercial interest in enforcement of the claim of another and to that extent takes a assignment of that claim to himself is entitled to enforce the assignment unless by the terms of the assignment he falls foul of our law of champerty, which, as has often been said, is a branch of our law of maintenance . . The court should look at the totality of the transaction. If the assignment is of a property right or interest and the cause of action is ancillary to that property right or interest, or, if the assignee has a genuine commercial interest in taking the assignment and in enforcing it for his own benefit, I see no reason why the assignment should be struck down as an assignment of a bare cause of action or as savouring of maintenance.’
Judges:
Lord Roskill, Lord Wilberforce
Citations:
[1982] AC 679, [1981] 3 WLR 766, [1981] 3 All ER 520
Statutes:
Jurisdiction:
England and Wales
Citing:
Appeal from – Trendtex Trading Corporation v Credit Suisse CA 1980
A stay was sought against a bank which had financed a contract and was supporting litigation arising out of it.
Held: Although the liability in crime and tort had been abolished, Section 14(2) of the 1967 Act preserved the law as to the cases . .
Cited by:
Cited – Giles v Thompson, Devlin v Baslington (Conjoined Appeals) HL 1-Jun-1993
Car hire companies who pursued actions in motorists’ names to recover the costs of hiring a replacement vehicle after an accident, from negligent drivers, were not acting in a champertous and unlawful manner. Lord Mustill said: ‘there exists in . .
Cited – Carlisle and Cumbria United Independent Supporters’ Society Ltd v CUFC Holdings Ltd and Others CA 5-May-2010
The claimant supporters’ club had brought an action to prevent a substantial shareholder in the first defendant company from selling off land owned by the club for no consideration. The parties had reached a settlement after a protracted claim . .
Cited – Simpson v Norfolk and Norwich University Hospital NHS Trust CA 12-Oct-2011
The court was asked whether it was possible to assign as a chose in action a cause of action in tort for damages for personal injury, and if so under what circumstances it was possible.
Held: The appeal was dismissed. The claimant did not have . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Legal Professions, Torts – Other
Updated: 01 May 2022; Ref: scu.272901