ON APPEAL FROM CAMBRIDGE COUNTY COURT
(His Honour Judge Moloney Q.C.)
Strand, London, WC2A 2LL
B e f o r e :
(Vice-President of the Court of Appeal, Civil Division)
DAME JANET SMITH D.B.E.
LORD JUSTICE MOORE-BICK
| JENNIFER SIMPSON
(as assignee of Alan Catchpole)
|- and -
|NORFOLK & NORWICH UNIVERSITY HOSPITAL NHS TRUST
Mr. Jeremy Morgan Q.C. (instructed by Kennedys Law LLP) for the respondent
Hearing date : 23rd March 2011
Crown Copyright ©
Lord Justice Moore-Bick :
" . . . actions which relate to a bankrupt's personal reputation or body have not been considered to be property and therefore they do not vest in anybody other than the bankrupt. They relate solely to his body, mind and character and any damages recovered are compensation for damage to his body, mind and character as opposed to other causes of action which have been considered to be a right of property. Thus causes of action to recover damages for pain and suffering have been held not to vest in the trustee. "
He held that although there was only one cause of action the claim was of a hybrid nature, comprising both a right to compensation in respect of bodily injury and a right to compensation in respect of loss of earnings, and that it vested in the trustee, who would be obliged to hold any damages recovered in respect of pain and suffering and loss of amenity on trust for the bankrupt, since it remained his property.
"The vice, if any, of the agreement lies in the introduction of the third party. It appears from the face of the agreement not as an obligation, but as a contemplated possibility, that the cause of action against C.B.N. might be sold by Credit Suisse to a third party, for a sum of U.S. $800,000. This manifestly involved the possibility, and indeed the likelihood, of a profit being made, either by the third party or possibly also by Credit Suisse, out of the cause of action. In my opinion this manifestly "savours of champerty," since it involves trafficking in litigation - a type of transaction which, under English law, is contrary to public policy."
"Where the assignee has by the assignment acquired a property right and the cause of action was incidental to that right, the assignment was held effective. Ellis v. Torrington  1 K.B. 399 is an example of such a case. Scrutton L.J. stated, at pp. 412-413, that the assignee was not guilty of maintenance or champerty by reason of the assignment he took because he was buying not in order to obtain a cause of action but in order to protect the property which he had bought. But, my Lords, as I read the cases it was not necessary for the assignee always to show a property right to support his assignment. He could take an assignment to support and enlarge that which he had already acquired as, for example, an underwriter by subrogation: see Compania Colombiana de Seguros v. Pacific Steam Navigation Co.  1 Q.B. 101. My Lords, I am afraid that, with respect, I cannot agree with the learned Master of the Rolls  Q.B. 629, 657 when he said in the instant case that "The old saying that you cannot assign a 'bare right to litigate' is gone." I venture to think that that still remains a fundamental principle of our law. But it is today true to say that in English law an assignee who can show that he has a genuine commercial interest in the enforcement of the claim of another and to that extent takes an assignment of that claim to himself is entitled to enforce that assignment unless by the terms of that assignment he falls foul of our law of champerty . . . "
He held that the agreement under which the assignment was made savoured of champerty because it was a step towards the sale of a bare cause of action to a third party who had no genuine commercial interest in it in return for a division of the spoils.
" . . . the law on maintenance and champerty can best be kept in forward motion by looking to its origins as a principle of public policy designed to protect the purity of justice and the interests of vulnerable litigants. For this purpose the issue should not be broken down into steps. Rather, all the aspects of the transaction should be taken together for the purpose of considering the single question whether, in the terms expressed by Fletcher Moulton L.J. in the passage already quoted from in British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd.  1 K.B. 1006, 1014, there is 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."
" . . . directed against wanton and officious intermeddling with the disputes of others in which the (maintainer) has no interest whatsoever and where the assistance he renders to the one or the other party is without justification or excuse."
" . . . to enforce such laws as it deems necessary to control the use of property in accordance with the general interest . . . "
Interference with the enjoyment of property must be justifiable as being in the public interest, proportionate to the objective sought to be achieved and represent a fair balance between the interests of the community and the protection of the individual's rights: see Pressos v Belgium, paragraphs 35-44. However, states enjoy a margin of appreciation in determining where the public interest lies because it is recognised that they are best placed to assess the nature of the problem that needs to be addressed and the most suitable method of resolving it.
Dame Janet Smith D.B.E.:
Lord Justice Maurice Kay: