Assignments of Claims or Judgment Debts
Author: Chris Millar
A judgment debt can be assigned if it is in writing, unconditional, doesn’t purport to be by way of charge only, and relates to the whole of the debt. Notice of the assignment must be given to the judgment debtor. For enforcement of the Judgment, an Application will have to be made to the Court for the assignor to replace the assignee as judgment creditor.
In a MVL the judgment can be assigned to the shareholders, provided the company’s articles permit a distribution in specie, and the assignment complies with the company law requirements in relation to dividends in specie. Refer also to HMRC Extra Statutory Concession C16.
With regard to the assignment of a claim then the procedure follows that for the assignment of a judgment debt. We have been asked whether an administrator or liquidator needs to consider if a claim has merit before they can make an assignment pursuant to Section 246ZD? The short answer is yes; an administrator or liquidator could be open to criticism for assigning a claim that he is aware has no reasonable prospect of success. However, he would not have to do very much investigation to assess whether the claim clears this bar.
For further information contact Chris Millar on 01306 502225 or c.millar@downslaw.co.uk.
