Assignment of Bare Rights to Litigate: Assessing the Modern Doctrinal Position

Abstract

It is well settled that an assignment of a bare right to litigate (or bare right of action) is prima facie invalid unless the assignee could establish a ‘genuine commercial interest’ in taking the transfer. Although the ‘genuine commercial interest’ test has frequently been applied in Australian cases, little ink has been spilled on elucidating its precise meaning. This paper begins with a critical examination of the mischief behind judicial opposition to assignments of bare rights of action, then proceeds to investigate the meaning of ‘genuine commercial interest’ with particular attention to two contentious aspects, viz.: the need for the assignee to possess a preexisting interest arising separately from the assignment, and the relevance of profit making by the assignee. This paper argues that judicial inquiry should not focus on the nature of the assignee’s interest but rather on the effect of the assignment with reference to the mischief that maintenance and champerty were intended to redress; accordingly, an assignment should not be struck down merely because the assignee lacks a pre-existing interest or makes a profit from the assignment.