COMP 7.2 How does the assignment of rights work?

The FSCS may make any payment of compensation to a claimant in respect of any11 protected claim or, where applicable, may make a payment to secure continuity of funeral plan contracts in accordance with COMP 3.3, 13 conditional on the claimant assigning the whole or any part of their 13 rights114 against11 any one or more of the 11the relevant person, 11any third party, 11or, where applicable, a successor,11 to the FSCS on such terms as the FSCS thinks fit.

If a claimant assigns the whole or any part of his rights against any person to the FSCS as a condition of payment, the effect of this is that any sum payable in relation to the rights so assigned will be payable to the FSCS and not the claimant.

1. (1)

   Before taking assignment of rights from the claimant under COMP 7.2.1 R, the FSCS must inform the claimant that if, after taking assignment of rights, the FSCS decides not to pursue recoveries using those rights it will, if the claimant so requests in writing, reassign the assigned rights to the claimant. The FSCS must comply with such a request in such circumstances (see COMP 7.4.2 R).10

2. (2)

   [deleted] [Editor's Note: The text of this sub-paragraph has been moved to new COMP 7.4.1 R.]10

   10
3. (3)

   [deleted]45

11Where the FSCS has paid compensation in respect of a claim, this has the effect that:

1. (1)

   11an assignment completed and signed electronically in a form prescribed by the FSCS will be deemed to satisfy the formalities for a valid legal assignment;

2. (2)

   11production of a hard copy of the electronically signed assignment form is conclusive evidence (or, in Scotland, sufficient evidence) that the formalities of a legal assignment have been complied with and that a legal assignment has occurred; and

3. (3)

   11an assignment completed electronically in the prescribed form is to be treated as having been made by writing under the hand of the assignor for the purposes of section 136 of the Law of Property Act 1925 and any other formal requirement.

1. (1)

   2For the purposes of compensation paid under COMP 3.2.4 R, FSCS may require any firm (including, but not limited to, the claimant firm) to assign to FSCS any rights the firm may have to claim against the relevant person in relation to the amount of the shortfall in client money arising out of the failure of the relevant person.

2. (2)

   A firm required by FSCS to assign its rights in (1), must assign those rights as requested, unless it has a reasonable excuse for not doing so.