This chapter applies to the FSCS.

The FSCS may make any payment of compensation to a claimant in respect of any11protected 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 newCOMP 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.

The FSCS's powers in this section may be used:

1. (1)

   separately or in any combination as an alternative and in substitution for the powers and processes elsewhere in this sourcebook; and/or2

2. (2)

   [deleted]

3. (3)

   in relation to all or any part of a protected claim or class of protected claim made with respect to the relevant person2 (or, where applicable, a successor).2

4. (4)

   [deleted]2

The FSCS may determine that the exercise of any power in this section is subject to such incidental, consequential or supplemental conditions as the FSCS considers appropriate.

1. (1)

   Any power conferred on the FSCS to make determinations under this section is exercisable in writing.

2. (2)

   An instrument by which the FSCS makes the determination must specify the provision under which it is made, the date and time from which it takes effect and the relevant person2(or, where applicable, a successor) 2and protected claims, parts of protected claims and/or classes of protected claims in respect of which it applies.

3. (3)

   The FSCS must take appropriate steps to publish the determination as soon as possible after it is made. Such publication must be accompanied by a statement explaining the effect of COMP 7.4.2 R.

4. (4)

   Failure to comply with any requirement in this rule does not affect the validity of the determination.

5. (5)

   A determination by the FSCS under this section may be amended, remade or revoked at any time and subject to the same conditions.

1. (1)

   The production of a copy of a determination purporting to be made by the FSCS under this section:

   1. (a)

      on which is endorsed a certificate, signed by a member of the FSCS's staff authorised by it for that purpose; and

   2. (b)

      which contains the required statements;

   is evidence (or in Scotland sufficient evidence) of the facts stated in the certificate.

2. (2)

   The required statements are:

   1. (a)

      that the determination was made by the FSCS; and

   2. (b)

      that the copy is a true copy of the determination.

3. (3)

   A certificate purporting to be signed as mentioned in (1) is to be taken to have been properly signed unless the contrary is shown.

4. (4)

   A person who wishes in any legal proceedings to rely on a determination may require the FSCS to endorse a copy of the determination with a certificate of the kind mentioned in (1).

Other provisions in this sourcebook and FEES 6 are modified to the extent necessary to give full effect to the powers provided for in this section.

Other than as expressly provided for, nothing in this section is to be taken as limiting or modifying the rights or obligations of or powers conferred on the FSCS elsewhere in this sourcebook or in FEES 6.

The FSCS may determine that:

1. (1)

   the payment of compensation by the FSCS; or5

   2
2. (2)

   a payment by the FSCS in connection with securing continuity of funeral plan contracts;5

   shall have all or any of the following effects:

   2
3. (3)

   the FSCS shall immediately and automatically be subrogated, subject to such conditions as the FSCS determines are appropriate, to all or any part (as determined by the FSCS) of the rights and claims in the United Kingdom and elsewhere of the claimant against the relevant person2(or, where applicable, a successor) 2and/or any third party (whether such rights are legal, equitable or of any other nature whatsoever and in whatever capacity the relevant person2(or, where applicable, a successor) 2or third party is acting) in respect of or arising out of the claim in respect of which the payment of or on account of compensation was made;

4. (4)

   the FSCS may claim and take legal or any other proceedings or steps in the United Kingdom or elsewhere to enforce such rights in its own name or in the name of, and on behalf of, the claimant,2 or in both names against the relevant person2(or, where applicable, a successor) 2and/or any third party;

5. (5)

   the subrogated rights and claims conferred on the FSCS shall be rights of recovery and claims against the relevant person2(or, where applicable, a successor) 2and/or any third party which are equivalent (including as to amount and priority and whether or not the relevant person2(or, where applicable, a successor) 2is insolvent) to and do2 not exceed the rights and claims that the claimant would have had; and/or

6. (6)

   such rights and/or obligations (as determined by the FSCS) as between the relevant person2(or, where applicable, a successor) 2and the claimant arising out of the protected claim in respect of which the payment was made shall be transferred to, and subsist between, another authorised person2(or, where a successor is not an authorised person, an authorised person) 2with an appropriate permission and the claimant provided that the authorised person has consented (but the transferred rights and/or obligations shall be treated as existing between the relevant person2(or where applicable, a successor) 2and the FSCS to the extent of any subrogation, transfer or assignment for the purposes of (3) to (5) and COMP 7.3.9 R).

The FSCS may alternatively or additionally make the actions in COMP 7.3.8R5conditional on the claimant assigning or transferring the whole or any part of all such rights as they 5 may have against the relevant person2(or, where applicable, a successor)2 and/or any third party 2on such terms as the FSCS determines are appropriate.

1. (1)

   The FSCS may determine that:

   1. (a)

      if the claimant does not assign or transfer his rights under COMP 7.3.9 R;

   2. (b)

      if it is impractical to obtain such an assignment or transfer; and/or

   3. (c)

      if it is otherwise necessary or desirable in conjunction with the exercise of the FSCS's powers under COMP 7.3.8 R or COMP 7.3.9 R3;

   that claimant shall be treated as having irrevocably and unconditionally appointed the chairman of the FSCS for the time being to be his attorney and agent and on his behalf and in his name or otherwise to do such things and execute such deeds and documents as may be required under such laws of the United Kingdom4 or any other state or law-country to create or give effect to such assignment or transfer or otherwise give full effect to those powers.

2. (2)

   The execution of any deed or document under (1) shall be as effective as if made in writing by the claimant or by his agent lawfully authorised in writing or by will.

1If the FSCS takes assignment or transfer of rights from the claimant or is otherwise subrogated to the rights of the claimant, it must pursue all and only such recoveries as it considers are likely to be both reasonably possible and cost effective to pursue.

If the FSCS decides not to pursue such recoveries and a claimant wishes to pursue those recoveries himself and so requests in writing, the FSCS must comply with that request and assign the rights back to the claimant.

1If the FSCS makes recoveries in relation to a claim3, it may deduct from any recoveries paid over to the claimant under COMP 7.6.2 R part or all of its reasonable costs of recovery and distribution (if any).

Unless compensation was paid under COMP 9.2.3 R3, if a claimant assigns or transfers their 5 rights to the FSCS or a claimant's rights and claims are otherwise subrogated to the FSCS and the FSCS subsequently makes recoveries through those rights or claims, those recoveries must be paid to the claimant:

1. (1)

   to the extent that the amount recovered exceeds the amount of compensation (excluding interest paid under COMP 11.2.7 R) received by the claimant in relation to the protected claim; or

2. (2)

   in circumstances where the amount recovered does not exceed the amount of compensation paid, to the extent that failure to pay any sums recovered to the claimant would leave a claimant who had promptly accepted an offer of compensation or whose rights and claims had been subrogated to the FSCS at a disadvantage relative to a claimant who had delayed accepting an offer of compensation or whose claims had not been subrogated (see COMP 7.6.4 R); or5

3. (3)

   5where the FSCS has secured continuity of a funeral plan contract, to the extent that the amount recovered exceeds the cost of securing that continuity as estimated on a reasonable basis by the FSCS.

For the purpose of COMP 7.6.2 R compensation received by eligible claimants in relation to contracts of insurance written at Lloyd’s3 may include payments made from the Central Fund.

The3FSCS must endeavour to ensure that a claimant will not suffer disadvantage arising solely from his prompt acceptance of the FSCS's offer of compensation or from the subrogation of his rights and claims to the FSCS compared with what might have been the position had he delayed his acceptance or had his claims not been subrogated.

1This section applies:

1. (1)

   in connection with any trust arrangement or contract of insurance that relates to funeral plan contracts entered into or carried out by a relevant person or successor who is in default; and

2. (2)

   irrespective of whether the trust arrangement, contract of insurance or related rights or obligations came into existence before or after the date on which this section comes into force.

The following provisions apply in relation to this section making any necessary changes:

1. (1)

   COMP 7.3.2R and COMP 7.3.3R (General);

2. (2)

   COMP 7.3.4R (Determinations by the FSCS);

3. (3)

   COMP 7.3.5R (Verification of determinations); and

4. (4)

   COMP 7.3.6R (Effect of this section on other provisions in this sourcebook etc).

If the FSCS:

1. (1)

   has paid, or has decided to make a payment of, compensation; or

2. (2)

   has made a payment, or has decided to make a payment, in connection with securing continuity of funeral plan contracts,

   the FSCS may make a determination with all or any of the following effects as set out in the determination:

3. (3)

   to vary existing rights or obligations under or in respect of the trust arrangement or contract of insurance; such variation may, in particular, provide for the right to be transferred, or obligation to be owed, to a different person and, in either case, to subsist between that different person and the trustees or insurer respectively provided that the different person (if not the eligible claimant) has consented;

4. (4)

   to create new rights under the trust arrangement or contract of insurance in favour of, or obligations by the trustees or insurer to, the FSCS; those new rights or obligations may, in particular, override existing rights or obligations;

5. (5)

   to enable the FSCS to claim and take legal or any other proceedings or steps in the United Kingdom or elsewhere to enforce any such rights held by or obligations owed to the FSCS in its own name against the trustees, the insurer and/or any third party.

Any right of recovery conferred on the FSCS by a determination under this section may not exceed the amount paid or (in the opinion of the FSCS) to be paid out by the FSCS in connection with the funeral plan contracts concerned.

Any right of recovery conferred on the FSCS by a determination under this section is subject to the prior payment of those sums that the FSCS reasonably considers should be prioritised. Such sums may include: the legitimate fees and expenses of the trustee, insurer, actuary and relevant person, tax payable in respect of the trust arrangement or contract of insurance and existing funeral costs.

A payment by the trustees pursuant to a determination will operate to discharge the trustees from all other obligations in relation to that part of the trust assets reflecting the payment made.

If the FSCS has a right of recovery under this section, it must pursue all and only such recoveries as it considers are likely to be both reasonably possible and cost effective to pursue.