When can you assign a claim for compensation? The stock answer to this question is that the point is settled by the decision in Trendtex Trading Corp v. Credit Suisse, under which the assignee must have a “genuine commercial interest” in taking the transfer. If he has not, the assignment is void against both the debtor and the assignor. This formulation looks at first sight convincing. Nevertheless, the object of this article is to suggest that it is actually rather unsatisfactory. Viewed closely, the “genuine commercial interest” criterion is unclear, does not make much sense, condemns some entirely justifiable transfers, and also leaves a number of important matters obscure. This article argues why this is the case, and suggests a possible alternative development.

When, under English law, can you assign a claim for compensation? Apart from the assignment of rights to sue under contracts containing a non-assignment clause, where special rules apply,1 the stock answer to this question is that the matter was settled in 1982 by the House of Lords’ decision in Trendtex Trading Corp v. Crédit Suisse .2 According to this the criterion of a valid assignment is whether the assignee has a “genuine commercial interest” in taking the transfer. If he has, the assignment is effective; if not, then it is void, as against both the debtor and the assignor. This formulation, frequently reiterated whenever the issue comes up,3 certainly sounds refreshingly businesslike and flexible, and has a sufficient air of common sense about it to suggest that there is little more that needs to be said. Nevertheless, the object of this article is to suggest that all is not as well as it seems. The “genuine commercial interest” criterion, I wish to suggest, actually makes rather little sense, is apt to condemn some entirely justifiable transfers, and also leaves a number of important matters unclear. Add to this a distinct impression that when judges

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