COMP 7.2 How does the assignment of rights work?

The FSCS:4

1. (1)

   must or if the FSCS is subrogated automatically to the claimant's rights may10 make any payment of compensation to a claimant, in respect of a protected deposit, conditional on the claimant, in so far as able to do so, assigning the whole of his rights; and4

2. (2)

   may make any payment of compensation to a claimant in respect of any other protected claim conditional on the claimant assigning the whole or any part of his rights;4

against the relevant person, or against any third party, or both, 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

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.