Background
Maltby Services Limited lent about £11 million to John Graham Rhoden under a deed dated 3 April 2019. Mr Rhoden died in March 2023. Maltby assigned its rights under the loan to TD Capital Limited (TDC) in November 2024, and TDC later assigned them to MSV Estates Limited in December 2025.
Before the latter assignment, Hickman Construction Law (HCL) acted for TDC in correspondence with the estate concerning the debt and contemplated proceedings. HCL’s directors, Andrew Hickman and Anthony Page, were solicitors. At the time of the assignment to MSV, they were also MSV directors and held minority shareholdings; they signed the assignment deed for MSV. The estate’s personal representatives applied to strike out the claim or obtain summary judgment, contending that the assignment breached the rule preventing solicitors from acquiring their client’s cause of action while conducting the matter.
The Court’s Holding
Master Sullivan held that the solicitor rule applies before proceedings are issued where solicitors are acting in pre-action steps toward litigation. The conflict of interest addressed by the rule does not depend on a claim form having been issued: HCL was acting for TDC when the assignment was made, during pre-action correspondence concerning a potential claim against the estate.
The court further held that using MSV as the assignee did not avoid the rule. Mr Hickman and Mr Page were directors of MSV, had at least approximately 11% shareholdings each, and executed the deed for MSV while acting as TDC’s solicitors. That created the conflict the rule is intended to prevent. The December 2025 assignment was therefore invalid, leaving MSV with no real prospect of establishing standing. The court would list a further hearing to address consequences and MSV’s unresolved application to add TDC as a party.
Key Takeaways
- The solicitor rule can invalidate an assignment made before proceedings are formally issued.
- Pre-action work undertaken in contemplation of a claim can engage the rule.
- Solicitors cannot sidestep the rule by taking the assignment through a company they direct and in which they hold an interest.
Why It Matters
The decision treats the solicitor rule as a substantive protection against conflicts arising while solicitors advise clients about prospective litigation, rather than a rule triggered only by issued proceedings. It also confirms that corporate form and minority ownership will not necessarily insulate an assignment from scrutiny where the acting solicitors have a personal and managerial interest in the assignee.