The High Court has ruled that an assignment of an approximately £11 million loan claim was invalid because of a conflict of interest involving solicitors who were advising the assignor while holding directorships and shareholdings in the company receiving the assignment.
What did the High Court decide?
In MSV Estates Limited v Leeds & Anor [2026] EWHC 2750 (KB), handed down on 27 October 2026, Master Sullivan considered an application by the defendants, Michael Leeds and Kristina Kicks, acting as personal representatives of the estate of John Graham Rhoden.
The defendants sought strike-out or summary judgment on the basis that the assignment of the loan claim to MSV Estates Limited was void under the solicitor rule. They argued that the solicitors involved in advising the previous creditor had acquired an interest in the claim through their roles at MSV.
The court accepted that the rule applied to the December 2025 assignment and held that it was invalid. Master Sullivan concluded that there was no real prospect of successfully arguing otherwise on the evidence before the court.
However, the court did not determine the ultimate procedural consequences for the entire dispute at that hearing. MSV’s separate application to add TD Capital Limited as a claimant remained outstanding and was to be considered at a further hearing.
How did the loan dispute arise?
The proceedings concerned a loan of approximately £11 million made by Maltby Services Limited to John Graham Rhoden in April 2019. The loan was recorded in a deed dated 3 April 2019 and was repayable in April 2039.
Following Mr Rhoden’s death in March 2023, the rights under the loan agreement passed through two assignments before reaching MSV Estates Limited.
- Maltby Services Limited enters into the loan agreement with Mr Rhoden.
- Mr Rhoden dies; the defendants act as personal representatives of his estate.
- Maltby assigns its rights under the deed of loan to TD Capital Limited.
- TD Capital assigns its rights to MSV Estates Limited while Andrew Hickman and Anthony Page are directors of MSV and are involved in advising TD Capital through Hickman Construction Law.
- Proceedings are issued.
- The defendants apply for strike-out or summary judgment challenging the assignment.
- The applications are listed for hearing.
- Master Sullivan hands down the approved judgment finding the assignment invalid.
At the time of the assignment, Hickman Construction Law had been corresponding on behalf of TD Capital in connection with the dispute and contemplated proceedings. Andrew Hickman and Anthony Page were directors of both the relevant legal practice and MSV. They also held minority shareholdings in MSV and signed the deed on its behalf.
What is the solicitor rule?
The solicitor rule is a longstanding common-law principle that prevents a solicitor conducting litigation from acquiring the client’s cause of action before judgment. It is concerned with the risk that a solicitor’s personal financial interest could conflict with the duty owed to the client.
Master Sullivan considered the Court of Appeal’s discussion in Farrar (Deceased) v Miller [2022] EWCA Civ 295, which distinguished the solicitor rule from related principles concerning the assignment of bare causes of action and the prohibition on champerty.
The historical authorities reflect a policy of protecting the integrity of the legal profession and preventing solicitors from obtaining an advantage in claims over which they have responsibility. The court focused on the potential conflict between the professional duty owed to a client and a personal interest in acquiring the client’s claim.
The central concern is the conflict of interest that can arise when a solicitor advising a client has a personal stake in acquiring that client’s claim.
Summary of the principle considered in the approved judgment.
Does the rule apply before proceedings begin?
One of the central issues was whether the solicitor rule applies only after formal court proceedings have been issued. MSV argued that the relevant legal practice had not conducted the issued litigation and that different solicitors had been instructed after the assignment.
The defendants argued that the rule was not confined to the period after a claim form had been issued. They relied on the historical authorities and on Commercial Law Practice Ltd v Atkinson Wheller Ltd, as well as the discussion of the rule in DLA Piper UK Ltd LLP v Henshaws Farming LLP [2025] EWHC 542 (Ch).
Master Sullivan accepted that the rule could apply before proceedings were issued where a solicitor was acting for a client in pre-action litigation in contemplation of a claim. The risk of conflict does not suddenly arise only when a claim form is filed. Pre-action correspondence can form part of the work undertaken in anticipation of litigation.
The judgment emphasised that the relevant question was whether the solicitor-client relationship and the work being undertaken created the conflict the rule is intended to prevent. The timing of the formal issue of proceedings was not decisive.
The court also considered whether earlier decisions by judges of coordinate jurisdiction prevented summary determination. It concluded that the cases could be distinguished on their facts and that there was no conflicting decision on the specific legal point that prevented it from deciding the issue.
Why did the company structure not avoid the rule?
MSV argued that an assignment to a corporate vehicle was not equivalent to an assignment directly to the solicitors who had advised TD Capital. It also relied on the fact that the solicitors held minority rather than majority shareholdings in MSV.
The defendants argued that the company structure did not remove the conflict. The same individuals were advising TD Capital through Hickman Construction Law while serving as directors and shareholders of MSV, the company receiving the claim. They had also executed the deed on behalf of MSV.
Master Sullivan accepted the defendants’ argument. Drawing an analogy with Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq 461, the court held that the involvement of a company did not neutralise the conflict arising from the actions and personal interests of the individuals acting for it.
The court considered that the directors’ shareholdings, their positions within MSV and their role in executing the assignment established the relevant conflict. The precise percentage of their shareholdings did not need to be resolved at trial because it would not alter the conclusion.
The judge therefore found that using a company as the assignee did not circumvent the solicitor rule. The December 2025 assignment was invalid.
What happens next?
The judgment determined the defendants’ application challenging the assignment. However, MSV had also applied to add TD Capital Limited as a claimant, and that application had not been heard when Master Sullivan delivered the decision.
The court indicated that a further hearing would be listed to determine the consequences of the judgment and the outstanding application. The parties were invited to seek to agree on the way forward in the meantime.
The decision is significant for solicitors and litigators involved in the acquisition or assignment of claims. It illustrates that the solicitor rule may apply during pre-action work and that transferring a claim through a company does not necessarily avoid a conflict where the relevant solicitors have a personal interest in the assignee.
Frequently asked questions
What was the dispute in MSV Estates Limited v Leeds?
The case concerned an approximately £11 million loan originally made by Maltby Services Limited to John Graham Rhoden. The defendants challenged the validity of the later assignment to MSV Estates Limited.
Why was the assignment held invalid?
The court found that the solicitor rule applied because individuals involved in advising the assignor through Hickman Construction Law were also directors and shareholders of MSV, the company receiving the claim. This created a conflict of interest that the rule is intended to prevent.
Does the solicitor rule apply before a claim form is issued?
According to Master Sullivan’s judgment, the rule can apply during pre-action work undertaken in contemplation of litigation. Formal issue of proceedings is not necessarily a prerequisite.
Can a solicitor avoid the rule by assigning a claim to a company?
Not on the facts considered in this case. The court held that the use of a corporate vehicle did not avoid the rule where the individuals involved had the relevant professional duties and personal interests in the company receiving the assignment.
Was the entire claim finally resolved?
The court found the December 2025 assignment invalid. However, MSV’s application to add TD Capital Limited as a claimant remained outstanding, and the court directed that the consequences of the judgment and that application be considered at a further hearing.
Which court delivered the judgment?
The High Court of Justice, King’s Bench Division, delivered the approved judgment through Master Sullivan on 27 October 2026.