An Uneasy Case of Multiple Tracing Claims in English Law

This paper looks at issues arising in relation to multiple claims contingent on tracing and following. Where a person grants a security interest in an asset in favour of a lender and subsequently sells the asset to a third party without the secured creditor’s consent, a question arises whether the secured creditor may be able to claim both the sale proceeds and the original asset. This paper explores how English law deals with this problem. Unlike in a number of jurisdictions which implemented Personal Property Security Acts, no statute in English law provides an answer to this question. In addition, the judicial guidance is sparse. An existing view seems to be that the secured creditor cannot claim both the traceable proceeds and the original asset because the remedies are inconsistent although the basis for this inconsistency has not been explored. This paper fills the gap.