Claims to Traceable Proceeds

This book explains the rational basis of the law of tracing, and why and when English law makes claims to traceable proceeds available. Tracing enables a claimant to make a proprietary claim to an asset acquired by a defendant from a third party, on the grounds that that asset represents the ‘traceable proceeds’ of another asset that belonged to the claimant. The book argues that the rules that allow this connection between assets to be established—the rules of tracing—aim to strike a balance between preserving the autonomy of defendants in making decisions to acquire or retain assets and preventing them from exploiting their power to deprive claimants of rights by such decisions. This account of tracing explains its historical development and its application in modern contexts. It also explains the availability of claims to traceable proceeds: an exploitation of power, of the kind that tracing is concerned with, can take place only in the context of a prior relationship of ‘control of assets’, whereby one person has a legal power to vary the legal rights of another with respect to some assignable right, owes that other a duty in respect of the exercise of that power, and is able to validly exercise the legal power in breach of that duty. These relationships, which exist both at law and equity, overlap with the categories of ‘fiduciary duties’ or ‘property rights’, but share additional and distinctive characteristics that justify the availability of tracing.