[3] English law uses chose to refer to a bundle of rights, traditionally relating to property which may be utilised in certain circumstances.
[10] In certain circumstances, the chose in action creates a separate proprietary right, independent from the property in which it may reference.
The consequence of this is that most financial instruments are now choses in action held by the beneficial party against the broker holding assets in a securities depository such as CREST, where investors own interlocking interests in trusts, rather than the actual issued note.
Currently, claims which are treated as being "locked up" inside the paper include pledges, negotiable instruments, and custodial bailment.
Before the Judicature Acts, a legal chose in action was not assignable, i.e., the assignee could not sue at law in his own name.
To this rule there were two exceptions:[17] Before this point, the courts of equity could not enforce a legal chose in action and vice versa.
[17] This was later updated by the Law of Property Act 1925 s. 136 which outlined that for an assignment to be valid:[18] These requirements are significant because without notice, it prevents the assignee from suing on the debt.
Relation, or rather, capacity of control and apparent dominion is required as the foundation of the alleged chose in possession.
Possession and possession-based techniques are of little relevance to modern financial markets, but still play a substantial role in commercial and retail lending.
However, a Chose in possession is particularly important in view of insolvency as the possessory right of the asset allows for enforcement of security irrespective of the solvency of the company.
Where an asset is (1) unique and cannot be replicated, such as shares in a company amounting to board control; (2) a proprietary interest wherein account of profits of the original owed item; or (3) procedural remedies; exist, a chose in possession will be crucial in enforcement.