The directors being sued claimed that the assignment was unlawful, as it was champertous (i.e. the wrong of getting an uninterested party involved in a lawsuit for money).

London Wall Claims Ltd argued that although the agreement may be champtertous, under the Insolvency Act 1986 Schedule 4, para 6, the liquidator had the power to sell any of the company's property, and that must include the fruits of a wrongful trading action under section 214.

It arises solely when a company goes into liquidation and it would be champertous and against public policy to assign the fruits of such an action.

Public policy demanded that it be regarded as champertous and Schedule 4 did not authorise the agreement as being necessary for the winding up of the company's affairs.

Peter Gibson LJ noted that: "As a matter of policy we think that there is much to be said for allowing a liquidator to sell the fruits of an action for the reasons given ... provided that it does not give the purchaser the right to influence the course of, or to interfere with the liquidator's conduct of, the proceedings.