Advantages
Tracing claims have two key advantages to claimants.
- Firstly, they are a proprietary remedy (as opposed to a simple personal claim) which means that, if the defendant is insolvent, then the claimant can take title to the goods, rather than just receiving an award of damages which may be of little value against a defendant in bankruptcy. However, in some countries tracing may also lead to the award of a personal remedy where for some reason a proprietary remedy is not appropriate (i.e. it would upset pari passu distribution upon insolvency, where it would not be appropriate to do so).
- Secondly, as demonstrated in AG for Hong Kong v Reid, where the wrongdoer has made a profit, it allows the claimant to recover a greater amount than their original loss. The House of Lords applied the same reasoning in Foskett v McKeown AC 102 where the claimants sought to enforce their rights against a third party.
Read more about this topic: Tracing (law)
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