Snapshot: can you assign a 'chose in action' in BVI law?

A chose in action is an intangible property right – a right to possession of something that can only be obtained or enforced through legal action.  

Common examples include receivables or the right to recover money or a debt – and these rights frequently arise in financing, commercial contracts and cross‑border corporate structures involving BVI companies.  

This snapshot explains how a chose in action can be assigned under BVI law, the limitations on creating a legal assignment and the practical consequences for lenders, investors and transaction parties. It also highlights why novation is often preferred in BVI transactions when transferring contractual rights. 

Assignment of a chose in action under BVI law 

BVI statute does not currently provide for the legal assignment of a chose in action governed by BVI law and does not have an equivalent of Section 136 of the English Law of Property Act, 1925. As a consequence, any assignment of a chose in action will take effect as an equitable assignment only, regardless of whether notice is given by the assignor to the counterparty. 

What this means for assignees 

Where a chose in action governed by BVI law has been assigned in equity, the assignee cannot bring a claim in its own name alone. If an assignee wishes to sue under the assigned contract, it must either sue with the assignor as a co-claimant or by adjoining the assignor as a defendant to any such claim. 

Why novation is common in the BVI 

As legal assignment is not available under BVI law, it is common in the BVI for a chose in action to be transferred by way of novation rather than by way of assignment. Novation replaces the original contract with a new one, transferring all rights and obligations to the incoming party. 

This avoids the need to involve the assignor in future enforcement and provides a clean and legally effective transfer mechanism. 

How Ogier can help 

For tailored advice on assigning a chose in action or novating contractual rights under BVI law, please contact our BVI Banking and Finance team. We have BVI qualified finance lawyers located across our global network of 13 offices, including on the ground experts in the Caribbean, Hong Kong, London and the Channel Islands.  

For more information on this topic please contact our BVI Banking and Finance team.  

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice