Private Law Theory

ABSTRACT
Subrogation and marshalling are two controversial sources of property rights. They are both said to allow one party to stand into another’s place and exercise the latter’s property rights. This is strange. Why should the law allow one person to take the benefit of another’s property rights? Are there any good reasons for subrogation and marshalling, or should they be abolished? Furthermore, subrogation and marshalling have a controversial relationship with each other. Sometimes, marshalling is treated as an example of subrogation or ‘akin to subrogation’. At other times, marshalling and subrogation are distinguished and analysed separately. So what is the relationship between subrogation and marshalling; is marshalling an example of subrogation or not?

To answer these questions, this chapter considers subrogation and marshalling separately, before considering their relationship. The central argument is that subrogation describes a particular form of rights, of which marshalling is an example. However, marshalling has a different justification to other instances of subrogation. Marshalling is justified by preventing a private party determining the distribution of assets on insolvency. By contrast, other instances of subrogation are justified by properly distributing the burden of a debt.

Gregson, Rory, Subrogation, Marshalling, and Property (August 10, 2023) in Natalie Mrockova, Aruna Nair and Luke Rostill (eds), Modern Studies in Property Law, Volume 12 (Hart Publishing 2023), https://www.bloomsbury.com/uk/modern-studies-in-property-law-volume-12-9781509963669/.