Legal Definitions - cessio actionum

Cessio Actionum is a legal concept, originating in Roman law, that describes the assignment of a legal right to sue. It occurs when a party who is entitled to bring a lawsuit (the original party) allows a third party to pursue that claim instead.

Specifically, under cessio actionum, the third party is permitted to:

• Bring a lawsuit or take legal action in the name of the original party who was initially entitled to sue.
• Retain any proceeds or damages recovered from that legal action.

This mechanism effectively transfers the right to pursue a specific legal claim and benefit from its outcome, without necessarily transferring the underlying obligation itself.

Examples:

• Debt Collection by a Specialized Agency: Imagine a small graphic design firm, "Creative Canvas," is owed a significant amount of money by a difficult client for completed work. Creative Canvas is busy with new projects and lacks the time or legal expertise to pursue a lawsuit. They enter into an agreement with "Recovery Solutions," a specialized debt collection agency. Under a cessio actionum arrangement, Creative Canvas allows Recovery Solutions to sue the defaulting client in the name of Creative Canvas. If Recovery Solutions successfully recovers the debt through litigation, they are entitled to keep the entire amount recovered as their fee and compensation for their efforts.

  This illustrates cessio actionum because Creative Canvas (the original party) assigns the right to sue to Recovery Solutions (the third party), who then sues in Creative Canvas's name and retains the proceeds.

• Estate Claim by an Overseas Heir: An individual living abroad, Ms. Anya Sharma, is an heir to her late uncle's estate in another country. The estate is owed a substantial sum by a local business for a past transaction. Ms. Sharma finds it impractical and costly to manage legal proceedings from her current location. She engages a local legal representative, Mr. Ben Carter, to handle this specific claim. Through a cessio actionum agreement, Ms. Sharma authorizes Mr. Carter to initiate a lawsuit against the debtor business in Ms. Sharma's name. In exchange for his services and the successful recovery of funds, Mr. Carter is permitted to retain the full amount recovered from the lawsuit.

  This demonstrates cessio actionum as Ms. Sharma (the original party) assigns the right to sue to Mr. Carter (the third party), who pursues the claim in Ms. Sharma's name and keeps the recovered funds.

• Litigation Funding for a Breach of Contract: "Tech Innovations Inc." has a strong claim against a former supplier for a major breach of contract that caused significant financial losses. However, Tech Innovations is currently facing cash flow challenges and cannot afford the high legal costs associated with complex litigation. They approach "Justice Funders," a litigation finance company. Under a cessio actionum agreement, Tech Innovations allows Justice Funders to pursue the lawsuit against the supplier in the name of Tech Innovations Inc. Justice Funders covers all legal expenses, and if the lawsuit is successful, they are entitled to retain all damages awarded by the court or agreed upon in a settlement.

  Here, Tech Innovations Inc. (the original party) assigns the right to sue to Justice Funders (the third party), who litigates in Tech Innovations' name and retains the proceeds from the successful claim.