Conversion and recovering physical goods

What is conversion?

Conversion is a legal cause of action available under English law which, in certain circumstances, can be used to recover physical goods or claim their value. It is particularly useful where goods have been stolen, misdirected, withheld, sold, pledged, stored or moved through intermediaries. Its practical attraction in fraud and asset recovery work is that it is a strict-liability claim: it is not necessary to show that the defendant acted dishonestly.

Conversion is regularly used alongside proprietary claims, tracing and third-party disclosure tools. This note explains how the tort works, where its limits lie, and how it fits within the wider fraud and asset recovery toolkit.

Conversion may sit alongside other asset recovery claims such as trespass to goods, knowing receipt, proprietary claims, and equitable compensation. What makes conversion unique is:

• dishonesty is not required;
• damages are often measured by the value of the goods at the date of conversion; and
• it has a broad reach, allowing the owner to pursue intermediaries who handled the goods (even innocently).

When does conversion arise in practice?

Conversion arises in situations when a party treats someone else’s goods as its own. The key question is whether the goods were dealt with in a way that is inconsistent with the owner’s rights, not whether the defendant intended to convert them.

Common examples include:

• taking or using goods without authority;
• selling, transferring or pledging goods without authority;
• destroying or significantly altering goods; and
• refusing to return goods after a proper demand.

The legal test for conversion

The leading authority usually cited is Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19. The core question is whether the defendant intentionally dealt with the goods in a manner so inconsistent with the claimant’s rights that it amounted to an assertion of dominion over them.

Practical points in conversion cases

A claimant must usually have possession, or an immediate right to possession, at the time of conversion. That means the legal owner will not always be the right claimant; a bailee or other person with an immediate right to possession may be better placed to sue.

Where a person originally receives goods innocently, conversion may arise when they refuse a properly made demand for return. The demand should identify the goods, explain the claimant’s right to possession, specify delivery arrangements and set a clear deadline. Related claims, including trespass to goods and bailment, may also be relevant depending on the facts.

Liability in conversion is strict: even an innocent intermediary may be liable if it deals with goods inconsistently with the true owner’s rights, and liability may persist even if the defendant no longer has the goods when proceedings are issued. This makes conversion particularly useful against downstream handlers and helps explain the importance of the demand-and-refusal mechanism where an innocent possessor is involved.

Conversion does not apply to intangible property such as information, electronic data, intellectual property or debts. Where digital value is involved, practitioners should usually look instead to proprietary remedies, equitable claims, tracing and disclosure tools. See our note on digital fraud.

There is usually a six-year limitation period for conversion. Where there are successive conversions of the same goods, time does not necessarily restart with each later dealing, so limitation should be checked early.

Remedies for conversion

Remedies for conversion are structured through the Torts (Interference with Goods) Act 1977. The court may order delivery up of the goods or award damages.

If the goods are returned, damages may still be awarded for diminution in value, consequential loss, and loss of use during the period of wrongful interference.

Where the goods are not returned, the standard measure is usually the market value of the goods at the date of conversion, with interest. Consequential losses may be recoverable on ordinary principles.

Key strategic considerations in conversion

• Limitation: this can be a serious concern in conversion cases, and early investigative work to build a chain of title, possession and custody is therefore essential. It is important to quickly identify wrongful dealings, any good faith purchasers for value, and dates of demand and refusal (which may mark the accrual event for innocent possessors).
• Follow the process: a demand for return of goods is often necessary and should be precise as to the identity of goods, delivery logistics, and a reasonable timeframe.
• Evidence: where ownership or identity is contested, work up an evidential file early. This might include such information as serial numbers, provenance documents, photographs, shipping and warehouse records, bailment contracts, consignment notes and expert valuations.
• Consider targeted disclosure and tracing tools: including Norwich Pharmacal and Bankers Trust orders – against custodians and intermediaries such as freight forwarders, warehouses, auction houses, platforms, banks and payment providers. See our toolkit note on obtaining information evidence from third parties and tracing assets.
• Criminal considerations: where criminality, sanctions or regulated intermediaries are involved, consider whether reports to law enforcement, regulators or insurers are required, and how those steps interact with the civil recovery strategy.

Conversion’s strict liability and reach into innocent intermediaries make it a useful tool where physical goods have moved through multiple hands. Used alongside proprietary claims, tracing and disclosure relief, it is best deployed early.

To meet the rise and increasing sophistication of fraud, victims need powerful legal tools and lawyers who know how to use them. In this guide, we provide an overview of the key issues involved in fraud cases and outline some of the fraud litigation tools available in England.

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This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, June 2026