There has been much judicial and academic debate over the proper scope of and rationale underlying the principle in ex parte James, and in particular its conferral of de facto insolvency priority on the successful claimant. This article attempts to review the principle's operation in the context of the function and principles of insolvency law, determine the actual role that it plays in dealing with post-insolvency claims and accordingly identify the justifications that can be offered for this role. It argues that the principle is better seen as an application of the liquidation expenses principle or the fair treatment of certain post-insolvency claims.