Professional diligence meaning

This Checklist outlines the principal contractual points within a bundle of construction documents that a construction lawyer should review and report on for a prospective buyer of a property or development. It should be read alongside: Construction due diligence for property purchase-initial review of construction package-checklist. After reviewing the documents and raising enquiries, the purchaser’s construction lawyer will also need to produce a report on the construction documents, see Precedent: Report on construction documentation. The issues below proceed on the basis that construction at the relevant property has been completed. Accordingly, there is no need to scrutinise terms governing the running of the contract during the build, such as payment provisions; these are only relevant where a buyer is acquiring while works are ongoing and step-in rights are being offered. Building contracts Identity of contractor – Confirm the contractor continues to exist and carry out a financial check (for example via Dun & Bradstreet) to ensure it is financially sound. Date of contract –...

For law firms For law firms, whether you are considering a merger, taking over another practice, disposing of the business or winding it up, the successor practice provisions are almost invariably engaged in such scenarios. You must give careful thought to these rules and their effect on the deal, at every stage, as outcomes are frequently truly surprising, costly and, in the end, can pose intolerable risks for either party or, indeed, both. Grasping the ramifications of your proposals is essential. When the parties collaborate, it is often feasible to reduce exposures enough and in good time to allow a deal to move forward that might otherwise collapse. As ever, knowledge is power. Seldom will buying any element of a legal practice not result in the purchaser becoming a successor practice—you are generally safest to presume that is so. Section 1 aims to outline circumstances in which a successor practice is liable to arise. If you think your arrangement can sidestep creating a successor practice, for example by taking...

Checklist Directors of insolvent companies, or companies that are likely to become insolvent, can seek an initial 20 business‑day moratorium under Part A1 of the Insolvency Act 1986 (IA 1986). The objective is to give viable businesses breathing space to reorganise or attract new investment, free from creditor action. This is a free‑standing protection, not a gateway to any particular insolvency procedure. It is intended to be a streamlined route that keeps administrative burdens low, makes progress as swift as possible, and avoids imposing disproportionate costs on struggling businesses. The aim is to reduce paperwork to the bare minimum and enable the moratorium to progress as swiftly as practicable. An insolvency practitioner (IP) serves as the ‘monitor’; however, subject to certain constraints, the directors continue to run the company on a day‑to‑day basis. It is therefore a ‘debtor‑in‑possession’ process, with the company being the ‘debtor’. The monitor’s duties are significant, but their powers are limited because directors remain in day‑to‑day control. This Checklist outlines the issues...

Checklist This checklist explores the actions a buyer’s solicitor ought to take during due diligence to deal with matters arising from the property’s physical state and the surveyor’s findings, as part of the investigation. Although this Checklist refers to the buyer’s solicitor, equivalent considerations apply to a tenant’s solicitor acting on the grant of a new lease, and to a borrower’s solicitor involved in the financing or refinancing of property. A solicitor is not qualified to advise on the state or the value of a property, and the report on title prepared for the buyer by the buyer’s solicitor should include a qualification to that effect. If the survey or valuation identifies any issues with the property, the buyer may wish to negotiate a reduction in the price or to include an obligation in the contract requiring the seller to remedy the matter prior to completion. Has the buyer’s solicitor advised the buyer to commission a survey? A buyer’s solicitor should always advise the buyer to have the property...

Original news Mr K (CAS-44560-Q1C8)—12 September 2025 Summary The Pensions Ombudsman upheld a complaint concerning a scheme’s inadequate due diligence on a high-risk investment. The professional trustee was found to have breached both common law and statutory duties by committing funds to storage pods and airport parking. As the investments lacked diversification and were overly speculative, no reasonable trustee would have proceeded. The determination underscores that a professional trustee can be accountable for investment losses even where the member was heavily engaged in making the decision... What were the facts? Mr K was a member of the Blick-Horsham Limited Executive Pension Scheme (the Scheme), a small self-administered scheme (SSAS). The Scheme’s trustees were Rowanmoor Trustees Limited (RTL) and Mr K. He proposed investing in storage pods and airport parking via Store First Limited (Store) and Park First Limited (Park). In February 2015, RTL warned Mr K that the proposed investments featured a two-year break clause and advised him to consider how a replacement tenant might be...

Original news Mr S (CAS-78433-Y1Y8)—18 February 2025 Summary The Pensions Ombudsman has upheld a complaint concerning a pension scheme’s inadequate and insufficient due diligence processes before entering into a high‑risk property investment. The investment was speculative and lacked any diversification. No prudent trustee would ever have pursued such an investment. The case clearly highlights that a professional trustee may still be liable for poor investment choices even where the complainant is a co‑trustee. What were the facts? Mr S was the only member and a co‑trustee of the Mr S Limited Executive Pension Scheme (the Scheme). The Scheme’s trustees were Rowanmoor Trustees Limited (RTL) alongside Mr S. Under the Scheme rules, trustee decisions had to be unanimous. At Mr S’s request, and without legal advice, the Scheme invested a large proportion of its assets in a German property company, including via loan notes. Sadly, the investment proved worthless...

Background to OTSI guidance Following Russia’s assault on Ukraine in February 2022, the UK brought in trade sanctions covering a broad spectrum of goods, technology and services. Although direct commerce between the UK and Russia has fallen markedly since these measures were imposed, Russia has continued attempting to source such items indirectly, often via intricate supply chains. This trend has heightened the exposure of UK businesses to sanctions circumvention and the diversion of products to Russia. The methods used to sidestep restrictions are diverse and evolve rapidly, including fabricated end-use details, routed shipments, and the involvement of professional sanctions evasion networks. Participants across supply chains must recognise the diversion threats created by Russia’s procurement activity in this changed environment. Among other provisions, UK trade sanctions bar the export from the UK of sanctioned items to, or for use in, Russia, even where those items are first consigned to another destination. It is therefore vital for UK companies to identify the final destination of their products and to apply rigorous,...

This Practice Note sets out your responsibilities for enhanced due diligence (EDD) and how to apply them in everyday professional practice. It aligns with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692, as amended. The guidance provided is of general application. You should determine whether the MLR 2017 impose additional or varied requirements for your sector, and whether your regulatory body sets any extra, sector-specific obligations relating to EDD...

Heads of terms A business purchase (the target business) typically starts with settling the key commercial points—price, structure of the deal, due diligence steps, exclusivity provisions and timetable. These points are commonly negotiated by the parties themselves, or alongside their accountants and other professional advisers, and then set out in heads of terms, sometimes called a ‘letter of intent’ or ‘memorandum of understanding’. See Practice Note: Heads of terms—share and asset purchases. Where environmental risks are known or suspected, the heads of terms might cover: providing the buyer with any existing environmental report(s) a requirement for a reliance agreement or collateral warranty, giving the buyer the benefit of those report(s) a process allowing the buyer to undertake a phase 1 environmental audit or phase 2 ground investigations headline terms for an environmental indemnity or environmental insurance What happens during the preliminary phase?...

Corporate deals call for a sizeable group of lawyers across multiple disciplines, alongside other expert professional advisers, all required to collaborate closely, frequently against very tight deadlines and schedules. Where property assets feature in the deal, property solicitors and related specialists become a vital and integral element of the overall exercise. This Practice Note explains how a property solicitor can handle correspondence and documentation efficiently within corporate transactions. Before commencing transaction—initial considerations Before the property solicitor begins work on the matter they should confirm at the outset: which party they are representing...

Introduction This concerns the acquisition by [ insert buyer name ] (the Buyer) of the [ entire share capital of [ insert name of target company ] Limited, incorporated in England and Wales under number [ insert company number ] (the Company) OR [ insert description of the business to be acquired ] (the Business) as a going concern, together with specified assets used in the Business ] from [ insert seller name ] (the Seller) (the Proposed Acquisition). This questionnaire is intended to enable the Buyer, the Buyer's solicitors, patent and trade mark attorneys, and other professional advisers to gather essential information about the IP owned and/or used by the [ Company and its subsidiaries OR Business OR which the Buyer requires to assist in the valuation of the Company OR Business and with the negotiation of the Proposed Acquisition ] . Please respond to every single question in full. Please set out your answers in italics immediately beneath each question and supply copies of all relevant documentation,...

Dated [ insert date ] Introduction This legal due diligence questionnaire concerns the intended acquisition by [ insert buyer name ] ( Newco ) of the whole issued share capital of [ insert name of target company ] Limited (the Target ) from [ insert seller name ] (the Seller ) (the Proposed Acquisition ). The questionnaire exists to enable Newco, Newco’s solicitors and its professional advisers involved in the Proposed Acquisition to obtain the information they require to aid the valuation of the Target and the subsidiaries of the Target (the Group and each a Group Company ). We reserve the right to raise further enquiries in relation to both your replies to this questionnaire and generally...

1 Introduction to the policy 1.1 [ Firm name ] must implement appropriate systems and controls to combat money laundering, terrorist financing and proliferation financing under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692, as amended. 1.2 For further detail on MLR 2017, see section 10. 2 Scope and application 2.1 This policy sets out the procedures we have developed to comply with MLR 2017, as amended. 2.2 This policy applies to all [ our offices, ] employees, officers, consultants, contractors and to other workers, including agency workers, casual workers [ , volunteers ] [ , interns ] and home workers. 2.3 All staff must be familiar with this policy and comply with its terms. 2.4 This policy does not form part of any contract of employment and we may amend it at any time. 3 Responsibility for AML, CTF and counter-proliferation financing...