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This Practice Note outlines the law concerning criminal recklessness. The subjective test for recklessness Certain statutory and common law offences allow the prosecution to prove mens rea through ‘recklessness’. Put simply, recklessness is where the accused takes an unjustified risk that results in unlawful harm or damage. The House of Lords in R v G reaffirmed the subjective approach to recklessness. Before R v G, two distinct tests were used, depending on the offence charged: Subjective recklessness from R v Cunningham: the prosecution had to establish that the accused personally foresaw the risk. Objective recklessness from R v Caldwell: the prosecution only needed to show that the risk would have been obvious to a reasonable person, without proving the accused themselves foresaw it. In R v G, the House of Lords concluded that the objective test could operate unfairly where a defendant did not foresee the
This Practice Note examines the remedy of rescission, explaining when and in what manner a contract can be unwound (at common law, in equity and under statute) and thereby terminated and brought to an end. It covers the consequences and effects of rescission, the principal grounds for setting aside an agreement (misrepresentation, mistake, undue influence, duress, non‑disclosure, fiduciary misdealing and bribery) and the main obstacles to claiming rescission—affirmation, the intervention of third‑party rights and the impossibility of restitution. For further guidance on rescission in the context of misrepresentation, see Practice Note: Misrepresentation—rescission as a remedy. There are many ways in which a contract may reach its end; see: Terminating contracts—how and when a contract ends—overview for a brief and accessible summary, with links to the related further practical guidance, including Practice Note: Termination and expiry of contracts. For a table
What is a res judicata? A res judicata is a determination by a court or tribunal with jurisdiction over the cause of action and the parties, which finally disposes of the issues decided so they cannot be litigated again by those bound, save on appeal. Final judgments entered by default or by consent fall within this concept, whereas rulings on purely procedural points and any decision lacking finality do not. The doctrine’s aim is to bring litigation to an end and shield parties from being harassed by the same dispute twice. in personam—binds the parties and their privies in rem—binds all persons, privy or otherwise (ie a judgment binding the whole world) A party may rely on res judicata: as an estoppel to defeat an opponent’s claim or defence; and/or as the basis of their own claim or
The offence of causing grievous bodily harm with intent Wounding or causing grievous bodily harm (GBH) with intent can be tried solely in the Crown Court on indictment. Elements of the offence Under the Offences against the Person Act 1861 (OATPA 1861), the prosecution must establish that the defendant unlawfully and maliciously: wounded with the intention of causing GBH, or caused GBH with that intention, or wounded intending to resist or prevent the lawful arrest or detention of any person, or caused GBH intending to resist or prevent the lawful arrest or detention of any person ‘Unlawfully’ and ‘maliciously’ Unlawfully The wounding or causing of GBH must be unlawful. Such conduct may be lawful if used: in self-defence in defence of another in defence of property for the prevention of crime where the victim gave express or implied consent For further information on these defences, see below:
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Trade credit insurance generally protects a policyholder against unpaid receivables arising from protracted default (i.e. when an invoice is not settled after its due date), buyer insolvency, or political risk. By shifting credit exposure off the policyholder’s balance sheet, it can strengthen profit and loss accounts, and may lead to lower bad debt provisions. Types of risk insured Trade credit insurance risks are commonly divided into commercial and political risks: Commercial risk: usually the buyer’s insolvency resulting in a payment default, or the buyer’s failure to pay for the goods on the due date Political risk: the possibility that a government buyer or a country blocks completion of a transaction or does not meet its payment obligations. Examples include: regulatory or legislative freezes on payments ...
What does this Practice Note cover? This Practice Note outlines the principal aspects of a total return (or total rate of return) swap ( TRS), including: what a TRS is how it is classified who enters into a TRS, and how to document a TRS What is a total return swap? A TRS is a derivatives agreement through which one party transfers the complete economic performance, including income from interest and fees, gains and losses arising from price movements, and credit losses, of a reference obligation to another party. TRSs may replicate the effect of securities financing transactions ( SFTs)—they can function as synthetic repo instruments for funding purposes. SFTs and TRSs are used extensively by managers of collective investment undertakings to obtain exposure to certain strategies or enhance their returns. A TRS is an over-the-counter, off balance sheet transaction. One participant, the total return payer (the TRS payer or...
How does a total return swap ( TRS) work? The TRS payer (protection seller) is, for instance, a bank, A, and the TRS receiver (protection buyer) is, for instance, a hedge fund, insurance company, pension scheme, UCITS or another investment fund, B. A keeps the reference asset on its balance sheet. A agrees ......
Scope of this Practice Note This Practice Note: sets out what fund tokenisation and digitalisation mean and how they diverge from conventional funds; surveys UK and overseas regulatory moves, highlighting current UK workstreams; details practical steps to launch a tokenised fund; evaluates the benefits of distributed ledger technology ( DLT) for funds; flags principal challenges and risks; and suggests next steps for practitioners. What is fund tokenisation and digitalisation? Fund tokenisation involves capturing elements of a fund’s administration and investor rights as digital tokens recorded on a blockchain ledger. A token digitally mirrors a standard unit or share in a UK authorised fund. The investor’s legal interest remains that of a traditional unit/share; the novelty lies in the representation and maintenance of ownership and fund records. In a traditional UK authorised fund, the unit/share register, asset register and client data sit in conventional book‑entry systems across multiple service providers....
This Practice Note addresses: what is meant by third party security? when third party security is commonly granted? drafting considerations when taking third party security whether third party security constitutes a guarantee the risks of third party security being considered voidable corporate benefit and directors' duties, and undue influence What is meant by third party security? Third party security describes security granted to support another person or entity’s obligations. It is frequently taken in commercial transactions alongside security from the borrower over its own assets, giving the lender(s) additional credit support. It is commonly granted in commercial transactions to bolster lenders’ overall credit support available to them. It can be provided: with a guarantee, securing the provider’s own liability under that guarantee and the borrower’s, and potentially other guarantors’, obligations; or as security for the borrower’s debt only In the latter case, the security provider assumes no personal liability for the obligations of the other person or...
This Practice sets out practical illustrations of how the Contracts ( Rights of Third Parties) Act 1999 ( C( RTP) A 1999) operates, addressing group liability and the defences to third party claims under C( RTP) A 1999. For wider guidance on the general operation of the Act, see Practice Note: Third party rights—the Contracts ( Rights of Third Parties) Act 1999. Rights and liabilities arising in contracts involving group structures For advice on construing contracts to assess whether benefits have been conferred on a third party for the purposes of C( RTP) A 1999, s 1(1)(b), see Practice Note: Third party rights—the Contracts ( Rights of Third Parties) Act 1999. A typical group supply arrangement might be structured as follows. Parent Supplier ( PS) agrees with Parent Customer ( PC) that: PS will provide raw materials to PC PS will also provide raw...
Purpose of the TP( RAI) A 2010 The Third Parties ( Rights Against Insurers) Act 2010 ( TP( RAI) A 2010) revoked and superseded the Third Parties ( Rights Against Insurers) Act 1930 ( TP( RAI) A 1930). The aim of the 1930 Act was to make sure that, where an insured person had incurred an insured liability to a third party and later became insolvent, the insurance proceeds were paid to that third party rather than forming part of the insolvent estate to be divided amongst all creditors of the insured. In much the same vein as the earlier regime, TP( RAI) A 2010 assigns to the third party certain of the insolvent insured’s rights under the policy and permits the third party to issue proceedings straight against the insurer. The principal development under TP( RAI) A 2010 is that a third party may now sue the...
Loan market and developments Please provide a brief overview of the current state of the loan markets in your jurisdiction and any significant recent market developments The heightened mandatory capital buffers for financial institutions continue to suppress both the number and the size of transactions in the Dutch loan market when set against the pre‑credit crisis period. Contrary to earlier expectations, COVID did not materially disrupt conditions; however, a slight rise in bankruptcies is evident as obligations to repay COVID support are falling due. Overseas banks that once lent regularly to Dutch borrowers are, on the whole, still less willing to extend credit in the current climate. In real estate finance, there remains sufficient appetite among foreign, mainly German, banks and funds to invest in the Netherlands; nevertheless, a flat market and a range of legislative changes (including tax measures) are making...
This Practice Note explains how a PFI or PF2 project can be terminated. It outlines the ways termination may occur, and examines the aftermath, the risks tied to bringing a project to an end, and the practicalities that parties should factor in. In the 2018 Budget (delivered on 29 October 2018), the government announced it would stop using PF2 for new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). Nevertheless, existing PFI and PF2 arrangements will carry on and, given the usual duration of these schemes, are expected to do so for many years. Both public and private sector participants have traditionally viewed ending a PFI as a ‘nuclear’ course, laden with risk and potential cost exposure. Yet pressure on public sector finances is considerable, and some authorities may regard terminating expensive PFI contracts as a credible option. Although...
Practice Note Term sheets in lending transactions This overview introduces key information on term sheets used in lending arrangements. It covers: the situations in which term sheets are deployed in lending transactions when term sheets are intended to be legally binding principal considerations when negotiating term sheets for borrowers and lenders core provisions in term sheets, including those in the Loan Market Association ( LMA) recommended form of term sheet For a more detailed discussion of the LMA investment grade term sheet, see Practice Note: Loan Market Association investment grade term sheet—commentary. For practical guidance on negotiation points in term sheets, see Practice Note: How to draft and negotiate a LMA investment grade term sheet. For a precedent term sheet for a bilateral lending transaction, see Precedent: Term sheet (for a term loan facility): single company...
This Practice Note looks at Term Loan B ( TLB) facilities, which often feature as a senior tranche within syndicated loans in leveraged financings. TLBs are long-established in the US market and are increasingly seen in the European lending market for institutional investors. It examines the structure of a typical TLB and how it diverges from traditional European leveraged loans, before setting out the key features. This Practice Note assumes some understanding of leveraged finance. For introductory information, see: Introductory guide to acquisition finance. For explanations of common terms, see Practice Note: Glossary of acquisition finance terms and jargon. What is a Term Loan B? In lending markets, ‘ Term Loan B’ or ‘ TLB’ (short for Term Loan Bullet) describes a tranche of senior secured credit facilities made available to a borrower and intended to be syndicated in the...
Takaful is a form of risk protection arranged in accordance with Islamic principles. To appreciate how takaful operates and how its documentation works, it is vital to note: the basis of takaful lies in Shari’ah ( Islamic law) its core is the sharing of risk among participants (policyholders), rather than transferring risk to the takaful operator (insurance company) at all times the risk sits with the fund into which participants pay contributions and from which claims are settled as needed (the Participants Solidarity Fund) Tabaru’, Qard Hasan and Shari’ah supervision as key underlying mechanics of takaful Tabaru’ Tabaru’ is an Arabic term signifying a ‘donation’ or a ‘voluntary and gratuitous contribution’. In Islamic legal terms, tabaru’ is a distinctive form of contract: instead of a bilateral exchange, it is a unilateral declaration to transfer ownership without seeking any return. As with the...
What is a securitisation? Securitisation is a method used to fund the holding or disposal of categories of assets that would otherwise be hard to fund/sell (ie ‘illiquid’ assets such as bilateral loans and mortgage and other loans to natural persons). In its most common and basic form, securitisation is a financing method that consists of a bank or another financial institution (the originator) selling very large pools of these income-producing assets to a special purpose vehicle ( SPV). To finance the purchase, the SPV issues interest-bearing securities (also called ‘bonds’ or ‘notes’) into the capital markets; these instruments benefit from security over the assets and/or the cashflows generated by them (the ‘receivables’). The cashflows produced by the receivables are applied to pay interest and redeem principal on the securities, and investors can generally look only to the receivables for repayment....
Loan market and developments Swiss National Bank figures for September 2024 indicate that banks licensed in Switzerland extended credit facilities of CHF1.384m (utilised) and CHF1.752m (committed) to borrowers incorporated or resident in Switzerland, of which CHF1.196m were utilised mortgage loans. Commercial lending has risen gradually yet consistently in recent years, a pattern expected to endure, notably for individuals and small to mid-cap corporate borrowers. Switzerland’s market for syndicated loans has grown substantially over the last two decades; during the pre-2008 peak, commitment levels in the high three-digit millions were not unusual. The financial crisis, the more stringent Basel III capital requirements and the strong Swiss franc curbed Swiss banks’ appetite for very large exposures. Lately, Swiss-based syndicates have faced mounting competition from foreign arrangers of syndicated loans and managers of high-yield bond issues, particularly for major Swiss corporates and issuers, alongside private funds...
The information shared in this piece is of a general nature. Please note that individual facts and contexts may result in different conclusions. Loan market and developments A concise overview of the current condition of Sweden’s loan markets and notable recent movements is set out below. Sweden’s financial landscape, including lending, has undergone a marked transition in recent years amid heightened macroeconomic uncertainty and rising interest rates. By the first quarter of 2024, buyout activity in Sweden had fallen sharply, reflecting a wider deceleration across the Nordic region. Even so, the market has demonstrated durability, with capital increasingly channelled towards high-growth areas such as technology, renewable energy, and healthcare, where long-term prospects remain compelling. Software as a Service (‘ Saa S’) businesses have also proved appealing targets. As conditions evolve, alternative sources of finance have taken on greater prominence within Sweden’s loan ecosystem. Direct lending funds and...
In the context of lending, borrowers commonly use derivatives to manage specific exposures, including: interest rate risk, by entering into an interest rate swap exchange rate risk, by entering into a currency swap commodity price risk, by entering into a commodity swap These swaps are typically executed with a bank acting as the hedging bank or hedging counterparty. As a rule, the hedging bank is better placed than the borrower to shoulder movements in interest rates, foreign exchange or commodity prices. Frequently, the hedging bank mitigates its own position through a back-to-back swap with a market counterparty. This Practice Note sets out the key documentation points to consider when hedging risks in a lending setting. For broader guidance on deploying derivatives in a lending context, see Practice Note: Use of derivatives to hedge against risk in a lending...
ARCHIVED: This Practice Note has been archived and is not maintained Silicon Valley Bank concentrated on providing finance to businesses—particularly early‑stage firms—in the technology and life sciences fields. Escalating concerns about the bank’s resilience triggered the withdrawal of tens of billions in deposits by customers, prompting regulatory intervention on Friday 10 March 2023 in the largest failure of a US bank since 2008. UK authorities took corresponding action. This Practice Note highlights the key matters arising from the collapse, including context, effects on deposits, lending arrangements and derivative positions, and implications for stablecoins and cryptoassets. It also signposts general resources on the legal issues surrounding bank stability. What has happened in the US? On 10 March 2023, California financial regulators seized Silicon Valley Bank, California ( SVBUS) citing inadequate liquidity and insolvency, appointing the Federal Deposit Insurance Corporation ( FDIC) as receiver. On 12 March 2023, the...
The sustainable finance market has seen explosive growth in select product segments over the past five years. Annual green bond issuance, for instance, topped US$500bn in 2021, and environmental resilience is becoming an increasingly significant driver of investment choices worldwide. Yet the Organisation for Economic Co-operation and Development ( OECD) estimates that US$6.9tn a year will be needed through 2050 to fund infrastructure that achieves development goals and delivers a low-carbon, climate-resilient future. If nothing changes, current market finance will fall far short in both scale and approach. One clear but transformative answer is to pool and amplify sustainable assets via sustainable securitisation. For this to be workable, a critical pipeline of sustainable finance assets across multiple classes must be available in the market. Sustainable securitisation can concurrently offer institutional investors access to sustainable assets while easing pressure on bank balance sheets. At...
2018 News 4 January 2019: Commission unveils draft rules obliging investment firms and insurance distributors to factor sustainability into advice— LNB News 04/01/2019 66 20 December 2018: AFME urges a clear, responsive classification framework for sustainable finance— LNB News 20/12/2018 158 19 December 2018: Council of the EU sets its position on low‑carbon benchmarks and disclosure duties— LNB News 19/12/2018 76 18 December 2018: Council of the EU issues a compromise text on proposed disclosure regulation for sustainable investments and sustainability risks— LNB News 18/12/2018 133 17 December 2018: UN Environment releases Sustainable Finance Progress Report and consultation— LNB News 17/12/2018 52 13 December 2018: ECON backs report on amending BMR for low‑carbon and positive carbon impact benchmarks— LNB News 13/12/2018 163 12 December 2018: HM Treasury updates the House of Commons EU Scrutiny and Union Committees on progress of the proposed disclosures Regulation— LNB News 12/12/2018 28 11 December 2018: LMA, APLMA and...
This Practice Note serves as a practical introductory guide to sustainable finance for transactional banking and finance lawyers across the UK and EU contexts. It is also aimed at practitioners working on transactions and documentation within these jurisdictions. For an overview of the UK and EU regulatory landscape around sustainable finance, see Practice Note: —regulatory landscape. Detailed information on all areas of sustainable business, including the regulatory environment, can be found in our ESG and sustainability toolkit. This Practice Note explains the following: what is meant by sustainable finance and environmental, social and governance ( ESG) key drivers behind sustainable finance principal sustainable finance products, including sustainability-linked and green loans, bonds, securitisations and derivatives market challenges, such as disclosure and ‘greenwashing’ information on market approaches and the main industry bodies, and where to find practical guidance on documentation issues What is meant by sustainable finance and...
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When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...
This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...
Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...
I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...
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