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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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BREXIT: From 31 January 2020, the UK ceased to be an EU Member State, yet entered an implementation period in which, for many purposes, the EU continues to treat it as a Member State. As a third country, the UK no longer takes part in the EU’s political institutions, agencies, offices, bodies or governance structures (save to the limited extent agreed); however, it must still observe its obligations under EU law (covering EU treaties, legislation, principles and international agreements) and accept the continuing jurisdiction of the Court of Justice of the European Union in line with the transitional arrangements in Part 4 of the Withdrawal Agreement. This affects this Practice Note. Further reading: Brexit—introduction to the Withdrawal Agreement. Guidance: Practice Note: Brexit—impact on finance transactions [ Archived]— Brexit planning and impact—key issues for debt capital markets...
Date Issuing body Document Description 7 March 2014 — Commission: Commission Delegated Regulation ( EU) No 382/2014 of 7 March 2014 establishes RTS for publishing supplements to prospectuses, complementing the Prospectus Directive. 20 December 2013 — ESMA: Final report on draft RTS concerning publication of a prospectus supplement; background consultation paper. ESMA set out consultation feedback and included draft RTS defining when a supplement must be issued (see pages 57–61). The Commission then had three months from this date to decide on endorsing the draft RTS. 8 August 2013 — Commission: Commission Delegated Regulation ( EU) No 759/2013 of 30 April 2013 published, amending the Prospectus Directive Regulation in respect of disclosure requirements for convertible and exchangeable debt securities. 31 May 2013 — HM Treasury: Prospectus Regulations 2013, SI 2013/1125. UK regulations effective on 31 May 2013...
FORTHCOMING CHANGE: Following the Government’s response to the Ministry of Justice and the Office of the Public Guardian ( OPG) consultation, Modernising Lasting Powers of Attorney, the Powers of Attorney Bill obtained Royal Assent on 18 September 2023, becoming the Powers of Attorney Act 2023 ( PAA 2023). Once in force, PAA 2023 will introduce amendments to the Mental Capacity Act 2005 ( MCA 2005) to deliver a more modernised lasting power of attorney ( LPA) service. The measures will include: bringing in regulations so that those involved in creating an LPA can choose whether to execute the instrument electronically or on paper; removing the option for attorneys to register an LPA, so that only the donor will be authorised to register; introducing regulations specifying identity verification requirements in relation to registration applications; providing for a single route for...
What are portfolio loans? A portfolio is a collection of investments, eg a group of properties, held by an investment company, hedge fund, financial or pension institution, or individuals. In property finance, portfolio investment loans are facilities offered by funders (banks and non-bank lenders) to borrowers who own, or aim to acquire and hold, a portfolio of properties for investment purposes (see Practice Note: Real estate finance—investment facilities—key features)... When are portfolio loans suitable? There is a blend of property types, such as office, residential or industrial assets Borrowers plan to buy a portfolio of properties Borrowers wish to use part of, or all of, their portfolio as security Rental income varies between properties or may fluctuate across the portfolio Borrowers want to consolidate their borrowings Reasons to consider portfolio financing Larger loan amount The facility is secured against the combined value of the...
The properties held by a company can be obtained by two routes: an acquisition of assets owned by the company (an asset purchase), or an acquisition of the company’s shares (a share purchase) Asset purchase On an asset purchase: the buyer takes the undertaking as a going concern and may select which elements of the business, together with any assets and liabilities, it wishes to take on every property owned, used or occupied by the undertaking must be conveyed, assigned or transferred to the purchaser within the sale documents Properties may be sold outright, or the buyer may be granted a fresh lease. Where a leasehold interest is involved (whether already existing or newly created), particular issues arise. For more information, see Practice Note: Leasehold property issues arising on an asset purchase. The properties will be identified in the sale...
What are property derivatives? Property derivatives are contracts where payments are linked to property prices used as the reference rate, determining what each party owes the other. They are available over the counter ( OTC) or traded on exchanges. This remains a niche area for specialist investors, and usage in the UK has stayed limited. Why are property derivatives used? As with other financial derivatives, there is no single rationale for using them. They allow participants to gain exposure to movements in property values and can be used for speculation, hedging existing property positions, or transferring risk across portfolios. Such contracts provide a cost-effective route to express a view on property prices without the expense of direct investment. They are not typically subject to taxes such as stamp duty that would otherwise arise on direct property purchases. In line with other...
When a bank or another source of finance resolves to fund a construction or development scheme, it will typically appoint a project monitor—often called a monitoring surveyor—to keep the project under review on its behalf. Because a lender’s own staff are unlikely to possess both the time and the requisite expertise to perform this function, the monitor acts, in practical terms, as the lender’s ‘eyes and ears’. In most cases, project monitors are either project managers or quantity surveyors, as these two professions carry sound knowledge of the contractual framework as well as the construction process itself. The lender should involve the monitor from an early point in the design and procurement stages, with that involvement then continuing throughout the build, right through to practical completion and beyond. This Practice Note describes the principal duties and roles undertaken by the project...
Risk Risk is a defining characteristic of many project finance transactions. For further detail on risk within a project finance transaction, see Practice Note: Introduction to project finance. When determining whether to provide funding, project finance lenders will identify, catalogue and analyse every risk connected to the project. They will look for evidence that risks are: shared between the various project participants (rather than being left solely with the borrower); and/or mitigated as far as practicable, for example through additional credit support or insurance If the project’s risks cannot be minimised to the lenders’ satisfaction, this is commonly reflected in the margin applied to the loan. For more on margin, see Practice Note: Introductory guide to interest in loan agreements— Components of a floating interest rate—margin. In some circumstances, the nature of the risks may lead lenders to conclude that they cannot lend at all. It is...
Much of the standard suite of representations and warranties found in a conventional syndicated loan agreement will likewise be relevant and applicable to a project finance deal. For background and detail on those provisions—what they are and the purpose they serve—consult Practice Note: Representations and warranties. This Practice Note considers the further representations and warranties that might be required in a project finance context, and examines how these may apply in such transactions. Purpose of representations and warranties in a project finance transaction Under general principles of contract law, the two concepts are distinct in effect and consequence: representations are pre-contractual assertions of fact made by one contracting party that persuade the other to enter into the agreement—if a representation proves inaccurate or deceptive, it may give rise to a claim for misrepresentation under the general law, with remedies of rescission and/or damages...
Before proceeding with a potential project, the intended sponsor must prepare a 'feasibility study' to assess and judge the project's viability. That study reviews the principal aspects of the proposal, including, for example: issues relating to the economics of the project technical matters contract terms any necessary government support market need for the project If, having considered the analysis, the sponsor determines the project is feasible, the study is then commonly used in practice to present the proposal to the prospective lenders and equity investors. A core element of the feasibility study is the 'financial model'. This Practice Note sets out what a financial model is, what it is used for, and how it is checked by the lenders. For more detail on the contents of the feasibility study, see Practice Note: Project finance—due diligence and...
Many of the standard events of default that appear in a conventional syndicated loan facility will likewise apply (in some guise) to a project finance transaction. For guidance on those events of default—covering what they are, typical examples, and how to distinguish an event of default from a default or a potential event of default—see Practice Note: Events of default. That Practice Note also explores the additional, project-specific events of default that may arise in a project finance setting. Purpose of events of default in a project finance transaction Events of default equip lenders with a defined route to take action against a borrower where it has breached its obligations under the facility agreement, or where specified triggers occur. This targeted approach is preferable to relying solely on general contract law remedies for breaches of the agreement. Setting out the events of default...
This Practice Note introduces project finance It covers: the idea of project finance, including the character of typical projects, the principal participants and the kinds of funding applied the standard documentation framework in a project finance transaction the main risks in a project finance transaction and how those risks are commonly allocated the usual security package in a project finance transaction Concept of project finance Project finance is not a recent development. In the 1980s it was widely used, chiefly by commercial banks, to fund the build-out of major infrastructure in North America and Europe. In the 1990s, these techniques spread further, taking hold in the Middle East, Latin America and throughout Asia. A standard project finance deal provides funding to: build and/or operate a new asset or facility acquire and/or refinance an existing asset or facility exploit a...
Where a facility is committed, exactly how and when the facility is to be repaid will be set out in the facility agreement (ie terms of repayment). Committed facility agreements generally also set out: whether the borrower may repay before the agreed repayment date(s) (ie make a voluntary prepayment), together with any conditions for such prepayments, such as minimum amounts or fees payable, and whether any events require the borrower to repay all or part of the facility early (ie make a mandatory prepayment) Project finance is typically provided as senior debt, usually via a development term loan facility used to fund the project’s development and/or construction costs. This Practice Note outlines the types of: repayment provisions prepayment provisions, and cancellation provisions that are commonly found in a project finance development term loan facility. It includes examples of how these provisions may differ from the typical repayment, prepayment and...
Most ventures rest on an intricate network of contractual ties linking all participants involved in the project (eg the project company, equity investors, contractors, sub-contractors, off-takers and suppliers). These agreements are commonly known as the 'project documents'. For further details, see: Project documents: issues for lenders—overview. In numerous projects, the construction contract forms one of the key project documents. What is a construction contract? Within a standard project finance deal, the project company is a special purpose vehicle ( SPV) created solely for the purposes of the project (see Practice Note: Project finance—key project parties). Schemes that require building a new asset (ie 'greenfield' projects) will almost always involve substantial construction activity. Where the project company is an SPV, it is improbable that it possesses the capability to design and/or build the project itself; accordingly, it will enter into a...
Project finance is a versatile approach to funding. For broader background on project finance, see Practice Note: Introduction to project finance. It can be deployed to fund almost any asset so long as the asset delivers a predictable income stream, because in a standard project finance arrangement, lenders place significant reliance on the revenues the project generates to repay the debt. This Practice Note outlines some of the more common applications of project financing, with a brief summary of a few notable issues that arise with each project type. Differences between project finance and asset finance Both project finance and asset finance involve funding assets, but the nature of the assets typically differs and the structures used are not the same: in asset finance, the asset in question is usually equipment such as aircraft, ships or rolling stock (rather than facilities such as...
Commercial bank lending remains the customary way to fund most schemes in the UK and overseas, but when liquidity in the market tightens, sponsors are more likely to consider alternative funding routes. One such alternative is the bond market. What is a project bond? A bond is a form of debt security, and a debt security is a document that evidences a borrowing or an investment (see Practice Note: Key features of the debt capital markets— What is a debt security?). A project bond is issued to finance all, or a portion, of a project. Project bonds can be used: as the sole funding source for a project as one element within a broader funding package, eg alongside bank debt to refinance existing bank facilities for a project, typically after construction (see Practice Note: Project finance—meaning of completion and its effect) Why would a sponsor finance a project with a bond...
This Practice Note outlines the common law doctrine of privity of contract; the equitable and statutory exceptions to it; how the doctrine bears on enforcing a contract against a non-party; and what occurs where, despite no privity, a contract has an indirect impact on a third party. For guidance on contracts and third parties more broadly, and on the Contracts ( Rights of Third Parties) Act 1999 ( C( RTP) A 1999), see the following Practice Notes: Contracts and third party rights Third party rights—the Contracts ( Rights of Third Parties) Act 1999 What does privity of contract mean? ‘ Privity of contract’ is a common law doctrine that provides a person cannot: enforce the benefit of a contract to which they are not a party, or be liable for any obligation under such a...
This Practice Note sets out guidance on the limitation periods for breach of contract claims under the Limitation Act 1980 ( LA 1980). It should be read alongside the following Practice Notes: Limitation Act 1980—general application, which details the core principles for calculating limitation periods pursuant to LA 1980, including when time begins to run and when it stops Limitation—the principal limitation periods, which provides an overview of the key limitation periods for disputes. In addition to high-level material relevant to breach of contract claims, it may assist with other claims that could apply concurrently on the facts For more general guidance concerning breach of contract and debt claims, see: Contractual breach damages and remedies—overview Debt...
Lending to high-net-worth individuals ( HNWIs) Lending to HNWIs is not the same as financing corporate bodies, especially group structures. Unlike standalone corporate borrowers, HNWIs take on debt in a personal capacity (even where an SPV is interposed), with collateral typically comprising a blend of private and other assets (such as property, investment portfolios and luxury collectibles like art), rather than cashflow from trading operations. This Practice Note sets out introductory guidance on the principal considerations when advancing funds to HNWIs and signposts further, more detailed material. It outlines prevalent deal structures and highlights documentary points and headline legal issues. For deeper analysis on lending to individuals, and on obtaining security and personal guarantees in relation to the matters flagged in this Practice Note, see the following Practice Notes: Key issues for lenders when dealing with an individual in a commercial finance...
Ratings outlooks and watch-lists Among the leading credit rating agencies ( CRAs) are Moody’s Investors, Standard & Poor’s ( S& P) and Fitch Ratings, which carry out periodic reviews of assigned ratings. They also publish rating outlooks—opinions on the likely direction of a rating over the medium term (typically the next 6 to 24 months)—which may be: positive negative stable developing or evolving An outlook usually explains the rationale and the possible scale of any change; in most cases, outlooks are stable. If an issuer’s credit profile is weakening and a payment default is anticipated, it may be moved to a negative outlook or placed on negative watch to signal that a downgrade could follow. Receiving a negative outlook or being added to a watch-list is not, in itself, a rating action, but it can foreshadow...
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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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