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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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Jurisdiction for English schemes The English court may approve a scheme of arrangement for a non- UK company under section 895(1) of the Companies Act 2006, where—following Knox J in Re Real Estate Development Co and Re Latreefers ( No 2)—the following are satisfied: the entity proposing the scheme is a “company” within Part 26 CA 2006 (that is, one that can be wound up under the Insolvency Act 1986, which includes companies incorporated abroad: see Re Magyar and IA 1986, ss 220(1)–221); there is a sufficient connection to England and Wales; and the scheme is capable of practical effectiveness, for example it will be recognised and given effect in other jurisdictions where the company holds assets or has creditors. For more on establishing jurisdiction, see Practice Note: Establishing jurisdiction and sufficient...
Islamic finance contracts Agreements structured under Islamic finance are, when performed in the UK, ordinarily subject to the laws of England and Wales. In cross-border deals, particularly those involving finance parties from leading Western economies, the governing law is frequently designated as English law too. This approach has developed for several reasons: in UK-focused transactions, many of the parties are resident in the UK and are familiar with those legal frameworks Islamic financial institutions ( IFIs), often banks or other financial entities, and related institutions, typically insist on this governing law as a matter of practicality, disputes are likely to be brought before an English court, which works most effectively when applying its own law no evidently superior alternative legal system presently exists Some commentators on Islamic finance have criticised the reliance on English law and the English courts, contending that they lack the capability to interpret Islamic finance...
What does this Practice Note cover? This Practice Note sets out, in broad terms, the overall concept of subordination and addresses: legal subordination structural subordination in debt capital markets transactions contractual subordination in debt capital markets transactions subordination in debt securities issued for regulatory capital purposes subordinated debt securities issued as part of a larger financing structure, and subordination in securitisations and other asset-backed securities Meaning of subordination Subordination describes an arrangement under which a liability or claim only becomes payable after another liability or claim, or a class of liabilities or claims, has been discharged. The obligation that is deferred until another obligation has been settled is called subordinated debt. In some deals, subordinated debt is labelled junior debt, and in those deals the obligation that is payable ahead of the subordinated debt is typically called senior debt. Senior debt is regarded as ranking above, and enjoying priority over, the junior debt. In a...
A legal opinion A legal opinion is a formal statement setting out a view on legal matters connected to a transaction. As discussed in more detail below, such opinions usually address several facets of a transaction, and the extent of the opinion differs on a case-by-case basis. This Practice Note concentrates on opinions on matters of English law. Where parties or assets are situated in multiple locations, multiple legal opinions will commonly be required, each dealing with issues relevant to the applicable jurisdiction. This Practice Note highlights matters relevant to opinions for secured bond issues. Most of the subjects covered in those opinions mirror the matters dealt with in opinions for unsecured bond issues. However, secured transactions involve particular issues that must be addressed in such opinions, together with additional assumptions and reservations that are typically included, and these are explored in detail below. For...
Insolvency of private not-for-profit registered providers of social housing The social housing landscape in England is often labelled a ‘no default’ market, reflecting that no English private not-for-profit registered provider of social housing ( NFPRP) of meaningful scale has ever been wound up through insolvency. When providers have encountered financial stress, the regulator of social housing (under its various historic incarnations) (the Regulator) has, thus far, leveraged regulatory intervention and sector-wide influence, including with the principal funder, to broker rescues by ‘white knights’—typically larger NFPRPs operating in the same locality as the faltering body or organisations with the requisite specialist know-how. This approach has to date avoided insolvent winding-up for significant NFPRPs, with takeovers arranged to steady distressed entities by suitable counterparts. The current housing administration framework was created by Part 4, Chapter 5 of the Housing and Planning Act 2016 ( HPA 2016) and...
This Practice Note explores the principal legal terms typical of social housing finance and what distinguishes them from financing in other sectors. It focuses on standard financial covenants and other sector‑specific provisions, including events of default, together with terms linked to the availability of long‑term fixed rate interest options. For more on social housing finance transactions, see Practice Notes: Social housing entities entering into finance transactions Key deal structures in social housing finance Taking and enforcing security from social housing entities This Practice Note concentrates solely on private not‑for‑profit providers of social housing registered in England (referred to as ‘ RPs’), as they comprise the vast majority of private debt finance raised by housing associations to date. It does not cover providers registered in Wales. Financial covenants—introduction The principal financial covenants in social housing finance are: loan to...
This Practice Note explores third party rights in relation to agreements under the Contracts ( Rights of Third Parties) Act 1999 ( C( RTP) A 1999). The Act introduces a statutory exception to the common law rule of privity of contract, enabling contracts within its reach to be enforced by third parties who are intended to benefit from them. This Practice Note does not deal with the Third Parties ( Rights Against Insurers) Act 2010... For the purposes of this Practice Note: A is the promisor and a party to the contract B is the promisee and a party to the contract C is the third party (and therefore not a party to the contract) Not a party but still affected by a contract Where your client is not a party to a contract, whether they may nonetheless be...
The Sanctions and Anti- Money Laundering Act 2018 ( SAMLA 2018) forms the UK’s home-grown sanctions architecture. Refer to Practice Notes: The UK sanctions framework under SAMLA 2018 and UK sanctions regimes currently in force. When advising on breaches and enforcement, advisers should consult the particular sanctions statutory instrument to verify the applicable bans, carve-outs and enforcement powers for that regime. This confirms the scope of prohibitions, any exclusions, and the enforcement mechanisms relevant to that particular regime. Always anchor advice to the instrument in force at the time. Who is responsible for enforcing financial sanctions in the UK? Within the UK, financial sanctions are enforced by the Office of Financial Sanctions Implementation ( OFSI), a division of HM Treasury. OFSI’s function is to oversee and implement financial sanctions nationwide. Broadly, ‘financial sanctions’ covers naming persons and entities, and placing...
This Practice Note This Practice Note examines how a mortgagee may enforce its security after an event of default in a ship finance deal and, in particular, addresses: the mortgagee’s entitlement to take possession of the vessel private disposal of the vessel by the mortgagee arrest of the vessel and sale by the court (a judicial sale) maritime and possessory liens Where the vessel’s owner commits an event of default, amounts secured by the ship mortgage will typically become immediately due and payable. If those sums are not remitted, the mortgagee can enforce the security, seek to sell the ship, and recover the outstanding indebtedness. For the mortgagee to secure the highest level of protection in the UK, the ship mortgage ought to be registered against the vessel at the UK Ship Registry and, where the mortgagor is a body corporate under the Companies Act 2006 ( CA 2006), it should also be...
Summary A secured creditor enjoys a range of remedies through which it can realise value from its security. Even so, it remains prudent for any such creditor to work through a series of checks before exercising those powers. The secured creditor will, unsurprisingly, be driven by the goal of maximising the prospect of being repaid in full, and will want to be sure that taking enforcement action is the most appropriate means of achieving that aim. Where a decision to proceed is reached, the security holder must then determine which enforcement route offers the most effective and efficient way to meet the overall objective. This Practice Note sets out the main issues that a secured creditor should examine before deciding to enforce its security. is there a workable alternative to enforcement, eg a consensual restructuring of the debt or a voluntary programme of...
Summary The character of the asset subject to security usually determines how value is realised for the security holder upon enforcement. For goods and chattels, a broadly comparable range of remedies is available to those used where security is taken over land—see Practice Note: Enforcement—security over land. There are, however, two significant exceptions to this general position. First, foreclosure cannot be used where goods or chattels are subject to a charge or pledge. Secondly, if security over goods or chattels is documented and granted by an individual, it may constitute a bill of sale, and statutory limits will apply to the exercise of the security holder’s remedies. These restrictions are set out in the Bills of Sale Act 1878 ( BSA 1878) and the Bills of Sale Act (1878) Amendment Act 1882 ( BSA(1878) AA 1882). Although, in legal terms, the remedies may...
In a given real estate finance ( REF) deal, a lender usually has several enforcement avenues at its disposal. It must review and weigh: the commercial position of the deal at the point of distress the security granted the legal regime governing the loan the jurisdictions of both the borrower and the property These factors inform the choice of the most viable enforcement route to optimise recoveries. Restructure or enforce? In the majority of stressed REF cases, lenders seek to exhaust restructuring routes before turning to enforcement. Lenders usually possess wide discretion to take steps they consider necessary or appropriate to restructure a REF facility. Examples include granting standstills, extending the loan maturity and consenting to other amendments to the facility agreement. They may also freeze bank accounts and limit outflows (as most REF deals feature structured account...
This Practice Note sets out an overview of how derivatives are applied within the energy markets and considers divergence between EU and UK regulation of energy derivatives. What are energy derivatives? Energy derivatives track the price of an underlying energy commodity, including oil, gas or electricity. They can be traded over the counter ( OTC) or on an exchange (exchange traded derivatives or ETDs). Market participants include: brokers financial institutions investment funds speculators direct energy users Common types of energy derivatives Forwards/futures A forward in the energy sector is an OTC derivative providing for the future delivery of an energy product, with the price fixed on the date the agreement is concluded. A futures contract is broadly comparable but is traded on an exchange rather than negotiated privately with a market counterparty. For further detail on these instruments, see Practice Note: Types of...
Electronic signature platforms (including Docu Sign and Adobe Sign) have reshaped the way commercial documents are executed. Within banking and finance deals, this evolution matters especially for security documents, guarantees and intercreditor agreements, many of which are completed as deeds and depend on strict adherence to statutory formalities. These services operate by enabling their users to upload documents into a secure, cloud-based workspace, from which signatories are sent links to review and sign remotely. Entry commonly requires two-factor authentication, and signatories agree to the platform processing personal data such as email addresses, telephone numbers and IP addresses. When signing is finalised, the platform issues a certificate that provides a digital audit trail of the execution. It sets out who signed the document, their email address, their IP address, any extra steps (such as two-factor authentication) used to verify the identity of the...
The rules regarding Scottish electronic documents and their execution are contained in: Requirements of Writing ( Scotland) Act 1995 ( RW( S) A 1995) Assimilated Regulation ( EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (as amended by the Electronic Identification and Trust Services for Electronic Transactions ( Amendment etc) ( EU Exit) Regulations 2019) ( UK e IDAS) Land Registration etc ( Scotland) Act 2012 ( LRE( S) A 2012) Electronic Documents ( Scotland) Regulations 2014, SSI 2014/83 Land Registration etc ( Scotland) Act 2012 ( Commencement No 2 and Transitional Provisions) Order 2014, No 41 ( C 4) (2014 Order) Land Register of Scotland ( Automated Registration) etc Regulations 2014, SSI 2014/347 Legal Writings ( Counterparts and Delivery) ( Scotland) Act 2015 ( LW( CD)( S) A...
The conflict in Ukraine spurred the Economic Crime ( Transparency and Enforcement) Act 2022 ( EC( TE) A 2022), forming part of the UK government’s response. The Bill was hurried through Parliament in March 2022, completing every stage within five Parliamentary sitting days. EC( TE) A 2022 aims to stop the UK property market being used to store, hide or launder criminal proceeds and wealth, and to deliver greater openness about the ultimate owners of property and assets held in the UK. The Act is divided into three principal sections. Part 1 introduces substantive new primary legislation for registering overseas entities. Part 2 adjusts existing proceeds of crime laws relating to unexplained wealth orders. Part 3 amends the Policing and Crime Act 2017 to implement changes to the sanctions framework. EC( TE) A 2022, Pt 1, which brings in the overseas entities regime, will be of...
The Economic Crime and Corporate Transparency Act 2023—what Banking & Finance lawyers need to know The Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023) was granted Royal Assent on 26 October 2023. It introduces wide-ranging reforms and upgrades aimed at corporate openness and the reliability of information maintained by Companies House. Some elements are yet to commence—see Progress on implementation of ECCTA 2023 below. Companies House has issued a series of factsheets explaining the various measures contained in ECCTA 2023. For broader information on legislative roll-out and timings, consult the Economic Crime and Corporate Transparency Act 2023—legislation and consultation tracker. For guidance on identity verification obligations and their practical effects, see Key Identity Verification Requirements Introduced by Companies House. This Practice Note highlights key developments under ECCTA 2023 that Banking & Finance lawyers should...
The concepts of material adverse change ( MAC) and material adverse effect ( MAE) are deployed in distinct yet connected ways in a standard facility agreement. Material adverse effect Facility agreements typically include a defined term for material adverse effect. Its primary function is to qualify specified representations, undertakings and events of default. Material adverse change A material adverse change in the borrower’s circumstances is often treated as a separate event of default. This provision is routinely the subject of heavy negotiation, with variations in scope. A common formulation links the MAC event of default back to the MAE definition. The borrower is also required to represent—sometimes on a repeating basis—that no material adverse change has occurred to its business or financial condition since the date of the most recent financial statements delivered to the lender. The drafting of the material adverse effect definition determines both the reach of the...
This Practice Note examines the application of term risk‑free rates ( RFRs) in loan agreements. It addresses: what term RFRs exist and when they are appropriate Term Secured Overnight Financing Rate ( Term SOFR) and the Loan Market Association ( LMA) Facilities Agreements EURIBOR and Term €STR key considerations when deploying Term Sterling Overnight Index Average ( Term SONIA) For: guidance on using compounded RFRs in loan agreements, see Practice Note: Interest provisions in risk‑free rate based loan agreements background on interest in a facilities agreement and the types of rates available, see Practice Note: Introductory guide to interest in loan agreements our material in an easy‑to‑navigate interactive toolkit, see: toolkit an overview of the key issues in the LIBOR transition, see Practice Note: Introductory guide to LIBOR transition a list of...
Key takeaways Purpose of the SLL Provisions: The LMA’s Sustainability- Linked Loan Provisions set out suggested wording to embed sustainability-linked terms within loan documentation. Function and Scope: In SLLs, the interest margin flexes according to the borrower’s progress against pre-agreed SPTs, measured by defined KPIs. Sustainability Margin Adjustment: A ratchet applies so the margin moves up or down based on the count of SPTs achieved in each SLL Reference Period, with scope to customise triggers and the economic effect. Compliance and Reporting: After every SLL Reference Period, the borrower must provide a Sustainability Compliance Certificate, backed by a Sustainability Report and an independent Verification Report evidencing outcomes and approach. Consequences of Breach: Breaching sustainability-linked undertakings or representations typically does not constitute an event of default; instead, SPTs are treated as unachieved, which feeds into margin calculations and may precipitate...
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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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