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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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Registration of aircraft mortgages at the Civil Aviation Authority ( CAA) This Practice Note explains how to record aircraft mortgages with the Civil Aviation Authority ( CAA) within a typical aviation finance deal. It does not address every action that might be necessary to perfect security over an aircraft. For guidance on filing security at Companies House, and on how that filing interacts with entry on the UK Register of Aircraft Mortgages, consult Practice Note: Perfecting security over aircraft and registering security on the UK Register of Aircraft Mortgages. See also Practice Note: Aviation finance and the Cape Town Convention. The CAA is responsible for keeping the United Kingdom Register of Civil Aircraft (the ‘ Register’). The Register contains entries where an aircraft serves as collateral for a mortgage or loan. It does not, however, record other categories of security interest, for example liens over the...
Operating leases are widely used across the airline sector. Because aircraft have long service lives, a mature marketplace for trading pre-owned aircraft has emerged. For a lessee, the essentials are that the leased aircraft is airworthy and that it can operate it without interference from the lessor. For a lessor, the fundamentals are being paid for the lessee’s use of the aircraft and avoiding any loss arising from the lessee’s operation of the aircraft. This Practice Note sets out what an operating lease is, how it contrasts with other leasing structures, and the core concepts underpinning the business of operating lessors. It highlights the principal clauses typically found in operating leases, including delivery condition, quiet enjoyment, rent and deposits, and operational indemnities. It also addresses key provisions on subleasing and events of default. The business of operating...
This Practice Note provides a starter overview of acquisition finance for readers with little or no prior exposure. It sets out: what acquisition finance means the parties involved and the documents used in an acquisition finance deal typical structures for acquisition finance transactions the main phases of an acquisition finance transaction the key legal topics to consider recent developments of particular relevance to the leveraged finance market It also directs you to related resources within Lexis+. Understanding key terminology Acquisition finance involves extensive jargon and shorthand. For explanations of common expressions, see Practice Note: Glossary of acquisition finance terms and jargon. You may find it useful to read this Practice Note alongside the glossary. What is meant by the term acquisition finance? Acquisition finance transaction The phrase ‘acquisition finance transaction’ generally describes the purchase of a business that is largely funded by debt...
Standby letters of credit Originating in the US as a means to bypass the prohibition on domestic banks issuing guarantees, standby letters of credit were developed to fill that gap. Outside the US, parties more commonly opt for an on demand guarantee or bond (see Practice Note: On demand guarantees and bonds) rather than a standby letter of credit. A standby letter of credit belongs to the broader category of letters of credit. What unites all letters of credit is a bank’s promise to pay the beneficiary a defined sum within a stated period against presentation of specified documents that comply with the credit’s terms. Letters of credit fall into two main forms: commercial letters of credit (also called traditional letters of credit) standby letters of credit (also called standby credits) The intended purpose of the credit determines which type applies......
Set-off remains a nuanced but significant doctrine across litigation and a wide range of transactions. Both independent set-off and transaction set-off may serve as defences in legal proceedings. For further detail, see Practice Notes: Independent set-off and transaction set-off and Pleading set-off. In commercial contexts, transaction set-off is a key entitlement for a party asserting breach of contract to resist a demand for payment under that contract. Parties to a contract can also make express provision for set-off in their written terms, either widening or curbing the extent of mutual rights to set off. For more information, see Practice Note: Contractual set-off. Within finance deals, contractual set-off, insolvency set-off and banker's set-off are often central. For more information, see Practice Note: Set-off in finance transactions. The construction industry also relies on set-off to help regulate cash flow. For more...
This Practice Note This Practice Note serves as a primer on the facilities commonly included in a leveraged senior facilities agreement ( SFA) and considers: the key attributes of each category of senior facility the types of senior lenders typically involved how the terms of the senior facilities are documented the security package and intercreditor position for senior facilities For an introductory overview of acquisition and leveraged finance, see Practice Note: Introductory guide to acquisition finance. For fuller detail on standard terms for senior facilities, see Practice Note: Introductory guide to leveraged finance facilities agreements. Definitions for many of the expressions used in this Practice Note are set out in the Glossary of acquisition finance terms and jargon......
This Practice Note offers a concise introduction to security and addresses the following: what security is why lenders take security who may grant security which assets can be the subject of security what forms of security can be granted what perfection is and why perfecting security matters other steps a lender can take to improve its place in the order of priority In this Practice Note, the term ‘security provider’ means the person or entity that creates security over its assets. The term ‘secured party’ means the person or entity that benefits from that security. The secured party is commonly a lender under a loan, and this Practice Note proceeds on the basis that security is taken in connection with a lending transaction. Security, however, may support any form of...
Companies beginning to exhibit financial strain often find their borrowings changing hands on the secondary market at prices below par or face value. The size of this discount signals the market’s judgement on the chances of full repayment. Original lenders of record, such as banks or loan originators, may wish to offload their exposure in the secondary market to: deleverage balance sheets to meet regulatory demands or maximise shareholder value; dispose of non-performing loans; pare back exposure to a particular debtor or sector in line with strategic aims. In complex restructurings, high levels of debt churn can frustrate talks with key creditors, as participants keep changing, producing a revolving door effect. Key players Typical secondary debt participants include hedge funds, vulture funds, special situation funds, private equity ( PE) funds and pension funds. They trade in secured or unsecured debt, bank or bond debt, or trade claims......
What is the Central Registry of Winding-up Petitions? The Central Registry of Winding-up Petitions (the Central Registry) is a computerised index of winding-up petitions and administration applications, kept for all petitions or applications submitted to the Insolvency and Companies List (formerly the Companies Court), a Chancery District Registry, or the County Court. A search of the Central Registry should disclose: any petition or order for the winding-up of a company made in England and Wales; and any administration application, order or appointment (including out-of-court appointments and intentions to appoint) filed in England and Wales The Central Registry exists to reduce the risk of petitions being presented twice, largely because the jurisdiction to issue such petitions is wide. The court should be notified of any earlier pending petitions before determining a current petition. The court should be told of any such earlier petition before ruling on the present...
STOP PRESS The Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023) obtained Royal Assent on 26 October 2023. Part 1 of ECCTA 2023 comprises a significant suite of measures that bolster the function of Companies House and increase the transparency of UK corporate entities, furthering the openness of UK corporate bodies. The ECCTA 2023’s provisions will be introduced gradually over time, over an extended period. Numerous elements of the statute depend on detailed secondary legislation and guidance, alongside the development of fresh technical systems and tools to deliver the changes. For further details, see Practice Notes: The Economic Crime and Corporate Transparency Act 2023—what Banking & Finance lawyers need to know and The Economic Crime and Corporate Transparency Act 2023—tracker. This Practice Note draws out the practical distinctions between legal entities in Scotland and those in England and Wales. It also addresses the legal...
This Practice Note examines retention of title clauses, also described as reservation of title, ROT or Romalpa clauses. It reviews how these clauses may safeguard a creditor-seller against a debtor-buyer’s insolvency, as well as their limits. It outlines the principal features of such clauses and distinguishes between basic and extended forms, including ‘all monies’ and ‘proceeds of sale’ provisions. It also addresses practical issues around incorporating ROT terms, enforcement, and other protective avenues open to a seller. Simple retention of title clauses Extended retention of title clauses, including ‘all monies’ and ‘proceeds of sale’ clauses What is a retention of title ( ROT) clause? At its most straightforward, a retention of title clause is a contractual term enabling the seller to keep title to goods it has supplied until the buyer has paid in full or, where permitted, resold them to a third party (...
This Practice Note explores the meaning of representations and warranties under general contract law. It reviews their role in financial transactions and the usual categories of representations found in facility documentation. It also examines when, over the life of a facility, representations are given and the typical negotiation points for the parties when settling the documents. Where relevant, this Practice Note signposts provisions in Precedent: Facility agreement (term loan): single company borrower—bilateral—with or without security or a guarantee and the Loan Market Association ( LMA) investment grade multicurrency term facilities agreement with/without observation shift (the LMA facilities agreement) (available to LMA members on the LMA website). The LMA’s user guides (available in the Documents & Guidelines section of its website) provide helpful commentary on representations and warranties in LMA investment grade...
What is the Renewables Obligation scheme? The renewables obligation ( RO) was designed to stimulate investment in renewable generation. It came into force in Great Britain in 2002, and in Northern Ireland in 2005. Under the scheme, electricity suppliers serving customers had to procure an ever-rising share of their wholesale power from renewable sources. Subject to certain exceptions, RO accreditation ended on 31 March 2015 for new solar PV and onshore wind projects, and from 1 April 2017 for all other new types of electricity generation. For more on this, see: Closure of the RO to new generation and grace periods below. The Secretary of State ( So S) for Energy, Security and Net Zero, who leads the Department for Energy Security and Net Zero ( DESNZ), determines the obligation in line with the Renewables Obligation Order 2015 ( RO Order 2015) SI...
This Practice Note explains when a rectification claim may be suitable, what you must prove to succeed, and which evidence may be admissible in support. What is rectification? Rectification is an equitable remedy intended to correct a document so that it reflects the parties’ true intentions. When contracting, the parties may have shared a common intention about the meaning of their agreement at the time of drafting, yet that intention is not captured in the wording; ie it diverges from the objective meaning of the contractual document as determined in accordance with the rules of contract interpretation (on which, more generally, see Practice Note: Contract interpretation—rules of contract interpretation). In those circumstances, a claim for rectification may be appropriate. As Hildyard J observed in Procter & Gamble v Svenska Cellulosa, the purpose of rectification is not to vary, modify or extend the bargain; it is to reform the...
Appointing a receiver offers creditors and certain other parties a means to safeguard their interests in a company’s assets. This note outlines the available forms of receivership and the key consequences of a receiver being appointed. For access to materials within the Receivership subtopic, refer to: Receiverships—overview. The following features apply across all receivership types: A company does not have to be insolvent to enter receivership Other creditors may still pursue claims despite a receiver being appointed During the receivership, the company’s dealings with property covered by the appointment are curtailed Receivership does not automatically lead to liquidation (the winding up of its affairs) Further points specific to particular receivership forms are outlined below. Law of Property Act ( LPA)/fixed charge receiver Under the Law of Property Act 1925 ( LPA 1925), a mortgagee may appoint an LPA...
This Practice Note outlines what constitutes a public to private ( P2P) deal and the relevant UK regulatory framework in brief. It also highlights particular matters a P2P can trigger under the City Code on Takeovers and Mergers (the Code) and addresses, among other things, directors’ duties. Public to private transactions Types of public to private transactions A public to private transaction (also referred to as a ' P2P' or a 'take-private' transaction) typically entails an offer for the entire issued share capital of a listed target company (the offeree) by a newly formed company established to act as the bidding vehicle ( Bidco), owned by a private equity firm and members of the offeree’s management team in tandem (the offeror). The offeree will ordinarily be de-listed (for example, from the Main Market or AIM) and ultimately re-registered as a private company. Generally, the private equity fund will take a...
Principles of security in project financing Project finance is fundamentally a form of secured lending. The motivations for taking security in a project finance deal mirror the key benefits found in wider commercial finance, including: granting lenders precedence over the borrower’s unsecured creditors enhancing lenders’ prospects of recovering funds in an insolvency situation allowing lenders, where the law of the relevant jurisdiction permits (see Onshore and offshore security—relevant jurisdictions below), to appoint a receiver or administrator providing mechanisms for lenders to exercise control over the assets of the borrower (and any other security provider) In essence, security within a project finance structure serves a twofold function—defensive and offensive......
Projects are typically financed on a limited recourse basis In project financings, capital is usually assembled from a combination of sources: government contributions senior debt arranged by commercial lenders and/or funds (see Practice Note: Project finance—key finance parties) equity injected by project sponsors (see Practice Note: Project finance—key project parties— Sponsor) That said, in some jurisdictions, obtaining senior debt from commercial lenders and/or funds can prove difficult owing to constrained local liquidity and/or actual or perceived political risks (see Practice Note: Project risks and risk allocation— Legal and political risk in a project finance transaction). In developing markets, this shortfall can be addressed by institutional lenders such as Export Credit Agencies ( ECAs) and multilateral or bilateral (national) Development Finance Institutions ( DFIs). Alternatively, providers of senior debt may benefit from ECA or DFI support through a guarantee or other insurance...
What is a direct agreement? Direct agreements are commonplace in project finance transactions. A direct agreement grants the project’s lenders direct rights in relation to a key project document (for the meaning of 'project document', see Project documents—issues for lenders—overview). Those rights are outlined in Direct agreements—key provisions below. For an illustration, see Precedent: Form of Contractor Direct Agreement in favour of a lender (for use on infrastructure and energy projects). The relevance of project documents Project documents are the contracts that allocate each party’s responsibilities on a project, and the outcome of most projects frequently hinges on them. For a project that has not yet been constructed, one of the project company’s (for the meaning of 'project company', see Practice Note: Project finance—key project parties) most valuable assets will be its rights under the construction contract. Once the project is fully built, documents of...
The core rule in property deals is caveat emptor—let the buyer beware. Put simply, the onus lies with the purchaser to ensure the asset they are buying matches what they intend to obtain, and that the consideration reflects fair value for what is on offer. Accordingly, the buyer must carry out as much investigation as possible before becoming bound to proceed... Searches deliver independent, third-party information about the property, supplementing or verifying details already identified from reviewing the title deeds or responses to enquiries. See also Practice Notes: Transferring commercial property—a practical guide— Pre-exchange—the due diligence process and Property—enquiries before contract and Due diligence—reviewing a registered title—checklist. This Practice Note examines the pre-contract searches that must, or are recommended to, be undertaken as part of title due diligence and are most frequently encountered in day-to-day practice. The list is not...
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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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