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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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Who are the parties to the Legal opinions are a core documentary condition precedent in loan transactions. In this setting, a legal opinion is a letter issued by a law firm to the lender(s) that sets out conclusions on points of law only; it does not address factual matters. The letter comprises the opinions themselves, together with a range of assumptions and qualifications, which often account for most of the document. It is usual for the solicitors acting for the lender(s) to provide the legal opinion on finance transactions; however, this ultimately turns on what the parties agree, the law firms advising them, and which opinions are needed, such as: capacity due execution enforceability (any one or more) For further guidance, see Practice Note: Legal opinions—uses, scope and structure— What is a legal opinion? and When do you use a legal...
Good and marketable title This Practice Note explains the meaning of ‘good and marketable title’, a phrase frequently seen in title certificates, reports, and property warranty provisions. For more detail on reporting to lenders and on property warranties, see the Practice Notes: Reporting to a lender in an investment real estate finance transaction, and Property warranties and indemnities in corporate transactions. The UK Finance Mortgage Lenders’ Handbook and the Building Societies Association Mortgage Instructions likewise require a lender’s solicitor to be in a position to certify that the title to the property is ‘good and marketable’. See Practice Note: Lenders’ instructions—the UK Finance Mortgage Lenders’ Handbook and the Building Societies Association Mortgage Instructions therein......
Bills of exchange Also known as ‘drafts’, bills of exchange are negotiable instruments that evidence an unconditional undertaking by one party (the drawer) to pay money to another (the drawee) in line with the terms contained in the instrument. They are commonly deployed in trade finance where, for one reason or another, a party prefers not to settle its account straight away. The Bills of Exchange Act 1882 ( BEA 1882) sets out in detail the formal requirements governing the form of a bill of exchange and, accordingly, should be referred to before any detailed consideration of a bill. BEA 1882 provides that a bill of exchange is: ‘…an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or...
Background to the regulated activity of accepting deposits Section 19 of the Financial Services and Markets Act 2000 ( FSMA 2000) prevents any person from lawfully performing regulated activities in the UK unless they are authorised or otherwise exempt from authorisation. This restriction is commonly termed the general prohibition. For fuller guidance on the general prohibition and its territorial reach, see the Practice Notes: The general prohibition and implications of its breach, and Territorial scope of the general prohibition. ‘ Regulated activities’ encompass specified activities carried on by way of business that concern ‘specified investments’, or any property to which the relevant activity relates. For these purposes, ‘specified’ means identified by HM Treasury. The Financial Services and Markets Act 2000 ( Regulated Activities) Order 2001, SI 2001/544 ( RAO) sets out a range of activities and investments that are so specified. For...
STOP PRESS The UK’s prospectus framework currently derives from the EU Prospectus Regulation, retained in UK law as the UK Prospectus Regulation. Following a review of the UK prospectus regime, the UK Prospectus Regulation will be replaced by the Public Offers and Admission to Trading Regulations 2024, with detailed admission-to-trading requirements to be set out in Financial Conduct Authority ( FCA) admission rules. The FCA published its final rules on 15 July 2025. The new rules take effect on 19 January 2026. This Practice Note reflects the requirements of the UK Prospectus Regulation regime. What does this Practice Note cover? This Practice Note: explains what financial services regulation is and why regulating the financial sector matters highlights the regulatory regimes that lawyers should consider when advising on lending, debt issuance and derivatives transactions provides a summary of the UK and EU...
Background This Practice Note outlines, at a high level, the definition of a client in chapter 3 of the Financial Conduct Authority’s Conduct of Business sourcebook ( COBS), and how such clients are classified as retail clients, professional clients or eligible counterparties for regulatory purposes. The COBS 3 provisions stem from the Markets in Financial Instruments Directive ( Directive 2004/39/ EC) ( Mi FID). Mi FID was superseded by the recast Mi FID ( Directive 2014/65/ EU) ( Mi FID II) together with the EU Markets in Financial Instruments Regulation ( Regulation ( EU) 600/2014, OJ L 173, 12.6.2014) ( EU Mi FIR) (collectively, the EU Mi FID II framework). As amended, most of the EU Mi FID II framework has been in force since 3 January 2018, and EU Member States had until 3 July 2017 to implement Mi FID II into their...
Scope of this Practice Note Land, or real property, is frequently taken as security for a loan...
In commercial lending, receivables are commonly pledged as security: as part of an all-asset security package over the entirety of a company's assets (see Practice Note: Key features of debentures); and in arrangements where a consistent flow of receivables represents a substantial element of the borrower's asset base and the lender seeks oversight of that income stream (for example, where the borrower supplies goods and services to third parties) This Practice Note outlines the principal issues that arise when taking security over receivables. For guidance on securing other categories of intangible assets, see the Practice Notes: Taking security over insurance policies, and Taking security over intellectual property rights While this Practice Note concentrates on receivables, broader guidance on taking security over contractual rights is set out in Practice Note: Taking security over contractual rights. For material specific to...
Goods range from substantial, high-value assets like ships and aircraft to everyday stock in trade. The way a lender secures goods from a corporate chargor will turn on a variety of factors. This Practice Note sets out: what we mean by ‘goods’ which form of security suits different categories of goods, and whether any perfection steps apply when taking security over goods It does not address security over personal chattels (that is, goods owned by individuals). For guidance on taking security from individuals, see Practice Note: Key issues in taking security from individuals. What we mean by ‘goods’ Tangible assets Goods are physical, tangible assets, distinct from intangible assets such as intellectual property (see Practice Note: Taking security over intellectual property rights) and contractual rights (see Practice Note: Taking security over contractual rights)......
ARCHIVED: This Practice Note is archived and is not maintained. A major overhaul of the UK listing framework took effect on 29 July 2024, abolishing the premium and standard segments and introducing a single listing category for equity shares of commercial companies. This reform replaced the earlier two-segment approach with one category for those equity shares, reshaping the overall regime. The commercial companies category is strongly disclosure-led and sits beside other categories, including shell companies, secondary listing and closed ended investment fund categories. To deliver these changes, the UK Listing Rules sourcebook came into force and the former Listing Rules sourcebook was withdrawn. For more detail see Practice Note: Reform of the UK listing regime—fundamentals. This Practice Note describes the position before 29 July 2024 and is retained for reference purposes only. The Financial Conduct Authority ( FCA) holds a statutory power under the...
This Practice Note explores five categories of set-off—emphasising that contractual set-off, insolvency set-off and banker’s set-off matter most in finance, particularly commercial lending. It also addresses issues concerning guarantees and freezing injunctions linked to set-off. For a general overview, see Practice Note: What is set-off and when is it available?... When is set-off relevant to finance transactions? There are five principal forms of set-off: independent set-off (also referred to as legal set-off or statutory set-off) transaction set-off (also called equitable set-off) contractual set-off insolvency set-off banker’s set-off (also known as current account set-off) For further detail, see Practice Note: Types of set-off. In commercial loan arrangements, the most significant variants are generally contractual set-off, insolvency set-off and banker’s set-off... Contractual set-off provisions in loan documentation For guidance on contractual set-off generally, see Practice Note: Contractual set-off. Many finance agreements in loan deals include...
This Practice Note carefully examines the overarching principles for assessing class questions in-depth. For fuller guidance on what, in practice, could or could not split a class, please refer to: Checklist of factors which may (and may not) fracture the class in a scheme of arrangement or restructuring plan. Statute and Practice Statement Under Part 26 of the Companies Act 2006 ( CA 2006), which regulates the scheme of arrangement (scheme) procedure, and CA 2006, Pt 26A, which regulates the restructuring plan ( RP) procedure, the applicant must, at the outset, seek a formal court order to convene the relevant meeting(s) of creditors, members, or any class(es) in question, to approve the proposed scheme/ RP. Absent properly constituted meetings of the applicable classes of creditors and/or members, the court lacks jurisdiction and, at the later sanction hearing, cannot lawfully proceed to sanction the scheme/ RP....
This Practice Note outlines the formal requirements for witnesses, covering who may witness another person’s signature on a document connected to a commercial deal, such as a deed or simple contract, as well as witnessing electronic signatures and the current approach to video witnessing in practice. For guidance on witnessing wills, see Practice Note: Validity of Wills—signature. We have created a collection that serves as a comprehensive, interactive resource to help users recognise and navigate the concepts and frequent issues and pitfalls in executing documents, including the witnessing of signatures. Each stage or phase provides practical guidance, precedent clauses and Q& As relevant to that stage. For further details, see: Execution collection. Witnessing What is the difference between witnessing and attestation? Witnessing is the act of observing the execution of a document. Attestation adds the further step of noting, on the document itself, that the witness has seen the...
What is a debenture? In secured lending, a debenture is a form of security agreement that creates security interests over a wide range of the security provider’s assets as collateral, either for the security provider’s own obligations or for those of a third party. Debentures commonly comprise: fixed security over particular assets, namely: mortgages (including assignments by way of security) fixed charges a floating charge over all other assets of the security provider (that is, any assets not captured by the fixed security) For more information on debentures and their formalities, see Practice Note: Key features of debentures. Where a company cannot satisfy its obligations under a loan agreement or another financial arrangement, lenders will need to consider the options open to them to recover...
A guarantee may exist as a standalone document or be included within the facility agreement as a guarantee clause. Regardless of the structure selected, the core principles for drafting and negotiating guarantees remain consistent. Parties For a separate guarantee, whether entered into as an agreement or executed as a deed, the parties will be: in a bilateral transaction—the guarantor and the lender, and in a syndicated transaction—the guarantor and the security agent acting for the lenders Where the guarantee is embedded in the facility agreement, each guarantor must also be a party to that agreement alongside the other contracting parties. Drafting the guarantee In most cases, the lender’s solicitors will produce the initial draft of the guarantee provisions, whether set out in a separate guarantee or contained within the facility agreement. Finding a suitable precedent When selecting an appropriate precedent guarantee, consider: who is granting the...
For an explanation of why participants in a loan transaction may adopt hedging, see Practice Note: Use of derivatives to hedge against risk in a lending context. Parties The parties to the hedging arrangements will be: the borrower, and the hedging bank (often called the hedging counterparty) The hedging bank will frequently be the lender, or, in a syndicated deal, one of the lending group. Nevertheless, the hedging bank operates in a distinct capacity from its role as lender, and separate teams within the bank will act for it in each role. For further details, see Practice Note: Use of derivatives in a lending context—documentation issues— Hedging bank and lending bank. Hedging documentation in loan transactions Certain facility agreements contain a clause detailing what hedging is required for a particular deal (for instance, clause 8.3 of the Loan Market Association ( LMA) Single Currency Term Facility Agreement for Real Estate...
Step-by-step guide Party A and Party B execute an International Swaps and Derivatives Association ( ISDA) Master Agreement and Schedule, and mutually confirm that they will record their currency rate swap ( CRS) Assume the opening exchange amounts for the CRS are USD 100 and €90 Assume that settlement falls due every quarter (it could also be yearly)......
Part 26A restructuring plans ( RPs) Since 26 June 2020, Part 26A restructuring plans ( RPs) have been in force by virtue of the Corporate Insolvency and Governance Act 2020 ( CIGA 2020). Section 7 and Schedule 9 of CIGA 2020 inserted a new Part 26A into the Companies Act 2006 ( CA 2006), entitled ‘ Arrangements and Reconstructions for Companies in Financial Difficulty’. The framework for their use is informed by: the applicable Practice Statement (see Practice Note: The Practice Statement for Part 26 schemes and Part 26A restructuring plans (2025)); and the Explanatory Notes, which are admissible to assist with interpretation without any need to show that the legislation is ambiguous or unclear (per Snowden J, as he then was, in Re Virgin Atlantic Airways, applying Re Flora v Wakom ( Heathrow) Ltd). These RP provisions represent a permanent reform of the UK’s...
The Insolvency Act 1986, s A1 ( IA 1986) The Insolvency Act 1986, s A1 ( IA 1986) sets out a mechanism allowing directors of insolvent companies, or those likely to become insolvent, to secure a moratorium. The initial period is a 20 business day period, with scope for extension in defined circumstances. The regime is underpinned by the Insolvency ( England and Wales) Rules 2016 ( IR 2016), SI 2016/1024, r 1A.1. Its purpose is to give otherwise viable businesses breathing space to reorganise or attract fresh investment without the pressure of creditor enforcement. The statutory architecture for this moratorium was added to IA 1986 by the Corporate Insolvency and Governance Act 2020 ( CIGA 2020), expedited in response to the coronavirus pandemic. An insolvency practitioner acts as ‘monitor’, supervising compliance, while the directors continue to manage day-to-day operations, albeit within...
What does this Practice Note cover? This Practice Note sets out the nature and framework of convertible and exchangeable securities. It considers: what convertible and exchangeable securities are why they are issued why investors choose to invest in them the principal terms commonly included in convertible and exchangeable securities documentation, including share allocation on conversion or exchange, anti-dilution adjustments, investor protections, change of control and call options disclosure requirements private placements What are convertible and exchangeable securities? These are forms of equity-linked debt securities. They give the investor the right to convert the debt into equity (ie shares) of the issuer, or to exchange the debt for equity in another company. This Practice Note focuses mainly on transactions where both the securities and the exchange or conversion shares are tradeable and listed. They are also referred to as ‘hybrid...
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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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