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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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What is meant by a contractual recognition of bail-in clause? The notion of a ‘contractual recognition of bail-in clause’ arose from provisions in the Bank Recovery and Resolution Directive ( EU Directive 2014/59/ EU) (the BRRD), introduced as part of the EU’s response to the financial crisis. Practice Note: EU Bank Recovery and Resolution Directive ( EU BRRD)—essentials contains fuller detail on the BRRD. The BRRD has been incorporated into the EEA Agreement, so it applies throughout the EEA, and not only to EU member states. One purpose of the BRRD is to ensure that, if an institution becomes insolvent, losses are absorbed by creditors and shareholders rather than by taxpayers. To facilitate this outcome, Article 43 of the BRRD enables an EEA regulator to write down and/or convert into equity the liabilities of a failing EEA institution (the bail-in tool). A possible...
rules on interpreting contracts (agreements) This Practice Note outlines the rules for construing contracts and their terms, reviewing leading cases— Rainy Sky v Kookmin, Arnold v Britton, and Wood v Capita—together with the principal canons of construction. It should be read alongside the Practice Notes: Contract interpretation—the guiding principles; and How to approach a contractual interpretation dispute—a practical guide. Lord Hoffmann’s five principles in ICS v West Bromwich Building Society (see Practice Note: Contract interpretation—the guiding principles) provide the central approach to interpretation, which is then supported by general rules or guidelines (often called canons of construction) used to help determine the meaning of a written agreement. This Practice Note examines the most significant of these, namely: the whole document is relevant commercial sense (business common sense) and avoiding an unreasonable outcome cutting down rights and remedies saving the...
Introduction This Practice Note sets out a concise outline of the applicable tests for cashflow and balance sheet insolvency under section 123 of the Insolvency Act 1986 ( IA 1986). It focuses, in particular, on the position in light of the Supreme Court’s leading judgment in BNY Corporate Trustee Services v Eurosail- UK 2007-3BL (the Eurosail decision)... The two tests IA 1986, s 122(1)(f) permits the court to wind up a company that cannot meet its debts (see Practice Note: Compulsory liquidation—issuing a petition). Under IA 1986, s 123(1)(e), a company is deemed unable to pay its debts if it is proved to the court’s satisfaction that it cannot pay debts as they fall due (the ‘cashflow insolvency’ test). In addition, under IA 1986, s 123(2), a company is likewise deemed unable to pay its debts if it is proved to the court’s...
Hague- Visby Rules (the Rules) This Practice Note outlines the Hague- Visby Rules, international rules governing the carriage of goods by sea, enacted into English law by the Carriage of Goods by Sea Act 1971 ( CGSA 1971). It summarises the scope of the Rules, the carrier’s obligations, limits of liability and available immunities under the Rules, and the applicable time bars. The Rules are contained in three international instruments: the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (1924) ( Hague Rules) the Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (1968) ( The First Visby Protocol) the Protocol Amending the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (1979) ( The Second Visby...
This Practice Note This Practice Note outlines the legal principles applicable to charterparties in arrangements for the seaborne carriage of goods. It summarises the core characteristics of voyage, time, bareboat and slot charters, together with the remedies in damages for breach associated with each category. Concluding remarks provide pointers on current legal developments affecting charterparties. Every day, a substantial quantity of cargo travels by sea, bringing into play, on a daily basis, the terms and obligations found in numerous charterparties. That commercial activity, coupled with the inherent hazards of maritime transport, fosters the emergence of disputes in this fast-moving field of law. A charterparty (or 'charter') is a contractual instrument that records the conditions upon which a shipowner permits others to employ the vessel, whether needed for a defined period or for a particular voyage agreed between the parties and set out in the...
What is a turbine supply agreement ( TSA)? The turbine supply agreement ( TSA) is a pivotal element within the contractual structure for both onshore and offshore wind farms. This note considers key aspects of a TSA and how it fits within the wider suite of contracts used to construct, operate and maintain a wind farm. Wind farms are made up of individual wind turbine generators (each a WTG) that produce renewable power. A typical WTG includes a nacelle—positioned at the top of the tower and housing the generating components—together with other essential parts: Blades Tower Control and data equipment Generator Switchgear A TSA usually covers the design, manufacture and delivery to site of these components, as well as the commissioning and performance of each WTG. The agreement may take a bespoke form or an amended standard form, tailored to the...
A pre-pack administration sale—some basic principles A pre-pack is the pre-arranged sale of a company’s business, assets, or both, executed immediately after the company enters administration. On appointment, the administrator finalises the deal swiftly to avoid the expense of trading in administration. This route is often chosen to preserve value where the glare of a formal insolvency could depress asset prices, notably goodwill. The buyer is lined up and the sale terms settled before appointment, though the intended administrator is typically involved beforehand. Compared with a conventional corporate disposal, pre-packs involve markedly less due diligence. Warranties and guarantees are uncommon to non-existent, and assets are transferred on an as-seen basis (for an illustrative administration sale agreement, see Precedent: Asset purchase agreement—administration sale). Independent, formal valuations of assets and goodwill are required, and any bid must align with those valuations......
The term ‘acquisition finance transaction’ generally means a business purchase part-funded with debt raised expressly for that deal. ‘ Acquisition finance’ is the borrowing sourced from banks and institutions that back these transactions. The label is closely tied to leveraged buy-outs, namely private equity sponsored purchases funded with both debt and the sponsor’s equity. It can also cover corporate acquisitions using specially raised debt. This Practice Note: summarises a standard leveraged buy-out structure sets out the main debt types used in an acquisition finance deal details the principal forms of acquisition finance transaction explains, from the sponsor’s perspective, why debt is attractive for funding an acquisition For a fuller primer, see Practice Note: Introductory guide to acquisition finance. For definitions of common expressions, see: Glossary of acquisition finance terms and jargon. Leveraged buy-outs ( LBOs) A leveraged buy-out is a transaction where: debt is used to fund buy-outs,...
This Practice Note sets out the principal participants commonly found on construction schemes (such as the employer, the contractor, the professional consultant team—both design and non-design disciplines—together with sub-contractors and funders) and offers an overview of their respective functions and how they relate to each other, including the contracts that are put in place between them. For a visual depiction of how a development can be arranged and the contractual web between the parties, see: Structure of a development project—diagram. Employer The employer (also described as the client or developer) is the entity for whom the construction works are undertaken. Frequently, though not invariably, the employer also holds title to the land on which the works will be delivered. The employer will usually assemble a professional team, made up of various consultants, to assist in shaping the project brief and preparing designs etc. ahead of...
The volume of claims brought against banks continues to grow. This Practice Note considers particular issues concerning the tortious duty of care owed by banks to their customers, namely the so‑called ‘ Quincecare duty of care’, assumption of responsibility, and the giving of volunteered advice. For direction on the role of banks in financial mis‑selling claims, see Practice Note: Standard of care in professional negligence claims— Negligent financial mis‑selling claims. For general guidance on tortious claims, see: Tort and negligence claims—overview; and for negligence specifically, consult the following Practice Notes: Negligence—key elements for establishing a negligence claim Negligence—when does a duty of care arise? Negligence—when is the duty of care breached? For guidance on professional negligence more broadly, see: Professional negligence claims—overview. Framing a bank’s duty to its customer Before exploring the potential ambit of a bank’s tortious duty to its customer, it should be borne in mind that—as in...
This Practice Note explains the circumstances and methods by which parties may seek to limit or exclude liability for misrepresentation, by invoking section 3 of the Misrepresentation Act 1967 ( MA 1967) together with the section 11 reasonableness test under the Unfair Contract Terms Act 1977 ( UCTA 1977). Note: from 1 October 2015, UCTA 1977 applies only to business-to-business contracts; for consumer contracts, see sections 61–76 of the Consumer Rights Act 2015 ( CRA 2015). For guidance on rescission and damages arising from misrepresentation, see: Misrepresentation—damages as a remedy Misrepresentation—rescission as a remedy For related matters, including: Entire agreement clauses and their role in limiting or excluding liability for misrepresentation—see Practice Note: Contract interpretation—entire agreement clauses Non-reliance clauses used to exclude or limit liability for misrepresentation and the notion of ‘contractual estoppel’—see Practice Note: Contractual...
This Practice Note explores the availability of damages as a remedy for a misrepresentation claim, with reference to the Misrepresentation Act 1967 ( MA 1967)... For analysis of when the courts will set aside a contract for misrepresentation and when parties may validly exclude or restrict liability for misrepresentation, see the following Practice Notes: Misrepresentation—rescission as a remedy Misrepresentations—excluding and limiting liability for them When can you claim damages as a remedy for misrepresentation? MA 1967 supplies a statutory foundation for seeking damages in cases of misrepresentation under MA 1967, s 2, in addition to the common law action for damages for fraudulent misrepresentation or the closely related tort of deceit......
ARCHIVED: This Practice Note has been archived and is no longer maintained. It outlines the core doctrines of marine insurance as set out in the Marine Insurance Act 1906 ( MIA 1906). It considers indemnity principles within marine cover, the notion of a marine adventure, combined land and sea exposures and perils of the sea. It further reviews insurable interests, the main risks insured, marine policy forms, the role of marine insurance brokers and the insurer’s rights of subrogation under a marine policy among other related matters. For fuller guidance on types of marine insurance, see: Marine insurance—overview Practice Notes: Marine insurance—essentials Marine cargo insurance Hull and machinery insurance Protection and indemnity insurance Marine war risks What is marine insurance? Marine insurance is defined in MIA 1906 as a contract by which the insurer agrees, in the manner and to the...
This fundamentals note explores core features of loan notes that might be issued by a private limited company formed in England and Wales. What is a loan note? A loan note is a type of debt instrument issued by the debtor (the issuer) that gives the noteholder (the lender) a right to receive principal and interest on the agreed amount. It evidences borrowing by the issuer from the holder. Interest under a loan note is usually payable for a fixed period, ending on a date when the full borrowing—namely the principal of the note together with any interest accrued to that point—must be repaid in full on the scheduled repayment date. What is a convertible loan note? A convertible loan note is a loan note capable of being converted into another class of security of the issuer, typically...
Scots contract law Although they have separate origins, Scots contract law has, in many respects, drawn closer to the English position. English-law notions such as undue influence and anticipatory breach have been taken into Scots contract law, and some leading authorities coincide across both systems. Nonetheless, there remain important differences that it is sensible to keep in view. The aim of this Practice Note is to point out some of the key differences between Scots and English contract law in these areas......
There are two forms of general meetings under the Companies Act 2006 ( CA 2006) Under the CA 2006, two types of members’ meetings exist: general meetings and annual general meetings ( AGMs). Members may convene a general meeting at any time, and as often as needed within a year, to pass resolutions authorising certain changes or approving particular actions. A public company is required to hold an AGM every year within six months beginning on the day after its accounting reference date. A private company has no annual obligation to hold an AGM, unless it chooses to do so, or its articles of association stipulate that one must be held each year. In a private company, members can adopt resolutions either at general meetings or by written resolution. In a public company, members may pass resolutions only at general meetings. The CA 2006...
What is a borrowing base facility? Borrowing base facilities (‘ BB Facilities’) are a form of trade finance. They are working capital arrangements that provide short-term liquidity either through advances or by issuing trade instruments, such as letters of credit (see: Letters of credit—overview) or on demand guarantees (see: On demand guarantees/bonds—overview). These facilities are fully secured against current assets—commonly trading receivables, inventory (i.e. goods in storage or in transit), cash and contractual rights—of the borrower and/or other security providers. Consequently, the borrower’s available capital at any given time is directly linked to the value of the assets securing the lender(s). BB Facilities are typically offered to trading companies on a revolving basis to fund the purchase, storage, transport and sale of prescribed commodities. They are often used to finance a pool of traded assets subject to high price volatility. Reflecting this, a standard...
Assignments by way of security can take various forms, and it is important to understand how they are created and their effect. Security over choses in action, such as debts and other contractual rights, is often taken by means of an equitable or statutory assignment used as security. This Practice Note explains the following: what assignments by way of security are which categories of assets they are typically used for whether they take legal, statutory or equitable form and the advantages of the statutory form why serving notice of an assignment by way of security matters What is an assignment by way of security? Assignments by way of security are a form of mortgage. They typically involve: an assignment (ie transfer) of rights by the assignor to the assignee, subject to an obligation to reassign those rights back to the assignor upon the discharge of the obligations that have been...
ARCHIVED : This Practice Note has been archived and is not maintained. Lawyers and the businesses they counsel must grasp their exposure to sanctions in order to craft and roll out a robust compliance plan. However, the contours of sanctions compliance shifted after the UK’s choice to exit the EU. Up to 11 pm on 31 December 2020 (the end of the implementation period), the bulk of the UK’s sanctions regimes derived from the EU, via EU regulations that applied directly in Member States; criminal offences and licensing arrangements were then put in place by UK regulations under the European Communities Act 1972. Domestically, UK sanctions were confined to (very unusually) freezing orders under the Anti- Terrorism, Crime and Security Act 2001 ( ACSA 2001), transactional measures directed under the Counter Terrorism Act 2008 ( CTA 2008), and...
This Practice Note sets out the core concepts and issues concerning ETDs, including: what ETDs are and how they operate how ETDs mitigate counterparty risk via clearing and collateralising trades how ETDs are traded and matched on a regulated exchange how ETDs are given-up for clearing, and how collateral is managed For more information on the differences between OTC derivatives and ETDs, see Practice Notes: OTC and exchange traded derivatives—key features and concepts and OTC and exchange traded derivatives—documentation. What are exchange traded derivatives? ETDs are derivative contracts entered into through a regulated exchange (the Exchange). The Exchange functions as a market mechanism that enables the exchange of offsetting derivative positions. It offers a venue where a relatively narrow range of futures and options is traded on standard terms. To be traded and matched on the Exchange, contracts must carry highly...
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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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