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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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This Practice Note outlines key aspects of a documentary 'relaxation' or 'release' clause, commonly included in leveraged buy-out ( LBO) facility agreements. It also considers: the most frequently encountered trigger conditions common ways of easing requirements within the facility agreement, and particular points to address when negotiating this clause This Practice Note assumes a degree of familiarity with leveraged finance structures and documentation. For introductory material, see Practice Notes: Introductory guide to acquisition finance and Introductory guide to leveraged finance facilities agreements. The Glossary of acquisition finance terms and jargon may also be useful. Background Traditionally, LBO facility agreements have placed strict limits on group activities and imposed rigorous mandatory prepayment obligations, reflecting high leverage. Private equity sponsors often contend that, while controls are appropriate when the balance sheet carries significant leverage, once the group has materially deleveraged, such tight...
IP COMPLETION DAY: At 11pm ( GMT) on 31 December 2020, the Brexit transition/implementation period ended following the UK’s departure from the EU. From that moment—defined in UK law as ‘ IP completion day’—core transitional arrangements fall away and major changes start to apply across the UK’s legal framework. This note provides guidance on topics affected by these developments. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [ Archived]. What is FATCA? The Foreign Account Tax Compliance Act ( FATCA) is US tax legislation enacted under President Obama in 2010. Its principal aim is to help the Internal Revenue Service ( IRS) obtain information on US taxpayers with investments held outside the US. As first enacted, FATCA captures many categories of non‑ US financial institutions, including banks as well as certain insurance companies and funds, and has a...
ARCHIVED: This Practice Note is archived and is no longer maintained. UCITS VI UCITS VI outlines the European Commission’s consultation on Undertakings for Collective Investment in Transferable Securities, issued on 26th July 2012. For information on UCITS V, see UCITS V [ Archived]. The consultation considered product rules, liquidity management, depositary matters, money-market funds and long-term investments. It followed the Commission’s UCITS V legislative proposals, likewise published in July 2012 (see UCITS V [ Archived]). In light of the European Securities and Markets Authority ( ESMA) speech by ESMA Chair Steven Maijoor on 6th November 2014, the topics raised under UCITS VI were not to be progressed through a single measure, i.e. by amending the UCITS Directive. By way of example, there was at the time a proposal for a regulation concerning money-market funds ( MMFs). For further detail on the Money Market Funds...
BREXIT: As at 31 January 2020, the UK ceased to be an EU Member State and moved into an implementation period, during which the EU continues to treat it as a Member State for many purposes. As a third country, the UK can no longer take part in the EU’s political institutions, agencies, offices, bodies and governance structures (save to the limited extent agreed), yet it must still meet its obligations under EU law (including EU treaties, legislation, principles and international agreements) and accept the ongoing jurisdiction of the Court of Justice of the European Union in line with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This affects this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions [ Archived]— Brexit planning and impact—key issues for debt capital markets...
Introduction ARCHIVED : This Practice Note was archived and is no longer maintained. Global depositary receipts ( GDRs) are securities issued by a depositary bank that stand for another security held by that bank, such as shares. An issuer commonly establishes a depositary receipt programme with a depositary to permit institutional investors to gain exposure to its shares. These programmes are widely used by companies based in emerging markets where domestic rules—like taxes or burdensome registration obligations—make direct shareholding by overseas investors impractical or unattractive. As a result, GDR programmes can open access to a broader investor base than a purely local share offering. GDRs are usually admitted to trading on leading stock exchanges, most frequently London, which can provide investors with enhanced liquidity and offer issuers the prospect of larger deal sizes or improved valuations. While issuers may...
Loan market and developments As the financial centre of the Asia Pacific region and a key channel for Chinese offshore borrowing, Hong Kong stands among the biggest and most active syndicated loan hubs in Asia Pacific (excluding Japan), often contributing more than 20% of the region’s total syndicated volumes. A sustained spell of low interest rates and plentiful liquidity across Hong Kong’s banking system has kept funding widely accessible to borrowers. Bloomberg indicates that, in the sustainability-linked loan arena, Hong Kong led the Asia Pacific region (excluding Japan), delivering a record 31.4% share of overall issuance. This strong demand has also boosted HKD-denominated activity, making HKD the second most utilised currency in the sustainability-linked loan market for H1 2024... Please provide a brief overview of forthcoming changes to the law or other matters that may affect the loan markets or the responses to the...
OTC derivatives and ETDs Derivatives broadly fall into two categories: over the counter ( OTC) derivatives; and exchange traded derivatives ( ETDs). OTC products can then be divided into: non‑cleared OTC derivatives; and cleared OTC derivatives, which exhibit traits common to both non‑cleared OTC trades and ETDs. For further detail on OTC derivatives and ETDs, see the Practice Notes: OTC and exchange traded derivatives—key features and concepts, and OTC and exchange traded derivatives—documentation. Why are derivatives regulated? Derivatives dealing is a major area of finance and has long been regulated; however, the purpose and breadth of that regulation shifted following the 2007–2008 global financial crisis. Prior to the crisis, in summary: ETDs were regulated because they are traded on public exchanges, with a view to safeguarding market participants and the public from fraud, manipulation and abusive practices; but OTC...
Banks and other financial institutions raise income by levying interest on the loans they extend. For lending to produce a return, the rate charged must at a minimum offset the lender’s own costs. See Practice Note: Introductory guide to interest in loan agreements— Cost of lending. In most syndicated facilities, many interest and interest period terms align with those used in real estate finance. This Practice Note highlights the interest and interest period mechanics that are particular to real estate finance ( REF) deals. Where to start with drafting interest and interest period provisions in a real estate finance transaction These provisions for any given deal are ordinarily settled at term sheet stage before the facility agreement is drafted. It is therefore essential to review the term sheet’s terms before preparing the facility agreement. LMA real estate finance...
In real estate finance, a property’s valuation is critical to any lender, because it is the principal asset over which the loan is taken as security. Accordingly, valuations are required to calculate the loan to value ( LTV) financial covenant (see Practice Note: Real estate finance—financial covenants). Such valuations are typically supplied as a condition precedent to drawdown (often defined as the ‘ Initial Valuation’) and then obtained periodically for the duration of the facility. Where to start with drafting the valuation provisions in a real estate finance transaction The Loan Market Association ( LMA) includes clause language to address these requirements within its real estate finance facility agreements—see clause 16.3 ( Costs and expenses—valuations) and clause 19.15 ( Representations—valuation) in each of the: Single Currency Term Facility Agreement for Real Estate Finance Multiproperty Investment Transactions ( LMA REF Investment Facility...
What is credit support? Credit support allows a party to lessen the credit risk of its counterparty. It functions as a protective mechanism against non-performance. Such arrangements are also described as 'financial collateral arrangements', 'margin arrangements', 'collateralisation' and 'credit enhancement'. One party (or both) will transfer, or otherwise make available, assets (termed collateral or margin) to the other party (the collateral taker) to secure or back its present or future obligations. If the credit support provider defaults, the collateral taker may rely on the collateral furnished by the defaulting party to secure any outstanding debt. Collateral might be posted by one party only (for example, where one party is rated more highly than the other, it may require collateral) or by both parties, as the particular arrangement requires. In this context, collateral denotes the assets delivered under a credit support...
Loan market and developments Activity in Finland’s corporate lending space has been broadly consistent over the past decade. That said, 2019 proved more animated, with a sustained rise in corporate loan values and a widening in the overall size of the market. Market sentiment is generally regarded as borrower‑friendly... Financing structures once mainly tied to English law documentation—such as SSRCF+senior notes deals—have been adopted with growing frequency in transactions governed by Finnish law. Proportionally, the most active areas have been industrial, scientific and technical sectors, together with real estate finance... Finland’s bond market was brisk in 2018, registering a 29% uplift in total value compared with the previous year. Nevertheless, the overall rate of expansion in the bond markets is easing... Regarding forthcoming matters that may affect the loan markets, an electronic register for housing......
Why are ISDA definitional booklets needed? The overwhelming bulk of derivatives trades are recorded under standard form documents created and issued by the International Swaps and Derivatives Association, Inc. ( ISDA). The principal ISDA paper setting out the commercial terms of an individual deal is the confirmation. For further detail, see Practice Note: ISDA confirmations. A confirmation can import defined terms by referring to ISDA-published booklets known as the ISDA definitions. Multiple definitions booklets exist and the appropriate set is chosen for inclusion in a confirmation according to the class of derivative being transacted (see Practice Note: ISDA definitions). Where a party is documenting a credit derivatives deal, the confirmation will typically incorporate the 2014 ISDA Credit Derivatives Definitions (the 2014 Definitions). Incorporation ensures that the key terms contained in the 2014 Definitions automatically apply to the transactions covered by the...
What does this Practice Note cover? This Practice Note summarises the main credit event types in the 2014 ISDA Credit Derivatives Definitions (the 2014 Definitions). It sets out how each event is triggered and applied in practice, and why they matter for credit derivative trades. What are credit events? A credit derivative aims to give the buyer protection against specified credit events affecting the underlying reference entity to the trade. These events are listed in the transaction confirmation. As the credit derivatives market is largely standardised, confirmations typically apply the same credit events to the same reference entities by incorporating the International Swaps and Derivatives Association ( ISDA) Credit Derivatives Physical Settlement Matrix (the Matrix). Reference entities are grouped into ‘transaction types’ by where the reference entity is located. For example: Sony Corporation would fall within the Standard Japan Corporate transaction type; and the Kingdom of Spain would be a...
Timing Loan transactions usually begin with the term sheet (also called heads of terms) alongside the mandate stage. In this early phase, the parties put confidentiality arrangements in place, settle the key deal terms, and clarify their respective roles. The duration of this stage can shift markedly, shaped by the deal’s nature and complexity. The level of detail in a term sheet also differs: sometimes it records only the principal commercial points, with matters such as representations and undertakings noted only briefly (eg ‘usual representations’). In other cases—particularly for specialist deals like leveraged finance—it can be highly detailed. Reaching agreement on a thorough term sheet at the outset can trim later time and cost when negotiating the loan and security documents. What happens during this stage of the transaction? The parties exchange confidential information At the very outset of a prospective deal, the parties seek to share...
Timing Signing and completion are pivotal points in a loan transaction. Their sequencing can follow two approaches: Signing and completion happen on the same day—in this scenario, all conditions precedent to funding must be fulfilled, or formally waived (see Precedent: Waiver letter: for a bilateral facility agreement—waiving conditions precedent), before either step can occur. There is an interval between signing and completion—this lets the parties commit to the deal at signing, while allowing time before completion to satisfy any outstanding funding conditions precedent. What happens during this phase? Signing Signing is when the parties execute the final versions of the finance documents and the transaction becomes binding, typically subject to certain conditions precedent being met (see Practice Notes: Conditions precedent and Conditions precedent phase in loan transactions). Any other ancillary documents relevant to the transaction that require signature may also be completed at the same time,...
P. R. I. M. E. Finance Arbitration Rules Updated in 2021, the P. R. I. M. E. Finance Arbitration Rules’ 2022 edition took effect on 1 January 2022 and applies to arbitrations begun on or after that date (the P. R. I. M. E. Finance Rules; the Rules). The Rules also contain model clauses and a model submission agreement. This Practice Note explains how to commence an arbitration under the P. R. I. M. E. Finance Rules. When a dispute emerges, parties should consult the relevant documents to review the dispute resolution clause(s). If a clause or agreement calls for arbitration, it is essential to check: the administering institution or the rules under which the arbitration will proceed (see Understanding institutional and ad hoc arbitration—overview) any applicable limitation period, contractual or statutory, by which the arbitration must be commenced (see Practice Notes:...
This Practice Note sets out what acts an unincorporated association, together with its members or office-holders, may undertake in a finance transaction. Any mention of an association refers to an unincorporated association. It also explains the steps to investigate capacity and authority under English law. Unincorporated associations are often used by clubs, societies and charities. This Practice Note does not address the charity law issues that apply to unincorporated associations which are charities. For information on charities, see: Practice Note: Charitable incorporated organisations Practice Note: Taking security over charity assets—key considerations Practice Note: Mortgaging charity land—mortgagee’s considerations Practice Note: Mortgaging charity land—charity's considerations Charity regulation—overview What is an unincorporated association? The courts have described an unincorporated association as ‘an association of persons connected by identifiable rules and with an identifiable membership’. An unincorporated...
This Practice Note examines the actions commonly undertaken by companies in the setting of finance transactions and outlines the steps that can be taken to confirm the capacity and authority of a company incorporated under English law. There are various types of company incorporated in England and Wales that may participate in a finance transaction. For more information on different types of company, see: Types of borrowers— Companies. For the purposes of this Practice Note, the assumption is that the entity in question is a private company limited by shares, since most finance transactions in England and Wales will feature at least one such company as borrower or as a provider of security... Why is it important to understand the acts a company will perform in a finance transaction? Lender's perspective A lender will seek to understand the acts a company will carry out in a...
This Practice Note This Practice Note reviews the range of acts typically undertaken by English law partnerships in the context of finance transactions and sets out the practical steps that can be taken to check and evidence the capacity and authority of an English law partnership. There are two categories of partnership recognised in English law—a general partnership and a limited partnership ( LP). Each is subject to its own legislative regime and associated guidance, as follows: general partnerships are governed by the Partnership Act 1890 ( PA 1890)—see Practice Note: The nature of a general partnership and its legal framework; and limited partnerships are governed by the Limited Partnerships Act 1907 ( LPA 1907)—see Practice Note: The nature of a limited partnership and its legal framework. These are distinct from limited liability partnerships ( LLPs), which are corporate bodies...
This Practice Note explores what liquidated damages provisions are and, in brief, when they are used and in what manner. It then concentrates, in particular, on the judiciary’s method when assessing whether an alleged liquidated damages term is in truth a penalty and thus unenforceable; following the authorities through to the approach now taken after the Supreme Court’s 2015 Makdessi/ Parking Eye ruling and examining, specifically, matters such as when terms for accelerated payment, default interest, or positive inducements may amount to a penalty. Consideration is also given to whether liquidated damages endure following termination and to their connection with partial performance. What is a liquidated damages clause? A liquidated damages clause is a contractual term by which the parties to an agreement fix, in advance, a specified sum of money to be paid by the defaulting party to the innocent party upon breach of...
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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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