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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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When an overseas company sets up an establishment that conducts business in the United Kingdom, it may need to file its particulars with Companies House. For guidance on registration obligations, see Practice Note: Overseas companies with an establishment in the UK. The framework for registering an overseas company trading in the UK is distinct from the system for registering overseas entities with interests in UK property. For information on the register of overseas entities that own UK property, introduced by the Economic Crime ( Transparency and Enforcement) Act 2022 ( EC( TE) A 2022), see Practice Notes: Register of overseas entities that hold UK property—fundamentals and The beneficial ownership register of overseas entities that own UK property. This Practice Note outlines the obligations of an overseas company under the Companies Act 2006 ( CA 2006) and the Overseas Companies Regulations 2009 ( OC Regs 2009)...
This Practice Note examines the ban on break fees and other deal protection devices (‘offer-related arrangements’) in Rule 21.2 of the City Code on Takeovers and Mergers (the Code), together with how Rule 21.2 applies to schemes of arrangement set out in Appendix 7. It also outlines the carve-outs to the general ban and the situations in which the Takeover Panel (the Panel) may permit departures, for instance in the context of competing offers or a formal sale process. Background— Takeover Panel consultations Since 11 September 2011, the Code has broadly prohibited break fees and similar deal protection measures in public takeovers, subject to specified exceptions. The restriction was introduced because the Panel was concerned that the growing use of inducement fee arrangements and other protections discouraged potential competing offerors and left offeree boards with little scope to advance or recommend a competing offer......
Offences relating to financial services The Financial Services Act 2012 ( FSA 2012) sets out three offences aimed at market manipulation: issuing false or misleading statements, or deceitfully hiding material facts, under FSA 2012, s 89 producing false or misleading impressions under FSA 2012, s 90 making false or misleading statements, and related conduct, concerning benchmarks under FSA 2012, s 91 See also Practice Notes: Misleading statements etc in relation to benchmarks and Misleading impressions under Financial Services Act 2012. For details of the previous regime for market manipulation under section 397 of the Financial Services and Markets Act 2000 ( FSMA 2000), which has been repealed, refer to Practice Note: Misleading the market and market manipulation under s 397 FSMA 2000 [ Archived]......
The Companies Act 2006 ( CA 2006) sets out rules that limit and oversee substantial property transactions carried out between a company and its directors. Such arrangements require approval because they involve directors (or their connected persons) and are viewed as particularly vulnerable to abuse. The interplay between the statutory approval regime for these transactions and the general statutory duties of directors is considered in Practice Note: Directors' duties—scope, nature, interpretation and application. There are also statutory provisions dealing with the position where a company enters into a substantial property transaction without securing any required members’ approval, or without making the transaction conditional on obtaining that approval (see Practice Note: Substantial property transactions—consequences of a failure to obtain members’ approval). One of the general statutory duties of directors is the obligation to declare to the other directors any way in which they are,...
A purchaser can finance the deal through: cash: drawing on its own available cash holdings (or those of its parent or another group entity) debt financing: obtaining funds via a bank loan or by issuing debt instruments to lenders (such as loan notes), or equity financing: raising capital through a further issue of its equity securities, by way of an open offer, rights issue, cash placing, cash box placing or vendor placing Debt or equity?......
Chapter 9 of the UK Listing Rules ( UKLRs) Chapter 9 of the Financial Conduct Authority ( FCA) UK Listing Rules ( UKLRs) sets out continuing obligations for any company that has a listing of equity shares in the equity shares (commercial companies) category, which the company must comply with to retain its admission to the Official List (terms in bold are defined in the FCA Handbook Glossary). For further detail on companies with a listing of equity shares in the equity shares (commercial companies) category, refer to Practice Note: The UK listing regime for more information. Under UKLR 6.6 R, a company with a listing of equity shares in the equity shares (commercial companies) category must include specified financial disclosures within its annual financial report. The UKLR 6.6 R obligations for both UK and overseas issuers with a listing of equity shares in the...
This Practice Note considers exclusion and limitation of liability in business-to-business ( B2B) contracts. This Practice Note offers guidance on the common law and statutory controls that govern exclusion and limitation of liability clauses (also described as limitation of liability clauses, limitation clauses, exclusion of liability clauses, exclusion clauses and exemption clauses), including the Unfair Contract Terms Act 1977 ( UCTA 1977) and the Misrepresentation Act 1967 ( MA 1967). It identifies which provisions amount to exemption clauses and sets out three central matters to address when drafting them or assessing them in a dispute: incorporation construction statutory controls It also outlines the courts’ treatment of attempts to exclude or restrict liability for certain breaches (eg fundamental breach) and for different heads of loss (eg direct loss, indirect and consequential loss, loss of profits, loss of use and loss of data). It notes common...
This Practice Note This Practice Note offers practical guidance on correctly and properly executing simple contracts and deeds for Law of Property Act receivers ( LPA receivers) or fixed charge receivers. Appointing an LPA/fixed charge receiver is a remedy available to the chargee (ie the holder of security over property) and is the remedy of a chargee. LPA/fixed charge receivership is not an insolvency process and does not necessarily, of itself, mean the chargor (ie the person who granted the security) is insolvent. An LPA/fixed charge receiver must be a natural person (ie a company cannot be a receiver) but need not be an insolvency practitioner or hold any other particular qualification. Unlike a liquidator, administrator or trustee in bankruptcy, an LPA/fixed charge receiver does not take control of the company as a whole (and, for an individual, does not control the...
This Practice Note sets out practical guidance on the correct execution of simple contracts and deeds by limited liability partnerships ( LLPs). See also Precedents: Execution clause—limited liability partnership—contract and Execution clause—limited liability partnership—deed. For commentary on establishing an LLP, see Practice Note: Forming a limited liability partnership. We have created a collection that serves as a comprehensive, interactive tool to help users pinpoint and navigate the concepts and common issues that arise when executing documents. Each stage or phase supplies practical guidance, precedent clauses and Q& As relevant to that part. For further details, see: Execution collection. The law Before 1 October 2009, the execution formalities applicable to LLPs were contained in the Companies Act 1985. From 1 October 2009, LLPs have been governed by the Companies Act 2006 ( CA 2006) by virtue of, and as modified by, the Limited Liability...
On 24 December 2020, the UK Government and the European Commission revealed they had reached agreement in principle on the legal framework for the future UK- EU relationship. Taking provisional effect from 1 January 2021 and entering fully into force on 1 May 2021, the EU- UK Trade and Cooperation Agreement ( TCA) sets out provisions on trade in goods and services, economic and social co-operation, law enforcement and security co-operation, alongside overarching governance rules. A series of related declarations and accords supplement the TCA, among them the Agreement on Security Procedures for Exchanging and Protecting Classified Information ( SIA) and a distinct Nuclear Cooperation Agreement ( NCA). It also features placeholders and commitments anticipating additional agreements to be concluded. Publicised only a week before the Brexit transition ended at 11 pm on 31 December 2020 ( IP completion day), the deal arrived at the...
This Practice Note outlines how an offeror conducts due diligence in a public takeover. It reviews the aims and likely scope of the exercise, the stance to be taken on hostile bids, the shareholder data a bidder may legitimately request, and key matters under the City Code on Takeovers and Mergers (the Code), including the obligation to furnish equal information to rival bidders. It also explains how the offeree can safeguard its position through confidentiality agreements. Purpose Due diligence gives a prospective buyer the chance to scrutinise the target’s affairs, confirm that trading aligns with market expectations, and check for any material commercial, financial, legal or regulatory concerns that might affect valuation or willingness to proceed. Findings may shape deal structure and flag conditions that must be addressed before the offer advances, such as competition notifications or clearances. A core principle of the Code is that an...
Dividends A company generally possesses an implied authority to share its profits with its members, save where the articles of association provide to the contrary. A dividend represents one form of distribution available to members and, in practice, is the distribution that companies make most frequently. To be lawful, any distribution must comply with Part 23 of the Companies Act 2006 ( CA 2006) together with the common law rules on distributions, as adapted and informed by that Part. For a fuller consideration of the legal framework and routine practice relating to distributions made by a company, see Practice Note: Distributions. For information about the potential consequences and liabilities arising from failure to comply with the law on distributions, see Practice Note: Unlawful distributions. This Practice Note concentrates on the law and practice that ordinarily apply to the declaration and payment of...
Company directors Merely holding the office of director does not, under company law, create an automatic entitlement to payment for acting as a director, or to repayment of expenses incurred while providing those services. Authority to remunerate directors for their services must be granted by the company’s constitution. A director may alternatively have a contractual right to remuneration by virtue of, or arising from, an agreement or arrangement with the company for their services......
This Practice Note maps the rules governing pay for directors of quoted companies, set against rising shareholder activism and greater media scrutiny of executive reward. It distils the statutory reporting regime on directors’ remuneration for quoted companies and highlights key provisions of the Companies Act 2006 ( CA 2006), the UK Listing Rules ( UKLR), the Financial Reporting Council’s ( FRC) UK Corporate Governance Code ( UKCG Code), together with best practice guidance on executive pay... Directors’ remuneration—law, regulation and best practice Legislation Under the CA 2006 and the Large and Medium-sized Companies and Groups ( Accounts and Reports) Regulations 2008, SI 2008/410, directors of a quoted company must produce an annual remuneration report disclosing prescribed details of directors’ pay. For CA 2006 purposes, a quoted company is a UK company whose equity share capital: has been admitted to the Official List of the London Stock...
The Companies Act 2006 ( CA 2006) Under the Companies Act 2006 ( CA 2006), any clause in a director’s service contract that fixes, or could fix, the guaranteed period of employment at more than two years must be approved by the company’s members. Such approval is mandated because long-term service arrangements with directors are commonly regarded as especially open to abuse. The relationship between these statutory approval provisions and the general duties imposed on directors by statute is considered in Practice Note: Directors’ duties—fundamentals. For these purposes, ‘director’ includes any individual who occupies the office of director, by whatever name called (that is, regardless of the official title), and any shadow director. A company must also comply with other statutory requirements concerning directors’ service contracts; see in particular Practice Note: Directors’ service...
A director of a company that is limited by shares may encounter a broad spectrum of liabilities arising directly or indirectly from their actions or omissions in the ordinary conduct of the company’s business and affairs, whether grounded in statute, contract, or tort, as applicable. The Companies Act 2006 ( CA 2006) sets a general prohibition on excluding, restricting, limiting, or indemnifying directors for those liabilities (see the General rule against protection from liability). Nevertheless, statute recognises specific exceptions that permit directors to be protected against such liability by: the company taking out and keeping insurance for its directors against liabilities (see Insurance) the company granting qualifying indemnities to its directors in respect of certain liabilities (see Indemnities) Shareholders can also relieve directors from liability by ratifying acts of misconduct, so long as the conduct is capable of ratification (see...
This Practice Note concentrates on the legal framework and practical steps for appointing directors, and the procedures by which a director may retire or step down from office. It examines the role performed by a director. It also considers the different types of director in a company. It outlines the required notifications and related actions on any director change, including updating statutory registers and submitting filings to Companies House as necessary. The note reviews the pertinent provisions of the Companies Act 2006 ( CA 2006), together with the company’s articles of association. It further addresses the additional requirements for appointing, retiring and resigning directors of listed public companies, including the UK Corporate Governance Code ( UKCG Code), which applies to UK and overseas companies with a listing of equity shares in the equity shares (commercial companies) category in the UK (listed...
Debt for equity swap A widely used restructuring approach is a debt for equity swap; financial creditors take shares in the reorganised corporate vehicle in return for reducing or writing off their debt claims against the company (and the remainder of the group). Many highly leveraged transactions have slender equity buffers and existing shareholders frequently end up ‘out of the money’. A debt for equity swap cuts balance sheet liabilities and lets lenders share in more of the upside after a restructuring when the business returns to profit (as equity holders, entitled to dividends once there are adequate distributable reserves) or on any subsequent sale. The valuation will indicate where the value breaks; that tranche will expect to receive the greatest equity allocation post‑restructuring (see Practice Note: Where the value breaks and negotiating strength). The corporate rescue exemption in section 322(5E) of the...
A deadlock arises when parties to an agreement face an irreconcilable dispute and cannot reach consensus. The expression is commonly associated with corporate joint ventures ( JVs), especially 50:50 JVs where neither side holds a controlling interest and, as a result, unanimous consent is required for all decisions. Deadlock may equally occur in non-50:50 JVs, for example where specific matters demand unanimity or where more than two JV participants vote and no majority is achieved. Certain conflicts can trigger a deadlock that prevents the joint venture company ( JVC) from operating effectively. It is sensible to address at the outset how a deadlock might be settled. Consequently, joint venture agreements ( JVAs) usually include deadlock resolution mechanisms (often in stepped stages) that must be followed to resolve the impasse. Defining deadlock procedures within the JVA will save time and expense if a...
This Practice Note This Practice Note brings together leading convictions for corporate manslaughter under section 1 of the Corporate Manslaughter and Corporate Homicide Act 2007 ( CMCHA 2007), offering succinct case summaries. It serves as a tracker to support practitioners in keeping abreast of the penalties handed down for this offence and the manner in which the relevant sentencing guidelines for corporate manslaughter are being applied in England and Wales. For the steps the Crown Court must take when sentencing corporate manslaughter offences in England and Wales, see Practice Note: Sentencing for corporate manslaughter. For guidance on the offence, see Practice Notes: Corporate manslaughter—an introductory guide, Corporate manslaughter—the offence and Corporate manslaughter—enforcement and prosecution. Corporate manslaughter—convictions Fairytales Day Nursery Limited Plea entered/verdict reached: Guilty pleas to breaches of CMCHA 2007, s 1 and HSWA...
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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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