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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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Assimilated law and retained EU law are concepts created by the European Union ( Withdrawal) Act 2018 ( EU( W) A 2018), as amended, arising from Brexit, and denoting a new class of domestic legislation. They are umbrella labels used, at two junctures in the UK legal system’s engagement with Brexit, for the corpus of EU‑derived rules kept within domestic law following the transition period (termed IP completion day in the EU( W) A 2018 and associated legislation). For initial background reading, see Practice Note: Retained EU law and assimilated law. Assimilated law versus retained EU law: what’s the difference? Both expressions describe the residual body of domestic rules originally deriving from the UK’s membership of the EU. The pair marks two phases in the legal system’s adaptation to Brexit: retained EU law was the label for that body as it was...
This Practice Note discusses the two ‘failure to prevent’ corporate criminal offences created by the Criminal Finances Act 2017 ( CFA 2017): CFA 2017, s 45 establishes the offence of failing to prevent the facilitation of a UK tax evasion offence(s) ( UK tax evasion facilitation offence) CFA 2017, s 46 establishes the offence of failing to prevent the facilitation of a foreign tax evasion offence(s) (foreign tax evasion facilitation offence) Both offences impose strict liability, with a ‘reasonable procedures’ defence for those able to show they maintained reasonable procedures designed to prevent facilitation of the underlying tax evasion offences. This Practice Note explains the components of each offence and the defences introduced by the CFA 2017. The offences sit within a broader suite of measures aimed at combating tax evasion and its facilitation, both in the UK and worldwide. They are...
Facilitating the performance of a duty by public officials Facilitation payments, sometimes termed ‘grease’ or ‘facilitating’ payments, are typically modest sums made to public officials or third parties in order to secure the carrying out of their functions, either more swiftly or even to ensure it occurs at all. This may extend to the giving of ‘gifts’, such as cigarettes or alcohol. In certain jurisdictions, these payments are routine and lawful (eg permitted in some situations under the US Foreign Corrupt Practices Act 1977 ( FCPA 1977); see Practice Note: The US Foreign Corrupt Practices Act 1977 ( FCPA 1977) and Bribery Act 2010 ( BA 2010) comparison table). Are facilitation payments illegal under BA 2010? Such payments amount to the offering, promising or providing of a financial advantage and therefore constitute bribery, as the Bribery Act 2010 ( BA 2010) provides no...
This Practice Note sets out practical guidance on how overseas companies execute documents, with particular emphasis on executions occurring on or after 1 October 2009 under the Overseas Companies ( Execution of Documents and Registration of Charges) Regulations 2009, SI 2009/1917. For the purposes of this note, it is assumed the contract is in writing. We have created an Execution collection—an extensive, interactive resource—to help users recognise and navigate the concepts and common issues arising on execution. Each stage or phase contains practical guidance, precedent clauses and Q& As relevant to that stage. For further information, see: Execution collection. The law relating to overseas companies The execution of documents by overseas companies is governed by the Overseas Companies ( Execution of Documents and Registration of Charges) Regulations 2009 ( OC( EDRC) R 2009), SI 2009/1917. These regulations apply, with...
Clean-up liabilities are legal and financial duties to rectify pollution or contamination arising under: statute, eg a pollution incident causing environmental damage civil disputes, eg damages for common law nuisance or negligence contract, eg an environmental indemnity Events that trigger clean-up liabilities can also lead to prosecution, liability for directors and officers, and reputational harm. Practitioners should address clean-up liabilities when: conducting environmental due diligence in corporate, property or financial transactions advising on company reporting and environmental accounting managing the transfer of environmental liabilities, such as contaminated land, between entities responding to pollution incidents Broad scope of clean-up liabilities Clean-up liabilities are not confined to remediation obligations for contaminated land under the Environmental Protection Act 1990, ss 78A–78YC ( Part IIA) ( EPA 1990) (the contaminated land regime). Their reach is broader, spanning environmental indemnities through to...
Parties often wish to stipulate that the entirety of their contractual relationship is governed by the written agreement they have signed. This is known as an ‘entire agreement clause’. This Practice Note examines why such clauses are used and the principal issues relevant to their operation, including the interplay between entire agreement clauses and implied terms, misrepresentation, fraud and exclusion clauses, non-reliance statements, and broader matters of evidential estoppel and contractual estoppel. For further guidance on construing the scope of parties’ contractual obligations, see Practice Notes: The parol evidence rule in interpreting contracts Contract interpretation—admissibility of surrounding documents and related content What is an entire agreement clause? At its simplest, an entire agreement clause provides that the whole of the parties’ contractual dealings is governed exclusively by the terms contained in their written contract. Consequently, when interpreting the contract, the court is...
The Health and Safety Executive The Health and Safety Executive ( HSE) is a non- Departmental Body within the Department of Work and Pensions and primarily serves as the principal regulator for health and safety offences. It co-operates closely with the Crown Prosecution Service ( CPS) and the police under the work related deaths protocol where manslaughter and corporate manslaughter are in issue. See Practice Note: Corporate manslaughter—an introductory guide. Section 10 of the Health and Safety at Work etc. Act 1974 (as amended) ( HSWA 1974) establishes the HSE to advance health and safety at work by conducting research, by providing training and information, and by undertaking enforcement. Basis of the HSE’s statutory powers Its powers and duties derive from a wide and comprehensive range of relevant statutes and statutory instruments......
Investment agreement This Practice Note acts as guidance for a drafter when preparing and/or reviewing an investment agreement, sometimes described as a subscription and shareholders’ agreement. It concerns the subscription for shares (and, where relevant, loan notes) in a private limited company incorporated in England and Wales by a private equity (or venture capital) fund investor (the investor) together with members of the target company’s senior management team, undertaken as part of a management buyout ( MBO). The transaction is assumed to proceed on a split exchange and completion basis, ie completion of the investment agreement is subject to conditions. Set out below are issues to consider when drafting and/or reviewing the key provisions of an investment agreement ( IA). Parties The investee companies In a typical buyout, the most straightforward structure is to incorporate a new company to acquire the target business or company (the...
The main directors’ duties The principal duties of directors, originally shaped by case law, were codified for the first time in sections 171–177 of the Companies Act 2006 ( CA 2006). These general statutory obligations are summarised in the Practice Note: Directors’ duties—scope, nature, interpretation and application. The Chartered Governance Institute ( CGI) has likewise issued guidance on directors’ duties. See: The Chartered Governance Institute guidance on directors’ general duties......
Deferred share bonus: key elements Deferred share bonus arrangements are usually made up of the following core features: they are set up as employees’ share schemes within section 1166 of the Companies Act 2006 ( CA 2006)—see Practice Note: The Companies Act definition of employees' share scheme and its implications participants are generally also enrolled in the company’s annual bonus plan......
Directors’ duties—fundamentals For the first time, the key duties of directors formulated by the courts were expressly set out in statutory form in sections 171–177 of the Companies Act 2006 ( CA 2006), thereby consolidating existing judge‑made principles. A full account of these statutory obligations—referred to as the general duties—can be found in Practice Note: Directors’ duties—fundamentals. The first four general duties are set out below: a duty to act in line with the company’s constitution and to use conferred powers solely for their proper purposes as intended by that constitution a duty to act, in good faith, in the manner the director believes is most likely to promote the company’s success for the benefit of all members collectively, while, in doing so, having regard to various factors a duty to exercise independent judgment a duty to exercise...
This Practice Note examines the distinctive contractual nature of the articles of association as between the company and its members, with a primary focus on section 33(1) of the Companies Act 2006 ( CA 2006). It assesses various forms of breach of the articles, considering when a majority of members may approve or ratify a breach in defined circumstances, or otherwise take appropriate steps against the board or an individual director, where relevant. It also considers actions brought by a minority shareholder, in particular personal actions for alleged infringements of ‘membership rights’ deriving from the constitutional contract. There is also brief reference to derivative actions, unfair prejudice claims and winding-up. What is the company’s constitution Unless the context otherwise requires, a company’s constitution is defined under CA 2006 to include: the company’s articles of association, and any resolutions and agreements affecting a...
A member’s entitlement to appoint a proxy arises under the Companies Act 2006 ( CA 2006). Beyond the statutory framework, a company’s articles may confer broader rights concerning how proxies are appointed. A traded company must also satisfy additional CA 2006 requirements on proxy appointments, which this Practice Note summarises. For illustrations of differing proxy forms, see Precedents: Short-form proxy for the general meeting of a private company or an unlisted public company Long-form proxy for a general meeting of a private company or an unlisted public company Proxy for a general meeting of a listed company This Practice Note does not deal with voting by proxy; see Practice Note: Voting by proxy. For details on appointing a corporate representative as an alternative to a proxy, see Practice Note: How to appoint one or more corporate...
This Practice Note outlines the classic fiduciary obligations owed by company directors, such as the duty to promote the company’s best interests, the twin rules against conflicts and unauthorised profits, and the equitable obligation of confidence. It also examines the remedies for contravention of those duties, and the different routes by which a director may be excused from the consequences of a breach, namely ratification, indemnity and insurance. What is a fiduciary relationship? A fiduciary duty signifies a relationship of trust, assurance or confidence between two or more persons. Although the common law imposes no inherent limit on the types of relationship that may be treated as fiduciary, certain relationships are generally fiduciary by default, eg those between trustee and beneficiary, solicitor and client, principal and agent, business partner and co-partners, mortgagor and mortgagee. Other relationships will be treated as fiduciary where one...
Rule 28— Setting the scene This Resource Note summarises the principal provisions of Rule 28 of the City Code on Takeovers and Mergers (the Code), covering the obligations for profit forecasts and quantified financial benefits statements ( QFBSs). It flags pertinent materials, commentary and guidance from the Takeover Panel (the Panel), alongside Lexis+® UK analysis and resources, to offer practical assistance on how Rule 28 is interpreted and applied. Materials covered Practice Statements issued by the Panel Executive (which undertakes the day-to-day supervision and regulation of takeovers) to offer informal guidance on the Executive’s normal interpretation and application of the Code Panel Statements ( P/ S) and Panel Instruments published by the Panel Public Consultation Papers ( PCP) and Response Statements ( RS) issued by the Code Committee Annual Reports published by the Panel discussing general matters Relevant Lexis+® UK...
Appendix 1— Setting the scene This Resource Note summarises the key aspects of Appendix 1 to the City Code on Takeovers and Mergers (the Code). It explains the process to follow where the Panel is asked to grant a waiver of the duty to make a mandatory offer under Rule 9. It also brings together pertinent materials, commentary and guidance from the Panel on Takeovers and Mergers, alongside Lexis+® UK analysis and resources, to provide practical direction on interpreting and applying Appendix 1. Code and Lexis+® UK resources Practice Statements from the Panel Executive (which undertakes the day‑to‑day supervision and regulation of takeovers), offering informal insight into how the Executive typically reads and applies the Code. Panel Statements ( P/ S) and Panel Instruments issued by the Panel. Public Consultation Papers ( PCP) and Response Statements ( RS) from the Code...
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 examines how to pursue a breach of warranty claim where warranties are given in a share sale and purchase agreement ( SPA), also referred to as a share sale agreement. For these purposes, we speak throughout about claims under an SPA, although the same broad considerations can be applied to a warranty claim arising from an asset purchase agreement ( APA). It draws out some of the most typical features of such claims, but it is not a replacement for carefully reviewing the contractual documents relevant to your dispute. For an outline of the steps to take, see: Starting a breach of warranty claim—checklist. Diligent analysis of the contract remains essential before progressing any claim further. What is a breach of warranty claim? A warranty is a contractual statement or assurance made by a seller to a buyer that a...
Produced with input from Rebecca Cousin of Slaughter and May on market practice The Companies Act 2006 ( CA 2006) includes provisions that allow or require an offeror, following a takeover offer, to acquire offeree shares where acceptances have not been received or given. These are termed: squeeze-outs: the offeror’s right to compulsorily buy the shares of shareholders who have not assented sell-outs: the right of non-assenting shareholders to insist the offeror purchases their shares In each case, the purchase is on the same terms as the offer. These statutory mechanisms apply to both public and private UK companies whenever there is a “takeover offer” as defined by CA 2006 (see Requirement for a takeover offer below). There is no requirement for the offer to be regulated by the City Code on Takeovers and Mergers (the Code). Accordingly, these provisions have no...
This Practice Note explores the range of issues that arise for companies admitted to trading on AIM when creating and running employee and executive share plans. It highlights the principal regulatory and corporate governance points to keep in view, together with some tax considerations for the company and scheme participants. Regulatory issues Introduction Compared with companies listed in the equity shares (commercial companies) category of the London Stock Exchange, AIM-traded companies usually face less onerous corporate governance obligations. Although AIM issuers must still comply with the Market Abuse Regulation, they are not required to adhere to the UK Corporate Governance Code, nor to the remuneration policy and reporting regime that applies to companies listed in the commercial companies category. AIM companies are not obliged to produce an annual directors’ remuneration report, and are not required to put a remuneration policy or report to a...
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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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