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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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A company limited by guarantee is a corporate form where members promise to contribute to the company’s assets if it is wound up. This Practice Note outlines the principal characteristics of a guarantee company and explains why such a vehicle might be chosen to run a business rather than a company limited by shares... What is a company limited by guarantee? Limited companies fall into two categories: limited by shares or limited by guarantee. In a guarantee company, the members agree to pay a specified amount towards the company’s assets should it be wound up. A company limited by guarantee cannot be a public company... Most companies limited by guarantee have no shares, because since 22 December 1980 (1 July 1983 in Northern Ireland) it has not been possible to form a guarantee company with a share capital. Those with a share capital can be public or...
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 EBT as a trust An employee benefit trust ( EBT) is a type of trust. A trust is the legal arrangement created by a settlor when assets are placed under the control of a trustee for the benefit of a beneficiary, or to achieve a specified purpose. A trust (including an EBT) typically has these characteristics: the assets form a separate fund and do not belong to the trustee’s own estate legal title to the trust property is held in the name of the trustee the trustee has the power and duty, for which it is accountable, to manage, apply, or dispose of the assets in line with the trust terms and the special obligations imposed by law As a general rule, a trust (including an EBT) must have certainty of objects, and for non-charitable trusts such as an EBT, there must be someone in whose favour the court can...
A long-term incentive plan ( LTIP) An LTIP is widely used by listed companies to denote executive share arrangements where senior employees receive share-based awards that vest after at least three years. To meet institutional shareholder voting requirements where approval is needed, such awards are generally conditional on achieving stated performance targets. With particularly rigorous performance conditions, an LTIP is often labelled a performance share plan ( PSP). In the past, where a particular style of LTIP award was used, some companies called it a restricted share plan. For companies listed in the equity shares (commercial companies) category of the London Stock Exchange, the Financial Conduct Authority ( FCA) handbook provides a specific definition of long-term incentive scheme. See Specific definitions below. The term LTIP is also employed more broadly to describe any incentive arrangement lasting more than one year, including cash bonus...
This Practice Note outlines the key features of a private company limited by shares. It also explains the principal differences from public companies limited by shares, and why this structure might be selected as the preferred business vehicle rather than another UK company form. What is a private company limited by shares? A private company limited by shares is a distinct legal person, separate from its members. Ownership rests with members through their shareholdings, while directors run the company in accordance with the Companies Act 2006 ( CA 2006) and the company’s constitutional document, the articles of association. This is a widely adopted vehicle. The Companies House public register records over five million limited companies, of which more than 95% are private companies limited by shares. The other UK company types available under the CA 2006 are: public companies limited by shares—see Practice Note: Public...
Pre-emption rights on allotment Pre-emption rights on allotment give every shareholder a means to shield their percentage interest from dilution where this could follow from an issue of shares, the conferring of rights to subscribe for shares, the ability to convert securities into shares, or a disposal of treasury shares by the company. This Practice Note explains the pre-emption regime applicable to allotments of equity securities by AIM companies and listed companies, with particular attention on those with equity shares admitted in the commercial companies category. Such rights may arise from: statutory provisions applying to all companies under the Companies Act 2006 ( CA 2006); the UK Listing Rules ( UKLRs), which bind certain listed issuers, including those in the commercial companies category; and a company’s articles of association or any shareholders’ agreement to which it is a...
A statement of capital provides a point-in-time record of a company’s share capital. Under the Companies Act 2006 ( CA 2006), a company must complete one in various situations. Requirement for a statement of capital A company with share capital must, on request, provide its members with a current statement of capital, giving access to up-to-date details whenever a member asks. In addition, a statement of capital must be filed with Companies House in connection with almost all transactions involving company’s share capital, accompanying the filing for such dealings......
This Practice Note Examines the provisions of the UK Corporate Governance Code ( UKCG Code) concerning the governance function of the boards of companies with equity shares listed in the commercial companies category, and outlines the separate roles and accountabilities of the chair, the senior independent director ( SID) and non‑executive directors ( NEDs). It further addresses the UKCG Code’s expectations on board composition, including the notion of independence under the Code. A non‑executive director ( NED) is not a statutory creation or requirement, yet the position is central to achieving sound corporate governance. The Companies Act 2006 ( CA 2006) draws no legal distinction between executive and non‑executive directors. NEDs therefore carry the same duties, responsibilities and potential liabilities at law as executive directors. For guidance on these legal obligations and liabilities, and the benchmarks to which all directors are held equally, see:...
General role and responsibility of a non-executive director ( NED) For a comprehensive overview of the duties and accountability of NEDs, consult Practice Note: Non-executive directors and the listed company board—corporate governance roles and responsibilities. Guidance on the rules, expectations and remit of NEDs is likewise set out in the UK Corporate Governance Code ( UKCG Code) and in the FRC Guidance on Board Effectiveness, both published by the Financial Reporting Council ( FRC). For further details on the Code itself, see Practice Note: The UK Corporate Governance Code. NEDs who perform SMFs under the SM& CR With effect from 7 March 2016, the Senior Managers and Certification Regime ( SM& CR) applied to UK banks, building societies, credit unions and Prudential Regulation Authority ( PRA)-designated investment firms. The regime then covered all dual-regulated insurers on 10 December 2018, and from 9 December 2019 it was...
Part 7 of the Financial Services Act 2012 The Financial Services Act 2012 ( FSA 2012) brought in new criminal offences connected to financial services, namely: issuing false or deceptive statements creating false or misleading impressions issuing false or deceptive statements, or causing a false or misleading impression, in relation to specified benchmarks Under section 401 of the Financial Services and Markets Act 2000 ( FSMA 2000), the Financial Conduct Authority ( FCA) is empowered to prosecute these offences......
The use of malus and clawback The concept that performance-based cash or share awards for executives and senior employees can be reduced (malus) or recovered (clawback) when a material adverse event occurs or later comes to light is now widely accepted and embedded in market practice. Although rooted in the financial services industry, malus and clawback are now standard elements of incentive plans operated by companies listed in the equity shares (commercial companies) category in the UK. This development flows directly from the Financial Reporting Council’s ( FRC) 2014 revisions to the UK Corporate Governance Code in response to the global financial crisis, together with the subsequent expectations of the UK’s major institutional shareholders. The Department for Business, Energy & Industrial Strategy’s ( BEIS) March 2021 consultation on modernising the UK’s audit and corporate governance regime further reinforces that deploying malus and clawback within...
The Companies Act 2006 ( CA 2006) sets out rules under which any loan by a company to one of its directors, or to a person linked to a director, together with any associated arrangements, must be sanctioned by the company’s members. Such member approval is required for these transactions because they involve directors (or their connected persons) and are seen as particularly prone to abuse, so it is a prerequisite before any step is taken. The way in which these statutory approval requirements sit alongside the general duties owed by directors is examined in Practice Note: Directors' duties—scope, nature, interpretation and application, which addresses their scope, nature, interpretation and application. Among those general duties is the obligation on a director to disclose whenever they have, whether directly or indirectly, any interest in a proposed transaction or arrangement with their company, and to set out 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......
This Practice Note examines the statutory route for presenting a winding-up petition on the just and equitable basis under section 122(1)(g) of the Insolvency Act 1986 ( IA 1986), explaining its nature and when it may safeguard minority shareholders’ interests. It outlines who may petition, which companies can be targeted, and the rationale for ordering a company to be wound up (including unfair prejudice). It also addresses the relevance of the petitioner’s own behaviour (such as delay) and the remedies available. For a guide to terminology used in this Practice Note—see the section below: Key terms encountered when applying for a winding-up on the just and equitable ground. For procedural guidance, see Practice Note: Just and equitable winding-up - the procedure. What is a just and equitable winding-up petition? A petition to wind up a company on the just and equitable ground is a...
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...
Background— EU law in the UK Pre-exit day The European Communities Act 1972 ( ECA 1972) was enacted to implement the United Kingdom’s obligations, as a Member State, under the relevant EU treaties and to ensure adherence to EU law. Under ECA 1972, s 2(1), certain EU rights and obligations intended to have direct effect applied in the UK without the need for additional domestic legislation. This encompassed rights under the EU Treaties and EU regulations setting out detailed legal rules. Other forms of EU law took effect via UK regulations made under ECA 1972, s 2(2), or, in some circumstances, through separate Acts of Parliament. This pathway covered EU directives, which stipulate overarching aims or frameworks while leaving each Member State to make its own provision to secure the required legal outcome. In its operation within Member States, EU law is...
This Practice Note concentrates on the appointment of a company secretary for either a public or a private company. It does not cover resignation or removal of a company secretary; for those topics, see Practice Notes: Resignation of a company secretary and Removal of a company secretary, which address those matters. The role of a company secretary The Companies Act 2006 ( CA 2006) does not set out the role or particular duties of a company secretary; these are generally determined by the secretary’s contract of employment. Typically, a company secretary’s remit will include, among other matters: keeping the company’s records and registers, statutory and non-statutory, up to date setting agendas for, and minuting, board meetings and members' meetings, and filing documents with Companies House, as required by statute CA 2006 allows the same individual to serve as both a director and the...
Background This Practice Note outlines the statutory framework contained in the Companies Act 2006 ( CA 2006), alongside other legislation, concerning the terms of an auditor’s appointment and the setting of an auditor’s remuneration and related matters. It also notes that additional rules on the terms of an auditor’s appointment and remuneration may apply to a listed company, an AIM company, or a company whose securities are admitted to the AQSE Main Market or the AQSE Growth Market (formerly the NEX Exchange Main Board or NEX Exchange Growth Market), but these fall beyond the scope of this Practice Note. For guidance on how an auditor is appointed (including the mandatory tender requirements that apply to public interest entities), see Practice Note: Appointment of an auditor, and for a form of resolution, see Precedent: Resolution to appoint or re-appoint an auditor and fix their...
Post 1 October 2013 From 1 October 2013, section 69 of the Enterprise and Regulatory Reform Act 2013 ( ERRA 2013) recast section 47 of the Health and Safety at Work etc. Act 1974 ( HSWA 1974), altering the previous position. For accidents occurring at work on or after that date, civil liability does not arise from a breach of statutory duty unless the particular regulation expressly provides for it. The Workplace ( Health, Safety and Welfare) Regulations 1992 ( W( HSW) Regs 1992), SI 1992/3004, do not provide for civil liability to arise from a breach. In those circumstances, claimant practitioners are left to rely on breaches of workplace regulations as support for a claim in negligence. The regulations have their greatest relevance and utility to claimant practitioners where they prescribe a framework of steps or measures required of an employer to ensure...
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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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