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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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Background to the regulated activities of effecting and carrying out contracts of insurance The regulation of conducting insurance business in the UK can be traced to 1870, with the passing of the Life Assurance Companies Act 1870, which required any firm engaged in life assurance to lodge a deposit with the court as a form of security. Successive Acts then introduced a range of enhancements and refinements to that framework. The original UK regulatory framework was made largely obsolete by the arrival of various EU measures from the early 1970s; a directive dealing with life assurance followed thereafter within that legislative programme......
The general prohibition Under section 19 of the Financial Services and Markets Act 2000 ( FSMA 2000), no person may undertake regulated activities in the UK unless they are authorised or fall within an exemption. This is referred to as the general prohibition. For guidance on the territorial reach of this restriction, see Practice Note: Territorial scope of the prohibition. Under FSMA 2000, s 31, an authorised person is one who: has been granted permission by the Financial Conduct Authority ( FCA) or the Prudential Regulation Authority ( PRA) under FSMA 2000, Pt 4A to carry on specified regulated activities; or is a Gibraltar-based person with a Schedule 2A permission to carry on one or more regulated activities. Please note that this latter provision, inserted by section 22(1), (2) of the Financial Services Act 2021, is not yet in force......
Practice Note This Practice Note outlines the functions of the Nominated Officer and the Money Laundering Reporting Officer ( MLRO) within a firm authorised by the Financial Conduct Authority ( FCA), or a firm registered with the FCA for money laundering ( ML) purposes (roles frequently, though not invariably, carried out by the same individual), under the UK’s anti-money laundering ( AML), counter terrorist financing ( CTF) and counter proliferation financing ( CPF) applicable legislative and regulatory framework......
Insured M& A transactions—a tax lawyer's guide This Practice Note considers the practical matters a tax lawyer should assess when advising on a share sale M& A deal where one party plans to obtain either warranty and indemnity ( W& I) insurance or tax risk insurance. W& I cover can be put in place by the buyer or the seller to address losses arising from: breaches of the seller’s warranties, and claims under the indemnities in the acquisition agreement (or warranty deed) and/or the tax covenant (if included). Tax risk insurance is intended to protect the insured against a particular tax exposure connected with the transaction. In broad terms, W& I insurance responds to unknown risks, while tax risk insurance covers a known contingent tax liability. For an outline of the risks each product will cover, and the procedure for arranging a policy to...
STOP PRESS The Financial Services and Markets Act 2023 ( FSMA 2023) revokes the 2004 Regulations ( SI 2004/353) with effect from a date still to be appointed, alongside a range of other EU‑derived legislation. The government does not intend to begin revoking individual EU‑derived instruments and provisions unless the regulators have prepared and consulted on rules that are ready for enforcement, and only where it is appropriate that the provisions are replaced with rules. FSMA 2023 also updated the UK’s insolvency regime for insurers, both to clarify certain points and to widen the protections available to an insurer and its policyholders undergoing insolvency or write‑down procedures—the government consulted on these measures in 2021, and published its response in April 2022 (see News Analysis: Financial Services and Markets Bill sets out post‑ Brexit framework for UK financial services, and LNB News...
This Practice Note explores the obligations contained in Chapter 13 of the Financial Conduct Authority ( FCA)’s Senior Management Arrangements, Systems and Controls sourcebook ( SYSC 13), and offers insurers direction on setting up and sustaining robust systems and controls to manage operational risk. Purpose of SYSC 13 SYSC 13 is intended to assist with the interpretation of SYSC 3.1.1 R and SYSC 3.2.6 R, which prescribe how firms should establish and maintain systems and controls for the management of operational risk. The chapter addresses systems and controls for risks arising across any aspect of a firm’s operations, but it does not extend to systems and controls for credit, market, liquidity or insurance risk. Firms should also take account of the operational risk provisions in the FCA’s Conduct of Business sourcebook ( COBS), SYSC 14 (risk management and associated systems and controls for...
This Practice Note sets out a synopsis of the extensive regulatory requirements and guidance applicable to UK insurers on governance, risk management, and systems and controls (for a checklist for Solvency II UK firms, see: Governance, systems and controls requirements for Solvency II UK firms—checklist). Introduction The obligations on UK insurers around governance, risk management, systems and controls are interconnected and should be treated in a rounded, integrated way. These obligations mainly comprise a body of granular rules and guidance, and insurers must from time to time assess their governance, risk management, systems and controls to achieve and maintain effective compliance. Insurers will further recognise that the UK regulators assess whether events amount to regulatory breaches by reference to overarching ‘threshold conditions’ and broad regulatory principles (or ‘fundamental rules’), which are outlined in this Practice Note. Consequently, the UK regulators might deem an insurer to have...
ARCHIVED This Practice Note is archived and no longer maintained. UK insurers must submit annual accounts pursuant to the Companies Act 2006. An insurer’s accounts are also governed by additional reporting frameworks, including UK Financial Reporting Standards issued by the Financial Reporting Council, or International Financial Reporting Standards from the International Accounting Standards Board (mandated in the EU by the International Accounting Standards Regulation and optional for UK insurers). While insurers share the usual corporate duties to disclose general accounting measures such as operating ratio and gross profit, they must also make specific premium-related declarations in their financial accounts and to their regulators, the Financial Conduct Authority ( FCA) and the Prudential Regulation Authority ( PRA). This Practice Note serves as an introduction to key terminology used in relation to insurers’ accounts and how these terms apply in practice. For a general...
What are insurance linked securities? Insurance Linked Securities ( ILS) are an alternative route to manage risk for insurance and reinsurance businesses. The Financial Conduct Authority ( FCA) defines ILS as financial instruments whose value is tied to an insurable loss event. Unlike traditional protection placed with a reinsurer, ILS provide insurers and reinsurers with a way to shift risk to the capital markets. An ILS transaction typically involves several steps. What is an insurance special purpose vehicle? An insurance special purpose vehicle ( ISPV) is a structure or entity established solely to assume specified contractual risks from an insurer or reinsurer. If an ISPV simultaneously undertakes more than one risk‑transfer contract from one or more cedants, it is termed a multi‑arrangement ISPV ( MISPV). Entities wishing to operate in the UK as an ISPV must apply to the Prudential Regulatory Authority ( PRA) for...
IPT is an indirect levy on insurance premiums. Unless an exemption applies, IPT is imposed as a percentage of the premium paid on particular categories of insurance policies issued by particular categories of insurers that cover risks situated in the UK. The economic burden of IPT is usually carried by the policyholder, yet the tax itself is accounted for and paid to HMRC by the insurer by reference to three-month accounting periods. Strictly, the premium includes IPT. As a result, the legislation differentiates between the premium and the ‘chargeable amount’ (the amount before IPT is added). The premium equals the chargeable amount plus IPT. For further details on what ‘premium’ means for IPT purposes, see: Premium below. IPT is due at 12% of the chargeable amount, the standard rate, unless the premium falls within the higher rate of...
What is the difference between an agent and a broker? Where insurance is arranged through an intermediary, that party is typically either an insurance agent (who generally represents a particular insurer or a number of insurers) or an insurance broker (who usually represents the insurance purchaser). Insurance agents Insurance agents have contractual appointments with insurers that define the products they may offer and how they are remunerated. A ‘captive agent’ focuses on a single insurer’s products, while an ‘independent agent’ can work with multiple insurers. The agent’s role is to bring insurance business to their principal(s). Insurance brokers As the buyer’s representative, a broker is independent. Brokers prepare and submit applications to insurers for their clients. During placement, they obtain a temporary contract, known as a ‘binder’, signed by an authorised representative of the insurer. After the transition period (often 30 or 60 days), the binder is...
This Practice Note outlines how the UK has given effect to the Insurance Distribution Directive ( Directive ( EU) 2016/97) ( IDD), setting out the core components of the UK insurance distribution framework, with links to UK legislation, rules and guidance, and noting reforms made since the UK’s withdrawal from the EU. For information on the EU IDD, including its background and objectives, see Practice Note: EU IDD—essentials. IDD—implementation in the UK EU Member States were required to transpose the IDD into domestic law by 1 July 2018, with the rules taking effect from 1 October 2018. To implement the IDD in the UK, the Financial Conduct Authority ( FCA) issued three dedicated consultation papers, three corresponding policy statements and a Handbook Notice. The relevant papers are: March 2017, FCA Consultation Paper ‘ Insurance Distribution Directive Implementation— Consultation Paper I’ 17/7 (...
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z This glossary provides helpful (re)insurance and underwriting definitions. For focused guidance on reinsurance terminology, see Practice Note: Reinsurance—essentials. A Accident An unforeseen or unintended event or incident that typically results in damage or injury (physical or financial) to the insured or a third party. Accidental damage Unintended or unexpected harm or damage caused to property or a person. Accidental death benefit Some life insurance policies pay an extra amount, over and above the original sum insured, if the insured dies because of an accident. Act of God (force majeure) An occurrence beyond anyone’s control, such as a natural disaster. Active underwriter The person with primary responsibility and authority to accept insurance and...
This Practice Note sets out the UK regime for insurance-linked securities ( ILS). It outlines what ILS are and identifies the requirements under: the Prudential Regulatory Authority ( PRA) Rulebook for Insurance Special Purpose Vehicles ( ISPVs); Section 284 of the Financial Services and Markets Act 2000 ( FSMA 2000); the Financial Services and Markets Act 2000 ( Regulated Activities) Order 2001, SI 2001/544 ( RAO); the Risk Transformation Regulations 2017, SI 2017/1212 ( RTRs); and the Risk Transformation ( Tax) Regulations 2017, SI 2017/1271 ( RTRs Tax). What are insurance-linked securities? ILS are a risk management tool for insurance and reinsurance firms. Insurers typically address their exposure by entering into arrangements where: the insurer keeps its direct liability to its policy holders; and another firm receives sums corresponding to part of the premium paid by policy holders to the insurer; and is obliged to pay...
Summary of the UK GDPR regime This Practice Note condenses the UK GDPR framework. For a higher-level primer on UK data protection, see Practice Note: Data protection law—new starter guide. The UK data protection law collection assembles key guidance on this regime and is a recommended first stop for research. For information on the EU’s General Data Protection Regulation, Regulation ( EU) 2016/679, see Practice Note: The EU’s General Data Protection Regulation ( EU GDPR). This Practice Note covers: principal legislation substantive scope territorial reach core concepts data protection principles legal bases for processing special category personal data criminal conviction and offence data individual rights accountability and governance security personal data breaches international transfers of personal data exemptions the Information Commissioner data protection fees ...
Where and how does the general prohibition apply? At the core of the UK regulatory framework sits a basic restriction: no individual or firm may perform a regulated activity in the UK, or hold themselves out as doing so, unless they are authorised or fall within an exemption. This is the “general prohibition” set out in section 19 of the Financial Services and Markets Act 2000 ( FSMA 2000). In strict terms, the general prohibition only bites when a person carries on, or claims to carry on, a regulated activity in the UK. Yet FSMA 2000 does not exhaustively define the circumstances in which an activity is regarded as being undertaken in the UK, meaning the question of whether an activity is regulated is ultimately determined by the general law. This Practice Note considers the territorial scope of the general...
How does the fracking process work? Shale gas extraction, or hydraulic fracturing (‘fracking’), involves pumping water and chemicals into shale at very high pressure to free natural gas, chiefly methane, trapped within the rock. Vertical well bores are drilled thousands of feet into the ground, passing through sediment layers, the water table, and shale formations to reach the gas. The drilling is then diverted horizontally, where a cement casing is installed and functions as a channel for the vast volumes of water, fracking fluid, chemicals and sand required to fracture the rock and shale. These cracks enable the gas to be extracted from the rock formations. Fracking is typically undertaken at considerable depth (1.7km to 3.1km), influencing a wide horizontal area as the geological sequence is utilised. UK’s position on fracking The UK government has, historically, been supportive of fracking. However, following a series of seismic events at the...
Introduction to flood insurance As climate change drives more frequent flooding and the expense of repairs rises, the property, legal and financial sectors are becoming increasingly alert to floods and associated risks. Flood insurance is essential to managing the financial consequences of flood damage. Most commercial lending arrangements insist on fully comprehensive insurance. Flood insurance Cover Flood insurance will usually offer varying elements of cover depending on the policy terms and whether the premises are for domestic or commercial use. Cover is commonly available for the following losses: flood damage/direct loss—protection for losses arising directly from flooding. This may include replacement or financial reimbursement for items damaged or destroyed, such as business stock or belongings. It can also extend to costs for repairing structural damage from floodwater, essential services and restoration, and works to make a property habitable, for example ‘drying out’ ...
This Practice Note offers an introduction to elements of the legal and regulatory framework aimed at preventing fraud in financial services. It covers: the FCA’s role and the duties on financial services firms to keep systems and controls that deter fraud common fraud types in financial services and the FCA’s expectations of firms in preventing them compensation and redress for victims, including the PSR’s mandatory reimbursement for Authorised Push Payment ( APP) fraud developments in anti‑fraud legislation and in regulatory, payments sector and consumer protection initiatives other key actors involved in preventing fraud in financial services Overview As a global financial centre with an open economy, the UK is exposed to economic crime from money laundering to fraud and market abuse. Fraud often serves as the predicate offence to money laundering and terrorist financing; it is frequently serious and...
This Practice Note offers a comprehensive primer on the UK’s anti‑money laundering ( AML), counter‑terrorist financing ( CTF) and countering proliferation financing ( CPF) regime as it applies to financial services firms. It outlines: money laundering ( ML), terrorist financing ( TF) and proliferation financing ( PF) the AML/ CTF/ CPF framework for financial services, including the Financial Conduct Authority’s ( FCA) role the UK’s statutory AML/ CTF framework relevant FCA Handbook rules and guidance Joint Money Laundering Steering Group ( JMLSG) Guidance the responsibilities of a firm’s Money Laundering Reporting Officer ( MLRO) FCA AML/ CTF reporting obligations: REP‑ CRIM the Economic Crime ( Anti‑ Money Laundering Levy) a snapshot of key participants in the UK AML/ CTF landscape for financial services UK AML/ CTF legislative proposals, action plans and reforms...
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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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