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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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Formulating an informal restructuring plan An informal restructuring may blend out-of-court measures with formal mechanisms to bind objecting parties, such as: schemes of arrangement Part 26A restructuring plan (see Practice Note: Part 26A restructuring plans: history, rationale and scope) pre-pack administrations company voluntary arrangements ( CVAs) US Chapter 11 proceedings Informal restructuring rationale Once a valuation of the company or group has been secured that identifies where the value breaks (see Practice Note: Where the value breaks and negotiating strength), it becomes apparent who genuinely has a seat at the negotiating table, and dissenters typically surface, often challenging the valuation itself. Where those dissenters sit near the value break, and the creditors who are in the money refuse to offer a small equity stake in the restructured entity or another incentive to win consent to an informal approach, parties often turn to one of the...
Investors in high yield paper are now exerting a far greater influence on restructurings. Historically, despite high yield instruments appearing in a number of sizeable European corporate capital stacks, talks around restructurings were largely led by senior banks and other syndicated lending groups. The key reason was that high yield notes were frequently unsecured, offering minimal, if any, return on a winding-up, in contrast to leveraged loans, which are commonly secured. As a result, high yield holders generally wielded little sway over restructuring discussions. Strategy and types of holders Following the 2008 global financial crisis, leveraged finance has shifted towards greater use of high yield bonds, in part due to tighter leveraged lending rules and guidelines for loans. Alongside buoyant M& A propelling market expansion, European issuers have often tapped the high yield market to replace senior, mezzanine and second-lien leveraged loans, opting to...
Status of the UK This document is archived and is not being updated any longer. From exit day on 31 January 2020, the UK ceased to be an EU Member State. Nonetheless, under the Withdrawal Agreement, the UK entered an implementation period, during which EU law continued to apply. In many Brexit SIs, as such, references to exit day should now be interpreted as references to IP completion day (the completion of the Implementation Period, defined in clause 39 as 31 December 2020 at 11.00 pm), unless that wording is expressly disapplied by the SI concerned. For further detail, see News Analysis: Brexit—impact of the Withdrawal Agreement and European Union ( Withdrawal Agreement) Act 2020 for R& I lawyers, and Brexit Bulletin—key updates, research tips and resources. We consider some of the likely issues for R& I lawyers and other...
Restructuring & Insolvency News Analysis— Brexit collection 26 September 2024 — Government pauses the start of new court processes for assimilated law — LNB News 26/09/2024 46. An instrument has been issued today cancelling the commencement of section 6 of the Retained EU Law ( Revocation and Reform) Act 2023 ( REUL( RR) A 2023). Consequently, the planned court procedures tied to assimilated law will not take effect next week as previously intended. 26 September 2024 — Retained EU Law ( Revocation and Reform) Act 2023 ( Commencement No 2 and Saving Provisions) ( Revocation) Regulations 2024 — LNB News 26/09/2024 2. SI 2024/976 revokes UK secondary legislation SI 2024/714: the Retained EU Law ( Revocation and Reform) Act 2023 ( Commencement No 2 and Saving Provisions)...
After the transition period From 31 December 2020, the transition period ended. The UK is no longer regarded as an EU Member State and a range of Brexit SIs came into force. As a result, the core operative provisions of Regulation ( EU) 2015/848 ( OJ L141/19), the Recast Regulation on Insolvency, concerning automatic recognition fell away (see Practice Note: Brexit—impact on Recast Regulation on Insolvency), and EU Brussels I (recast) similarly ceased to apply. Accordingly, while jurisdiction to commence certain insolvency proceedings for overseas companies may still be available, achieving recognition of those proceedings across the remaining EU Member States may now be more difficult. Nevertheless, despite the loss of the main operative elements of the EU Recast Regulation on Insolvency, the UK and many EU Member States maintain sophisticated comity principles. Moreover, EU Rome I is largely unaffected and continues to...
This Practice Note reviews the factors the court will take into account and the test it will adopt when considering an application by a trustee in bankruptcy (the trustee) seeking orders for possession and sale of the bankrupt’s home, including accommodation occupied by the bankrupt’s family... For further reading on making possession and sale applications and on the timing of any application, see Practice Notes: Possession and sale applications in respect of a bankrupt’s family home The ‘three-year rule’ in bankruptcy under section 283A of the Insolvency Act 1986 Applications for possession and sale of the family home Where a trustee applies to the court for possession and sale, they will, amongst other things, need both an order for sale and an order for vacant possession. In substance this is a two-stage exercise, yet, in practice, it is usually addressed within a single...
A members’ voluntary liquidation ( MVL) occurs when a company is solvent and an orderly wind-up of the company is required. For more detail, refer to the following Practice Notes: What is a members’ voluntary liquidation and when is it typically used? MVL—the information and documents to be provided to the liquidator by the company The procedure is set in motion at a board meeting once the directors conclude the company can settle all its debts in full, together with interest at the official rate, within no more than 12 months from the start of the winding up. A company can be wound up voluntarily under members’ control only where a majority of the directors have made a statutory declaration of solvency and provided a statement of the company’s assets and liabilities (along with the other matters required by Insolvency ( England and Wales) Rules...
Pizza Express Financing 2 plc applied for a Part 26A restructuring plan ( RP) at a convening hearing in September 2020 and sanction hearing in October 2020. The principal points are outlined below; unless specified otherwise, capitalised expressions bear the meanings set out in the convening judgment. This Deal Debrief sits within our Restructuring plans collection. For an in-depth look at key metrics from the 2023 RPs and commentary from leading figures in the restructuring arena, see Practice Note: Market Insights Trend Report—trends in Part 26A restructuring plans in 2023 [ Archived]. Plan company: Pizza Express Financing 2 plc (the Company) Industry: Restaurants Debtor’s incorporation and jurisdictional aspects: England & Wales, with COMI in the UK Pre-convening development: the Company executed a Contribution Deed one month prior to the convening hearing, which in effect rendered it a primary obligor......
This Practice Note explores the principal parties commonly engaged in a PFI or PF2 project. It outlines the functions of public sector participants, private sector counterparts, finance providers and sub-contractors, together with support providers and other professionals involved. In the 2018 Budget (delivered on 29 October 2018), the government confirmed it would cease using PF2 for new schemes (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). Nonetheless, live PFI and PF2 arrangements remain in operation and, given the usual duration and lifespan of these schemes, are expected to do so for many years to come. Public Sector Authority/ Trust This is the public sector organisation that originates and procures the PFI scheme in question and seeks to have the asset constructed and properly maintained (the label ' Trust' applies only to NHS schemes). The public body will typically be a local...
Why indemnities and security are required When an insolvency practitioner takes office, they owe creditors a duty of care to act bona fide and in their best interests. Depending on circumstances, an office-holder may continue trading for a time or complete or take on contracts, and must shield themselves from personal exposure while doing so. In most cases, office-holders seek to exclude personal liability within contracts and ensure all documents are executed in their capacity as office-holder, not in a personal capacity. Nevertheless, a complete exclusion may not be possible, so they may need to rely on statutory indemnities, where available, alongside extra creditor indemnities. The importance of indemnities differs according to the office held and the actions required during the appointment. Personal liability The degree of personal liability for an office-holder depends on the specific office and the extent to which the role carries...
When pension contributions are recoverable This Practice Note considers two issues: whether a bankrupt’s pension arrangement sits within the bankruptcy estate, and if the arrangement is outside the bankruptcy, whether payments into it can be recouped for the estate’s benefit It deals solely with occupational pension schemes and personal pension arrangements. State pensions and most statutory pension schemes do not comprise part of the bankrupt’s estate, meaning the sole route for a trustee in bankruptcy (trustee) to realise pension rights is via an income payments order. Bankruptcies before 29 May 2000 This section applies to individuals made bankrupt following petitions presented before 29 May 2000. Contributions paid in respect of both personal pension schemes and occupational pension schemes are ordinarily recoverable by the bankrupt’s trustee, because a debtor’s contractual rights under such schemes are treated as choses in action falling within the broad...
The Pension Schemes Act 2021 On 11 February 2021, the Pension Schemes Act 2021 ( PSA 2021) obtained Royal Assent. It amends the Pensions Act 2004 ( PA 2004), introducing measures with significant consequences for corporate and restructuring transactions involving companies or groups that run UK defined benefit schemes, including: Two criminal offences—‘avoidance of employer debt’ and ‘risking accrued scheme benefits’—effective from 1 October 2021. This Practice Note addresses these offences. Broader grounds for the Pensions Regulator ( TPR) to issue a contribution notice ( CN) under its moral hazard powers, making third parties liable to help fund a scheme deficit, via two new threshold tests: the ‘employer insolvency test’ and the ‘employer resources test’. These also took effect on 1 October 2021. For an overview of CNs, see Practice Note: Contribution Notices. Expanded...
This Practice Note applies to defined benefit and hybrid occupational pension schemes. What is the Pension Protection Fund? The principal role of the Pension Protection Fund ( PPF) is to provide, by way of compensation, payment of members’ benefits up to a prescribed level where a qualifying insolvency event has arisen in relation to the sponsoring employer of an eligible pension scheme. When such a qualifying insolvency occurs, the relevant scheme enters an assessment period, during which the PPF examines the position and determines whether the scheme satisfies the conditions for admission to the PPF. The PPF also performs other functions that sit outside the scope of this Practice Note, including: running the Financial Assistance Scheme ( FAS). Established by the government, the FAS offers a minimum level of benefits to members of qualifying pension schemes who would otherwise forfeit all or part of their pension because their...
Alongside the more familiar company voluntary arrangements ( CVAs) and individual voluntary arrangements ( IVAs), insolvency law allows insolvent general partnerships to propose compromise terms to their creditors. Such arrangements are called partnership voluntary arrangements ( PVAs). When considering any proposal of this kind, partners should remember that they remain fully and personally responsible for all partnership liabilities. Accordingly, in the vast majority of cases it is prudent for each partner to put forward an IVA as well, in order to ensure their own position is comprehensively safeguarded. Applicable legislation Part II of the Insolvent Partnership Order 1994 ( SI 1994/2421) ( IPO 1994), as modified by the Insolvent Partnership ( Amendment) ( No 2) Order 2002 ( SI 2002/2708), applies the CVA regime in Part I of the Insolvency Act 1986 ( IA 1986) to insolvent partnerships via a PVA ( IA 1986, s 420). The IPO...
Under common law contract principles, an insurer cannot pass on the burden of its insurance obligations without the policyholder’s consent. As a rule, this requires a novation involving the existing insurer, the policyholder, and the incoming insurer. An exception arises under Part VII of the Financial Services and Markets Act 2000 ( FSMA 2000), which, subject to specified conditions, allows an insurer to transfer the whole or a defined part of its business without securing the consent of each policyholder... The UK has long operated a mechanism for portfolio transfers. Earlier procedures under the Insurance Companies Act 1982 drew a distinction between long-term insurance (broadly life, annuity, permanent health and pension business) and general insurance. For the former, a court application was required, whereas for general insurance, approval by the regulator was sufficient. In both instances, a persistent difficulty was that outwards...
The deal debriefs The deal debriefs outline key metrics for every Part 26A restructuring plan ( RP), including, among others: industry sector place of incorporation legal counsel involved the timeline the restructuring terms any third-party releases the classes formed any excluded creditors voting in each class governing law any challenges raised returns under the relevant alternative compared to under the RP any retention of equity by original shareholders whether cross class cramdown was used the ultimate result The debriefs span all RPs proposed from June 2020 (when the RP was first introduced under the Corporate Insolvency and Governance Act 2020) to date, irrespective of whether they were ultimately sanctioned or not. For a detailed analysis of key metrics from the RPs filed in 2024, together with commentary from leading figures in the...
Practical implications of a restructuring plan The Corporate Insolvency and Governance Act 2020 ( CIGA 2020) introduced a restructuring route enabling a company to bind all creditors or members through a cross-class cram down ( CCCD). This may include junior or senior classes that vote against the proposal, provided specified conditions are satisfied and dissenting classes are not placed in a worse position than under the relevant alternative. For more detail, see Practice Note: Cross- Class Cram Down under a Part 26A restructuring plan. Creditor classes are set by the plan proponent on a case-by-case basis. Approval requires at least 75% in value of a class to support the plan. For information on all RPs sanctioned to date, see Practice Note: Part 26A restructuring plan deal...
Part 26A restructuring plans ( RPs) Since 26 June 2020, companies have been able to use Part 26A restructuring plans ( RPs) (see Practice Notes: Part 26A restructuring plans: history, rationale and scope and Frequently asked questions ( FAQs) on the restructuring plan). This procedure is open to businesses of every size, including small to medium enterprises ( SMEs). Within the EU, SMEs are typically described as organisations with fewer than 250 employees and either turnover below €50m or a balance sheet total under €43m. Section 465 of the Companies Act 2006 provides a slightly different approach for medium enterprises: a company meets the qualifying conditions in a year if it fulfils two or more of the following thresholds: turnover not more than £54m balance sheet total not more than £27m number of employees not more than 250 For an in-depth review of key...
In both corporate and personal insolvency, office-holders chiefly gather the company’s or individual’s assets, realise them and distribute the proceeds to creditors in accordance with the statutory waterfall. For more detail, consult the following Practice Notes: Waterfall of payments—a comparative guide Waterfall of payments in administration Waterfall of payments in liquidation Waterfall of payments in bankruptcy Waterfall of payments in administrative receivership Pari passu distribution Pari passu, a Latin term, translates as ‘with an equal step’ or ‘on equal footing’. In insolvency, it captures the principle of proportionality and is used to describe how creditors are treated relative to one another. Where claims rank ‘pari passu’, all creditors within the same class are paid alike, with no one preferred. If funds are insufficient to satisfy debts in full, distributions are made pro rata on a pari passu basis, so each receives a...
ARCHIVED: This Practice Note is no longer updated and is supplied solely for background reference purposes only. In addition, certain links may not lead to the provisions as they stood on the date the guidance in this Practice Note was issued. Warning: if you plan to print the final report, it runs to more than 500 pages in length. Introduction On 14 January 2010, Jackson LJ released his final report on the review of costs in civil litigation. The report examines how cases are financed and how costs are generated, managed and evaluated throughout. Jackson LJ proposes fundamental reforms, firmer enforcement of existing rules, and greater awareness among judges, lawyers and litigants alike. Funding Before proceedings begin, there must be clarity and understanding about how they will be funded. A review of the legal aid system was beyond the scope and remit of the report....
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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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