Legal Practice Notes

This Practice Note forms part of the Share purchase transaction collection. At the start of a private company M& A deal, aside from price, the central question for the parties and their advisers is ultimately the transaction structure to be adopted at the outset. Will the buyer take the whole issued share capital of a company (a share purchase), or instead buy a trading business as a going concern, together with only certain selected assets (an asset purchase)? Another key question, to be settled at an early stage, is whether the seller is negotiating solely with one bidder, or entertaining multiple approaches within an auction sale process. Running an auction sale also entails a different procedure and overall timetable when compared with a standard transaction involving just one potential buyer. Share purchase or asset purchase? A privately owned company or business can be acquired either by means of a...

This Practice Note highlights the risks in mixed use developments that may arise where residential leaseholders of flats exercise: their collective right of pre-emption their collective right to acquire the freehold their collective right to manage the individual right to obtain an extended lease It also reviews the typical structuring approaches adopted to lessen the impact of those rights. Why is structuring a mixed use scheme important? Mixed use developments combine one or more buildings in commercial, retail and/or industrial use with an element of residential accommodation. Even if the residential part is merely ancillary to the principal commercial purpose, such schemes must be handled with particular care. Common pitfalls and challenges include: Right to buy/right of pre-emption — The Landlord and Tenant Act 1987 ( LTA 1987) grants qualifying long lease residential tenants a collective right of first refusal to...

If a limited company registered in England and Wales is chosen as the joint venture ( JV) vehicle, the joint venture company ( JVC) must have articles of association. The parties typically embed agreed, tailored provisions in the articles, with those arrangements complemented by the terms of a joint venture agreement ( JVA). Those specific terms are commonly drafted to reflect the parties’ agreed position and operate alongside the wider JVA. Statutory framework for articles of association Limited companies incorporated in England and Wales on or after 1 October 2009 fall within the Companies Act 2006 ( CA 2006). Any company formed under CA 2006 must adopt articles, being either the applicable model articles or bespoke articles that disapply or amend the model articles. Where the model articles are excluded or altered, those articles must be filed at Companies House. If no articles are filed at...

Differences between distributed and centralised legal functions This Practice Note explores contrasts between distributed and centralised legal teams, outlining the advantages and the drawbacks for each. It also covers hybrid approaches and the geographical issues they raise, including location-driven challenges and constraints. In commercial organisations—and indeed within national government policy—it is common for power and operational independence to be handed to local units, later pulled back to the centre again, with the pattern recurring over time. Motivated by ideology and practicalities in both spheres, such shifts regularly reshape in-house legal structures; only infrequently do general counsel enjoy the discretion to decide for themselves. Typically, there are two straightforward models: to centralise the function within a core team serving the business from a co-ordinated corporate centre to decentralise the function, placing lawyers alongside the specific business teams they...

Rising worldwide need for public infrastructure—from roads and schools to energy schemes—has sparked fresh, inventive approaches to arranging the procurement and financing of such facilities. There are countless ways to structure a project. The chosen model turns on factors such as: who the employer is (e.g. public authority, private company, or consortium) the character of the scheme (e.g. its complexity, whether it concerns state‑owned assets) whether only facility design and construction are being purchased whether facility operation and maintenance are also being procured which party raises the funding or supplies investment for the project (e.g. a public body or a private consortium) who owns the facility during construction, operation, and at the end of any operating term who is entitled to the facility’s output or revenues Some infrastructure schemes are let entirely by the private sector (for...

In recent years, annual executive bonus designs have come under intense scrutiny, leading remuneration committees to reassess, and in many cases rethink, their approach. The unusual economic backdrop created by the coronavirus pandemic and the cost-of-living crisis has pushed bonus payments under an even stronger spotlight, further intensifying scrutiny. This Practice Note delivers a practical examination of the matters companies will need to consider as they review the nature and the structure of their executive annual cash bonus arrangements. Does the cash bonus still have a role? With the sharp rise in share-based rewards over roughly the last 30 years or so, particularly through long-term share incentive plans, does the executive cash bonus still have a place? The answer is yes: the short-term incentive—defined as the means of rewarding the achievement of short-term goals after the end of a 12-month financial year—will typically include a...

Environmental, social, and governance ( ESG) is taking the world by storm. ESG can look like a modern fad, yet scrutiny of non-financial risks and opportunities—and board oversight of them—has long pre-dated the coining of ‘ ESG’ in 2005. What has shifted is that ESG supplies distinct lenses for organisations to judge whether, and how far, they must demonstrate greater creativity around risk and strategy. This how-to guide sets out the actions companies should follow when establishing an ESG board committee. As the ESG landscape broadens daily, fresh queries emerge about how boards ought to organise oversight of the environmental and social matters encompassed within their own ESG definition. The concise answer mirrors classic corporate governance: there is no universal template. For some, the best course is to clarify and sharpen the remit of existing board structures; for others, it lies in forming a new board...

Looking at secondments from the law firm’s perspective Large clients have long become used to insisting on free secondees as a condition of joining or staying on a panel. Gaining a concession of this sort from a law firm might seem appealing, yet it can be a poor choice if there are other routes to client benefit that do not generate the same operational headache for the firm. No firm is keen to release its top associates on secondment; equally, if the secondee is not a strong ambassador, the client’s experience will suffer. So many associates have been hired directly by clients, or have chosen to move in-house, on the back of secondments, that firms are increasingly reluctant. Practices tend to be more open where some payment is offered and the secondment is not a five‑day‑a‑week commitment. Be clear about your aims, and ask...

Overview Rain that falls, along with other forms of water, is intercepted as it travels through the hydrological cycle and put to work to produce electricity for consumption. This can be realised in a number of distinct ways, for example by tapping a river’s inherent force as it drops from upland terrain down to sea level across distance and gradient, or by building a dam and reservoir; in both arrangements, purpose-built, appropriately installed turbines and generators serve as the means of converting energy into power. Because water is not a finite global commodity and is not consumed while energy is produced as it moves downstream, hydropower is classed as renewable energy. Owing to fluctuations in seasonal flows, water availability, and landscape and geography by specific location, however, hydropower can be difficult to rely on as dependable baseload supply for the grid, and more often...

Types of products that can be static or managed A transaction backed by a portfolio of assets can be labelled either ‘managed’ or ‘static’. In both cases, an initial pool is chosen at the start of the deal; however, in a static structure the assets remain unchanged, whereas in a managed structure some of the original holdings are likely to be replaced over the life of the transaction. What is a static transaction? In a static transaction, the collateral or underlying asset pool is set for the full term of the structured product. Put simply, the assets are picked at issuance and are not altered during the life of the deal. The main justification is cost efficiency: no active manager is needed once the deal is live, which avoids ongoing management fees. Cash collateralised debt obligations ( CDOs) or arbitrage synthetic CDOs can be...

Practice Note This Practice Note summarises key authorities and commentary relevant to practitioners in structured products and securitisation. The decisions are arranged by subject area and include: Insolvency and restructuring Bondholders binding and being bound by other stakeholders Interpretation of clauses Flip clauses Duty of care misrepresentation Notice of default Valuations Disclosure to investors Insolvency and restructuring Re ARM Asset Backed Securities SA [2014] 2 BCLC 364, [2014] EWHC 1097 ( Ch) 28 March 2014. The Luxembourg regulator, the Commission de Surveillance du Secteur Financier (the CSSF), sought the opening of liquidation proceedings under article 39 of the Luxembourg Law on Securitisation against a company incorporated in Luxembourg. However, following an application by the directors, the High Court appointed provisional liquidators on the basis that the company was insolvent and that its centre of main interests lay in England. The company’s registered office was in Luxembourg and its only business was issuing bonds to...

FORTHCOMING CHANGE: On 6 August 2024, the government publicly signalled its plan and commitment to repeal the Strikes ( Minimum Service Levels) Act 2023 (the Strikes Act 2023). Following that statement, clause 61 of the Employment Rights Bill, introduced on 10 October 2024, expressly sets out the repeal of the Strikes Act 2023 together with the reversal of its amending provisions to Part V of the Trade Union and Labour Relations ( Consolidation) Act 1992. Clause 118 of the Bill confirms that these repealing provisions will come into force on the day on which the Employment Rights Act 2025 is passed. For more information on the Employment Rights Bill, in general, see Employment News Analysis: The Employment Rights Bill, and Employment Rights Bill 2024 – views from the sector, LNB News 10/10/2024 85. To track the Bill’s progress through Parliament, see Practice Note:...

This Practice Note outlines the procedure for statutory undertakers and holders of street works licences to use the highway for utility works and apparatus under the statutory framework in the New Roads and Street Works Act 1991 ( NRSWA 1991) and other enabling legislation. It explains who qualifies as statutory undertakers and sets out the duty of care owed, both under statute and at common law, to other highway users. Street works at common law At common law, interfering with the surface of a highway amounts to a nuisance. In the nineteenth century, utility companies seeking to route underground pipes and cables along highways—though these were the most obvious corridors—were, in the absence of statutory powers, restrained by the courts from placing their apparatus. The Sheffield Gas and Cambridge Gas cases illustrate this principle. Street works—liability in negligence Even where legislation authorises...

Background Chapter 4 of the Levelling-up and Regeneration Act 2023 ( LURA 2023), which obtained Royal Assent on 26 October 2023, adds sections 61QA to 61QM into the Town and Country Planning Act 1990 ( TCPA 1990). These provisions establish a new route for planning consent called street vote development orders ( SVDOs), enabling local residents to put forward development on their own street and then ballot on whether planning permission should be granted. SVDOs will confer planning permission for defined street areas in England. At present, and only for limited purposes, TCPA 1990, ss 61QA–61QM are commenced in so far as they confer powers to make regulations and for certain minor and consequential changes set out in LURA 2023, Sch 9. Otherwise, they have not yet taken effect; they will commence on a date to be appointed, with subsequent...

This Practice Note outlines the meaning of information and communication technology ( ICT), how organisations can gain from integrating it, and the potential risks tied to its use. It also offers practical guidance on how to formulate, draft and implement a strategic ICT plan. For guidance on the use of artificial intelligence ( AI), see subtopic: Artificial intelligence compliance. What is ICT? Information and communication technology ( ICT) is an umbrella term for all technical means used to manage information and support communication. It spans tools such as computer and network hardware and software, satellite systems and mobile phones, together with the many services and applications linked to them. Many regard the significance of ICT not as the technology itself but as its ability to expand access to information and...

FORTHCOMING CHANGE relating to IHT on pension death benefits : In the Autumn Budget 2024 on 30 October 2024, the government revealed plans to treat unspent pension pots and pension death benefits as part of an individual’s estate for IHT from 6 April 2027. The measure will cover both defined contribution and defined benefit arrangements, spanning UK-registered schemes and qualifying overseas pension schemes. A technical consultation on delivery ran between 30 October 2024 and 22 January 2025, and the provisions now appear in Finance Act 2026. For further details, see: Autumn Budget 2024— Private Client analysis— Inheritance tax. This Practice Note offers a step-by-step guide to completing Form IHT400 (the IHT account) and Schedules IHT401– IHT436, for use within probate or letters of administration applications and throughout broader estate administration. Form IHT400 supplies HMRC with comprehensive details of the estate’s assets and...

This Practice Note offers clear direction on the principal actions an in-house legal function should take when establishing a panel of preferred external legal services providers. It proceeds on the basis that a thoughtful choice has been made to outsource part or all of the legal work within an organisation. It further assumes the organisation is a private sector organisation incorporated in England and Wales and is also not subject to public sector procurement rules. This Practice Note outlines a coherent sequence to lead you through the legal outsourcing journey, and is supported by a range of Precedents and tools. Step 1: Assemble a procurement project team Begin by forming a legal services procurement team to direct and oversee the project. Ideally, keep this group small (no more than six people) so it does not become unwieldy. The engagement and backing of business...

Trustees' powers As trusts may arise both by operation of law and through express creation, the law provides implied powers so that trustees can discharge their responsibilities. Those implied powers include, for instance: advancements delegation insurance investment maintenance buying and selling land When setting up express trusts it is common practice to vary these implied powers and to add further provisions... The Standard Provisions of the Society of Trust And Estate Practitioners (1st Edition) Background The Society of Trust and Estate Practitioners ( STEP) was established in 1991. It asked James Kessler QC to prepare routine administrative clauses that could be incorporated into trusts and Wills by reference, so those documents could be shortened and simplified. These clauses are referred to as the Society of Trust and Estate Practitioners Standard Provisions (1st Edition) (the 1st Edition). The Standard...

There are five essential stages to boosting efficiency overall consistently: define precisely which process requires improvement (covered in this Practice Note) measure the issue clearly (see Practice Note: Improving efficiency: Step 2—measure the problem) analyse the relevant data (see Practice Note: Improving efficiency: Step 3—analyse what is causing the problem) enhance the process meaningfully (see Practice Note: Improving efficiency: Step 4—improve the problem) control, ie embed the revised process firmly so it becomes business as usual (see Practice Note: Improving efficiency: Step 5—embedding changes) Management consultants widely describe this as the ‘ DMAIC framework’. This Practice Note takes you through the opening step—the ‘define’ stage in detail. It sets out two practical ways to pinpoint which processes merit attention at this stage, ie by: identifying where processes create waste, as waste truly signals an inefficient process checking...

This Practice Note sets out the ‘staying put’ provisions in section 23CZA of the Children Act 1989 ( Ch A 1989). Purpose of the arrangement Eligibility requirements How arrangements should be formalised Duties of the local authority Implications of ongoing care for the foster carer What is the purpose of a staying put arrangement? The ‘staying put’ scheme in Ch A 1989, s 23CZA provides a statutory route for a young person to continue living with their foster family for up to three years after their 18th birthday. Its purpose is to ensure care leavers have the same type of security and support as their peers. Although an 18-year-old is an adult in law, many young people do not yet have the financial independence or emotional maturity to move out on their 18th birthday and establish an independent life. Many young adults still need emotional, practical and financial support from their...