Legal Practice Notes

This Practice Note explores the aim of Part 36, explains what constitutes a Part 36 offer, and outlines the motivations for proposing one. It further supplies guidance on requesting clarification of a Part 36 offer and sets out the costs repercussions for both claimants and defendants when making and accepting Part 36 offers. Note that this Practice Note addresses the rules currently in force after 1 October 2023. For details of specific provisions in place before 1 October 2023 for Part 36 offers in fixed costs matters, see Practice Note: Part 36 offers—fixed costs (position prior to 1 October 2023). For guidance on Part 36 offers in civil claims that fall within the fixed costs regime on or after 1 October 2023, see Practice Note: Part 36 offers—fixed costs (position on or after 1 October 2023). The purpose of Part 36...

This Practice Note addresses and answers common questions about the Electronic Documents Questionnaire ( EDQ) (also known as the E-documents questionnaire). It should be read in conjunction with Practice Note: Electronic disclosure— Electronic Documents Questionnaire ( EDQ). Note: this Practice Note does not deal with the provisions of the disclosure scheme operating in the Business and Property Courts. In the majority of such cases, electronic disclosure must be provided, though particular rules govern how it is handled and searched for. For guidance on electronic disclosure in such circumstances, see: Disclosure Scheme ( Business & Property Courts)—overview. When should I first look at the Electronic Documents Questionnaire ( EDQ)? In a case not subject to the disclosure scheme, consider EDQ as soon as you are instructed......

Commodity Murabaha and Tawarruq Murabaha contracts can be structured to fund working capital or acquisitions, including property purchases. When used in this way, the structure is often termed a commodity Murabaha. A related technique, Tawarruq (sometimes called ‘reverse Murabaha’), operates in a very similar manner, and the labels are frequently conflated, yet Shari’ah draws a distinction between them. Commodity Murabaha is required to satisfy the general Murabaha rules and is chiefly concerned with the conduct of the Islamic financial institution ( IFI). By contrast, Tawarruq is centred on the Customer: the Mustawriq acquires an asset on deferred terms with the express intention of immediately selling it on for cash to a third party. Scholars of Shari’ah do not all recognise Tawarruq as valid; nonetheless, most consider it allowed where the sale complies with Shari’ah conditions. Meeting working capital needs remains among the most...

Practice Note This Practice Note assists with identifying the applicable law in the courts of England and Wales for events causing damage that occurred on or after 1 January 2021, and is intended for matters arising in respect of such incidents. Please note that, where a conflict of laws arises between different jurisdictions within the UK, or between the UK and Gibraltar, Assimilated Rome II ( UK Rome II) is used if the harmful event took place on or after 11 January 2009. For events falling outside these periods, the UK courts will apply an alternative applicable law regime, determined by the date when the event happened. For an overview of the various regimes and how they relate to one another, see Practice Note: Applicable law regimes. This Practice Note reviews the provisions of UK Rome II, Regulation ( EC) 864/2007 concerning the law...

Auction processes Auction processes are pivotal in particular industries; for example, in private equity, in government privatisations, and in other large‑value transactions, where they remain central to those transactions. Selling shares by way of auction is intended to trigger competitive bidding for the target among interested parties, achieving both the highest achievable price and securing the best possible terms. For the seller, there is strong certainty that completion will occur with a preferred bidder (which is preferable from management’s point of view). Auctions may involve numerous bidders, or be narrowed and targeted to a selected few bidders only. This will generally depend on the market in which the target company operates and the nature of its business, that is, the market it operates in and its business’s nature. Typically the seller directs the auction and appoints advisers to act for it—for instance, an...

This Practice Note addresses the initial gateway within the controlled foreign company ( CFC) rules. Where a company is a CFC for an accounting period and no entity-level exemptions apply, the CFC gateways determine whether, and to what degree, the CFC has chargeable profits. Typically, those entity-level exemptions are considered first, as several are easier to operate and can remove the entity from scope entirely. A CFC’s chargeable profits equal its assumed taxable total profits, calculated on the footing that: the CFC’s assumed total profits are confined to amounts that pass through the CFC charge gateway; and reliefs set against the assumed total profits are correspondingly restricted to mirror that cap For details on calculating a CFC charge, see Practice Note: CFC rules—calculating the CFC tax charge. Meaning of gateways The expression ‘gateway’ in the CFC regime can cause uncertainty. The core point is simple: if you wish to...

When is security transferred? Security interests are commonly moved between creditors in situations where: a secured bilateral facility is transferred or assigned from one lender to another, with the related security likewise transferred or assigned; or a security agent or trustee in a syndicated facility resigns and a replacement is appointed. This is distinct from scenarios where a syndicated loan is sold down or shifted by syndicate lenders through loan transfers, assignments or sub-participations. In those cases, there is seldom any need to transfer the security, because transaction security is typically granted in favour of a security agent or trustee, who holds it on trust for and on behalf of the lenders (including new lenders, assignees and transferees). For fuller guidance on security trustees, see Practice Note: The security agent. This Practice Note focuses specifically on the transfer of security, for instance in the...

This Practice Note sets out the particular instances where legislation demands a contract to be in writing, covering assignments, contracts for the sale of land, equitable mortgages, assents, share transfers, transfers of intellectual property rights, and guarantees... When a written contract is beneficial or a necessity Contracts can come into being in three ways: orally, by conduct, or ‘under hand’ (in writing). For further detail on formation and interpretation, see: Formation and interpretation—overview. Simple contracts arise in ‘simple form’, whereas deeds must be executed in ‘solemn form’. See Practice Notes: Deeds and Executing documents—deeds and simple contracts. There are situations where writing is either required by law or necessary to meet registration rules. Statute requires contracts to be made or evidenced in writing for: assignments contracts for the sale or other dispositions of an interest in land (as distinct from the actual...

1. What is the applicable legislation? Control of foreign direct investment ( FDI) in Spain is primarily governed by: Spanish Act 19/2003 on the legal regime of capital movements and economic transactions abroad ( Act 19/2003) ( Ley 19/2003, de 4 de julio, sobre régimen jurídico de los movimientos de capitales y de las transacciones económicas con el exterior y sobre determinadas medidas de prevención del blanqueo de capitales); and Royal Decree 571/2023 of 4 July 2023 on foreign investments ( Real Decreto 571/2023, de 4 de julio de 2023, sobre inversiones exteriores), in force from 1 September 2023, which develops the FDI regimes in Spain. 2. Which government or other body (or bodies) reviews foreign investments? Under Spain’s FDI regime, procedures are generally overseen by the Directorate General for International Trade and Investments ( Subdirectorate of Foreign Investments) of the Ministry for...

This Practice Note explores the jurisdictional service gateway, or basis for service, in CPR PD 6B, para 3.1(3), which concerns pursuing claims against a necessary or proper party to a dispute between the claimant and the defendant that it is reasonable for the court to determine. For direction on additional claims under Part 20, and on assessing whether the person to be served is a necessary or proper party to the main or additional claim, see Practice Note: Cross-border service—jurisdiction gateways 1, 1A, 2, 4 and 4A (general grounds)— Gateway 4—additional claims. Read this Practice Note alongside Practice Note: Cross-border service—jurisdictional gateways (principles). This Practice Note refers to: the Privy Council decision in AK Investment CJSC v Kyrgyz Mobil Tel (2011), also reported as Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel in some law reports the courts of England and...

This Practice Note explains how the Standard Conditions of Sale ( Fifth Edition—2018 Revision) ( SCS) address insurance for the property, the consequences of pre‑completion damage, and the position where the buyer obtains early access. What happens if the property is damaged or destroyed between exchange and completion? Under Condition 5.1 SCS, the risk transfers to the buyer on the date the contract is made, mirroring the open‑contract approach. If the property suffers damage or is destroyed after exchange but before completion, the buyer remains obliged to complete. Even so, the seller must exercise reasonable care in relation to the property. Who insures between exchange and completion? Earlier editions of the SCS did not set out insurance responsibility fully, which could cause difficulties. As risk sits with the buyer from exchange, the buyer should arrange suitable cover from exchange of contracts. The buyer’s...

This Practice Note surveys New Zealand’s law on state immunity in general terms before moving to the two scenarios noted above. For an overview of arbitration in New Zealand, see Arbitration in New Zealand—an introduction. For approaches to challenging the jurisdiction of arbitration awards more broadly, see Practice Note: Challenging jurisdiction and anti-suit provisions in New Zealand. State immunity can be pertinent to arbitration in two ways: a challenge to the arbitral tribunal’s jurisdiction grounded in state immunity, or a challenge to enforcement of the arbitration award relying on state immunity The application of state immunity to investment arbitration awards under the Arbitration ( International Investment Disputes) Act 1979 is addressed separately below. Note: New Zealand judgments below are not reported by Lexis Nexis®. State immunity in New Zealand: generally A state named as a defendant may dispute the court’s jurisdiction by invoking state...

This Practice Note explores the treatment of sub-contracting within the 2017 editions of FIDIC’s Red, Yellow and Silver Books, setting out the relevant approach adopted in those forms. For discussion of sub-contracting under the 1999 Red, Yellow and Silver Books, the 2008 Gold Book and 2010 Pink Book, and details of the Subcontract for Construction 2011 and the Subcontract for Plant and Design- Build 2019 (each intended for 1999 main contracts), refer to Practice Note: FIDIC contracts (pre-2017 editions)—sub-contracting. A core rule across FIDIC regarding sub-contracting is that the Contractor stays liable to the Employer for Subcontractors’ work. This is set out in Red Book clause 5.1 and Yellow and Silver Book clause 4.4. Together, these clauses confirm that, even where tasks are sub-contracted, responsibility towards the Employer remains with the Contractor, across all three forms. Extent of...

This Practice Note explains how contract claims are dealt with under Article 7(1) of Regulation ( EU) 1215/2012, Brussels I (recast). This Practice Note clarifies the treatment of contractual claims under Article 7(1) of Regulation ( EU) 1215/2012, Brussels I (recast). It examines the necessary connecting factors, the nature of the contractual obligations, and identifies the relevant place of performance and the place of delivery. It also differentiates between contracts for the sale of goods and those involving the provision of services. The rules governing such claims appear in Article 7 of Regulation ( EU) 1215/2012, Brussels I (recast), which replaced Article 5 of Regulation ( EC) 44/2001, Brussels I. Although the recast introduced certain changes, the Court of Justice’s case law interpreting Article 5 of Regulation ( EC) 44/2001 should continue to inform both the construction and application of Article 7 of the recast...

This Practice Note addresses common assault or battery committed against emergency workers. It considers the elements of the offence, identifies who qualifies as an emergency worker, explains the meaning of acting in the exercise of functions as an emergency worker, outlines statutory aggravating features, notes alternative charges, highlights the racially or religiously aggravated variant of offence, and provides information on sentencing. The offence of assault on an emergency worker Section 1 of the Assaults on Emergency Workers ( Offences) Act 2018 ( AEW( O) A 2018) creates the offence of committing a common assault or battery on an emergency worker acting in the exercise of functions as such a worker. The offence is triable either way......

An activity counts as a regulated activity only when it is undertaken by way of business in the UK. The Financial Services and Markets Act 2000 ( FSMA 2000) does not define that phrase, so it retains its ordinary meaning. Deciding whether an activity is conducted by way of business is ultimately a matter of judgment. There are, nonetheless, particular circumstances in which activities will be regarded as by way of business, identified for a limited set of activities by the Treasury under its FSMA 2000 powers. This Practice Note outlines how HM Treasury’s interpretation of business applies to those categories of activity. For details on whether an activity is a regulated activity, see Practice Note: What are regulated activities? For further information on the carrying on of regulated activities in the UK, see Practice Note: Territorial scope of the general...

Lawful powers to take and keep property (subject to legal professional privilege) after searching premises may arise in several ways, such as: pursuant to a warrant under section 8 of the Police and Criminal Evidence Act 1984 ( PACE 1984) without a warrant, on or following arrest, under PACE 1984, ss 18 and 32 via the general power of seizure in PACE 1984, s 19 by removing property for retention and sifting at another location under section 50 of the Criminal Justice and Police Act 2001 ( CJPA 2001), and with the owner’s consent Seizure under a warrant authority If investigators hold a warrant granted under PACE 1984, s 8 or Sch 1, they should rely on the warrant’s seizure powers because they are straightforward, swift and efficient. They may take possession of any documents (subject to legal...

This Practice Note examines the key financial covenants commonly found in a real estate finance transaction. Purpose of financial covenants Financial covenants are used across many types of commercial finance (see Practice Note: Introductory guide to financial covenants). They are a distinct form of covenant or undertaking, being commitments to meet defined financial thresholds. See Practice Note: Introductory guide to financial covenants— What are financial covenants? Financial covenants enable the lender to oversee the borrower’s financial performance and provide these benefits: they assess the borrower’s financial position using objective, readily measurable criteria they highlight potential financial stress before any payment default arises, allowing the lender to act sooner than waiting for non-payment if a breach occurs, they allow the lender to protect its position by calling an event of default and accelerating the loan/enforcing security, or by potentially requiring mandatory...

Produced with input from Rebecca Cousin of Slaughter and May on market practice This Practice Note explores the step-by-step processes for effecting the purchase by a bidder (offeror) of all shares, or one or more share classes, in a target company (offeree) that it does not yet hold, using a scheme of arrangement under Part 26 of the Companies Act 2006 ( CA 2006) (scheme). Distinct from a takeover offer, a scheme creates no contract between the offeror and the offeree’s shareholders. Rather, it is a statutory device employed to deliver various corporate transactions. In a takeover setting, the offeree proposes the scheme to its shareholders, or to the relevant class holders, and so the offeree’s board will generally need to participate and co-operate. A scheme has hallmark features, most notably the requirement for approval by offeree shareholders at a...

THIS PRACTICE NOTE APPLIES TO DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES Numerous employers running defined benefit ( DB) occupational pension schemes have opted to halt future accrual, substituting them with a defined contribution ( DC) solution, often — though not invariably — by way of a group personal pension ( GPP) arrangement. At times, the impetus for such a shift follows the acquisition of the employer(s) by a new owner keen to curb future pension expenditure and/or to standardise pension provision across the corporate group that the relevant employer(s) has joined. In other situations, the driver for change arises in the ordinary course of the employer(s)’ business operations and is typically propelled by cost pressures and affordability. In any case, a proposal to close a DB scheme to future accrual will generally be regarded as a deterioration in the benefits package for the employees...