Legal Practice Notes

This Practice Note examines what a wasted costs order is and the court’s power to make such an order. It also considers the relevant test and the principles the court will apply in such cases. For information on making an application for a wasted costs order, and the practical points to consider, see Practice Note: —application. What is a wasted costs order? A wasted costs order is described in CPR PD 46, para 5.1 as an order of the following type: requiring a legal representative to pay a sum in respect of a party’s costs, the amount either specified by the court or left to be assessed; or disallowing costs connected to a specified sum or particular items of work. Such orders are not available to satisfy a disgruntled party who has been unable to obtain an effective costs order; ie they are not a back-door device to...

Read this Practice Note together with the Practice Notes on Civil restraint orders, Limited civil restraint orders, Extended civil restraint orders and General civil restraint orders. What is a civil proceedings order and when will a court order one? Section 42 of the Senior Courts Act 1981 ( SCA 1981) empowers the court to limit vexatious litigation when specified criteria are met. If a person repeatedly brings unmeritorious claims and/or court applications against the same or different parties, the Attorney General, acting in the public interest, may seek an order under SCA 1981, s 42 that stops a vexatious litigant from starting further civil proceedings without the leave of the High Court. This is termed a ‘civil proceedings order’ ( CPO). Under SCA 1981, s 42, the High Court can also make a ‘criminal proceedings order’ or an ‘all proceedings order’. As the names...

This Practice Note outlines VAT treatment of residential service charges. Service charges payable to landlords Where a lease or licence requires the occupier to pay service charges to the landlord, they are treated in the same way as the rent for VAT purposes. The reason is that there is no distinct supply: rent and service charges together constitute the consideration for granting serviced accommodation. In effect, both elements amount to a single payment for a letting. Consequently, service charges linked to residential property are normally exempt. The tenant therefore bears no VAT, while the landlord cannot reclaim VAT on associated expenditure. By contrast, service charges connected to holiday accommodation will normally be subject to VAT on the same basis as the rent (see Practice Notes: Exclusions from the exemption from VAT for land and buildings— Hotel and similar...

This Practice Note outlines the position on costs budgeting from 1 October 2020. It explains why the phrase ‘significant developments’ is key when seeking to vary a costs budget and what the phrase is intended to capture. It also refers to examples, drawn from judgments, of changes the court has regarded as significant developments. Why are ‘significant developments’ important? A costs budget can only be changed if there have been ‘significant developments’ that justify the alteration. This is provided for in CPR 3.15A(1): ‘ A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.’ It is important to recognise that where significant developments affect a party’s costs budget, that party (the revising party) must revise the budget, whether the figures go up or down. What is meant by ‘significant...

Following an injury, a claimant may rely on a friend or relative for help, particularly in the early stages of recovery. In such circumstances, the reasonable value of care delivered gratuitously (ie without charge) can be recovered. The identity of the carer At law, sums awarded for the time and effort of providing nursing or care are held on trust by the claimant for the benefit of the carer. Consequently, this head of loss cannot be recovered where the defendant supplied the care. The rationale is that a claimant cannot obtain damages from the defendant only to hold them on trust for that same defendant. Instead, support may come from another family member or friend, or be purchased commercially. A further consequence is that, where the claimant cannot pass the funds to the carer (eg the carer has died or contact has been lost), the court is...

In cross-border securities offerings, underwriters or initial purchasers typically insist that the issuer’s accountants deliver one or more comfort letters addressing, in full, the financial information set out in the prospectus or the offering memorandum for the transaction. These letters are a key part of underwriters’ due diligence and underpin their robust defence against possible liability under US securities law. They are frequently called SAS 72 letters, a nod to the Statement on Auditing Standards 72 ( SAS 72) upon which they were originally based and widely well-understood in practice. That standard has since been replaced by AU Section 634, Letters for Underwriters and Certain Other Requesting Parties ( AU 634), which now applies in this area. Comfort letters and the 'due diligence' defence The grounds for potential liability under US securities laws vary depending on whether the offer is made publicly in the US, ie...

A 10b-5 letter, often termed a ‘negative assurance letter’, is provided to the underwriters by the issuer’s and the underwriters’ counsel in connection with a United States securities offering, whether via an SEC-registered transaction or a private placement under Rule 144A of the United States Securities Act of 1933 (the ‘ Securities Act’). Underwriters rely on this letter as corroboration of their due diligence investigations into the issuer when assembling a defence to potential liability under US federal securities laws. The document’s central focus is the prospectus used to market the securities to investors. It states that, based on counsel’s work on the offering, nothing has come to their attention that would cause them to believe the prospectus either: contains an untrue statement of a material fact; or omits a material fact necessary to ensure that, in light of the...

This Practice Note outlines the key criminal offences and civil protections against unlawful eviction affecting certain tenants and licensees. Unlawful eviction and harassment—criminal offences A landlord commits a criminal offence under section 1 of the Protection from Eviction Act 1977 ( PEA 1977) if they: unlawfully exclude a residential tenant or occupier from possession of the premises, or any part of it, or attempt to do so (it is a defence to have believed, with reasonable cause, that the occupier had stopped living in the premises), or carry out acts likely to disturb the peace or comfort of the residential tenant or any member of their household, or persistently cut off or withhold services reasonably required for occupation of the premises as a home. The landlord must either intend to induce the occupier to give up occupation or to refrain from...

What is unjust enrichment and when is it used? A claim in unjust enrichment aims to strip from a recipient the benefits derived at another’s expense and return them to the blameless party. It is sometimes labelled ‘restitution’ or a ‘restitutionary claim’, although, strictly, restitution describes the remedy, while unjust enrichment is the underlying cause of action. The overlap in terminology stems from the fact that the unified concept of unjust enrichment emerged from claims that had long been treated as restitutionary. Contemporary unjust enrichment doctrine has evolved through centuries of jurisprudence; its core tenets were articulated by scholars and later endorsed by the highest courts. That historical lineage explains much of the present confusion about labels and categories. In this respect the subject is unusual, because instead of the principles being exhaustively set out in legislation and/or case law, a...

As part of your customer due diligence ( CDD) measures, you must keep your business relationships under continual review. This Practice Note outlines the ongoing monitoring obligations set out in the Money Laundering, Terrorist Financing and Transfer of Funds ( Information on the Payer) Regulations 2017 ( MLR 2017), SI 2017/692, as amended. The guidance is of general applicability. You should verify whether the MLR 2017 contain additional or different duties for your sector and whether your regulatory body sets any further, sector specific expectations regarding ongoing monitoring. Counter-proliferation financing is the most recent element of the long-established anti-money laundering ( AML) and counter-terrorist financing ( CTF) regime. Amendments to the MLR 2017 introduced requirements relating to, for instance, systems and controls, risk assessment, etc. No specific counter-proliferation financing rules were added to CDD, and the existing CDD provisions in the MLR 2017 were not...

This Practice Note sets out practical guidance on how unincorporated charities execute documents. For details on execution by incorporated charities, refer to Practice Note: Execution formalities—incorporated charities. We offer a comprehensive, interactive collection that helps users identify and navigate the concepts and common issues in document execution, including deeds. Each stage includes practical guidance, precedent clauses and Q& As tailored to that stage. For further detail, see the Execution collection. Capacity Unincorporated charities lack a separate legal personality; consequently, the entity itself has no rights or duties and cannot own property in its own name. Property that appears to ‘belong’ to an unincorporated charity is vested in the organisation’s leading members, who act as trustees and hold it on trust for the remaining members. Accordingly, the individuals with authority to enter into arrangements and to execute documents are the trustees or members of the...

An administrator enjoys broad powers and latitude when running an administration and, consequently, the courts hesitate to intrude upon the process unless it is strictly required. That said, situations can arise where an administrator’s conduct should be contested if they are acting, have acted, or intend to act in a way that unfairly prejudices the interests of a member or a creditor of the company. Challenges to administrator’s conduct There are two principal provisions that enable a challenge to an administrator’s conduct. The first of these is paragraph 88 of Schedule B1 to the Insolvency Act 1986 ( IA 1986), which gives the court lawful authority to remove an administrator from office......

What does this Practice Note cover? This Practice Note explains how institutions serving as underwriters or managers operate within capital markets debt issuances. It sets out an overview of underwriting and managerial duties, describes the principal deal documents they ordinarily sign up to, and summarises particular risks managers encounter in a debt securities offering. It notes the documents to which they are party and the risks they face. What is underwriting and why are securities issuances typically underwritten? The expression ‘underwriting’ denotes a commitment to subscribe for, or to buy, securities that cannot be placed with investors or funded by them in an offering. By giving that commitment, the underwriter transfers from the issuer the risk that investors will not take up the securities being offered. Accordingly, subject to specified conditions, the underwriter in effect guarantees the issuer both the volume of securities that will be sold and the...

Introduction The UNCITRAL Model Law on Cross- Border Insolvency ( MLCBI) has no automatic force; rather, nations may choose to implement it in whole or in part, with or without adjustments. Of about 60 UNCITRAL Member States, those that have adopted the MLCBI are shown below. As ‘official language’ is not defined in the MLCBI, parties should check the local enacting law in the state where recognition is sought to confirm the language into which documents must be translated for recognition under the MLCBI (see MLCBI, Article 15.4). The table is only a guide, reflecting the official language stated in each country’s constitution. For instance, when England gave effect to the MLCBI via the Cross- Border Insolvency Regulations 2006 ( CBIR 2006), SI 2006/1030, Sch 2, para 4(3) requires the supporting affidavit to exhibit an English translation of any exhibit that is not in...

Companies in the US and the UK have long allowed their workforces to hold equity stakes, and each country has offered tax reliefs and introduced other policies and mechanisms to foster employee share ownership across organisations. While the schemes used in the US and UK have evolved along different paths, they still share numerous similarities. Despite differing development over time, many core aspects remain aligned between the two jurisdictions. Accordingly, comparisons should be drawn with those common elements in mind carefully. This Practice Note compares the UK and US across: tax-advantaged, all-employee arrangements discretionary share schemes, and non tax-advantaged share schemes The tables that follow are merely summaries and ought to be read alongside the further Practice Notes suggested. Tax advantaged share plans— UK and US comparison All employee plans The following table compares the US tax-qualified employee stock purchase plan ( ESPP) with two...

Where no exemption or relief is available, UK‑sourced annual interest is subject to UK withholding tax at the basic rate (20%), moving to the savings basic rate (22%) from 6 April 2027. For further details, see Practice Note: UK withholding tax on yearly interest. This Practice Note summarises the exemption from UK withholding tax that: is set out in section 888A of the Income Tax Act 2007 ( ITA 2007) and the Qualifying Private Placement Regulations 2015, SI 2015/2002 ( QPP Regs) has been in force since 1 January 2016 applies to interest paid: by a corporate borrower on an unlisted security or loan that qualifies as a qualifying private placement ( QPP), and is expected to apply to bond issues and bilateral and syndicated loans—see: What is a...

Unless an exemption or relief (including relief available under a double tax treaty ( DTT)) applies, a payment of yearly interest originating in the UK (ie a UK-source payment) is, as a rule, subject to a duty to withhold (and pay over to HMRC) an amount on account of UK income tax at the basic rate (20%) or, from 6 April 2027, at the savings basic rate (22%) where the payment is made: by a company by a local authority by or on behalf of a partnership with at least one corporate partner, or by any person to another whose usual place of abode is outside the UK (broadly, this covers an individual who ordinarily lives outside the UK, or a company whose principal place of business is outside the UK and which has no permanent establishment in the UK in respect of which the interest is within the...

Consideration of electronic data interchange ( EDI) frameworks, blockchain, smart contracts, or sector‑specific legislation or regulation, including regimes for financial services, intermediation services, or online auctions, falls outside the scope of this Practice Note. For a primer on EDI and smart contracts, see Practice Notes: Business to business e‑commerce—introduction and Smart legal contracts. For blockchain guidance, refer to Blockchain—overview and Practice Note: Blockchain—key legal and regulatory issues. The type and functionality of the website A website’s compliance obligations and the rules that apply will vary according to the kind of site in question and its intended functionality or aim and audience. As an initial step, the site operator should determine, early on, the nature of the proposed site and the planned extent of its functionality. For example, consider the following questions: will the site be an ‘information only’ destination? will it operate as a...

Practice Note Anyone carrying on a business who is registered, or required to be registered, for UK VAT (a taxable person) must comply with fairly onerous VAT obligations. Accordingly, understanding precisely when a person becomes a taxable person is essential. This Practice Note covers: compulsory and voluntary registration determined by the value of taxable supplies; and compulsory registration, effective from 1 December 2012, for non- UK established businesses (described as non-established taxable persons ( NETPs) in HMRC’s guidance) that make supplies of goods or services in the UK It does not address the VAT registration rules applicable to: the disposal of goods for which a VAT repayment is or has been claimed UK businesses that previously benefitted from the distance selling rules but may, following Brexit, be required to register for VAT in EU Member States businesses in Northern Ireland (identified using the ‘ XI’...

Why is the exemption for financial services important? VAT is a significant issue for organisations in the financial sector, as the provision of certain financial services to customers located in the UK is exempt from UK VAT. This matters because: businesses do not levy VAT on services that fall within the exemption; and those businesses cannot recover input VAT on supplies they receive in the course of making an onward exempt supply The financial services exemption from VAT The UK VAT exemption for financial services stems from the relevant provisions of Council Directive 2006/112/ EC (the VAT Directive). These provisions have been enacted into UK law through Schedule 9, Pt II, Group 5 to the Value Added Tax Act 1994 ( VATA 1994), which lists the items that qualify for exemption. This Practice Note concentrates on the exemptions for services within the...