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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 appropriateness requirements The Financial Conduct Authority’s rules on ‘appropriateness’ and the associated test, set out in COBS 10 and COBS 10A of the Conduct of Business sourcebook, were first brought in under the Markets in Financial Instruments Directive ( Directive 2004/39/ EC) ( Mi FID) to bolster investor protection in the non-advised market. The test’s purpose is to enable firms to judge whether clients possess sufficient knowledge and experience to grasp the risks inherent in a product sought or a service requested. That knowledge and experience must be evaluated in a way proportionate to: the client in question the service the product Mi FID ( Directive 2004/39/ EC) was superseded by the recast Markets in Financial Instruments Directive ( Directive 2014/65/ EU) ( Mi FID II Directive) together with the Markets in Financial Instruments Regulation ( Regulation ( EU) 600/2014) ( Mi FIR),...
Restricted shares and EMI valuations For EMI purposes, restricted shares are those subject to any restrictions described in sections 423(2)–(4) of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). See Practice Note: What are restricted securities? There are two forms of market value relevant to restricted shares for enterprise management incentives ( EMI): actual market value ( AMV) — the value of a share after allowing for any restrictions, including the risk of forfeiture; and unrestricted market value ( UMV) — the value of a share on the basis that no restrictions apply. For restricted shares, the value that ignores the restrictions will be the higher of the two. For EMI, AMV is used to decide whether income tax, employees’ and employers’ National Insurance contributions ( NICs), and potentially the apprenticeship levy, will arise when options are exercised. For more on the tax...
This Practice Note explores distribution arrangements in general and the commonly adopted models. It explains the distinctions between sole, exclusive, non-exclusive and selective distribution agreements, and describes the relationship between a distributor and the manufacturer. The nature of distribution In a distribution set-up, the distributor buys products from the manufacturer and resells them on its own account. By comparison, under an agency arrangement the agent does not purchase the goods, but secures sales on the manufacturer’s behalf. For a summary contrasting agency and distribution, see Practice Note: Agency and distribution compared. Distribution is often chosen where a manufacturer needs support to access a particular market—for example, in an overseas territory where it lacks sufficient familiarity or connections, or where the products do not necessitate direct dealings with customers. Distribution arrangements can also be used by wholesalers, who act as...
Scope of this Practice Note This Practice Note explores the function of designated professional bodies ( DPBs)—covering solicitors, accountants, actuaries, licensed conveyancers and chartered surveyors—as provided in Part 20 of the Financial Services and Markets Act 2000 ( FSMA 2000). DPBs supervise and regulate members of these professions, who are regarded as exempt professional firms ( EFPs) under FSMA 2000, s 327. It outlines: the criteria a professional body must meet to be treated as a DPB; the exemptions that apply to members of these professions; and the disclosures such firms must make to the public. What is a Designated Professional Body? A Designated Professional Body is a body that regulates and oversees members of the professions listed above, who are EFPs under FSMA 2000, s 327. An exempt professional firm is a person to whom the general prohibition does not apply. A person must not...
The UK Government has enacted measures allowing various UK authorities to secure search warrants to ‘raid’ business premises. For many companies, the risk of a dawn raid is part of everyday operations, driven by the growing criminalisation of corporate conduct, the rise in regulatory criminal offences, and the spread of money laundering legislation and regulations. The chance of intervention has further increased with the Bribery Act 2010 and the corporate offence of failing to prevent bribery, the Criminal Finances Act 2017 creating a corporate offence of failing to prevent tax evasion, and the widening of corporate criminal liability together with a new offence of failing to prevent fraud introduced by the Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023). As technology within businesses continues to develop, organisations must keep information and policies current so staff understand how to respond...
Practice Note This Practice Note sets out leading judgments of the High Court, Court of Appeal and Supreme Court under the law of England and Wales, handed down since 2012, concerning compensation claims by data subjects for breaches of one or more of the following UK data protection laws: the United Kingdom General Data Protection Regulation, Assimilated Regulation ( EU) 2016/679 ( UK GDPR), together with related provisions of the Data Protection Act 2018 ( DPA 2018) Assimilated law is the label given to retained EU law ( REUL) that remains in force after the end of 2023, such as the UK GDPR. The re-categorisation of REUL (and associated terms) as assimilated law marks a change in its status and treatment under UK law, in that it is generally to be interpreted according to ordinary domestic law and principles. From 1 January 2024, REUL is...
A director of a company limited by shares faces a broad spectrum of possible liabilities arising from actions or failures to act undertaken in the course of the company’s business, in the ordinary running of the company. One method of shielding a director from such exposure is for the company to buy a directors’ and officers’ insurance policy ( D& O policy). This is an arrangement of cover. Companies Act provisions The Companies Act 2006 ( CA 2006) generally forbids relieving or indemnifying directors for liabilities as a general rule. Nevertheless, statutory carve-outs permit protection where directors are covered through: the company’s purchase and upkeep of insurance for its directors against liabilities the grant by the company of qualifying indemnities to its directors for specified liabilities These mechanisms are set out in statute. Before 2005, companies were not allowed to obtain insurance or give...
This Practice Note outlines information on Assimilated Regulation ( EU) 909/2014 ( UK CSDR). It also explains the repeal, under the Financial Services and Markets Act 2023 ( FSMA 2023), of the direct regulatory obligations on CSDs contained in the UK CSDR, enabling the Bank of England ( Bo E) to substitute those provisions with its own rules. Scope of the UK CSDR The UK CSDR applies to the settlement of all financial instruments in the UK and to the activities of central securities depositories ( CSDs), unless stated otherwise. Authorisation, reporting, and most other obligations under the UK CSDR do not extend to the Bank of England ( Bo E) or to other public bodies engaged in managing public debt in the UK, where the relevant CSD is directly administered by those bodies, has access to their funds, and is not a distinct...
This Practice Note outlines counter-proliferation financing ( CPF). It highlights regulatory duties and explores the risks linked to proliferation financing. It is directed at businesses within scope of the Money Laundering, Terrorist Financing and Transfer of Funds ( Information on the Payer) Regulations 2017 ( MLR 2017), SI 2017/692—see Practice Note: Money Laundering Regulations 2017—scope and application, and for law firms Money Laundering Regulations 2017—scope and application—law firms. Organisations subject to the MLR 2017 must evaluate proliferation financing risks and establish policies, controls and procedures to manage and reduce those risks. What is proliferation financing? Proliferation financing is the provision of funds or financial services used, in whole or in part, for any of the following in relation to chemical, biological, radiological or nuclear ( CBRN) weapons, in breach of a relevant financial sanctions obligation: manufacture acquisition ...
In certain circumstances, a company within a group may transfer a tax repayment owed to it to another member of the same group. This can be advantageous for the group overall, as it may reduce the interest payable by the group on underpaid tax. For these purposes, ‘group’ refers to a loss relief group as set out in Practice Note: Group relief—loss relief group......
A company belonging to a loss relief group that has sustained any category of losses eligible to be surrendered by way of group relief (including group relief for carried-forward losses) can, in the absence of any further rules or constraints, have more than one route for deploying that loss. For instance, it might either surrender the loss for group relief or set the loss against its own profits in the present or a subsequent accounting period of its own. That said, various provisions curtail the company’s freedom by, for example, stipulating the order in which particular reliefs must be used first and specifying the types of profits against which those losses may properly be matched. This Practice Note outlines the rules—both the choices and the limitations—relevant to trading losses, excess capital allowances, non‑trading loan relationship deficits, UK property business losses,...
The general rule As outlined in Practice Note: Taxation of derivatives—the main rules, a company’s profits and losses from derivative contracts are, in the same way as the profits and losses on its loan relationships, ordinarily brought into account as income for corporation tax purposes. The legislative code for derivative contracts is set out in Part 7 of the Corporation Tax Act 2009 ( CTA 2009), which this Practice Note refers to simply as Part 7. This Practice Note examines the particular situations where that general rule is disapplied, and where the profits and losses on a company’s derivative contracts are instead taken into account for corporation tax on a chargeable gains basis. Where derivative profits and losses are taxed on a chargeable gains basis, this does not of itself mean that: the usual rules for computing corporation tax on chargeable gains apply, or there is an...
This Practice Note This Practice Note sets out how a company that sustains a trading loss in an accounting period may obtain relief. As outlined further below, a trading loss can be: offset against the company’s profits of the same year (current period loss relief) carried back and set against profits of earlier accounting periods (carry back loss relief) surrendered under group relief or consortium relief carried forward to relieve profits arising in a subsequent accounting period (carried-forward loss relief) carried forward and surrendered as group relief for carried-forward losses There are also specific provisions, termed terminal loss relief, which apply where a company incurs a loss in the accounting period in which it ceases trading. This Practice Note covers the rules on: current period loss relief carry back loss relief the...
Conditions for claiming group relief Where a company (the surrendering company) has a loss or other amount that is eligible to be surrendered for group relief in an accounting period (the surrender period), it may surrender that loss as group relief, and then another company (the claimant company) may claim the relief as a deduction against its total profits if all of the following apply: the surrendering company consents to the claim there is a period common to both the surrender period and the claimant company's accounting period in which the claim is made (the overlapping period) the surrendering company and the claimant company are members of the same group at some point during the overlapping period both the surrendering company and the claimant company are UK related, meaning either a UK resident company or a non- UK resident company within the...
Board composition In 50:50 joint ventures, the joint venture agreement ( JVA) commonly grants each party the right to nominate the same number of directors to the board of the joint venture company ( JVC). The parties may alternatively rotate the appointment of the chair for a defined term (eg an annual rotation), and the chair will ordinarily have no casting vote. As a result, control of the JVC’s board is shared, and neither side can unilaterally set the joint venture’s course. That shared control can, however, produce deadlock if the parties cannot reach consensus. For guidance on deadlock scenarios and potential solutions, see Practice Notes: Deadlock in corporate joint ventures and Deadlock—fundamentals. Where a joint venture involves a minority shareholder (ie a shareholder, or several shareholders, each holding under 50 per cent of the JVC’s issued share capital) alongside a majority...
There are several avenues for reshaping a company’s debt. The best route will hinge on how severe the company’s financial issues are, the complexity of its funding structures, and whether any creditors are dissenting... What are the key stages in a debt restructuring process? The principal stages are to: stabilise the company (identify key parties and agree a standstill with creditors) prepare for the restructuring (carry out due diligence, develop a business plan and secure a valuation) implement the restructuring A consensual restructuring is generally preferable for cost and speed, though formal procedures (eg company voluntary arrangements ( CVAs), restructuring plans, schemes of arrangement or pre-pack administrations) can address dissenting creditors. For details of the key requirements, the core stages, and the stabilising, preparation and implementation phases in the restructuring journey, see Practice Note: Restructuring process......
This Practice Note highlights the principal considerations when establishing a subscription model for the sale and supply of goods, services or digital content to consumers. Subscription types There are broadly three categories of subscription: curation—the customer is sent a curated mix of different products. Examples include monthly boxes for clothing, pet items, cosmetics, personal hygiene products, or recipe boxes and food services replenishment—the customer receives repeat deliveries of the same or similar goods. For instance, monthly supplies of toilet paper, razors, vitamins or other staple commodities access—the customer is granted access to content or premium functionality. For example, content streaming platforms, gaming services, premium subscriptions, and cloud storage services Regulatory landscape When launching subscription models, a range of rules must be considered, notably consumer protection law, data protection legislation, direct marketing requirements and the self-regulatory advertising...
This Practice Note outlines the Consumer Rights Act 2015 ( CRA 2015). The CRA 2015 sets out consumer rights and remedies for goods, digital content and services, and overhauled the law on unfair terms in consumer contracts. It explores the Act’s aims, key definitions, controls on limiting or excluding liability, and the framework for assessing unfair terms in consumer contracts set out within it. It also briefly addresses the reform of enforcement powers, the expansion of civil remedies, and consumer collective actions for anti-competitive behaviour under the CRA 2015, alongside provisions relating to letting agents and secondary ticketing. Background to the CRA 2015 The CRA 2015 received Royal Assent on 26 March 2015 and marked a major overhaul and rationalisation of consumer law in the UK. In particular, it covers consumer rights and remedies for the sale of goods and the supply of services and...
Part 3, Schedule 5 Parts 1–6 and Schedule 6 of the Consumer Rights Act 2015 ( CRA 2015) establish a consolidated, generic suite of investigatory powers to be used across the catalogue of consumer protection legislation. These powers amount to a consolidation, refinement and amendment of those that previously stemmed from the fractured legislative framework that once governed consumer law. Enforcers with access to the generic set of investigatory powers under CRA 2015 Various regulatory bodies and enforcers are responsible for applying consumer law in the UK. Under the CRA 2015, an enforcer’s type is determined by the legislation or offences being addressed, and the powers available to them depend on that classification. The CRA 2015 provides for four categories of enforcer: domestic enforcers who have responsibility to enforce consumer law in the UK. In relation to England and Wales, this includes Trading...
Pursuant to article 60B(1) of the Financial Services and Markets Act 2000 ( Regulated Activities) Order 2001, SI 2001/544 ( RAO), concluding a regulated credit agreement in the UK in the capacity of lender, when done by way of business, constitutes a regulated activity. Moreover, exercising, or being entitled to exercise, a lender’s rights and obligations under a regulated credit agreement is likewise regulated by article 60B(2) of the RAO. This Practice Note outlines the extent of those activities, the definition of regulated and exempt credit agreements, and the principal exclusions and exemptions that may apply. Regulated activities—general Section 19(1) of the Financial Services and Markets Act 2000 ( FSMA 2000) places a general prohibition on carrying on regulated activities in the UK unless a person is authorised or exempt. Under FSMA 2000, s 22, an activity only amounts to a regulated activity if it is...
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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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