Legal Practice Notes

This Practice Note examines the extent to which, and the ways in which, a party’s sensitive information and the documents that contain it can be protected even though documents fall within disclosure obligations in a civil action. Its primary focus is creating and running a so‑called 'confidentiality club', together with editing out confidential yet immaterial portions of documents that directly bear on the dispute. It also surveys other protective tools, including undertakings and injunctions as available options. Understanding the limits on confidentiality of documents in disclosure Telling a party with no prior experience of litigation in England and Wales that they may inspect their opponent’s confidential material, and should anticipate having to disclose their own in exchange, is frequently received with astonishment by many clients. The concern is sharper where the party is located in a civil law jurisdiction that does not employ...

Who can prosecute criminal offences in England and how is the decision to prosecute made? The Crown Prosecution Service ( CPS) is the public prosecutor in the UK. It is overseen by the Director of Public Prosecutions ( DPP), who reports to the Attorney General ( AG). Acting as prosecutor, the DPP is mandated to assume responsibility for the conduct of all criminal proceedings begun by, or in the name of, a police force, except for certain ‘specified proceedings’. Specified proceedings refers to the schedule of matters designated by the AG in the Prosecution of Offences Act 1985 ( Specified Proceedings) Order 1999, SI 1999/904 (as amended). That framework permits the police to take enforcement action without referring a case to the CPS, allowing them to issue fixed penalty notices or start proceedings for particular road traffic offences and other low-level offences. The DPP must also...

This Practice Note explores costs proportionality. It addresses the thinking and development behind proportionality, when it ought to be considered, the relevant CPR provisions, and the core principles that have emerged from litigation. It should be read alongside Practice Note: Costs proportionality—illustrative decisions, which identifies case law where the proportionality of costs has been examined. Rationale for the proportionality provisions The Jackson Final Report set out the principal justification: access to justice is achievable only where litigation costs are proportionate; if parties elect to advance claims or defences at disproportionate expense, they must expect to shoulder, at least in part, that cost themselves. The introduction of proportionality was addressed by Lord Neuberger of Abbotsbury, the Master of the Rolls. Although it was expected to be a significant factor across a variety of court applications, before it came into force many expressed concern about the limited...

What is a project policy? A ‘project policy’ usually means insurance the employer arranges to cover Contractors All Risks ( CAR) and public liability. It is for the employer, contractors, sub-contractors and suppliers, and applies to one named project. These are composite policies; subrogation rights between co-insureds do not exist or are waived... What and who is covered/not covered? What is covered? A project policy commonly insures CAR and public liability exposures arising during the works... What is not covered? It will generally exclude matters that would ordinarily fall under a professional indemnity ( PI) policy because: PI is placed in a distinct insurance market; and a project policy responds to occurrences during its term and only needs to operate for the project period. By contrast, PI responds to claims made during the policy period. As professional liability may run for 6 or 12 years, PI must be...

Principles of security in project financing Project finance is fundamentally a form of secured lending. The motivations for taking security in a project finance deal mirror the key benefits found in wider commercial finance, including: granting lenders precedence over the borrower’s unsecured creditors enhancing lenders’ prospects of recovering funds in an insolvency situation allowing lenders, where the law of the relevant jurisdiction permits (see Onshore and offshore security—relevant jurisdictions below), to appoint a receiver or administrator providing mechanisms for lenders to exercise control over the assets of the borrower (and any other security provider) In essence, security within a project finance structure serves a twofold function—defensive and offensive......

Projects are typically financed on a limited recourse basis In project financings, capital is usually assembled from a combination of sources: government contributions senior debt arranged by commercial lenders and/or funds (see Practice Note: Project finance—key finance parties) equity injected by project sponsors (see Practice Note: Project finance—key project parties— Sponsor) That said, in some jurisdictions, obtaining senior debt from commercial lenders and/or funds can prove difficult owing to constrained local liquidity and/or actual or perceived political risks (see Practice Note: Project risks and risk allocation— Legal and political risk in a project finance transaction). In developing markets, this shortfall can be addressed by institutional lenders such as Export Credit Agencies ( ECAs) and multilateral or bilateral (national) Development Finance Institutions ( DFIs). Alternatively, providers of senior debt may benefit from ECA or DFI support through a guarantee or other insurance...

What is a direct agreement? Direct agreements are commonplace in project finance transactions. A direct agreement grants the project’s lenders direct rights in relation to a key project document (for the meaning of 'project document', see Project documents—issues for lenders—overview). Those rights are outlined in Direct agreements—key provisions below. For an illustration, see Precedent: Form of Contractor Direct Agreement in favour of a lender (for use on infrastructure and energy projects). The relevance of project documents Project documents are the contracts that allocate each party’s responsibilities on a project, and the outcome of most projects frequently hinges on them. For a project that has not yet been constructed, one of the project company’s (for the meaning of 'project company', see Practice Note: Project finance—key project parties) most valuable assets will be its rights under the construction contract. Once the project is fully built, documents of...

This Practice Note reviews ‘pay when paid’ and ‘pay when certified’ provisions in construction contracts, together with the relevant parts of the Housing Grants, Construction and Regeneration Act 1996 ( HGCRA 1996). In particular, it covers: HGCRA 1996, s 113—which bans pay when paid clauses, save where a third party has become insolvent HGCRA 1996, ss 110(1A)–(1D)—which prohibit ‘pay when certified’ clauses, introduced by the Local Democracy, Economic Development and Construction Act 2009 ( LDEDCA 2009) Pay when paid clauses ‘ Pay when paid’ clauses are provisions that make a payment obligation under a construction contract conditional upon a corresponding payment being received from a third party under a separate agreement......

Working out who controls the float on a construction project is often thorny (and controversial), and it regularly features in disputes about a contractor’s right to an extension of time in practice. This Practice Note explores what float means, which party benefits from it, the treatment of float under the Society of Construction Law Delay and Disruption Protocol ( SCL Protocol), together with the position regarding float within the JCT, NEC, FIDIC and CIOB standard form contracts. What is the float? Float is the surplus time, over and above the period the contractor truly requires, that is usually appended to the end of its construction programme. Put another way, it is the interval between the contractor’s expected actual completion and the date by which it is obliged under the contract to complete. The Society of Construction Law Delay and Disruption Protocol ( SCL...

In analysing the causation and remoteness aspects of a professional negligence claim When evaluating causation and remoteness in professional negligence, a sensible point of departure is the pair of 2021 Supreme Court authorities, Manchester Building Society v Grant Thornton (accountants’ negligence) and Khan v Meadows (clinical negligence). In both, heard by the same constitution, the court indicated that adopting the analysis set out below provides a structured way to examine the scope‑of‑duty principle, “but for” causation, and the foreseeability of harm within clinical negligence claims. The result of that exercise informs the proper extent of the claimant’s damages, consistent with the compensatory principle that the law, so far as money can, seeks to place the claimant in the position he or she would have occupied had the defendant not been negligent ( Khan at para [58]). The analysis (at para [6] of...

This Practice Note examines professional indemnity ( PI) insurance in the setting of construction projects—the requirement to carry insurance, the level and basis of cover, and standard clause wording obliging parties to maintain PI cover. For a broader review of professional indemnity insurance, see Practice Note: Professional indemnity insurance—essentials. It also reviews the usual wording found in clauses mandating the maintenance of PI insurance. Although this Practice Note addresses a consultant’s duty to keep PI insurance in force, main contractors and sub-contractors who assume design duties must likewise maintain such insurance, and the same principles outlined below apply equally to them. A contractor with no design role might regard PI cover as unnecessary; however, if it departs from a consultant’s design, an employer might claim the contractor made an ‘on-the-spot design decision’, potentially engaging a PI policy. For further detail, see Practice Note: Design...

This Practice Note outlines the professional indemnity insurance obligations for FCA-regulated practitioners. These obligations extend to all financial services firms, insurance firms, consumer credit firms and investment firms, as well as individuals delivering services within the sector. Regulatory setting Who is the regulator (if any)? The Financial Conduct Authority ( FCA) regulates the UK’s financial services industry, overseeing the conduct of nearly 42,000 businesses, prudentially supervising around 41,000 firms and setting specific standards for around 17,000 firms. Unlike regulators of professional services, such as the Solicitors Regulation Authority ( SRA) and the Institute of Chartered Accountants in England and Wales ( ICAEW), the FCA is not a professional body. Rather, it functions as a financial regulatory authority in the UK. It operates independently of government and is financed through fees levied on members of the financial services industry. All financial services firms, consumer credit firms and...

In both the magistrates’ court and the Crown Court, going ahead with a trial when the defendant is not present is a measure of last resort, one the courts seek to avoid unless it is truly required. In R v Jones, the House of Lords confirmed that any choice to proceed in a defendant’s absence must be approached with exceptional caution and with careful attention to the fairness of the hearing; a defendant who cannot attend because of involuntary illness or incapacity has far stronger grounds to oppose the trial continuing than someone who has deliberately absented themselves by absconding. Running a trial without the defendant can create prejudice not only for the missing accused but also for any co‑defendants, and it may lead to confusion for a jury, undermining clarity and fairness in the process......

This Practice Note sets out the core principles, meaning and rationale for privilege. It identifies the main categories and explains how they operate: legal advice privilege and litigation privilege (together, ‘legal professional privilege’ ( LPP)) common interest privilege joint privilege public interest immunity ( PII) closed material procedures ( CMP) It examines the effect of privilege on disclosure and inspection, distinguishes confidential documents from privileged material, and considers who owns the right, how long it lasts, and its impact on case management. Practical tips on handling privilege are also provided. What is privilege? In English law, privilege is a fundamental right enabling a party, or its successors in title, to refuse production of certain documents (see the Court of Appeal decision in Addlesee v Dentons Europe). Where privilege applies, it generally does not remove the duty to disclose that a...

This Practice Note outlines the concept of privilege in arbitral proceedings and its treatment under English law, certain commonly adopted arbitration rules, and the IBA Rules on the Taking of Evidence in International Arbitration ( IBA Rules). Privilege in arbitration The approach to assembling and presenting documentary evidence in arbitration differs from English court litigation. In a domestic arbitration between English parties applying English law, English evidential rules will govern, and anything privileged in litigation will likewise be privileged in that arbitration—see: Privilege under English law. By contrast, the position in international arbitration is more complex. Tribunals frequently face parties from multiple jurisdictions; the arbitration agreement may be subject to a different system of law; the dispute may be most closely connected to another forum; arbitrators and counsel may hail from diverse legal traditions; and the process may follow...

This Practice Note considers privilege and confidential information where the client–solicitor relationship has ended. It explores who holds privilege in general and in later litigation, and whether a former client can restrain their previous solicitor from acting for another party on the basis of privilege or breach of confidence. Who does privilege belong to in any subsequent litigation? Legal professional privilege belongs to the client—see further: Privilege—general principles— Who does privilege belong to? Moreover, once a communication is privileged, it will usually remain so—see further: Privilege—general principles— How long does privilege last? This was illustrated in Kousouros v O’ Halloran, where it was decided that a party retained legal advice privilege over a document disclosed to an opponent by a former solicitor, even after the retainer had concluded. The underlying dispute involved a brother and sister who were each given equal shares in their...

Background The idea of the privilege against self-incrimination, often treated as a single safeguard, in truth stems from several distinct common law protections for defendants and witnesses, each aimed at shielding citizens from misuse of powers by those who investigate crime. Each reflects concern for the protection of citizens against abuse of powers by those investigating crimes in law. Those varied protections can be broadly grouped as: a privilege against self-incrimination for witnesses in criminal, civil, or other non-judicial investigative proceedings (including coroners' inquests) the entitlement of a defendant not to give evidence at trial; and a suspect’s right to remain silent during a pre-trial criminal inquiry As outlined below, the privilege is not absolute, and statute has intruded upon these protections in several ways. The privilege against self-incrimination at common law The privilege against self-incrimination is a long-established common law protection. The principle developed at common law as a reaction to...

Power to bring a private prosecution A private prosecution is initiated by an individual, company or organisation acting independently of the police, the Crown Prosecution Service ( CPS) or any other public prosecuting body. Section 6(1) of the Prosecution of Offences Act 1985 ( POA 1985) safeguards the ability of a private person to commence and run criminal proceedings. A broad spectrum of offences is routinely pursued through such actions, often by specialist bodies and charities. Notably, the courts have repeatedly acknowledged this as a significant right within the justice system. Charities, including the Royal Society for the Prevention of Cruelty to Animals ( RSPCA), bring cases privately. Organisations such as the Federation against Copyright Theft and the British music industry pursue misuse of intellectual property through private prosecutions. The Financial Conduct Authority ( FCA) has also exercised this route, acting in the...

What is a private law claim for breach of statutory duty? A private law claim for breach of statutory duty arises where: the defendant was subject to a statutory obligation to take a specified action that action was not carried out and the breach caused damage to the claimant Such a cause of action can be pursued against any entity bound by the duty, whether a public authority or a private organisation. For instance, section 41 of the Highways Act 1980 enables highway users to bring proceedings for a failure to maintain the highway. Additionally, where a public authority acts in breach of a statutory obligation, an adversely affected individual may seek a public law remedy by applying for judicial review. However, many statutory duties do not confer a private right to sue. Consequently, most claims against public...

Capital maintenance rule Under English company law, a core principle is that a limited company with a share capital must preserve that capital intact. Accordingly, a company must not reduce its capital save as expressly permitted by statute. The capital maintenance doctrine is designed to safeguard a company’s creditors by ensuring that the assets representing its capital remain available for future recourse. The Companies Act 2006 ( CA 2006) sets out detailed provisions governing the ways in which a limited company may implement a reduction of capital. The restrictions in CA 2006 concerning reductions of capital have no application to unlimited companies. For further guidance on that type of company, see Practice Note: Unlimited companies. This Practice Note concentrates on reductions of capital under CA 2006, Pt 17, Ch 10, with particular emphasis on those effected by a special resolution supported by a...