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The rule in Clayton’s Case: its application in non-banking relationships
The rule in Clayton’s Case originated in banking relationships and its application is most often seen in that context. Recently there has been a trend to disapply the rule, in cases where multiple claimants seek to trace into a single fund. This article looks at a recent decision of the Court of Appeal which turned on the application of the rule in a non-banking context, and in particular on the timing of the appropriation of payments which is deemed to take place pursuant to the rule.
05 May 2024Going cashless: the treatment of cryptoassets in insolvency proceedings
The transaction volume of cryptoassets and associated products has witnessed rapid expansion, with recent reports indicating that the cumulative market value for cryptocurrencies alone has now exceeded $3trn. This growth has, in turn, increased the likelihood of both cryptoasset-related businesses (such as exchanges and custodian wallet providers) entering into formal insolvency processes, and cryptoassets featuring within insolvency proceedings. Accordingly, this article considers how cryptoassets are treated within English insolvency law, focusing on their classification as property, jurisdictional issues arising from their decentralised nature, the enforcement of security interests, and the challenges of valuation and distribution.
05 May 2024A mortgagee’s accountability for mortgage valuations following Shokrollah-Babaee v EFG Private Bank
This article considers the judgment of Miles J in Shokrollah-Babaee v EFG Private Bank Limited [2023] EWHC 3270 (Ch), how it affects the relationship between mortgagees, valuers and mortgagors (to the extent that it can fairly be described as a relationship at all) and its wider impact.
05 May 2024Joining the dots: a wider use for AML e-verification tools?
Everything is electronic nowadays. Globalisation, technology and Covid have all played a significant part in driving legal changes that mean it is rare not to be able to sign documents, open bank accounts or indeed do most things using just a keyboard or a click. But can established processes help to mitigate the risks of more newly permitted e-signatures? This article looks at how anti-money laundering identity verification processes can help with verification of document signatories.
03 May 2024Does the restoration of Crown preference mean that guarantors can get off the hook?
When the economic landscape changes, people often look to wriggle out of their financial commitments. Just such a change occurred in 2020, when HMRC’s status as a preferential creditor of insolvent companies was restored.
03 May 2024Unravelling the Travel Rule: AML requirements for cryptoasset businesses
The Financial Action Task Force (FATF) recently updated its guidance for Virtual Assets and Virtual Asset Service Providers (VASPs) in October 2021 including on its Recommendation 16 that certain transfers of cryptoassets must be accompanied with identifiable originator and beneficiary information. The application of Recommendation 16 to VASPs has caused controversy, as it is regarded as being very difficult to comply with by the industry. This article explores whether the proposed implementation of the Travel Rule in the UK addresses any of the commonly cited practical difficulties with compliance (which are particularly pronounced for unregulated firms or start-ups that may be unaccustomed to being scrutinised in this way) in light of the most recent guidance.
18 April 2024Implementation of the remaining Basel III standards in the UK
The aim of this article is to provide an overview of the Prudential Regulation Authority’s rules (PRA Rules) implementing the remaining Basel III standards in the UK, to highlight any key deviations from the underlying Basel III standards and the equivalent EU CRR2 regime, and to discuss potential challenges that these deviations might create for banking groups. In addition, this article includes responses to frequently asked questions in relation to the above.
18 April 2024Preserving guarantor liability: an update
In this article, Richard Salter QC provides an update to his 2017 article on the “purview doctrine”, which offered practical pointers to those called upon to document variations in syndicated lending transactions secured by a guarantee.
18 April 2024Commercial litigation funding: a more secure approach
A series of recent decisions have focussed on the practice of commercial litigation funding. The High Court and Court of Appeal have made clear that commercial funders will be expected to show that they can satisfy adverse costs orders that may be made during the litigation, failing which they are likely to be required to provide security for costs.
18 April 2024Virtual property as trust assets and investments
Following a number of recent decisions, it now seems reasonably settled that digital assets such as cryptocurrencies will as a matter of law be regarded as “property”. One consequence is that cryptocurrencies can be the subject of a trust and may be held as investments. However, the unique features of digital assets give rise to a number of problems on which there is little authoritative guidance. The impact of s 53(1)(c) of the Law of Property Act 1925 (LPA), in particular, appears to have been overlooked in cases where cryptocurrencies have been found to be held on express trust for multiple co-owners.
18 April 2024
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