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New challenges for tackling Authorised Push Payment fraud
The Payment Systems Regulator (PSR) has recently announced significant changes to the mandatory reimbursement regime for Authorised Push Payment (APP) fraud that will be implemented during 2024. The scheme is likely to create difficulties for financial institutions preparing for the far-reaching changes. This article summarises the reforms, explores the challenges and provides suggestions for preparing for the new measures.
18 March 2024Shared appreciation mortgages: how far can the “unfair relationships” regime stretch?
A trial of alleged mis-selling of shared appreciation mortgages (SAMs) by Bank of Scotland plc (BoS) is listed for early 2024. In this article Benjamin Pilling KC and Ruth Bala of 4 Pump Court review the issues in the case. Does the “excessive” finance charge generate an “unfair relationship”? Will the court be willing to use the “unfair relationship” provisions to rewrite a mortgage, where there was full disclosure upon inception of the level of the finance charge (c.f. PPI, where the high level of commission was undisclosed)? The authors also consider limitation.
18 March 2024Collective stress or collective redress? Examining available mechanisms for securities litigation in England and Wales
It has been a turbulent few years for mass litigation in England and Wales. The advent of new collective procedures and revival of old ones has seemingly gifted claimant investor groups an abundance of choice. But the precise boundaries of the various mechanisms available seem to be in a constant state of flux. This article examines the current state of play through the prism of securities litigation and seeks to identify key considerations and future trends.
18 March 2024Liquidity covenants to the fore
With interest rates remaining at record levels and businesses still struggling with increased costs and the fall-out from the cost-of-living crisis, many businesses have been unable to meet leverage maintenance covenant requirements in their deals. As a quid-pro-quo for covenant relief, lenders often seek to impose a minimum liquidity covenant to ensure the business remains operationally solvent during the covenant relief period. This article explores what a liquidity covenant is and the issues facing sponsors and lenders in negotiating them.
18 March 2024For whom the code tolls: an integrated, modular architecture for smart derivatives contracts
In this article, we dissect the complex interplay between law and technology in the derivatives market and describe an approach for developing modular, smart contracts. We draw parallels between legal prose and programming, advocating for a formalised approach to contract drafting that accommodates smart contract technology. The Common Domain Model is identified as a pivotal tool, providing a standardised representation of contractual terms that ensures clarity and consistency across the industry. Using this standard framework, we demonstrate how to embed traditional contracts within a modular, composable smart contract architecture.
18 March 2024The Mandatory Reimbursement Scheme: the obvious points of conflict within the proposals
Frauds may be unauthorised (credit card fraud, phishing, for example) or authorised. Authorised frauds may be “pull” frauds, where the fraudster is given the victim’s account details and authorised to pull the funds from their account, or “push” frauds (APP), where the victim instructs its bank to send money to the fraudster’s account.According to the Payment Services Regulator (PSR), £485.2m was lost to APP fraud in 2022 alone. Back in May 2022, HM Treasury announced its intention to legislate to allow the PSR to require victim reimbursement for APP scams. That legislation came into effect on 29 June 2023, when the Financial Services and Markets Bill received Royal Assent. This article considers the implications of the mandatory reimbursement scheme propounded by the PSR.
18 March 2024Moveable transactions: Scotland v England: Round 2 – taking security over chattels
Scottish moveable transactions law is currently outdated and much less useful in practice than the law in England and Wales. The Moveable Transactions (Scotland) Act 2023 will bring Scots law up to date when it comes into force and will arguably move it ahead of the law south of the border. This article tests whether or not that is the case when taking security over chattels.
18 March 2024Just a minute: inserting the time into pre-prepared board minutes
Pre-prepared board minutes are used in complex corporate transactions to ensure the proper steps are completed in the appropriate order. This article looks at cases in which the practice has been considered, and identifies some of the risks involved.
18 March 2024DeFi platforms: delineating the regulatory perimeter
In this article the author considers how to delineate the regulatory perimeter in relation to DeFi platforms. He considers where the line is to be drawn between a platform that is essentially a CeFi platform that uses smart contract components to provide virtual asset services, and DeFi proper, where the originators of the set of smart contracts are merely developing and deploying software as a public utility.
18 March 2024The fiduciary’s divestment dilemma: ESG and the age of climate change
In this article, Richard Hoyle considers a range of recent English cases which examine fiduciary duties relating to investment or divestment where fiduciaries were either motivated by, or, in contrast, downplayed ESG and climate change issues. In doing so he highlights the potential for fragmented outcomes when comparing different types of fiduciary relationship, including charitable trustees, pension trustees and directors, noting that for the time being, courts appear to be deferential to the approach which different fiduciaries choose to adopt to ESG and climate change issues.
18 March 2024
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