In Practice

Section 32 Limitation Act: an evolving yet difficult route for claimants

Is it time to review your “standard” increased costs clauses in facility documentation?

With the advent of the final stage of Basel III implementation (often referred to as Basel IV), it is time again for lenders and borrowers to consider the formulation of “boiler plate” increased costs clauses in their existing credit documentation and future transactions. In this In Practice article we highlight some of the potential interactions the latest reforms may have with commonly seen drafting both in the UK and the US and discuss some of the devices which borrowers and sponsors may use to mitigate the likelihood of being on the receiving end of an increased costs claim in the future.

The Quincecare duty: 30 years on

In a sign of the times, the first quarter of this year has seen three cases on a bank’s duty to refrain from executing a payment instruction where it has reasonable grounds to suspect the transaction may be an attempt to misappropriate the account-holder’s funds. Until now, in the thirty years since it was first recognised, cases relating to the so-called Quincecare duty have been few and far between. This in itself indicates the narrow circumstances in which the courts have found the duty has not only been breached, but even arisen in the first place.

ESG: authorities’ potential enforcement action against companies

The environmental regulatory risk landscape is evolving in ways that companies may not yet have considered. It is already well-known that financial regulators are working to protect capital market participants from greenwashing by the adoption of sustainability disclosure standards and the creation of a green taxonomy. Comparatively less attention has been paid to authorities with broad regulatory remits covering most or all sectors of the economy, which are increasingly using their powers to take enforcement action or cause reputational harm in respect of companies who engage in greenwashing. Meanwhile, private actors such as non-governmental organisations (NGOs) with ESG mandates can opportunistically seek to trigger or encourage investigations by such authorities, so as to pressure businesses to change behaviours. In this article, we examine the role of two such authorities: the Competition and Markets Authority and the UK National Contact Point.

The Bank of England’s loose understanding of Islamic financial law

In this In Practice article leading UK and international legal authority on Islamic financial law, Dr Lu’ayy Minwer Al-Rimawi, explains how the Bank of England’s webpages need to demonstrate a better understanding of Islamic finance law.

The “crypto crash”: a catalyst for further crypto litigation?

In recent years, the cryptoasset market has developed rapidly, with market capitalisation for cryptoassets estimated to have been around US$2.6-3trn in 2021.1 The market for decentralised finance (DeFi), although still relatively small, has also expanded quickly from less than US$10bn in 2020 to nearly US$100bn in 2021.2 However, over the last few months the cryptoasset market – specifically cryptocurrencies – has been seeing one of its worst selloffs since a market rally in 2020. This has sparked panic amongst investors, causing substantial financial losses. Inevitably, this has seen a flurry of litigation globally in recent months. This trend is likely to continue. We consider the causes of the crypto crash and the likely litigation risks for financial institutions and advisers.

The Draft RTS on ESG disclosures for STS securitisations: a hit or a miss?

Draft technical standards concerning sustainability disclosures aim to make STS securitisations more appealing from an ESG investment perspective. This In Practice article examines the proposed regime and identifies some practical shortcomings.

Recent trends in leveraged financing: the ever more borrower friendly market

In this article the authors examine recent trends in leveraged finance transactions, looking at “Most Favoured Nation” (MFN) protection, dividend to debt reallocation mechanics, ineffective IP transfer prohibitions and super grower baskets/contribution debt baskets.

Recurring revenue-based deals

In this article the authors examine recurring revenue transactions in the UK and European markets – what are they, who are they for, how they work, what are the key features and market trends?

Embedded finance: key considerations for funders of platform borrowers

Embedded finance is, broadly, the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions and capitalised by “traditional” financial institutions. Companies are providing these products directly to their own customers, cutting out financial institutions as intermediaries. The benefits of these technology driven products for end-users are efficiency of transactions and bundling complementary services to enhance customer experience (eg point of sale buy-now-pay-later (BNPL) credit).