Wednesday, 27 October 2021

UK: introducing a corporate re-domiciliation regime - consultation launched

The Government has today - on autumn budget day - published a consultation paper seeking views on the introduction of a corporate re-domiciliation regime: see here (pdf). To quote from the consultation paper (at paras. 2.1 and 2.2): "This [new regime] would enable a company to shift its place of incorporation from one jurisdiction to the UK while maintaining the same legal identity ... Re-domiciliation would therefore enable a company to maximise continuity of its operations while enabling it to shift its place of incorporation. Its corporate history, management structure, assets, intellectual and other property rights, contracts, and regulatory approvals will generally remain intact...".

UK: England and Wales: regulatory action by FCA did not require insolvency court permission

Judgment was given today in Financial Conduct Authority v Carillion Plc [2021] EWHC 2871 (Ch). The question before the court was whether regulatory action by the FCA against a company in liquidation, under section 91 and/or section 123 of the Financial Services and Markets Act 2000, constituted "action or proceeding" such that it required the permission of the insolvency court under section 130(2) ("consequences of winding-up order") of the Insolvency Act 1986. The trial judge, Mr Justice Michael Green, held that such permission was not required. 

Monday, 25 October 2021

UK: The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021

The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 were laid before Parliament a few days ago and come into force on 12 November: see here or here (pdf). The accompanying explanatory memorandum is available here (pdf). The Rules provide further detail for the operation of the special administration procedure established in the Payment and Electronic Money Institution Insolvency Regulations 2021

Friday, 22 October 2021

UK: FCA permiter report - online harms and fraud

The Financial Conduct Authority has today published its annual permiter report: see here (pdf). Within it, the FCA joins those calling for changes to made to the Government's Online Safety Bill in respect of fraud. The report states (pp. 31-31):
We continue to believe the protection of consumers from illegal online scams would be strengthened through clear legal obligation on platform operators within the Government’s Online Safety Bill (OSB) and that the duties in the OSB should extend to paid-for advertising, as well as user-generated content. We also hope that the OSB can be amended to designate content relating to fraud offences as ‘priority’ illegal content and so require monitoring and preventative action by platforms".

Wednesday, 20 October 2021

UK: England and Wales: insolvency - the rule against double proof and a novel situation

The Court of Appeal gave judgment today in Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings Plc & Ors [2021] EWCA Civ 1523. The decision is noteworthy because of the way in which the court, in the novel situation before it, developed the rule against double proof - sometimes known as the rule against double dividend: see Lord Walker in Re Kaupthing Singer and Friedlander Ltd [2011] UKSC 48

As Lord Justice Lewison explained (para. [172]): "Where (a) the surety has paid part of the debt owed by the principal debtor to the creditor and (b) the surety has given up any right to indemnity from the principal debtor, with the consequence that he has no entitlement to prove for anything, then the creditor must give credit for the payment in the insolvency of the principal debtor. It is the second condition that makes all the difference. There is nothing in the Insolvency Rules which deals with the rule against double proof. Consequently I do not consider that a modest development of the rule intrudes upon legislative competence".

And, as Lady Justice Asplin added (para. [178]): "I too consider, instinctively, that if a surety pays part of a guaranteed debt, and releases his right of indemnity from the principal debtor, the amount which the creditor is entitled to recover in the principal debtor’s insolvency must be reduced as a result of the payment and as a result, the creditor can only prove in the principal debtor’s estate for the lesser sum".