Two new pieces of insolvency legislation

13 September, 2021

UPDATE 30 September 2021:
An error has been spotted in the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021. They have been replaced with effect from 28 September 2021 by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) (No. 2) Regulations 2021. The error was not in the substance of the replaced Schedule 10, which is identical in both sets of Regulations, and the commentary below is still applicable.

Two new pieces of insolvency legislation have been passed which will come into force over the next 3 weeks.

First, on 29 September 2021 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 come into force.  These amend Schedule 10 of the Corporate Insolvency and Governance Act 2020 by replacing the original schedule with a new one.  Those who deal with winding-up cases will know that Schedule 10 restricts the circumstances in which a creditor can petition for the winding up of a debtor company. Whilst it is unfortunate that the rules have been changed just as practitioners have got used to the old version, such is the nature of temporary, emergency provisions. The new Schedule 10 is considerably simpler than its predecessor.

In short, the new schedule states that a creditor cannot present a petition for the winding up of a company under section 122(1)(f) (“the company is unable to pay its debts”) unless 4 conditions are met.  Those conditions are:

  • The debt is (a) liquidated; (b) due for payment; and (c) not excluded;
  • The creditor has delivered a written notice to the company seeking proposals for payment of the debt;
  • The company has not, within 21 days of the notice, made a proposal for payment which is satisfactory to the creditor; and
  • The total petition debt is at least £10,000.

Debts excluded for the purposes of Ground A are those “in respect of rent, or any sum or other payment that a tenant is liable to pay, under— (a)  in England and Wales, a relevant business tenancy … and which is unpaid by reason of a financial effect of coronavirus.”  “Relevant business tenancy” is itself defined.

The definition of “excluded debt” contains the only remaining substantive reference in Schedule 10 to the coronavirus, and the requirement for a creditor to believe that “coronavirus has not had a financial effect on the company” before presenting a petition, found in the old Schedule 10, has been removed.

The provision is time limited and runs from 1 October 2021 to 31 March 2022.  Presumably a new practice direction will follow.

Second, from 1 October 2021 the Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 makes extensive changes to the Insolvency Rules to incorporate the new moratorium procedure.  It begins by introducing Part 1A to the Insolvency Rules, containing the provisions applicable to the new moratoria.  The rest of the changes are consequential and other minor textual modifications to the remaining rules in the Insolvency Rules to include references to moratoria in the necessary places.

Simon Hunter

Professor Subedi publishes a new book ‘Unilateral Sanctions in International Law’

20 June, 2021

Three Stone Chambers are very proud that one of our barristers Professor Surya P. Subedi, QC, OBE, DCL has published a new book ‘Unilateral Sanctions in International Law’ (Hart Publishing, Oxford, 2021).

This is the first book that explores whether there are any rules in international law applicable to unilateral sanctions and if so, what they are.

The book examines both the lawfulness of unilateral sanctions and the limitations within which they should operate. In doing so, it includes an analysis of State practice, the provisions of various international legal instruments dealing with such sanctions and their impact on other areas of international law such as freedom of navigation, aviation and transit, and the principles of international trade, investment, regional economic integration, and the protection of human rights and the environment.

This study finds that unilateral sanctions by a state or a group of states against another state as opposed to ‘smart’ or targeted sanctions of limited scope would be unlawful, unless they meet the procedural and substantive requirements stipulated in international law. Importantly, the book identifies and consolidates these requirements scattered in different areas of international law, including the additional rules of customary international law that have emerged out of the recent practice of States and that increase the limitations on the use of unilateral sanctions.

Professor Surya P. Subedi QC, DCL, OBE

Invitation for Applications for Third Six Pupillage

9 June, 2021

Chambers are looking to recruit a Third Six Pupil from October 2021.The successful applicant will have successfully completed 1st and 2nd Six Pupillage in Chancery / Commercial Chambers.

Please write to:

Justin Brown
Senior Clerk
3 Stone Buildings
Lincoln’s Inn
London WC2A 3XL


The closing date is 31 July 2021.

Triannual Review: Issue 3

26 May, 2021

Please find below a link to Issue 3 of the new Three Stone Triannual Review, where you will find articles on current issues, case reviews, and a practice update that we hope will be of interest and of use to you.

The topics covered in this edition include:

  • “A Bribe or Not a Bribe? That is the Question” (or is it?!) Stuart Cutting explores the Court of Appeal’s decision in Wood v Commercial First Business Ltd.
  • The Long Road to Insolvency Daria Gleyze counsels weary travellers on their road through insolvency procedure.
  • Insolvency Issues in Open Source Software Michael Smith tells us why we should all think about open source software.
  • Case Reviews
  • Practice Update
  • Chambers News

Download pdf

Matthew Marsh joins Three Stone as a new Door Tenant

10 May, 2021

We are delighted to announce that Matthew Marsh joined Three Stone as a Door Tenant on 1 May 2021 to act as Mediator and Arbitrator.

Matthew was a Chancery Master for nine years and Chief Master for seven years from 2014 to 2021. He originally qualified as a solicitor and was a partner with Collyer Bristow LLP until 2012. He sat as a Recorder from 2002 to 2021. He is an accredited mediator. He is also a Fellow of the Chartered Institute of Arbitrators (1992) and holds a Diploma in International Commercial Arbitration. He has wide experience of arbitration, both domestic and international, as sole arbitrator and acting for parties.

Stephen Baister said: “A former solicitor in a respected London firm and, until recently, Chief Chancery Master of the High Court, Matthew Marsh (alongside whom I was privileged to work) brings a unique blend of skills to the Three Stone mediation and arbitration team. The breadth of his practice and judicial experience is complemented by a calm and reassuring personality. Litigants and their advisers will find him effective in a wide range of commercial and other disputes in both capacities in which his services are available.”

Justin Brown (Senior Clerk) said: “I am thrilled that Matthew is joining us. His role as Chief Master was a greatly distinguished one. He joins our experienced team of arbitrators and mediators and I am sure will have great success”.

Matthew Marsh


Professor Surya Subedi interviewed by “Counsel” as an inspiring legal personality

20 April, 2021

The article titled “Legal Personality – The International Human Rights Jurist: Surya Subedi QC” features in the April edition of “Counsel” – the monthly journal of the Bar of England and Wales.

Three Stone Chambers are very proud to see one of our barristers Professor Surya P. Subedi, QC, OBE, DCL interviewed by fellow barrister Admas Habteslasie, in an article highlighting his life and contribution to international law and human rights as a leading international jurist.

The article describes Professor Subedi’s career journey, highlights his many achievements and explains how he has combined his academic work with more practical work in the field of public international law and his contribution to top level policy formulation within and outside of the UN system of human rights.

It also highlights Professor Subedi’s publications, including his recently published book entitled “Human Rights in Eastern Civilisations”.

Professor Subedi said that he was honoured to feature in an article, written by a barrister, highlighting his contribution within a prestigious magazine of a professional national legal institution of England and Wales.

Read the article in full here.

Professor Surya P. Subedi QC, DCL, OBE

Wood and Pengelly – Court of Appeal Holds No Need for Broker’s Fiduciary Relationship in Secret Commission Cases

31 March, 2021

David Lord QC and Stuart Cutting appeared for the Appellants in a significant decision of the Court of Appeal on broker secret commission handed down today in the conjoined appeals of Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471.

The appeal of the Assignees was dismissed in the lead judgment given by David Richards LJ (with Males LJ and Elisabeth Laing LJ in agreement).

Background Facts
The original mortgagee in both cases was Commercial First Business Ltd (“CF”) and the broker was UK Mortgage and Financial Services Ltd (the “Broker”). In both cases the mortgages were subsequently assigned to various third parties (the “Assignees”).

Mrs Wood took out two mortgages (26 May 2006 and 12 July 2007) and a further advance under the first mortgage (30 November 2007), which were secured against Mrs Wood’s farms. As the mortgages were commercial they were unregulated.

Mrs Wood paid a fee to the Broker in respect of the first mortgage and the further advance, but no broker’s fee was paid in respect of the second mortgage.

The Broker received commission from CF in relation to the two mortgages and the further advance (being either 3% or 4% of the amount of the advance). CF did not disclose the fact or the amount of these payments to Mrs Wood as they required the Broker to do so.

Mr Pengelly took out a single mortgage (11 January 2006), which was secured against a barn on Mr Pengelly’s farm. As the mortgage was commercial it was unregulated.

Mr Pengelly paid a fee to the Broker Fee. The Broker received commission from CF in relation to the mortgages (being 3% of the amount of the advance). CF did not disclose the fact or the amount of this payment to Mr Pengelly as they required the Broker to do so .

No Requirement for a Fiduciary Relationship
If a “a fiduciary relationship” is required as a pre-condition for remedies in respect of bribes or secret commissions the inherent risk is either that civil remedies which should be available will be denied because there is not a fiduciary relationship, or that the term “fiduciary relationship” will be applied so widely as virtually to deprive it of content [46]. To ask in cases of this kind whether there is a fiduciary relationship as a pre-condition for civil liability in respect of bribes or secret commissions is an unnecessarily elaborate, and perhaps inaccurate, question [48]. It is the content of the duty, not the label attached to it, that matters, which is in accordance with the authorities as well as with principle [50]. The Court acknowledged that in a significant number of authorities, particularly recently, the liability of the payer and recipient of the bribe or secret commission was in terms of a “fiduciary duty” and an accessory liability for the payer (at [73] and [87]). However, such references were only in a “wide” and “very loose sense” ([73] and [79]).

It should be noted though in the case of a “half-secret commission” the Court of Appeal in Hurstanger Ltd v Wilson and Anthr [2007] 1 WLR 2351 made it clear that it is necessary to establish a fiduciary relationship [119] and [128].

Requisite Duty Owed by Payee
With there being no need for the payee to be in a “fiduciary relationship” with the borrower the question is much simpler. The payee will be “someone with a role in the decision making process in relation to the transaction in question e.g. as agent, or otherwise someone who is in a position to influence or affect the decision taken by the principal” [51] (affirming the view of Christopher Clarke LJ in Novoship (UK) Ltd v Mikhaylyuk [2012] EWHC 3586 (Comm) at [108]).

The Court found that the emphasis on the duty to provide disinterested advice as the pre-condition to the application of the rules and remedies available in the case of bribes and secret commissions has been repeated in many cases since Panama and South Pacific Telegraph Company and v India Rubber, Gutta Percha, and Telegraph Works Company (1874-75) L.R. 10 Ch. App. 515 [62] (with one striking authority being Shipway v Broadwood [1899] 1 QB 369 [63]).

The straightforward and simple question to ask is “Did the ‘agent’ [the payee] owe a duty to be impartial and to give disinterested advice, information or recommendations” [102]. It is the duty to be honest and impartial that matters [92]. The precise scope of the payee’s duties will require examination by reference to the terms of engagement [47].

In recent authorities Courts have characterised the payee’s duty as a “fiduciary duty of loyalty”. While that may be accurate, it does not mean that the Courts need to involve themselves in complex analyses of the nature of a fiduciary relationship or the duties that may be associated with a fiduciary relationship. The Court found it would be better to avoid doing so [102].

Whether Broker Owed Requisite Duty On Facts
The Broker, on the basis of their terms and conditions, did owe the requisite duties on these facts to engage the law applicable to bribes and secret commissions. The Broker was under a duty to make a disinterested selection of mortgage product to put to its client in each case. To the extent that it was necessary, the Judges below were also correct to hold that the Broker owed a fiduciary duty of loyalty to Mrs Wood and Mr Pengelly [110].

Where the Broker only put forward a single product for the client’s consideration (the so called “information-only sale”), it was the Broker and not the client, who had access to a panel of lenders and the Broker undertook to work from that panel to provide the “appropriate” product to meet the client’s individual circumstances and needs. This necessarily involved judgment and choice on the part of the Broker. Moreover, under the terms and conditions the Broker had express authority to negotiate with lenders and could thereby seek to improve the terms available to the client [113].

The High Court authority of HHJ Raynor in Commercial First Business Ltd v Pickup and Vernon [2017] CTLC 1 (where the Court had dismissed the ‘half secret’ commission claim on the basis that no fiduciary duty was owed as there could be no expectation of “undivided loyalty” and the broker was a mere introducer) was wrongly decided [126]. On the broker’s terms and conditions there was clearly intended to be an exercise of judgment on the part of the broker as to what best fitted the borrower’s requirements, which was an exercise requiring an impartial and disinterested view (thereby being sufficient to impose a fiduciary duty on the broker) [125].

Half or Fully Secret?
The Broker’s terms and conditions were identical for Mrs Wood and Mr Pengelly. They notified Mrs Wood and Mr Pengelly that the Broker “may” receive fees from creditors with whom it placed mortgages. The terms went on to say:

Before you take out a mortgage, we will tell you the amount of the fee in writing. If the fee is less than £250, we will confirm that we will receive up to this amount. If the fee is £250 or more, we will tell you the exact amount.”

The evidence of Mrs Wood and Mr Pengelly was that they did not receive any subsequent written notification of the fact or amount of the Broker’s commission. The Court found that the Broker’s failure to make any disclosure in accordance with the terms and conditions in these cases meant that Mrs Wood and Mr Pengelly were entitled to proceed on the basis that no commission was being paid [119]. Therefore on both cases this was a case of “fully secret” commission [134].

Secret payments were treated as a special category of fraud with the principal being entitled to have the relevant contract rescinded as of right at his or her election [61]. Therefore. rescission of a transaction with the third party is available as of right in cases of bribes or secret commissions, subject to making counter-restitution [101].

Stuart Cutting

Devonshires Solicitors LLP v (1) Elbishlawi (2) Lam Developments Ltd

11 March, 2021

[2021] EWHC 173 (Comm)
This decision contains useful guidance for claims concerning unpaid solicitors fees.  The Claimant sought summary judgment as the period for challenging its bills under the Solicitors Act 1974 (“the 1974 Act”) had expired and there were no special circumstances justifying an extension of time.  The Defendants argued that summary judgment could not be given as (1) with one exception, the bills were not final statute bills (2) the Defendants had a right to assessment at common law, irrespective of the 1974 Act.

Butcher J gave summary judgment for the Claimant.  He found inter alia that (1) the Defence did not allege the bills were not final statute bills (an allegation which should have been pleaded) (2) whilst there was a jurisdiction to order assessment at common law irrespective of the 1974 Act, the onus was on the client to challenge specific items where a breakdown had been provided (applying and clarifying Turner v Palomo [2000] 1 WLR 37).  In relation to two of the six invoices at issue, sufficient detail had been given.  As the Defendants had not challenged specific items in respect of those invoices, the Court gave summary judgment for the amounts claimed in them.  Summary judgment was also given on the other invoices, with the amounts to be assessed at common law.

Daniel Burkitt

The Supremacy of The Supreme Court & Brexit – Seminar Notes

23 February, 2021

Three Stone Chambers held a ‘zoominar’ on 18 February 2021 on “The Supremacy of The Supreme Court & Brexit”. The Speakers included: Adam Chichester Clark; Daria Gleyze; James Woolrich and Christopher Howitt.

Topics covered:

              •  Brexit and Private International Law in 2021
              •  Reflective loss: the Supreme limitation
              •  Business interruption: the Supreme Court has got us covered
              •  Enka v Chubb: Supreme ruling on Arbitration Governing Law


Please click here to download the Seminar Notes.
Please click here to watch the Seminar.
Please click here to listen (audio only) to the Seminar.

Three Stone Zoominar: The Supremacy of The Supreme Court & Brexit

3 February, 2021

Three Stone Chambers will be presenting a ‘zoominar’ on “The Supremacy of The Supreme Court & Brexit” on 18 February 2021, 5pm – 6.30pm.


Speakers include:

  1. Adam Chichester Clark
  2. Daria Gleyze
  3. James Woolrich
  4. Christopher Howitt


  1. Brexit and Private International Law in 2021
  2. Reflective loss: the Supreme limitation
  3. Business interruption: the Supreme Court has got us covered
  4. Enka v Chubb: Supreme ruling on Arbitration Governing Law

The programme is available to download here.