Described once as a 'manifestation of the English genius for harnessing the most abstract conceptions to the service of commerce', floating charges are now not only commonly used but form virtually an essential component in financing transactions. This Practice Note seeks to highlight the differences in the laws of Scotland and England with regards to floating charges. In doing so, it considers the composition, registration requirements and enforcement procedures under each jurisdiction. This Practice Note focuses on the position of a 'qualifying floating charge' as such term is defined in the Insolvency Act 1986 (IA 1986) as that concept applies to both Scotland and England. The floating charge Although fixed securities provide a lender with preferential ranking ahead of floating charge and unsecured creditors, they require reference to the specific asset over which they are granted and preclude the borrower from transacting with the asset without specific permission from the holder of the fixed security. Given their narrow scope and restrictive nature, fixed charges are not suitable for many classes of asset (particularly

What is a letter of non-crystallisation? Title due diligence against property owned by a company may disclose the existence of a floating charge. See Practice Notes: Pre-contract searches—Company search and Pre-completion searches—Company search. Where this is the case, a letter or certificate of non-crystallisation may be required in order to confirm that: • the floating charge has not crystallised in respect of that particular property • no steps have been taken which have caused or would cause the crystallisation of the floating charge so that it fixes on the property, and • the chargee consents to either the sale of the property or the creation of a second floating charge over it This ensures that the company is free to deal with the property (subject, of course, to any fixed charges and other title restrictions). A letter of non-crystallisation may be provided by either the chargee or the chargor. However, it is preferable to obtain the letter from the chargee because evidence of non-crystallisation is not conclusive unless

A floating easement describes a right of way or similar servitude whose precise route or location is not fixed on creation, but is intended to be capable of later definition on the ground. In practice, it usually arises where land is to be developed or subdivided and the dominant owner needs rights over the servient land, but the eventual road, access or service corridor layout is not yet determined.In England and Wales and Northern Ireland, “floating easement” is not a statutory term but a descriptive label used in case law and practice. The courts have traditionally been cautious about upholding easements that lack sufficient certainty of route or extent, but will recognise rights that are initially flexible, provided they are capable of being made certain by subsequent construction, plan, or agreed use.In Scotland, the analogous concept falls within servitudes; again, uncertainty of route or extent can threaten validity, but flexibility is sometimes tolerated where later specification is contemplated. In Ireland, the expression is also descriptive rather than legislative, with similar concerns about certainty.Floating easements are significant in drafting development agreements, transfers, leases and wayleave arrangements, where future-proofing access and service rights is essential.

A security on which the coupon paid changes on every interest roll-date throughout the life of the debt in line with a reference date, such as London Interbank Offered Rate (LIBOR) or Euro Interbank Offered Rate (EURIBOR).

A bond whose coupon varies with (short-term) interest rates. Floating rate bonds are generally issued by banks or companies whose earnings are closely tied to interest rate fluctuations as a way of more closely matching interest payments to earnings.

ARCHIVED: This archived Practice Note provided an outline of the former ‘flood defence consent’ regime for main rivers under the Water Resources Act 1991 (WRA 1991) and ordinary watercourse consents under the Land Drainage Act 1991 (LDA 1991). Following consultation, the Environmental Permitting (England and Wales) (Amendment) (No. 2) Regulations 2016, SI 2016/475 extended the scope of the Environmental Permitting regime to bring flood risk activities within the environmental permitting regime from 6 April 2016 as a regulated facility. This replaces the flood defence consent regime. Transitional and saving provisions apply in respect of existing flood defence consents, outstanding applications for flood defence consents, existing notices and arbitration matters. For more information on flood risk activities, see Practice Note: Environmental permitting—flood risk activities. For information on environmental permitting generally, including the Environmental Permitting (England and Wales) Regulations 2016, SI 2016/1154 , which came into force on 1 January 2017, see: Environmental permits and exemptions—overview. When is flood defence consent required? A flood defence consent is required before the commencement of any work on or near a main watercourse

Introduction to flood insurance The property, legal and financial markets are increasingly sensitive to flooding and flood risk as the rate of flooding increases due to climate change, and the cost of flood damage continues to escalate. Flood insurance plays a crucial role in the management of financial losses associated with flood damage. Most commercial lending agreements require fully comprehensive insurance. Flood insurance Cover Flood insurance will typically provide different aspects of cover depending on the policy in place and whether the property is in domestic or commercial use. Cover is typically available for the following losses: • flood damage/direct loss—cover for losses arising as a direct result of flood damage. This may include either replacement or financial reimbursement for damaged or destroyed contents such as business stock or belongings. In addition, it may include cover for costs associated with repairing structural damage as a result of flood waters, essential services and restoration, and works required to make a property habitable such as ‘drying out’ • consequential loss—cover for losses arising indirectly as a result of flood damage.

STOP PRESS: A revised version of the National Planning Policy Framework was published on 17 August 2026. This content is being reviewed in light of this revised edition. Background This Practice Note provides a summary of the key legislation, organisations and legal principles to consider when planning, maintaining and demolishing flood defences. It does not cover environmental permitting or planning permission in detail. For further information on permitting, see Practice Notes: Environmental Permitting—flood risk activities and Flooding—flood risk and development. What is a flood defence? A flood defence is any structure or feature designed, constructed or maintained for the purpose of managing flood risk by controlling, impeding or diverting the movement of water. Examples include embankments, flood walls, sluices, culverts, barriers, flood storage reservoirs and artificial channels. Flood defences may be temporary or permanent and may form part of a wider system of flood risk management infrastructure. Key flood defence law Key legislation relating to flood defences includes: • Coast Protection Act 1949—this provides coast protection authorities with general powers to execute coast protection

Overview of Land Drainage Act 1991 The Land Drainage Act 1991 (LDA 1991) forms part of the wider statutory framework for the management of water resources alongside the Water Resources Act 1991 and Water Industry Act 1991. This framework was changed significantly by the Flood and Water Management Act 2010. See Practice Note: Flooding—UK policy and legislative framework. Part 5 of the Environment Act 2021 (EA 2021) has amended LDA 1991 in order to bolster the water management system in England and Wales. Amendments introduced by EA 2021 that affect internal drainage boards (IBDs) are set out below. LDA 1991 consolidates enactments relating to the powers, functions and duties of IDBs. For more information on LDA 1991, see Practice Note: Land Drainage Act 1991—snapshot. Purpose of IDBs IDBs are independent public bodies created under LDA 1991 that manage water levels in designated areas, called internal drainage districts, where there is a special need for drainage. IDBs undertake works to reduce flood risk to people and property, and manage water levels

Sources of rights and responsibilities for flood management and drainage The law relating to flood management and drainage dates back to the nineteenth century and developed within the ambit of land law. At that time, flood management and drainage were treated as a private law matter to be managed between neighbouring landowners. Gradually, public policy has changed to recognise flooding as a problem faced by society as a whole, with public authorities now taking key roles in preventing and managing flooding on behalf of communities. Nevertheless, many of the key rights and responsibilities relating to flooding and drainage today still attach to, and run with, ownership of land. It is important that landowners understand their rights and responsibilities in relation to flooding and drainage. Landowner rights and responsibilities is often the first area that will need to be considered where a flooding dispute arises. This Practice Note explains the main sources of landowner rights and responsibilities for flood

Flood and Water Management Act 2010 The Flood and Water Management Act 2010 (FWMA 2010) was enacted to provide: • more comprehensive management of flood risk for homes and businesses • safeguards against rises in surface water drainage charges • protection to water supplies for consumers For more information see Practice Notes: Flood management and drainage—responsible bodies and Flooding—UK policy and legislative framework. FWMA 2010 came into force in accordance with a number of orders made by the Secretary of State and Welsh Ministers, which relate to specific aspects of the Act. FWMA 2010 gives the various bodies responsible for flood management powers to fulfil their obligations. This Practice Note focuses on the flood risk management powers for Lead Local Flood Authorities (LLFAs). For more information on who is responsible for flood management, see Practice Note: Flood management and drainage—responsible bodies. For more information on FWMA 2010, see Practice Note: Flooding—UK policy and legislative framework. Creation of LLFAs The 2007 Pitt Review on flooding stated that ‘the role of local authorities

Liability for flood management and drainage Primary responsibility for flood defence historically rested with individual landowners. However, it has long been recognised that drainage works are in the wider public interest. Public authorities therefore have a key role in preventing and managing flooding on behalf of communities. The starting point for any claim following a flooding event will be the identification of the party or parties with relevant duties to prevent flooding. This may involve potential liabilities and claims in both the private law and public law spheres. This note covers both topics. The availability of insurance will also need to be considered at the outset of any flooding event. See Practice Notes: Flood insurance—overview of the market and Flood reinsurance—the Flood Re scheme. Potential responsible parties include: • landowners • riparian landowners, and • public bodies Landowners Landowners may have duties relating to flooding and drainage arising as title matters, under statute and under the common law of nuisance or the rule in Rylands v Fletcher.