Commercial analysis: Dov Ohrenstein of Radcliffe Chambers considers the case of Peter Dunn v Kostas Kazolides which addresses interesting questions about limitation periods, insolvency, the formal requirements for the execution of deeds, and how variation to the contract between the principal debtor and creditor may discharge a guarantor.

Where the contractor agrees a figure as a ceiling for the contract sum. The contract may also provide for savings to be shared between the employer and the contractor as an incentive to control costs.

Scheme benefit provided to an employee who was contracted out (on a salary-related basis) of the State-Earnings Related Scheme (SERPS) between 1978 and 1997. It is a defined benefit paya-ble from State pension age designed to compensate the member for the amount they would have received from SERPS.

FORTHCOMING CHANGE 1 : On 8 June 2026, HMRC launched a technical consultation on draft legislation that would amend the Finance Act 2004 to preserve Deferred Member Carve-Out protection following GMP conversion, preventing members from incurring unexpected annual allowance tax charges as a result of the equalisation method used. The draft Order would require increases in pension rights attributable to GMP conversion to be disregarded when calculating pension input amounts from the 2027–28 tax year. For further information, see Tax implications below and LNB News 08/06/2026 33. FORTHCOMING CHANGE 2 : On 3 September 2026, the DWP published a consultation on draft regulations to amend the GMP conversion regime so as to give effect to the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022. The draft regulations would, if made, prescribe post-conversion survivor benefit requirements, define the ‘relevant person(s)’ whose consent is required for GMP conversion and introduce an alternative actuarial-equivalence certification process for conversions relating to a single individual. The draft regulations would come into force on a date

Guarantees are typically used in banking transactions as a form of collateral for a debt. In such circumstances, they are a contractual arrangement where one party (the guarantor) agrees to answer for the liability of another party (the principal) to another party. They do not create rights over property. In this context, guarantees are characterised as quasi-security. This Practice Note examines: • the key characteristics of guarantees • how guarantees are used in financing transactions • why lenders prefer guarantee documentation to include both a guarantee and an indemnity • which obligations are commonly guaranteed in finance transactions—obligations under a specific transaction or 'all moneys'? • whose obligations are commonly guaranteed in finance transactions • the use of limited guarantees, and • the importance for lenders of understanding the rights of guarantors and guarantor protections This Practice Note does not deal with on demand guarantees (see Practice Note: On demand guarantees and bonds). Characteristics of guarantees A guarantee is a secondary obligation in a tripartite structure. Meaning of 'tripartite structure' Guarantee arrangements involve three parties.

This Practice Note summarises the key elements of guarantees and indemnities, the circumstances in which they are used, issues that beneficiaries and lenders should consider in respect of the form of the guarantee or indemnity, and in the context of indemnities or guarantees granted by individuals or corporate entities. For an example: • indemnity clause, see Precedent: Indemnity clause—commercial contracts • performance guarantee, see Precedent: Parent company guarantee—commercial contracts • payment guarantee, see the Precedents listed in: Guarantees—overview For more information on guarantees and indemnities generally, see Practice Notes: • Guarantees • Indemnities in commercial contracts Elements of a guarantee A guarantee: • is a promise by the guarantor to the beneficiary that a third party (the primary obligor) will perform an obligation, and/or if the third party does not perform, the guarantor will perform it or procure its performance • creates a secondary obligation (ie an obligation dependent on the primary obligor’s obligation), and • can never exceed the obligation of the primary obligor in the absence of wording to the contrary (ie if the primary

It is often the case that financing transactions require guarantees to be given by more than one guarantor. For example, guarantees might be required from a number of companies in a group to support group borrowings or from each of the directors of a company to support loans made to that company. In such cases it is important to be aware of: • the rights of the lender against the guarantors and, in what circumstances those rights might be diminished, and • the rights of each guarantor against its co-guarantors How multiple guarantor guarantees are documented Where a transaction involves more than one guarantor, the guarantee arrangements are typically documented either: • in one guarantee executed by all of the co-guarantors—this could take the form of either a single standalone guarantee document executed by all the co-guarantors (see for example, Precedent: Guarantee and indemnity: cross guarantee from group companies—bilateral—all monies) or specific provisions in the facility agreement to which all the co-guarantors would be a party, or • in several separate guarantee documents, one for each

Banking & Finance analysis: Guarantees executed, but unenforceable, as deeds may take effect as simple contracts where supported by sufficient consideration. Written by Ben Archer, barrister, at 4 New Square Chambers.

Commercial analysis: Unsuccessful appeal under section 69 of the Arbitration Act 1996 (AA 1996) arising out of ten separate arbitral awards concerning ten shipbuilding contracts for container vessels. The buyers contended that the yard’s obligation to provide refund guarantees within 120 days of novation was a condition of the contracts, so that breach entitled them to recover loss of bargain damages. The Commercial Court upheld the tribunal’s conclusion that the obligation was an innominate term. The buyers were entitled to cancel the contracts pursuant to the express contractual regime, but not to claim loss of bargain damages. Written by Alexander Whatley, barrister at Gatehouse Chambers.

Commercial analysis: This case deals with the distinction between guarantees and indemnities in a complex written agreement. Having decided that certain obligations were guarantees and others indemnities, the case goes on to deal with the effect of a claim of equitable set-off and the extent to which the variation of the underlying agreement can release a guarantor from liability, following the so-called ‘rule in Holme v Brunskill’. The judgment highlights the need for careful drafting of all contractual documentation in group situations and the risks of assuming that consent given by one member of a group of companies can bind other members of the group. It also contains a very useful summary of the various Supreme Court authorities on interpretation of contracts and implied terms. Written by Steven Fennell, barrister at Exchange Chambers.

Once the capacity and authority of a company to enter into a guarantee have been investigated, the next step is to consider the commercial (or corporate) benefit of entering into the guarantee. Issues of commercial benefit can be of particular concern in finance transactions which include a guarantee because the company providing the guarantee is often in the position of taking on a considerable contingent financial liability for the obligations of a third party (typically the principal debtor of the lender—see Practice Note: Guarantees—Whose obligations are guaranteed?). On the face of it, providing such a guarantee would appear not to be in the commercial interests of the guarantor. See the Q&A: In what circumstances do I really need to worry about commercial (or corporate) benefit? This Practice Note considers the issues that arise in relation to commercial benefit when a company provides a corporate guarantee. In particular it covers: • the duty of directors to promote the success of the company and commercial benefit • issues surrounding intra-group guarantees • insolvency issues including how commercial benefit is relevant

Commercial analysis: The court considered whether the term of a personal guarantee for the debts of a company, provided by its director were enforceable in circumstances where the directorship had been terminated as a consequence of the company’s liquidation. Written by Graeme Kirk, barrister, at Lamb Chambers.