NOTICE CONFERRING BENEFIT OF THIRD PARTY RIGHTS [ By recorded delivery ] [Name of grantor of third party rights] [Grantor’s address] Company registration number [insert company registration number] For the attention of [insert name] [Insert date] Our ref: [insert reference] Dear

This Practice Note considers third party rights in relation to contracts under the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999), which provides a statutory exception to the common law doctrine of privity of contract, thus allowing contracts, which fall within its scope, to be enforceable by third parties on whom they confer a benefit. This Practice Note does not cover the Third Parties (Rights Against Insurers) Act 2010. For the purposes of this Practice Note: • A is the promisor and a party to the contract • B is the promisee and a party to the contract • C is the third party (and so not a party to the contract) Not a party but still affected by a contract Where your client is not a party to a contract, whether or not they may still be liable for obligations in a contract or avail themselves of benefits under it is governed by: • the common law doctrine of privity of contract. This provides that, in general, a

This Practice Note discusses the common law doctrine of privity of contract; the equitable and statutory exceptions to it; how the doctrine affects enforcing a contract against a third party and what happens when, notwithstanding the lack of privity, a contract has an indirect effect on a third party. For guidance on contracts and third parties more generally and on the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999), respectively, see Practice Notes: • Contracts and third party rights • Third party rights—the Contracts (Rights of Third Parties) Act 1999 What does privity of contract mean? 'Privity of contract' is a common law doctrine, which provides that you cannot either: • enforce the benefit of, or • be liable for any obligation under a contract to which you are not a party. Therefore, at common law, if your client is not a party to a contract (ie they are a third party) then they cannot sue or be sued under that contract. Example: A promises

Construction analysis: There is a ‘a dearth of case law’on section 1(1) of the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999), as observed by Lenon KC, the judge in the case of HNW Lending Ltd v Lawrence. While an accurate assessment, the judge would have been well within his rights to add (but didn’t) that the dearth of caselaw extends to the entire Act, not just C(RTP)A 1999, s 1(1). This is surprising given the rising prevalence of reliance on C(RTP)A 1999 in commercial contracts (and perhaps most frequently, construction contracts) since its introduction in 1999. Written by Kevin Henderson, associate at BCLP.

This Practice Note considers: • what is meant by third party security? • when third party security is commonly granted? • drafting considerations when taking third party security • whether third party security constitutes a guarantee • the risks of third party security being considered voidable • corporate benefit and directors' duties, and • undue influence What is meant by third party security? Third party security refers to security granted to secure another person or entity’s obligations. It will often be granted in commercial transactions alongside security from the borrower over its own assets to provide the lender(s) with additional credit support. Third party security can be granted: • with a guarantee, as security for its own liability under the guarantee and for the borrower’s, and potentially other guarantors’ obligations, or • as security for the borrower’s debt only In the second scenario, no personal liability is assumed by the security provider for the obligations of the other person or entity. Instead, it merely offers up an asset as security for the other’s obligation. In

1 The Supplier acknowledges that the Customer has a duty under section 40A of the Equality Act 2010 to prevent sexual harassment of its staff by third parties and will not tolerate sexual harassment of its staff. Having identified third parties (though not specifically the Supplier) as one of the factors that may increase the risk of sexual harassment, to mitigate that risk the Customer needs to ensure that, where its staff have contact with staff of third party suppliers or contractors, those third parties have measures in place to prevent sexual harassment by their staff. The Supplier therefore agrees to provide the undertakings set out in clause 2. 2 The Supplier undertakes: 2.1 to review

This Deed is made on [insert day and month] 20[insert year] Parties 1 [Insert name of Chargor], a company incorporated in England and Wales with registered number [insert company number] whose registered office is at [insert address] (the Chargor); and 2 [Insert name of Lender] of [insert address] (the Lender). Recitals: (A) The Lender has agreed to make available a loan facility to the Company on the terms and conditions set out in the Facility Agreement (as defined below). (B) It is a condition precedent to the availability of the loan facility to the Company that the Chargor enter into this Deed for the purpose of providing security in favour of the Lender in respect of the Secured Obligations (as defined below). It is agreed as follows: 1 Definitions and interpretation 1.1 Definitions In this Deed, unless otherwise provided: Company • means [insert name of borrower under the Facility Agreement], a company incorporated in England and Wales with registered number [insert company number] whose registered office is at [insert address]; Facility

a third state is a country that is not a contracting state to the relevant EU regulation or international convention in question. This includes the UK after transitional provisions under the agreement'>Withdrawal Agreement no longer apply

Background The infrastructure in the United Kingdom Continental Shelf (UKCS) is a complex network which has developed over many decades, much of it built to serve the needs of individual fields, but also including a network of trunk lines. Over the years increasing amounts of capacity have become available in pipelines and platform processing facilities. At the same time, in a mature basin such as the UKCS, discovery sizes have fallen, and few fields are now large enough to justify the creation of entirely new infrastructure. Most new developments therefore require access to third-party infrastructure in order to reach the shore. In some cases, access may be required to several different links in an export route. This would seem to present a great opportunity for both owners of new fields and owners of infrastructure. However, it comes with challenges. First, for many new fields, there will be limited choice as to export route and therefore the normal competitive market process may fail to operate effectively. The infrastructure may even constitute an essential

Arbitration analysis: The Singapore International Commercial Court held that an arbitral tribunal’s refusal to award third-party funding costs could not be challenged on public policy or agreed procedure grounds under Article 34 of the UNCITRAL Model Law. The court emphasised the distinction between an alleged error of law and the high threshold required to establish a conflict with Singapore public policy. It further held that the relevant SIAC costs provision concerned the tribunal’s substantive authority rather than arbitral procedure. The decision reinforces Singapore’s pro-arbitration and non-interventionist approach while leaving unresolved whether third-party funding costs are recoverable in principle, thereby preserving uncertainty for parties and funders when structuring funding arrangements. Produced in partnership with Hazel Tang of Hui Zhong Law Firm.

Construction analysis: The Technology and Construction Court (TCC) dismissed a sub-contractor’s claim for damages against an employer under section 1 of the Contracts (Rights of Third Parties) Act 1999. The claim related to sums that, on the sub-contractor’s case, the employer should have paid under the project bank account provisions of the main contract (which was based on the NEC4 Engineering and Construction Contract). However, the court held that only ‘Named Suppliers’ within the NEC4 project bank account regime could fall within the relevant class of third party beneficiaries; here, the claimant had not achieved that status, because the necessary formalities had never been completed. The decision underlines the importance of complying with the formal mechanics of NEC4 project bank account arrangements and demonstrates the limits of third party rights.

Third-party funding has seen increasing impetus across the globe, in the sphere of both litigation and arbitration. Third-party funding is regularly used in both commercial and investment treaty arbitration and has gained widespread acceptance around the world. While many of the same issues that arise in court proceedings apply equally in an arbitration context, third-party funding in arbitration presents its own discrete challenges. To compare the answers to questions relating to third-party funding and arbitration in jurisdictions around the world, please see our International Comparator Tool. What is third-party funding? Definitions of third-party funding vary and some broad definitions can encompass insurance or contingency arrangements entered into between counsel and client. This note is concerned with ‘classic’ third-party funding, which involves a third-party, normally an investment company or fund, providing initial capital to cover a claimant’s legal costs and expenses in return for the repayment of that capital with a return. The return can be calculated as a percentage proportion of the damages successfully recovered by the claimant, or as a fixed return on either committed capital