Drafting Effectively - Guarantees

• Guarantee concepts are difficult to adapt to quickly, affecting the ability to draft and negotiate them effectively. By examining the commercial structure of a guarantee, this course provides a solid foundation on which to improve drafting skills.
• The drafting effectively guarantees webinar examines some key pitfalls in guarantee drafting in one session that would ordinarily take months or years of experience.
• Our trainer has many years of experience training and mentoring junior lawyers and has a unique insight into the drafting problems they encounter in practice when looking at guarantees.

• Why are guarantees so often the subject of litigation?
• How does looking at guarantees as a form of insurance help the approach to drafting and negotiating them?
• Why is there never a one size fits all guarantee?
• The questions that you must consider before drafting or reviewing any guarantee
• Should you consider a guarantee term sheet?
• How to get to grips with guarantee jargon – guarantee vs undertaking vs indemnity
• Some of the significant bear traps in guarantee drafting
• The impact of other documents/transactions on guarantees
• Distinguishing between legal and commercial risk in the context of guarantees

Case law and exercises may be used to highlight particular issues.

This drafting effectively guarantees training course is not a clause-by-clause page turn of a guarantee, but by examining fundamental drafting principles and examining how guarantees fit together commercially, it will help you to acquire a set of core key principles that you can apply and adapt to different guarantee scenarios to draft and negotiate more effectively.

Why are guarantees one of the most litigated form of documents?

• Mainstream ‘market’ guarantees vs other guarantees
• Why are bank standard forms used?
• Why are guarantor standard forms used?
• What are the pitfalls in using standard forms
• What can go wrong when negotiating standard forms?
• What difficulties arise in practice when confronted with an unfamiliar guarantee document?
• What gives rise to drafting errors?
• How does this shape how guarantees should be approached?
• Some examples from case law - Triodos Bank NV v Dobbs

How looking at guarantees as a form of insurance helps the approach to preparing and negotiating them

• What is the role of a guarantee on a transaction
• The insurance comparison
• Why do people take out insurance?
• Why do businesses take out insurance?
• What’s hidden/missing in the insurance small print?
• What’s hidden/missing in the guarantee small print?
• Acquiring an eye for detail – the insurer’s and the insured’s mind-set
• The six-billion-dollar question for all guarantees

Why there is never a one size fits all guarantee

• What are the main types of guarantee?
• How do they differ?
• When is a ‘guarantee’ not a guarantee – why it’s what it says inside the tin that matters – understanding ‘guarantee jargon’
• Why is understanding the different guarantee types important for drafting purposes?

The questions that you must consider before drafting or reviewing any guarantee

• Examining the commercial rationale for guarantees and how that could affect your drafting
• Considerations when examining the scope of a guarantee
• Suitability of the guarantor – key issues
• Testing the limits – how far does a guarantee stretch & what are its limits? The principles from Holme v Brunskill & issues of the purview
• ‘Best before’ dates – do you know when a guarantee may be worthless?
• Competing interests
• How might other documents impact?
• Taxing issues and the question of set-off
• Down at the bureau de change – why currency matters
• Guarantee amendments
• When is a release a release? Wulff v Jay and other cases
• Alternative methods of comfort – are they of any use?

Should you consider a guarantee term sheet?

• What’s the purpose of a term sheet – why could it help with guarantees?
• Guarantees on non-finance transactions
• What could a guarantee term sheet look like?
• How a term sheet helps through the drafting and negotiation process
• The arguments for not having a guarantee term sheet

Reviewing guarantees - drafting bear traps

• Who is drafting?
• What document are you starting with?
• Recitals – why might they be important?
• Definitions
• The guarantee clause itself
• Guarantor rights & defences (including First National Finance v Goodman)
• Joint and several liabilities – Ellis v Emmanuel
• Duration and Discharge
• Liability caps - Re Rees Ex p. National Provincial Bank of England
• Making a claim – examining the hoops to jump through
• Preserving rights under the guarantee
• Immediate recourse
• Continuing obligation language
• Double recovery
• Enforcement - Governing law and jurisdiction - Ms X v. Banque Privée Edmond de Rothschild
• Unfair Contract Terms Act 1977
• Resurrection of guarantees

The impact of other documents/transactions on guarantees

• Other guarantees
• Security
• Intercreditor and priority agreements
• Facility agreements
• Other agreements

Distinguishing between legal and commercial risk in the context of guarantees

• What’s my remedy?
• What legal factors affect the remedy?
• What commercial factors affect the remedy?
• The crystallisation of legal risk into economic loss

The trainer is a highly experienced and sought-after lawyer, advisor, educator, mentor and writer. For almost 30 years and across several different industries, he has written and delivered a wide range of bespoke training courses for individuals, businesses, professional associations and educational establishments.

Over a 20-year legal career, he has advised banks & financial institutions, asset and receivables financiers, alternative lenders, large and SME corporates, private equity houses, pension trustees, regulators, guarantors and private individuals on a wide range of complex UK and international cross-border banking and finance matters on transactions with individual values of in excess of £2 billion. These have included global loans, investment grade lending, leveraged finance acquisitions, real estate investment & development finance, asset and receivables finance, bridge finance, private wealth finance, project finance, securitisations, social housing finance, trade finance, higher education finance, intragroup lending, netting and cash pooling arrangements and general corporate lending transactions including cross border syndicated and club deals. He has also advised on directors’ duties issues, restructurings and complex multi-layered intercreditor arrangements.

The trainer completed his formal training and qualified as a banking & finance solicitor in Leeds at Cobbetts LLP in 2005, before moving to London in 2007 to continue his career at Denton Wilde Sapte LLP (now Dentons) and subsequently with Wragge & Co LLP (now Gowling WLG (UK) LLP).

He moved to an in-house counsel role at Barclays Bank PLC in 2010, working in their Sales Finance and Trade & Working Capital Finance teams, advising on a wide range of UK and international receivables finance, inventory finance, securitisation and other asset finance matters (including invoice discounting, factoring, recourse and non-recourse financing, selective receivables finance, supply finance and full asset-based lending agreements). He also worked on secondment with the HSBC (UK) Invoice and Equipment Finance legal and business teams, advising on UK and cross border receivables and asset based lending transactions, including hire purchase, lease finance and asset purchase finance.

In 2015, he returned to Gowling WLG (UK) LLP, to become a professional support lawyer in their banking & finance team, responsible for education & training, knowhow, implementation of legal technology and providing cross-jurisdictional advice on complex areas of law. He has also written and delivered training for several professional associations including the Loan Market Association and the American Intellectual Property Law Association (AIPLA).

Having worked both in private practice and in-house with leadership, sales, relationship, risk, compliance, legal, transaction management, operations and product teams, the trainer understands the obstacles that need to be overcome on transactions and how to get deals over the line successfully. Consequently, his training focuses on providing students with the essential foundations, commercial awareness and approaches to thinking which are necessary to achieve this.

The trainer sits on an advisory board for a major legal publisher and advisory panel for a leading international banking and finance journal. He has also sat on the legal & technical committee for ABFA (now UK Finance).

He has also participated in a number of major law reform projects and consultations including the University of Oxford led Secured Transactions Law Reform project, the City of London Law Society’s Secured Transaction Code project, the UK Jurisdiction Taskforce consultation on crypto-assets, distributed ledger technology and smart contracts and the England & Wales Law Commission’s calls for evidence on smart contracts and digital assets. He has also participated in several UK Government legislative consultations.

As a mentor, he has also worked on the law firm panel at Barclays Eagle Labs Legal Tech Hub, London providing help and support to a wide range of new start-up legal-tech businesses from the UK and overseas.

Guarantees are one of the most litigated forms of documents. With increased pressure on lawyers to provide more excellent value for money to their clients, understanding how to draft guarantees effectively is a crucial part of every banking & finance lawyer’s toolkit. It is also essential for any lawyer involved in reviewing, negotiating, and drafting changes to guarantees, whether working for lenders or other commercial parties.

This unique drafting effectively guarantees training course webinar is aimed at any lawyer who wants to understand the mechanics of guarantees better, to improve drafting skills and negotiate guarantees effectively and with greater confidence. It is also aimed at any lawyers who wish to be able to explain the impact of guarantee drafting in plain English, a vital skill in the 21st century. Additionally, this guarantee drafting training online course is suitable for anyone who requires a refresher on the principles of guarantee drafting.