Guidance

Film & TV Production Restart Scheme: explanatory notes

Updated 13 April 2023

1. Introduction

These Explanatory Notes set out in further detail the aims of the Film and Television Production Restart Scheme (the “Scheme”) and provide additional commentary on the legal rules of the Scheme (the “Scheme Rules”). However, these Explanatory Notes do not form part of the Scheme Rules and are not intended to have any legal effect. They are not comprehensive and do not cover every aspect of the Scheme Rules. If there is any inconsistency between these Explanatory Notes and any provision of the Scheme Rules, the Scheme Rules will prevail. Reading the Explanatory Notes is not a substitute for reading the Scheme Rules themselves and producers are advised to seek independent legal advice in relation to their participation in the Scheme.

2. Definitions and interpretation

These Explanatory Notes use the definitions set out in Annex 1 (Definitions and interpretation) to the Scheme Rules. In addition, certain capitalised terms have been given a specific meaning for the purposes of these Explanatory Notes.

3. Background to the Scheme

3.1 The Scheme has been established to facilitate the commencement of new, and the restart of existing, film and TV productions in the UK, which have been unable to proceed in light of the lack of insurance cover for certain COVID-19 related risks on commercially viable terms. Insurance products are considered commercially unviable where the value of the premium quoted is so high, and/or the nature of the cover offered is so limited, that it would not be commercially reasonable for the production to rely on such insurance.

3.2 The Scheme is not intended to cover all risks arising in respect of film and TV productions, nor is it intended to respond to every type of COVID-19 risk. Compensation will only be available under the Scheme in respect of two categories of risk, namely: (i) Cast Losses and (ii) Civil Authority Losses, further detail on which is provided in paragraph 11 (Eligible Losses) below. Producers will, therefore, still need to arrange for appropriate insurance cover in respect of other risks of the relevant production not covered by the Scheme.

4. Scheme commencement (Rule 4)

The Scheme will open for registration on the Launch Date, which is 16 October 2020.

5. State aid (Rule 5)

5.1 Under the laws of the European Union (“EU”) certain forms of aid granted by Member State authorities are prohibited because of their capacity to distort competition and trade in the EU (“State aid”). Although the UK left the European Union on 1 February 2020, the Withdrawal Agreement (i.e. the agreement concluded between the EU and the UK on 17 October 2019) provides that the laws of the EU will continue to apply in the UK until the expiry of the transition period on 31 December 2020. As the Scheme is being established by the UK Government and the Launch Date falls before the expiry of the transition period, DCMS has sought - and obtained - confirmation from the European Commission that it is not opposed to the Scheme.

5.2 If, however, any aid provided under the Scheme subsequently were to be determined to be unlawful State aid, DCMS would have a legal obligation to clawback from beneficiaries any aid that had been unlawfully granted. Rule 5 provides a contractual basis for the existing legal position.

6. Compensation available (Rule 6)

6.1 Participants who register a production for the Scheme are not guaranteed compensation. In this respect, the Scheme is different to contracts of insurance, which guarantee an entitlement to some benefit (usually, monetary compensation) on the occurrence of an uncertain event.

6.2 Any participant who successfully registers a production for the Scheme will be able to request compensation in respect of that production, which DCMS may provide under the Scheme at DCMS’ sole and absolute discretion. In principle, DCMS expects to pay compensation for claims that are made in accordance with the Scheme Rules, but the following is a (non-exhaustive) list of examples of matters DCMS may take into account when deciding whether to provide a participant with such compensation:

(A) failure of the participant to engage in any meaningful way with the Social Commitments (as further described in paragraph 10 (Social Commitments) below);

(B) intentional failures of the participant to comply with the requirement to credit the UK Government for the Scheme (as further described in paragraph 21 (UK Government credit) below);

(C) significant or persistent failures of the participant to cooperate with and provide any information requested to DCMS or the Administrator, in accordance with its obligations described in Rule 23 (Provision of information); and

(D) significant or persistent failures of the participant to comply with the guidance issued by the British Film Commission (BFC) in relation to working safely during the COVID-19 pandemic or (where applicable) the equivalent guidance published by PACT.

7. Eligible Participant (Rule 7)

7.1 In order to be considered eligible to participate in the Scheme (i.e. an Eligible Participant), a producer must be:

(A) a company or other incorporated entity that, for tax purposes, is resident solely in the UK or an EEA (European Economic Area) State; or

(B) a partnership, all of whose profits are subject to tax in the UK or one or more EEA States.

An overseas permanent establishment of a UK/EEA incorporated entity that is located in a Non-EEA State and whose profits (in whole or in part) are subject to tax in that Non-EEA State would not be eligible to participate in the Scheme. For example, if a production was being made by a United States branch of a UK incorporated company and any of the profits of that branch were subject to tax in the United States, the producer would not be eligible to participate in the Scheme.

7.2 In order to make a request for compensation in respect of a production, the eligible participant must have registered that production for the Scheme by 23:59 on 30 April 2022, in accordance with the process described in paragraph 18 (Registration) below. Only one application for registration may be submitted in respect of each production. Where a production is co-produced, one of the co-producers who is eligible to participate in the Scheme must take responsibility for registering that production on its own behalf and on behalf of every other co-producer that is also eligible to participate in and wishes to rely on the Scheme in respect of that production.

8. Eligible Productions (Rule 8)

8.1 The Scheme is designed to facilitate the commencement of new and the restart of pre-existing productions and both “new” and “pre-existing” productions may, therefore, be registered for the Scheme. Whether a production is treated as “new” or “pre-existing” is defined for the purposes of the Scheme Rules by whether the legally binding agreement relating to that production (i.e. the contract, financing agreement or trust letter) was signed prior to or after the announcement of the Scheme by the Secretary of State (which occurred on 28 July 2020).

8.2 As is described further in paragraph 16 (Production Limit) below, the value of compensation that an Eligible Participant may request in respect of any production registered for the Scheme is determined by reference to its Production Budget (i.e. the gross production budget declared at the time of registering for the scheme, which relates to expenditure incurred or to be incurred on or after 28 July 2020, less the value of any Applicable Deductions). To reduce the risk of fraud or overstatement, the Production Budget must have been agreed by the relevant parties and included in (or annexed to) the legally binding agreement governing the production.

8.3 In addition to this requirement, an Eligible Participant may only register a production for the Scheme if it fulfils all of the following criteria:

(A) it is produced by that Eligible Participant (either solely or in conjunction with one or more other co-producers);

(B) at least fifty per cent. (50%) of its Production Budget will be spent on goods or services that are used or consumed in the UK (calculated using the same principles that apply in the context of determining whether something constitutes “UK expenditure” for the purposes of assessing a production’s eligibility for UK corporation tax reliefs);

(C) it passes the Cultural Test, as evidenced either by: (i) the Eligible Participant providing a signed self-assessed declaration confirming that this is the case to DCMS (the Eligible Participant may incur legal liability if this declaration is false or misleading); or (ii) if a UK corporation tax relief will be claimed in respect of the production, the Eligible Participant providing to DCMS a copy of the interim certificate issued by the BFI, certifying the production as “British” for these purposes;

(D) it satisfies the Commercial Viability Criteria, as explained in further detail in paragraph 9 (Commercial Viability Criteria) below; and

(E) it does not fall into any of the categories of “Excluded Production” that are ineligible for the Scheme, listed in Rule 10 (Excluded Productions) of the Scheme Rules.

8.4 The requirement in paragraph 8.3(B) above applies to the production budget for the entire production. A co-production must still spend at least fifty per cent. (50%) of its gross production budget (less any Applicable Deductions) on goods and services used or consumed in the UK, even if one or more co-producers are located overseas and are not participating in the Scheme. It should be noted, therefore, that this requirement sets a higher standard than the thresholds required to qualify for the film and TV tax relief regimes.

9. Commercial Viability Criteria (Rule 9)

9.1 All productions must fulfil the Commercial Viability Criteria in order to be eligible to participate in the Scheme. These criteria have been developed to ensure that only projects that genuinely cannot commence or restart production without the support of the Scheme are eligible to benefit from it. The Commercial Viability Criteria will be met where:

(A) Commercial insurance for the production is not available: The producer has unsuccessfully tried to obtain insurance cover for the risks covered by the Scheme under an insurance policy for the production, and, in addition, has been unable to obtain such insurance cover either through one insurance broker or from two insurers directly, and in either case its requests have been rejected or no insurance was available on commercially viable terms (as defined in paragraph 3.1 above).

(B) The producer is unable to access alternative cover: The producer is not able to rely on another source of cover for risks covered by the Scheme (e.g. a group insurance policy, a self-insurance structure or another government fund or scheme in a jurisdiction outside of the UK).

(C) Insurance for non-COVID risks has been obtained in the customary way: The producer has in place (or has agreed in principle) insurance cover provided by a regulated insurer in respect of all the risks that would normally be covered for the production (but excluding any of the COVID-19 related risks covered by the Scheme). For example, the producer should have in place (or should have agreed in principle) insurance that covers the risk of damage to property.

(D) A legally binding agreement for the production is in place: The relevant parties have executed a legally binding agreement (i.e. a contract, financing agreement or trust letter) in respect of the production, which includes or appends the agreed Production Contract and a production schedule.

(E) Either:

(i) Principal photography has been unable to commence/restart: The commissioning broadcaster or any other provider of financing to the production has refused to release or provide funding as a result of the lack of access to cover for risks covered by the Scheme on commercially viable terms and the production has, therefore, been unable to commence/restart principal photography.

Or:

(ii) Principal photography has commenced/restarted filming in reliance on the Scheme: The production was able to secure the release of funding and commence/restart principal photography only after the announcement of the Scheme (i.e. 28 July 2020), in reliance on anticipated eligibility for the Scheme.

Assessment of the Commercial Viability Criteria

9.2 All participants applying to register a production for the Scheme must carefully consider whether these Commercial Viability Criteria are met and must be prepared to provide supporting evidence to DCMS to corroborate this. All participants will be required to submit a signed self-assessed declaration that confirms that these criteria have been met. Participants may incur legal liability if this declaration is false or misleading.

9.3 The level of verification that DCMS will perform on a production’s compliance with the Commercial Viability Criteria will depend on the value of its Production Budget:

(A) Production Budget of less than £30m: The participant’s self-assessment of its compliance may be subject to additional checks and the participant may be required to submit supporting evidence, where DCMS considers this is appropriate.

(B) Production Budget of £30m or more: The participant’s self-assessment of its compliance will be subject to full verification by DCMS and DCMS will perform its own independent assessment, based on information provided by the participant (including, among other things, correspondence with their commissioning broadcaster or finance providers, insurers and/or insurance brokers).

9.4 If a production that has a Production Budget of £30 million or more continued to be filmed during the period beginning on the date that the UK Government implemented lockdown measures in response to COVID-19 (i.e. 24 March 2020) and ending on the date that the Scheme was announced (i.e. 28 July 2020), it will be presumed not to meet the Commercial Viability Criteria. This is on the basis that a high-value production that was able to continue filming during this period of uncertainty was likely commercially viable even without access to the Scheme (and, therefore, should not need to rely upon it).

10. Social Commitments (Rule 11)

10.1 DCMS has introduced a requirement in the Scheme Rules for participants to comply with the Social Commitments (further described in Rule 11.1), to reflect the UK Government’s commitment to addressing wider societal issues, such as a lack of diversity in certain creative industries and to promote best practice in film and television production.

10.2 If a producer applies to register any new production for the Scheme (i.e. a production that was legally documented on or after the announcement of the Scheme on 28 July 2020), the producer will be required to comply with the Social Commitments described in Rule 11.1 from the outset, until the production is completed.

10.3 If a producer applies to register a pre-existing production for the Scheme (i.e. a production that was legally documented prior to 28 July 2020), then the producer must consider meaningfully how it might comply with these Social Commitments and use commercially reasonable efforts to implement and comply with them going forward. This is to reflect the fact that while DCMS expects all producers to engage in a real way with the Social Commitments, it may be significantly more difficult in practice for pre-existing productions to adopt them, since their terms were agreed before the Scheme was even in contemplation. For the same reason, if DCMS amends or updates the Social Commitments during the period of the Scheme, DCMS will only expect participants who have already registered a production for the Scheme to consider meaningfully how they can comply with the amended requirements and only to implement changes where it would be commercially reasonable for them to do so.

10.4 Where a participant is required to consider meaningfully how to implement any of the Social Commitments, DCMS will expect the participant to have given proper consideration to the relevant matter at a senior (i.e. management) level, with best practice being to document the outcome of any such process. Participants should note that, should it become apparent that they have materially or persistently failed to comply with the applicable Social Commitments, DCMS reserves the right to refuse to provide any compensation requested and/or require compensation that has been paid to be returned.

11. Eligible Losses (Rule 12)

11.1 Only two categories of loss are covered by the Scheme, namely Cast Losses and Civil Authority Losses:

(A) Cast Losses are the losses a producer incurs when a production has to be interrupted, postponed or abandoned, as a result of:

(i) one or more members of the cast or crew (whose roles are necessary elements in the production) contracting COVID-19 and having to stop working (either through death or illness); or

(ii) one or more Named Persons needing to take time off work because of the death or critical illness of a member of their immediate family due to COVID-19.

(iii) For the purposes of Cast Losses, illness will include asymptomatic (or low symptom) infection with COVID-19 of a relevant person.

(B) Civil Authority Losses are the losses a producer incurs when a production has to be interrupted, postponed or abandoned due to:

(i) the actions of a UK Civil Authority (that is, the UK Parliament, the UK government (or any devolved or local form of government) or any police force in the UK) in response to COVID-19 that prevents a participant from accessing a production location – for instance, where a local lockdown prevents a participant from going to a filming site;

(ii) one or more members of the cast or crew (whose roles are necessary elements in the production) being unable to perform their jobs because they are acting in accordance with regulations, written directions or written guidance issued by a UK Civil Authority in response to COVID-19 (“UK Civil Authority Restrictions”) – for instance, where an individual self-isolates after displaying COVID-19 symptoms, or is required to self-isolate following contact with the UK Government’s track and trace programme, as required by current guidance; or

(iii) the introduction of new, or the amendment of existing, UK Civil Authority Restrictions and this change has a material negative impact on the ability of the applicant to complete the production in the original timeframe or otherwise as expected. The restrictions must directly affect the applicant’s ability to make the production as intended rather than the production being less interesting or its subject matter less relevant or available. The restrictions must therefore affect the manner in which the production was to be made, for example a requirement to wear face coverings on camera having a material adverse effect on the completion of the production.

11.2 When a production has to be interrupted or postponed, the losses suffered by a producer will be measured as the production costs which were necessarily and reasonably incurred in completing the production over and above the expenditure that would otherwise have been incurred, had the death or illness not occurred (in the case of Cast Losses) or, in the case of Civil Authority Losses, (i) the action of the UK Civil Authority not taken place or (ii) the action taken in respect of UK Civil Authority Restrictions not occurred.

11.3 When a production has to be abandoned, the losses suffered by a producer will be measured as the production costs which have been rendered entirely valueless solely and directly by reason of the death or illness (in the case of Cast Losses), or, in the case of Civil Authority Losses, (i) the action of the UK Civil Authority or (ii) the action taken in respect of UK Civil Authority Restrictions.

11.4 In order for the Cast Losses or Civil Authority Losses to be deemed Eligible Losses (i.e. losses which can be claimed against under the Scheme), the losses must have been incurred on or after 28 July 2020, but before the Closure Date, and directly relate to production activity scheduled for before the Closure Date. However, in the case of claims for interruption or postponement (but not abandonment) involving the postponement of production to after the Closure Date, DCMS will treat additional expenditure incurred after the Closure Date (but before the Request Cut-Off Date) as eligible for the purpose of Rule 12.

11.5 While DCMS anticipates that most Eligible Losses will be incurred in relation to a production’s period of principal photography, a participant may claim for losses incurred both pre-production and post-production, provided all the relevant criteria under the Scheme Rules have been met.

12. Testing Requirement (Rule 13)

12.1 To make a successful claim for compensation where an individual is thought to have contracted or been exposed to COVID-19 and, therefore, cannot perform his or her job, a producer will need to demonstrate that the affected individual has had a Test - that is, a PCR Test and/or any other test which DCMS subsequently specifies to Scheme participants - as soon as reasonably practicable, and, in any event, within 48 hours of developing symptoms or being required to self-isolate or quarantine.

12.2 The Test must be approved by the relevant medical authority (in the UK, this is the Medical and Healthcare Products Regulatory Agency). The Test may be self-administered by the individual (if received by post from the NHS or, if the individual is situated overseas, the relevant jurisdiction’s competent medical authority), or administered by a healthcare professional with the appropriate qualifications and training to carry out the Test.

12.3 A participant must take all reasonable steps to ensure that the test results are obtained as soon as practicable. If the Test comes back negative (and, therefore, shows that an individual has not contracted COVID-19), a producer must ensure that the relevant individual commences or continues (as applicable) his or her duties in the production as soon as practicable thereafter. For the avoidance of doubt, in deciding when it will be practicable for individuals to return to work, producers should take into consideration any government guidance and any guidance issued by the BFC and PACT (see paragraphs 12.4 and 13 below).

12.4 Among other things, the guidance issued by the BFC and PACT (see paragraph 13 below) sets out a number of protocols which productions should follow in relation to testing, symptom checking and the length of time that should elapse before affected individuals are allowed to return to work. These should all be adhered to, as explained in paragraph 13 below.

13. BFC and PACT guidance (Rule 14)

It is a requirement of the Scheme Rules that producers comply at all times with the guidance issued by the BFC in relation to working safely during the COVID-19 pandemic or (where applicable) the equivalent guidance published by PACT. Producers are reminded that they must continue to comply with such guidance, even if changes are made to the guidance in the future. Failure to comply with this guidance may result in a request for compensation being refused and/or a requirement for any amounts of compensation paid out under the Scheme in respect of a given production to be returned to DCMS.

14. Exclusions (Rule 15)

General Exclusions

14.1 In the following scenarios, a participant in the Scheme will not be entitled to claim compensation:

(A) in the case of a co-production, the participant is not contractually and financially responsible for the losses (i.e. where the losses are the responsibility of one or more co-producers and not the participant);

(B) the participant is able to recover the relevant losses in respect of the production under a compensation or insurance scheme or fund in any location outside the UK and its purposes are similar to those of the Scheme;

(C) the participant is able to recover the relevant losses under an existing insurance arrangement;

(D) the relevant production in respect of which the relevant losses were incurred has not completed, prior to 23:59 on 5 May 2022, a period of principal photography equal to at least (i) 5 days or (ii) 20 per cent. (20%) of the total number of days of filming scheduled for the production (whichever is the lower), unless the exception set out in paragraph 14.2 below applies (in which case a participant will be entitled to claim compensation);

(E) where the participant has paused principal photography due to production scheduling or public holidays, and such principal photography is scheduled to continue in 2021, but it has not resumed within 8 weeks of the date on which it first commenced, unless the exception set out in paragraph 14.3 below applies (in which case a participant will be entitled to claim compensation); and

(F) the participant has not submitted a request for compensation in accordance with Rule 23 (Requests for Compensation) by the Request Cut-Off Date – unless DCMS considers that the request could not reasonably have been made by then.

14.2 The exclusion in paragraph 14.1(D) above will not apply in circumstances where the participant failed to complete the relevant period of principal photography (i.e. 5 days or 20 per cent. of the total number of days of filming scheduled for the production (if lower)) due to the interruption, delay or abandonment of the production for any of the reasons set out in limbs (A) or (B) of the definition of Cast Losses or limbs (A), (B) or (C) of the definition of Civil Authority Losses, and all reasonable steps were taken to reschedule or complete the relevant period of principal photography before 23:59 on 5 May 2022. For instance, if the relevant period of principal photography was interrupted due to the illness of a key actor (see limb (A) of the definition of Cast Losses), and there were no reasonable steps which the participant could have taken to complete the relevant period of principal photography before 23:59 on 5 May 2022.

14.3 The exclusion in paragraph 14.1(E) above will not apply in circumstances where the participant failed to resume principal photography due to the interruption, delay or abandonment of the production for any of the reasons set out in limbs (A) or (B) of the definition of Cast Losses or limbs (A), (B) or (C) of the definition of Civil Authority Losses, and all reasonable steps were taken to resume principal photography before 23:59 on 5 May 2022. For instance, if the participant could not resume principal photography before 23:59 on 5 May 2022 because the production was interrupted by the imposition of a local lockdown by the UK Government (see limb (A) of the definition of Civil Authority Losses), and the participant had taken all reasonable steps to resume principal photography before then.

14.4 The purpose of the general exclusions set out in paragraphs 14.1(A) to 14.1(C) above is to ensure that Eligible Participants exhaust all other options for claiming compensation before making a request under the Scheme. The Scheme is only intended to assist those who do not have any other avenues to recover any Eligible Losses.

Cast Exclusions

14.5 In respect of Cast Losses, compensation will not be awarded under the Scheme if the relevant individual to whom the losses relate:

(A) was over seventy (70) years of age when the Cast Losses were incurred – unless the producer has obtained a Specific Age Extension in respect of that individual in accordance with Annex 4 (Specific Age Extension) of the Scheme Rules;

(B) was, at or around the time of contracting COVID-19, in material breach of UK Civil Authority Restrictions or (if the individual was situated overseas at such time) the regulations, written directions or written guidance issued by an Overseas Authority in response to COVID-19 (“Overseas Authority Restrictions”) – unless the breach was reasonably required for the individual to fulfil his or her duties on the set of the production and the individual was, in any event, at all times complying materially with BFC guidance on working safely during the COVID-19 pandemic or the equivalent guidelines published by PACT;

(C) was, at or around the time of contracting COVID-19, not materially complying with the safety guidelines provided by BFC or any equivalent guidelines published by PACT; or

(D) was unable to perform his or her duties on set due to an illness, infection or condition unrelated to COVID-19.

14.6 The purpose of the exclusions set out in paragraphs 14.5(B) and 14.5(C) above is to encourage producers and their cast and crew to observe best practice and minimise the risk of individuals contracting and spreading COVID-19. The exclusion described in paragraph 14.5(B) may apply to an individual’s actions off set, as well as on set: an individual will be deemed to be in breach of UK Civil Authority Restrictions or Overseas Authority Restrictions, if he or she disobeys or otherwise acts in contravention of the applicable restrictions in his or her personal life.

14.7 For the purposes of the exclusions in paragraphs 14.5(B) and 14.5(C), the phrase ‘at or around’ means a maximum period of 5 (five) calendar days before the day on which the relevant individual started to display COVID-19 symptoms or, in asymptomatic cases, the day on which the relevant individual is thought to have contracted COVID-19.

14.8 The exclusion set out in paragraph 14.5(D) is in line with the Scheme’s stated purpose of covering only specific risks associated with COVID-19, rather than risks associated with other illnesses or conditions (see paragraph 3.2 above).

Named Person Exclusions

14.9 In respect of losses relating to the death or critical illness of a member of a Named Person’s immediate family, no compensation will be awarded where:

(A) the Named Person’s full name was not provided to DCMS (in accordance with Rules 19.6 to 19.8) prior to those losses being incurred; or

(B) the Eligible Participant designated more than five (5) individuals as Named Persons at the time of registering the production for the Scheme.

Civil Authority Exclusions

14.10 Where Civil Authority Losses are incurred, compensation will not be awarded under the Scheme:

(A) to the extent a UK Civil Authority’s restrictions on international travel (including any quarantine measures) contribute to such losses;

(B) to the extent Overseas Authority Restrictions contribute to such losses, in circumstances where the losses are caused by either (i) the actions of a UK Civil Authority or (ii) the amendment of existing, or introduction of new, UK Civil Authority Restrictions; and

(C) if such losses arise in circumstances where an individual is unable to fulfil his or her obligations in respect of a production, and, at the time of contracting COVID-19 or having to self-isolate or quarantine, such individual:

(i) was in material breach of UK Civil Authority Restrictions or Overseas Authority Restrictions (as applicable) – unless such breach was reasonably required for the individual to fulfil his or her duties on the set of the production and the individual was, in any event, at all times complying materially with BFC guidance on working safely during the COVID-19 pandemic or the equivalent guidelines published by PACT; or

(ii) was in material breach of the BFC guidance on working safely during the COVID-19 pandemic or any equivalent guidelines published by PACT.

14.11 As with the Cast Exclusions referred to in paragraph 14.6 above, the exclusions described in paragraph 14.10(C) are meant to encourage producers and their cast and crew to observe best practice and minimise the risk of individuals contracting and spreading COVID-19. The exclusion in paragraph 14.10(C)(i) may apply to an individual’s actions off set, as well as on set.

Mitigation

14.12 Eligible Participants must take all reasonable steps to avoid and minimise any Cast Losses and Civil Authority Losses, as well as any circumstances likely to give rise to these losses. This may involve, if reasonably practicable, replacing individuals on set, (temporarily or permanently), or making adjustments to the relevant production’s timetable. Failure to take mitigating action will result in compensation being reduced by the same amount by which such failure increased the losses incurred.

14.13 If, after making a successful claim for compensation under the Scheme, an Eligible Participant is subsequently able to recover a sum of money from a third party for the same losses in respect of which compensation was given, the Eligible Participant will be required to: (i) notify DCMS promptly of the circumstances; (ii) procure that all steps are taken as DCMS may reasonably require to facilitate such recovery; and (iii) pay DCMS the amount recovered (less any costs or expenses incurred in such recovery) as soon as reasonably practicable after receipt.

15. Excess (Rule 16)

15.1 Except in the circumstances described in paragraph 15.3 below, compensation will only be given if the value of all the Eligible Losses incurred by the participant which relate to the request in aggregate exceed a particular threshold known as the Retention. The Retention is the greater of: (i) £1,000; and (ii) a sum equal to 10 per cent. (10%) of the value of the losses in respect of which compensation is to be paid.

15.2 If compensation is granted, it will be the amount of the Eligible Losses minus the value of the Retention, up to a maximum value of £5 million of compensation per production (see paragraph 16 below).

15.3 If an Eligible Participant wants to make a request for compensation under the Scheme which relates (in whole or in part) to Cast Losses involving an individual over 70 in respect of whom a Specific Age Extension has been obtained (see Annex 4 (Specific Age Extension)), special rules in relation to the excess will apply. These are described in paragraphs 24.5 to 24.8 below.

16. Production Limit (Rule 17)

16.1 The compensation that may be paid out for Cast Losses relating to the interruption, postponement or abandonment of a production due to the death or critical illness of a Named Person’s immediate family member as a result of COVID-19 will be limited to the losses incurred in respect of five (5) consecutive days of production.

16.2 In all other cases, compensation will be limited as follows:

(A) in respect of any other interruption or postponement, up to twenty per cent. (20%) of the Production Budget (or, if the production is co-produced, up to twenty per cent. (20%) of the participant’s financial interest in the production); and

(B) in respect of the abandonment of the production, up to seventy per cent. (70%) of the Production Budget (or, if the production is co-produced, up to seventy per cent. (70%) of the participant’s financial interest in the production).

16.3 The maximum amount of compensation that can be awarded in respect of each and every Eligible Production is £5 million. This is known as the Production Limit. The Production Limit is not reduced by the value of the applicable Retention.

16.4 By way of example, if an Eligible Participant incurs £6 million of Eligible Losses, the Retention would be £600,000. If the producer’s Request were accepted by DCMS, the net Eligible Losses would be £5.4 million (i.e. the gross Eligible Losses less the Retention). However, as the Production Limit sets a cap on the compensation that may be awarded per production, the maximum which the producer would receive under the Scheme would be £5 million.

16.5 If a production is co-produced and the compensation sought is over the Production Limit, the compensation awarded will be capped at the Production Limit and will be split proportionately between all the Eligible Participants according to their financial interests in the production.

17. Scheme Limit (Rule 18)

17.1 The total amount of compensation that may be claimed under the Scheme is £500 million. This is known as the Scheme Limit.

17.2 If the total amount of compensation paid out under the Scheme is nearing the Scheme Limit, DCMS may close the Scheme to new registrations and/or review the value of the Scheme Limit. If participants have successfully registered for the Scheme, their requests for compensation will not be refused simply due to the fact that the Scheme Limit has been reached.

18. Registration (Rule 19)

18.1 The Scheme will open for registrations on 16 October 2020 and close to new registrations on 23:59 on 30 April 2022 (or, if DCMS so decides, an earlier date).

18.2 A producer may not register for the Scheme if the relevant production has already been completed.

Named Persons

18.3 If a producer wants to be able to request compensation in circumstances where a key cast member or director has to take time off work due to the death or critical illness of a member of his or her immediate family, at the time of registering for the Scheme, the producer normally will need to provide the full name of the relevant cast member or director. If, however, the exact position has not been cast yet (and so the producer cannot give the cast member or director’s name), the producer may specify the full job title of the position to be filled instead. The key cast member or director will be known as a Named Person.

18.4 If the producer specifies only the job title of the Named Person at the time of registering for the Scheme, the producer will need to provide the Named Person’s full name as soon as the position is filled and, at any rate, within two (2) business days of the Named Person being hired (as evidenced by a legal contract).

18.5 If a person no longer qualifies as a Named Person (e.g. if the key cast member or director’s position has been removed from the Eligible Production), the producer may make a request to DCMS to nominate another Named Person in that person’s place. The producer will need to explain why the request is being made, produce any evidence DCMS requires and provide the replacement’s full name. DCMS will be entitled to decide whether or not to accept such a request.

Eligibility Criteria

18.6 As part of the registration process, a producer will have to (i) provide details of the production and how the production satisfies the requirements of Rules 8 (Eligible Productions), 9 (Commercial Viability Criteria) and 11 (Social Commitments) (known together as the Eligibility Criteria); and (ii) declare its Production Budget to DCMS. The producer may need to provide evidence to support the declared Production Budget, including details of any Applicable Deductions.

18.7 If a producer satisfies all the Eligibility Criteria and has paid all applicable Fees, it will receive an Eligibility Certificate, which will document its Production Budget (or, if the Eligible Participant is a Co-producer, its financial interest in the production) and will be used to calculate any compensation payable.

18.8 Participants who have successfully registered for the Scheme are not allowed to withdraw from the Scheme. DCMS is under no obligation to refund any Fee and/or Increase Fee which has been paid by a participant in respect of its participation in the Scheme.

19. Fee (Rule 20)

19.1 The Fee will be one per cent. (1%) of:

(A) the Production Budget for the relevant production; or

(B) in the case of a production that is co-produced, the aggregate value of the financial interests of every co producer who is eligible to participate in the scheme and is willing to do so.

19.2 For applications made after 23:59 on 31 October 2021 the Fee will be two and a half per cent (2.5%) rather than one per cent (1%).

19.3 For an Existing Production, the Fee will be one per cent. (1%) of the part of the gross production budget that relates to expenditure incurred (or to be incurred) after 28 July 2020, after taking into account any Applicable Deductions (see the definition of Production Budget in Annex 1 to the Scheme Rules for further detail). From 23:59 on 31 October the Fee will be two and a half per cent (2.5%). However, producers are reminded that the amount of compensation that may be awarded will be calculated on the same basis (i.e. on the basis of only that part of the gross production budget that relates to expenditure incurred (or to be incurred) after 28 July 2020, after taking into account any Applicable Deductions).

19.4 Until the full value of the Fee has been paid in respect of a relevant production, (i) a claim for compensation under the Scheme cannot be made and (ii) an Eligibility Certificate will not be issued.

20. Production Budget Increase (Rule 21)

20.1 Only one application may be made for an increase in the Production Budget per production. In order for such an application to be approved, the participant must pay DCMS an amount equal to a certain percentage of the difference between the Production Budget (i.e. the old budget) and the new production budget (after the proposed increase). This is known as the Increase Fee. For productions that applied to register under the Scheme by 23:59 on 31 October 2021 the relevant percentage is one per cent. (1%). For productions that applied to register under the Scheme after 23:59 on 31 October 2021 the relevant percentage is two and a half percent. (2.5%). A new eligibility certificate, known as the Supplementary Eligibility Certificate, will be issued, once the Increase Fee has been paid in full. Until the Increase Fee is paid, no Supplementary Eligibility Certificate will be issued and no claim for compensation based on the new production budget can be made.

20.2 An application for an increase in the Production Budget cannot be made if (i) a request for compensation has already been made, or (ii) the participant is aware at the time of any matter or circumstance which might lead to a request for compensation being made. The participant must provide a declaration which confirms that the participant is not aware of any such matter or circumstance. It is important to note that the Eligible Participant may be legally liable for any untrue or misleading statement in the declaration.

20.3 If an application to increase the Production Budget takes the new production budget to £30 million or more, the participant will need to provide additional documentary evidence to DCMS in accordance with Rule 9.4. It should be noted that, in such circumstances, DCMS will assess the Commercial Viability Criteria in relation to the relevant production.

21. UK Government credit (Rule 22)

21.1 As a condition of participating in the Scheme, each participant must credit the UK Government for making the Scheme possible by displaying the text and logo set out in Annex 3 (Form of UK Government credit) to the Scheme Rules in the opening or closing credits of the relevant production.

21.2 Failure to satisfy the requirements described in paragraph 21.1 above may result in: (i) a request for compensation being refused; and/or (ii) any monies paid out to a participant in respect of a production under the Scheme having to be returned.

21.3 However, if a participant fails to credit the UK Government due to a demonstrable genuine error or mistake, DCMS will not take the actions listed in paragraph 21.2 above, provided that the participant uses all reasonable endeavours (to the extent commercially practicable, without incurring substantial costs) to correct the error and comply with the obligations under paragraph 21.1, once it has been notified of it.

22. Requests for compensation (Rule 23)

22.1 In order to make a claim for compensation under the Scheme, an Eligible Participant must complete any form specified for this purpose by DCMS.

22.2 Under Rule 23.2, if a participant abandons a production and wishes to recover the Cast Losses or Civil Authority Losses it has incurred, it may be required (at DCMS’ sole and absolute discretion): i) to take steps to transfer the legal rights in respect of the production to DCMS; or ii) to give a legally binding contractual undertaking to DCMS not to use or disseminate, or sell, transfer, use as financial security or exploit in any other way, the legal rights and materials in respect of the production for a period of 10 years.

22.3 Rule 23.2 has been introduced as it is DCMS’ view that abandonment should only be viewed by producers as a measure of last resort. In deciding which requirements (if any) it wishes to impose under Rule 23.2, DCMS may have regard to the financial strength of the Eligible Participant. If an Eligible Participant has limited financial resources, DCMS may be more likely to require the Eligible Participant to transfer its legal rights in respect of the production to DCMS, rather than require it to give an undertaking. This is because, in the event such an Eligible Participant breaches its undertaking, DCMS would have only limited legal recourse.

22.4 If an undertaking is given under Rule 23.2, the participant may use or disseminate, or sell, transfer, use as financial security or otherwise exploit, the legal rights and materials in respect of the production before the expiry of the 10-year period, provided that the participant obtains DCMS’ express written consent before this. DCMS may make such consent conditional on repayment in full by the participant to DCMS of all compensation paid to the participant in respect of the production under the Scheme.

22.5 If the legal rights to the production have been transferred to DCMS under Rule 23.2, the Eligible Participant still has the ability to reacquire them at a future date, provided it has either: (i) repaid DCMS in full for all the compensation it has received under the Scheme in respect of the relevant production; or (ii) otherwise agreed some contractual arrangement with DCMS for the repayment of the compensation. In either case, DCMS will be entitled to retain the full value of any Fee or Increase Fee paid by the Eligible Participant in respect of the relevant production.

23. Provision of information (Rule 24)

23.1 Applicants and participants must co-operate and liaise with DCMS and take any steps DCMS requires, such as furnishing DCMS promptly with any information requested. In addition, the information which applicants and participants provide to DCMS, to the best knowledge of the applicants and participants (after they made all reasonable enquiries), should be true and accurate and should not omit any details which would make the information misleading in any material respect.

23.2 Failure to comply with this obligation may result in: (i) an application to join the Scheme being rejected; (ii) access to the Scheme being withdrawn; and/or (iii) any existing or future request for compensation by the participant being denied. In each such scenario, DCMS would be entitled to keep any Fee or Increase Fee which the participant has paid, and may even require the participant to return any compensation paid out to it under the Scheme.

24. Specific Age Extension (Annex 4)

24.1 Under the Scheme, compensation will not be available to a producer in respect of Cast Losses which involve an individual over seventy (70) years of age (see paragraph 14.5(A) above), unless that producer obtains express authorisation from DCMS in relation to that individual in the form of a Specific Age Extension.

24.2 A Specific Age Extension will only be valid in respect of a single named individual. Two (2) Specific Age Extensions may be granted by DCMS in respect of a production and further Specific Age Extensions beyond two (2) will be reviewed by DCMS on a case-by-case basis and will be subject to an additional fee.

24.3 A Specific Age Extension (up to two (2)) will only be granted if a producer: (i) submits the relevant application form to DCMS; (ii) provides any documentation which DCMS requests; and (iii) pays an additional fee to DCMS, which will be calculated as 0.25 per cent. (0.25%) of the Production Budget or (if the production is co-produced) the sum of the financial interests of every co-producer participating in the Scheme.

24.4 Further Specific Age Extensions (beyond two (2)) will only be granted if a producer: (i) submits the relevant application form to DCMS; (ii) provides any documentation which DCMS requests; and (iii) pays an additional fee to DCMS, for each additional over-70, which will be calculated as 0.275 per cent (0.275%) of the Production Budget or (if the production is co-produced) the sum of the financial interests of every co-producer participating in the Scheme.

Compensation

24.5 If a producer wishes to make a request for compensation which relates (in whole or in part) to Cast Losses involving an individual who has a Specific Age Extension, compensation will only be given if:

(A) the value of all Eligible Losses incurred by the participant which are subject to the request in aggregate exceeds the Retention; and

(B) the value of all Cast Losses which involve an individual who has a Specific Age Extension and are subject to the request exceeds the Additional Retention.

24.6 The Additional Retention is a sum equal to 5 per cent. (5%) of the value of the Cast Losses which involve an individual to whom a Special Age Extension applies and in respect of which compensation is to be paid.

24.7 If compensation is granted, it will be the amount of the Eligible Losses included in the request minus an amount equal to the sum of the Retention and Additional Retention, up to a maximum value of £5 million of compensation per production (see paragraph 16 above).

24.8 This effectively means that:

(A) in respect of all Cast Losses which involve an individual over seventy (70) years of age to whom a Specific Age Extension applies, the deductible will be 15 per cent. (15%); and

(B) in respect of Cast Losses which involve individuals under seventy (70) years of age and Civil Authority Losses, the deductible will be the greater of £1000 or 10 per cent (10%).

24.9 Unless the exception in paragraph 24.10 below applies, compensation will not be paid for any Cast Losses that relate to an individual who has a Specific Age Extension, if those losses were incurred before the relevant Specific Age Extension was obtained.

24.10 As an exception to the rule in paragraph 24.9, a producer may claim for Cast Losses relating to a person who has a Specific Age Extension, even if those losses were incurred before the Specific Age Extension was obtained, provided that: (i) those losses were incurred before 20 December 2020; and (ii) the producer submitted its application to register for the Scheme before 20 December 2020. This ensures that producers who have already registered for the Scheme may still claim for historic Cast Losses involving an individual over seventy (70) years of age, if those losses were incurred before the Specific Age Extension regime was introduced on 20 December 2020.