Retail & Consumer Horizon Scanner 2023

This horizon scanner provides clarity on what legal and regulatory changes lie ahead for retail and consumer businesses so that you can plot your course with confidence.

Times are tough enough without the extra burden of not knowing what’s coming around the corner so this resource is for you and it's one that we'll make sure is up to date for you to refer back to throughout the year.

We've identified seven key themes that may impact your business throughout the next 12 months, seperated quarterly.

Move through each theme to see the key dates and upcoming changes you need to know to support your business and plot your course.

In each theme, you'll also find related articles to provide further context and additional information.

Key themes

Retail spaces – requirements and use

Corporate sustainability and transparency

Government consultations and proposals

1. Retail spaces - requirements & use

New regulations will continue the push for greener retail spaces, extending energy efficiency requirements for commercial leases (including already-existing leases). The Government is set to tackle issues around vacant high street premises that have not been let for longer periods, to improve their impact on the nation’s high streets.

The Supreme Court decided that where there were certification provisions relating to service charges in a commercial lease, this was conclusive evidence of the tenant’s liability to pay. The case has introduced a “pay now, argue later” regime.”

Requirement of an energy rating of E for properties before they can be let – from 1 April 2023 it will extend to commercial leases, including where a lease already exists.

Currently in its final stages in Parliament. This will address a local authority’s ability to let out vacant high street premises, where they are left unoccupied for over a year.

Related articles

2. Corporate sustainability and transparency

Further EU regulation will place increased pressure on retail companies to publish sustainability reports and carry out strict due diligence into their supply chains. The UK government will continue to crack down on economic crime and companies that shield their ownership of foreign entities overseas.

This comes into force on 5 January 2023. This will extend the scope of reporting requirements under the non-Financial Reporting Directive. In addition, the CSRD contains extraterritorial provisions and will extend the scope of reporting requirements to listed SMEs and non-EU companies with substantial activity in the EU market.

The Global Reporting Initiative (GRI) has published its latest biodiversity standard update, asking companies to disclose their biodiversity impacts, boosting data transparency.

The Bill received its first reading in the House of Lords on 30 January 2023 and its second reading on 8 February 2023. It may receive Royal Assent in the spring of 2023.

The Bill will introduce the offence of fraud. This new offence (the scope of which is to be determined) could impact all businesses. The offence could lead to directors having criminal liability for the fraudulent acts of the company’s employees or, potentially, in circumstances where the company has somehow been involved in facilitating a fraud and did not have satisfactory anti-fraud measures in place.

They must register information about the entity and any beneficial owners with Companies House. Came into force in the UK on 1 August 2022 through the Economic Crime (Transparency and Enforcement) Act 2022. Indications suggest that it may receive Royal Assent in the spring of 2023.

Related articles

3. Litigation and disputes

As the cost-of-living crisis continues to bite, litigation is likely to arise in several forms, including recovery actions for late or not-payment of debts, claims for late delivery, contract variation and/or termination, consumer-related disputes and ESG-focussed actions. Worst-case-scenario planning is a must this year

This consultation was updated on 4 August 2023. Please see Q3 for more information.

This pilot for small claims paper determinations allows courts to order that most small claims can be determined without a hearing, on the papers, without party agreement. The pilot will operate until 1 June 2024 (for now) and will apply in courts in Bedford, Cardiff, Guildford, Luton, Manchester and Staines.

Supply chains continue to be significant for retailers, given the uptake in value chain liability claims being brought in the UK. Retailers will have to assess their supply chains to ensure compliance with international and human rights obligations. The risk of reputational damage remains high.

The Ministry of Justice has published its response to this consultation and confirmed that all Part 7 small claims (i.e. usually claims valued below £10,000) will soon be automatically referred for compulsory mediation. Details and an implementation timetable are awaited. The consultation can be found here.

From October 2023, fixed costs will apply to all claims worth £25,000 or less and allocated to the fast track, as well as all claims worth £25,000 – £100,000 and allocated to a new ‘intermediate track’. Value will still only be one relevant factor in determining where a matter is allocated (and therefore whether the FRC will apply). Claims may be exempt if factors such as the number of, parties, experts, witnesses of fact, or the trial length place them outside of prescribed parameters. The intermediate track will be banded by reference to the complexity of the matter and that will dictate the amount of fixed costs that are recoverable. Clarification has been sought from Parliament as to whether the FRC will override a prior contractual agreement between parties in relation to costs. A response is anticipated before the autumn.

Related articles

4. Consumer rights and marketing

Retail companies will need to be mindful when disseminating consumer data online as sensitive data shared between entities and across the Atlantic will continue to be an area of dispute. Where consumers are faced with advertising and credit schemes– transparency will continue to be the core aim of legislation, particularly when relating to buy-now-pay-later.

Addresses issues such as restrictions on US national security data collection methods, and a redress mechanism for EU citizens in the event of an alleged privacy violation – end of March 2023.

Second reading held on 1 February 2023.

The ICO’s ICO25 strategic plan includes a commitment to produce and publish a ‘guidance pipeline’ to include its updated direct marketing code.

The Treasury’s consultation on bringing buy-now-pay-later lending into regulation is due to close on 11 April 2023. On 2 February 2021, the government announced its intention to regulate interest-free buy-now-pay-later products.

All FCA authorised retailers must have implemented the Consumer Duty into their organisations by the 31 July 2023.

Will enhance the CMA’s powers and ability to tackle breaches of competition and consumer law and empower its new Digital Markets Unit. The changes would see the CMA given power to declare companies in breach of consumer law without taking them to court first, and levy fines accordingly. These powers are expected to be in force October 2023.

The proposed reform of the data protection legislation in the UK is likely to bring changes that make life for retailers both easier and more difficult. From relaxing the rules around consent for website cookies to increasing the penalty for non-compliant online marketing activities – the changes will provide for a smoother and more pleasant online retail experience but ensuring compliance with the legislation will become even more important.

Related articles

5. Employee wellbeing

Retail employers will be faced with a number of new legislative developments, many focused around the effects of cost of living and increased importance of flexible working. Protection from third party harassment is also high on the agenda, given the increase in harassment in retail since the pandemic.

Consultation closed on 9 March 2023.

Consultation closes on 18 April 2023.

This will be effective from 1 April 2023.

Proposes to introduce duties on employers to prevent third-party harassment in retail at the workplace. Second Reading on 24 March 2023.

Aims to allow employees one week of unpaid leave to arrange dependant care.

Aims to allow employees up to 12 weeks of paid leave relating to neonatal care.

Rights for workers under fixed-term contracts.

The right to request flexible working will become a day 1 right and employees will be able to make two flexible working requests in any 12-month period.

Currently making its way through Parliament and will come into force a year after the Bill is passed. The Bill will broaden the scope of employers’ liability to protect their employees from harassment, including from third party harassment.

Related articles

6. IP and emerging tech

Whilst new patent courts are launched, creating new rules and systems – the question of whether AI can be classed as an inventor will still be debated. The Metaverse and all things blockchain will continue to evolve and crypto assets will continue to be an important focus for brand owners and for businesses evolving into this space.

Considered whether a patent can be granted for an invention created by an AI machine.

The launch of generative AI products such as ChatGPT has sparked renewed debate over the role of AI in society. There’s concern over the risks the technology might pose to safety, privacy, civil rights and jobs but also excitement over AI’s potential to revolutionise business operations and drive growth. The EU is leading the charge for better regulation of AI technology with its proposed AI Act and the UK Government looks set to follow suit with plans for a pro-innovation, non-statutory AI regulatory framework announced in March this year.

Due to launch in Europe in mid-2023, they will offer users of the patent system a cost-effective option for patent protection and dispute settlement across Europe.

Unitary Patent – Unitary Patents will make it possible to get patent protection in up to 25 EU Member States by submitting a single request to the EPO, making the procedure simpler and more cost effective for applicants.

Unified Patent Court – The Unified Patent Court (UPC) is an international court set up by participating EU Member States to deal with the infringement and validity of both Unitary Patents and European patents, putting an end to costly parallel litigation and enhancing legal certainty.

The Supreme Court will decide whether filing broad trademark specifications can amount to bad faith.

Related articles

7. Government consultations and proposals

The UK Government has several consultations open, including on minimum service levels during strikes. The retail sector will have experienced the effect of postal and rail strikes, in terms of deliveries and footfall to shops, so this will be one to watch. Competition rules may also see changes in future.

Government proposing amendments concerning e-money and payment legislation.

Draft guidance to come in relation to monitoring at work and handling information on workers’ health to follow.

The Information Commissioner’s Office (ICO) has announced that its Employment Practices Code (not yet updated for UK GDPR or the Data Protection Act 2018) will be replaced by an Employment Practices Hub.

Introduced in January 2023, this is making its way through Parliament and will allow the Secretary of State to make regulations for minimum levels of service during strike periods. If passed, this legislation will allow an employer in those sectors to serve a ‘work notice’ on a union notifying it of a strike under TULR(C)A 1992, s 234A, identifying the persons required to work and the work to be carried out so that the relevant minimum service level (as set out in regulations) is provided.

Unions will lose their protection from certain tortious liabilities if they do not take reasonable steps to ensure that the workers identified in the notice comply with it. Those workers identified in the notice will lose their unfair dismissal protection if they do not comply with the notice.

Related articles

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