Retail & Consumer

This will come into force on 6 April 2024, bringing the Building Safety Act 2022 largely into force.

From 12 February 2024, planning applications for significant developments in England must demonstrate at least a 10% biodiversity net gain (BNG) to comply with the Environment Act 2021 and the new Environment Act 2021 (Commencement No 8 and Transition Provisions) Regulations 2024 (SI 2024/4). Non-residential ‘small sites’ (those with a new floor space of up to 1,000 square metres, or a site area of less than 1 hectare) will also have to show a statutory minimum BNG of at least 10% from 2 April 2024, and nationally significant infrastructure projects will be affected from November 2025.

Applicants must review their options to achieving this, either by generating the net gain on site, by purchasing off-site biodiversity units from a land manager or buying statutory credits from the government.

The Planning Act 2008 (Commencement No. 8) and Levelling-up and Regeneration Act 2023 (Commencement No. 4 and Transitional Provisions) Regulations 2024 were made on 2 April 2024 and bring the Levelling-up and Regeneration Act 2023 (‘LURA’) enforcement package into effect as of 25 April 2024. One of the key changes is the abolition of the 4 year time limit for initiating enforcement action against buildings/engineering operations and changes of use to a single dwelling house, which has now been replaced with a standardised 10 years for all breaches of planning controls.

The Law Commission is reviewing how the right to renew business tenancies operates and how the regime may be reformed. Many businesses with a “bricks and mortar” presence occupy their premises under tenancies whilst Part 2 of the Landlord and Tenant Act 1954 gives these tenants’ rights to renew their tenancy when it would otherwise expire. The review will reconsider Part 2 and will have a particular focus on supporting efficient use of high streets and town centres to ensure the legislation is suitable for the needs of today’s market. A Consultation paper is expected to be published in Autumn 2024.

Kaushal Corporation v Maria Carmel O’Connor (By her son and Litigation Friend Justin Marciano) [2023] EWHC 618 (KB): The judge found that litigation costs do not fall within the service charge clause under a commercial lease, and that in situations where the construction of a clause would expand a tenant or guarantor’s liability considerably, this should be construed narrowly. So, costs relating to an application for approval or consent could be recovered but the costs of litigation could not.

B&M Retail Limited v HSBC Bank Pension Trust (UK) Limited [2023] EWHC 2495 (Ch): The court held that the new lease should contain a rolling redevelopment break clause which can be immediately exercised with six months’ notice. This gives significant weight to landlords looking to redevelop and need to obtain possession from tenants who have protection under LTA 1954.

Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2: The Supreme Court held that the service charge under the lease was payable upon presentation of the service charge certificate but it did not prevent the tenant from challenging the amount. This decision marks the ability for tenants to “pay now, argue later”.

This brought redevelopment ground F under the microscope, conveniently at a time where the Law Commission is reviewing the Landlord and Tenant Act 1954 (LTA). The decision discusses a new strategy for tenants when their landlord uses section 30(1)(f) LTA (or ‘Ground F’) to oppose a new tenancy on the grounds of redevelopment. The tenant, Sainsbury’s, vacated part of its demised premises before trial, so it could argue that works proposed by the landlord, Medley, were not to the “holding”.  Medley’s opposition on Ground F failed. Two key points arising from this case are a reminder that the landlord must demonstrate a settled and unconditional intention to carry out their proposed works, which Medley in this case failed to show, and secondly that it is possible for the tenant to reduce their ‘holding’, or the part of the demised premises that they are actually using, before trial so as to defeat the landlord’s opposition based on Ground F.

M&S submitted a planning application to demolish their store on Oxford Street and replace it with a new 9-storey mixed use office and retail store to include a restaurant and a gym. Despite the proposal being approved by the Planning Inspector, Secretary of State (SoS) Michael Gove rejected it. In their challenge, M&S argued that the SoS had misinterpreted the National Planning Policy Framework and had made incorrect conclusions about the impact of refusing this planning application. The Court agreed with M&S and emphasised the importance of providing clear reasons for departing from an inspector’s recommendations.

Ofcom plans to issue a call for evidence regarding its approach to transparency, user empowerment, and other duties on categorised services in early 2024 and a consultation on draft transparency guidance in mid-2024.

In April this year, the ICO published its new children’s code strategy which builds on the regulator’s previous work in relation to websites, apps and games to provide better privacy protections for children since the introduction of the children’s code of practice in 2021. Going forwards, the ICO will be considering the processing of data to determine whether it is in children’s best interests to do so. As part of its evidence gathering, the ICO is set to publish a call for evidence in Summer 2024 to invite input from a range of stakeholders.

In April, the ICO announced it had signed an international, multilateral agreement with Global CAPE that enables the ICO to co-operate with other Global CAPE members on a global scale in relation to cross-border data protection and privacy enforcement. The ICO, by signing this agreement, will be able to share information and work with other members on investigations without having to enter separate memorandums of understanding with each participating nation.

Following the closure of its consultation in March 2024, Ofcom is set to publish a statement on its final decisions in relation to the draft codes of practice and guidance of illegal harms in Autumn 2024. The codes of practice will then be submitted to the Secretary of State for Science, Innovation and Technology, and subject to their approval, laid before Parliament.

Despite significant delays, the Government has introduced a Bill reforming digital, competition and consumer protection regulations. This large and ambitious piece of legislation strengthens the Competition and Markets Authority’s (CMA’s) powers and introduces a new regulatory framework for digital markets that will apply to large digital companies with UK activities. As a result, the Government intends for the CMA to have a much broader and more powerful toolkit for competition, digital regulation and consumer protection that will enable it to regulate digital markets and protect consumers. The Bill is currently expected to receive Royal Assent in the near future, with the new regimes coming into force in Autumn 2024.

The NIS2 (Network and Information Security) Directive is the EU’s latest policy that aims to improve the collective cybersecurity of member states. Relevant organisations offering services in the EU, including digital service providers and those which serve an essential function in society are expected to comply with the new requirements by October 18 2024. The UK is in the process of considering similar changes to the original NIS Regulations, introduced by the UK government when it was a member of the EU. Whilst there is no action to take at the moment, the UK’s NIS 2 Regulation is one to keep an eye on as it may require businesses caught by the existing NIS Regulation to make changes to its business practices (although any such changes are not expected to be as far reaching as those imposed by the EU).

The NIS2 (Network and Information Security) Directive is the EU’s latest policy that aims to improve the collective cybersecurity of member states, and relevant organisations offering services in the EU, including digital service providers and those which serve an essential function in society are expected to comply with the new requirements by October 18, 2024. The UK is in the process of considering similar changes to the original NIS Regulations, introduced by the UK government when it was part of the EU. Whilst there is no action to take at the moment, the UK’s NIS 2 Regulation is one to keep an eye on as it may require businesses caught by the existing NIS Regulation to make changes to its business practices (although any such changes are not expected to be as far reaching as those imposed by the EU).

The 3Million v Secretary of State for The Home Department: The UK Government’s second attempt in amending the Data Protection Act 2018 which disapplied UK GDPR data subject rights for activities relating to immigration control was held as unlawful. Following the decision, the Government is required to address how vulnerable individuals within the immigration system can access their personal data, within three months of the decision (ruled on 11 December 2023).

Clearview AI Inc v. Information Commissioner [2023] UKFTT 819 (GRC): The American facial recognition company Clearview AI successfully appealed a £7.5m UK data-scraping fine and enforcement order issued by the ICO in 2022 for breach of data protection regulation – it was held that the AI company’s data processing was outside the territorial scope of the data protection regulations, and the ICO had no jurisdiction to issue the notices. The ICO has sought permission to appeal the ruling and awaits the Tribunal’s decision.

The EV market looks set to grow throughout 2024 and 2025: DNV estimates that 27% of new (light) vehicles sold in 2025 will be EVs. This is in the context of many factors which could limit the transition to EVs, such as charging infrastructure, limited EV range and charge speed as well as grid integration.

However, it remains to be seen whether production will ramp up enough to meet the UK’s targets. Energy Live News reports that car manufacturers are on track to miss the government’s target for EV sales in 2024. The target in place is the Zero Emission Vehicle mandate which was introduced in January 2024, requiring 22% of new cars sold by major manufacturers in the UK to be zero-emission. This in the year that the government delayed its commitment to ban the sale of new petrol and diesel cars to 2035.

The Head of Technology and Innovation at SMMT (Society of Motor Manufacturers and Traders) informed the Commons Transport Select Committee that the industry will not meet these requirements this year, currently the SMMT consider the market was expected to reach only 19.8% for cars and 8.3% for vans. Therefore, there remains a distinct lack of optimism in the industry that electric vehicle production will grow sufficiently in the next 5-10 years. This will not only impact affordability for consumers but also affect profits for manufacturers and retailers of electric care in years to come.

Our recent article captures the new and growing opportunities to invest in EVs: Electrifying changes for the EV Market: COP28 EV announcements and UK investment prospects | Foot Anstey

In previous years, companies have been essentially prohibited from developing windfarm projects onshore in the UK due to a myriad of planning restrictions. This could be set to change in the coming year, in particular if the UK sees a change in its national government.

The Labour Party have previously promised to lift the ban on onshore windfarms and many commentators consider that an election may well bring a shift towards a Labour government. Although a date for the UK’s general election has yet to be announced, by law it will have to take place by January 2025 at the latest, therefore, future policy pledges on topics such as planning and renewables are sure to be seen towards the end of 2024 and potentially on into next year.

Find out more in our recent article on Clean Energy predictions: The year ahead – a 2024 Clean Energy preview | Foot Anstey.

M&S applied to demolish and install two mixed use retail developments on Oxford Street. In 2023, the Secretary of State for Levelling Up, Housing and Communities (Michael Gove) refused permission on ground of heritage and carbon impact, stating that the site should be refurbished instead. M&S brought a legal challenge to the decision arguing that the minister had made errors of judgment in his decision. The company has as of 1 March been successful on 4 of the 6 grounds it brought. The High Court considered that whilst the planning policy encouraged the re-use of buildings, this was not to be interpreted as a presumption for retrofitting.  The decision is now remitted back to the SoS to be redetermined.

For retail and consumer sector clients, the decision suggests that although retailers should consider whether retrofitting is appropriate – as central government is clearly encouraging – the outcome of the case suggests that planning law will not be interpreted to favour re-use and refurbishment in all circumstances. The decision also highlights the need for clear guidance to address conflicts between the arguments for demolishing compared with redeveloping property more generally.

Many consumers select companies based on the perceived impact that the business has on the environment. The result of this is an increase in false statements made by businesses in order to lure in customers that are ‘green-conscious’. To combat this, on 23 April 2024 the FCA published its final guidance on new anti-greenwashing rules which will apply to all FCA authorised firms from 31 May 2024. The rules require sustainable finance reference to accurately reflect the sustainable characteristics of that product or service, and not to be misleading.  Although not enforced in the UK yet, some decisions have been made across Europe relating to this, for example in the case of Alcantara whereby an Italian court ordered the company to stop making “vague, false and non – verifiable green claims”

One key proposal is the expansion of the newly identified “identification doctrine” recently introduced in the Economic Crime and Corporate Transparency Act 2023 (the “ECCTA”). The doctrine creates a statutory route to attribute criminal liability to a corporation where a senior manager of a body corporate or partnership commits an economic offence, provided they were acting within the actual or apparent scope of their authority in relation to specific economic crimes such as fraud, bribery and concealing criminal property, amongst others. The Bill proposes to expand this doctrine further and will repeal the relevant section of the ECCTA which, as mentioned above, limits its scope to economic crimes. The Bill will allow a corporation to be held criminally liable where a senior manager commits non-economic offences whilst acting within their actual or apparent authority. The bill is currently at the Commons report stage, and is enter into law in 2024 or early 2025.

On 08 May 24, the Payment Systems Regulator announced a consultation proposing that banks and other payment providers (together PSPs) that participate in the CHAPS payments system reimburse customers who become victims of authorised push payment (APP) scams.  Crucially, the PSR intends the CHAPS protections to come into force on 7 October 2024 – this is the same date as the Faster Payment System (FPS) reimbursement policy implementation date we discussed here. The consultation confirms that the approach for CHAPS will be as similar as possible to the approach with FPS, the policy for which was published in June 2023 and offers some obvious benefits in terms of consistency for victims.

The new Litigation Funding Agreements (enforceability) Bill has recently begun Parliamentary Progress. It intends to reverse the UK Supreme Court’s judgment in the recent PACCAR case, which makes many third-party litigation funding agreements unenforceable. The effect of this legislation would make it easier for the public and consumers to obtain third-party financial support for complex litigation, thus improving access to class action funding. As of 15 May 2024, the bill is at the report stage of the House of Lords, and is expected to become law in 2024 or early 2025.

Churchill v Merthyr Tydfil County Borough Council – Court has the power to stay proceedings to allow, or can actually order, parties to engage in non-court ADR.

Gordiy v Dorofejeva and another – The Court warned legal practitioners that claims valued under £1 million should not be commenced in the Commercial Court. The Judge commented that the commencement and/or continuation of proceedings in the correct court is equally the responsibility of all parties.

James Churchill v Methyr Tydfil Borough Council [2023] EWCA Civ 1416 – held that the court could stay proceedings or order parties to “engage in a non-court- based dispute resolution process”.

ASA ruling on HSBC UK Bank plc – HSBC UK Bank plc – ASA | CAP – the basis of environmental claims must be clear and that unqualified claims could mislead if they omit significant information.

Professor Carolyn Roberts v (1) Severn Trent Water Limited and (2) Severn Trent PLC – collective action taken against Severn Trent Water for alleged overcharged water services and abuse of market dominance to under-report pollution incidents.

Wood v Commercial First Business Ltd – The leading case law concerning Secret Commissions.

CCP Graduate School Ltd v National Westminster Bank Plc and Santander UK Plc[2] – court considered the possibility of a so-called “Retrieval Duty” on the part of a payment service provider to track and retrieve misappropriated funds.

The new Reporting on Payment Practices and Performance (Amendment) Regulations 2024 came into force on 5 April 2024 and will expire on 6 April 2031. They extend and strengthen the existing regime for reporting on payment practices.

They include provisions requiring the reporting of:

• the total value of invoices paid;
• the percentage of payments that were paid in 30 days or fewer, between 31 and 60 days, and in 61 days or longer;
• the total value of payments and the percentage not made within the payment period; and
• the proportion of invoices that are disputed which result in payments being made outside the agreed payment terms.

Corporate governance | Key legal developments | January 2024 | Foot Anstey 31 Jan 2024

As part of the government’s renewed focus on tackling modern slavery, the following updates have been made to the modern slavery statement registry:

• A one-off email notification to registered companies who have not uploaded a statement since the registry was launched.
  • Email reminders to registered companies every year to prompt them to submit their latest annual statement.
  • If companies have not yet uploaded their annual statement, they will first receive a reminder one month before the deadline.
• A further reminder will be sent 2 weeks before the deadline and a final reminder one week prior to the deadline.

Changes to the statement summary pages and search pages to clearly show how many of the recommended sections a company has completed on the registry.

Introduced in 2022, the UK Plastic Packaging Tax applies a levy to plastic packaging materials that contain less than 30% recycled content. We saw the tax increase further in April this year (currently £217.85 per tonne).

The final text of the AI Act will likely be published in the Official Journal of the European Union in the second quarter of 2024 and enter into force 20 days after publication. It will then be applicable after a grace period of two years. Some specific provisions will apply within six months, while the lighter rules on General Purpose AI Models e.g., Large Language models such as Chat GPT 4, will apply within 12 months.

Businesses will need to be more aware of the risks of phishing, ransomware, and identity fraud as increasing threats from hackers will emerge. The EU’s NIS2 Directive improves and strengthens cybersecurity standards across Europe, meaning that businesses not in compliance may face heavy penalties. EU member states will have to transpose NIS2 into their national legislation by October 17, 2024.

With the approach of the November U.S Presidential Election, Deepfake ads are predicted to become the primary cause of election misinformation. This is due to the increased adoption of AI image-generation tools. We expect deepfake advertising will hit crisis levels this 2024 election season.

Thaler v Comptroller of Patents [20 Dec 2023] – The Supreme Court held that the AI “inventor” DABUS was not an inventor for the purposes of the Patents Act 1977 (“PA 1977”) and Dr Thaler therefore did not derive the right to secure the grant of the patents to himself through his ownership of DABUS. As a result, the Comptroller was right to find that the applications were deemed to be withdrawn.

Find out more

The Flexible Working (Amendment) Regulations 2023 have been laid before parliament and are due to come into force 6 April 2024. The Regulations remove the requirement that an employee must have 26 week’s service in order to be able to make a request for flexible working. The right to request flexible working will become a Day One right.

From 1 April 2024 the National Living Wage (NLW) will increase to £11.44 for workers in the UK. In addition, the National Living Wage will now be applicable to workers aged 21 and over, where previously it was only applicable to those aged 23 years and over.

The National Minimum Wage (NMW) will also be increased for younger workers as below:

• 18 – 20: £8.60
• 16 – 17 and apprentices: £6.40

The draft Carer’s Leave Regulations 2024 have been laid before parliament and are due to come into effect on 6 April 2024. The regulations make provision for a statutory right to one week’s unpaid leave per year for employee’s providing or arranging care for a dependant with long-term care need. There is no minimum service requirement to qualify.

The below changes came into force for irregular hours and part-year workers who have leave years beginning on or after 1 April 2024 (if you use a calendar year as the holiday year, these changes will only apply from 2025). The key points are:

• An accrual method of calculating holiday entitlement for workers with irregular hours and part year workers.
• Rolled up holiday pay (calculated at the classic 12.07% rate) has returned as an option for holiday pay calculation for casual, irregular-hours and part-year workers. Rolled up pay will be available for leave years starting on or after 1 April 2024.
• A new definition of ‘normal renumeration’ – when calculating holiday have been specified, for example payments related to the performance of tasks (including commission payments) and regular overtime should be included.

More detail can be found here.

Protection from redundancy for pregnant employees and family-leave returners

The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 and The Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 provide extended protection in the event of redundancy.

See how the protections apply here.

The Workers (Predictable Terms and Conditions) Act 2023 is expected to come into force in September 2024. This will provide workers and agency workers the right to request a predictable working pattern in terms of hours, working days, start and finish times or periods of engagement. It is expected that the minimum service requirement to access the right will be 26 weeks.

The Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force circa October 2024. This will:

• Introduce a proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees.
• Enable employment tribunals to increase awards against employers by up to 25% where employers are found to have breached the new duty.

The Neonatal Care (Leave and Pay) Act 2023 is expected to come into force in April 2025 and means that parents who have babies in neo-natal care within their first 28 days of their life (for seven continuous days or more) are allowed to take neonatal leave and pay for up to 12 weeks. This will be a day one right.

The Claimant was employed as a support worker and involved in planning and taking part in lawful strike action. After the strikes ended, she was suspended.

The Claimant complained to the Employment Tribunal, that her suspension amounted to a detriment imposed for the sole or main purpose of preventing her from taking part in trade union activities or penalising her for having done so, in breach of section 146 of Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

On final appeal, the Supreme Court made a declaration that the failure of s. 146 of TULRCA to provide any protection against sanctions short of dismissal for union members taking part in lawful industrial action is incompatible with Article 11 of the ECHR.

We will keep an eye on legislative developments in light of the Supreme Court’s ruling and await action (if any) from Parliament.

SkyKick UK Ltd and another (Appellants) v Sky Ltd and others (Respondents)- bad faith will continue to be on the agenda in 2024. The Supreme Court will have to decide whether filing broad trade mark specifications can amount to bad faith.

Thatchers Cider Company Limited v Aldi Stores Limited [2024] EWHC 88 (IPEC) – Find out more here: Retail Reduced – January 2024 | Foot Anstey

This is an important and interesting decision that seemingly contravenes past jurisprudence regarding the extent of a director’s liability in relation to tortious acts. In a trade mark infringement claim, the Court of Appeal held that both a company and its two directors were considered jointly liable for trade mark infringement because of their company’s manufacturing and sale of infringing clothing. As the infringing company was dissolved, the claimant was unable to recover any damages from it. However, the Court of Appeal upheld the trial judge’s decision that while the company’s directors did not have to account for the profits the company made, they should pay 10% of their salaries over the infringing period.

The decision was appealed to the Supreme Court by both the claimant and defendant.

Ultimately the Supreme Court stated that the directors were not jointly liable as accessories to the company’s wrongdoing by procuring the company to commit the infringing acts/acting with a common design. This is because the directors had acted in good faith and without knowledge of the “essential facts” that made the company’s acts wrongful. Further, even if the directors were liable, they could only account for the profits they personally made from the infringements. Therefore the directors were not required to pay profits earnt by the company and neither did they have to pay a proportion of their salaries which appeared to be standard remuneration.