Horizon Scanner

Retail & Consumer

Our 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.

Note: The Horizon Scanner is up-to-date as of April 2 2024 and is updated at regular intervals throughout the year. 

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.

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

Those involved in the Commercial Property sphere watch the government’s latest announcements with mixed views as the future of commercial properties continues to remain uncertain. Environmental issues, the safety of occupants and more traditional property law regimes such as security of tenure feature in the headlines most weeks as a variety of solutions are debated. Read on to see the developments we have highlighted and contact us if you would like to discuss how these issues may affect you and/or your business.

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Data-driven strategic opportunities for businesses have significant potential, however the associated risks – if not identified and managed – can be complex and costly. Understanding your own risk appetite in this area, as well as maintaining clear visibility of what’s going on in the wider world from a data perspective is key to realising and maximising the potential of your data. Please read on to see how new legislation and ICO guidance can affect you and your business.

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The Energy, Property, Infrastructure and Construction space is fast evolving, and we appreciate that businesses operating this sphere may face numerous legal queries as a result. As the importance of sustainability and clean energy is only set to increase, we expect to see many developments in the upcoming year. From rooftop solar installations, electrical vehicles, to environmental claims and greenwashing, please read on to see how these topics may affect you and/or your business.

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The world of commercial disputes is an ever-changing landscape for all involved, be those corporate entities or the individuals within the organisations. As we look forward, the upcoming year is no exception to this change. There are some significant developments in this space, and we are looking ahead with the hope of assisting businesses to be well-prepared and well-equipped to deal with these changes. From fraud to secret commissions, greenwashing to ADR, please read on to see how these issues can affect you and/or your business.

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Corporate law is poised for noteworthy changes, requiring companies to prioritise transparency, tackle increasing administrative burdens, and adapt to evolving societal expectations. Please read on for updates to the Economic Crime and Corporate Transparency Bill and how this underscores the need for robust governance frameworks and how changes to the Payment Practises Reporting Regulations and growing ESG obligations indicate a wider effort to foster ethical business practises.

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With the rapid development of AI technology combined with new and innovative uses of data in supply chains, the upcoming year is expected to bring about great regulatory change. Businesses will be challenged too, with many of these complex regulations having a widespread impact across sectors. We are ready to support businesses dealing with these changes and we can help them take advantage of new opportunities whilst minimizing risks in the new legal landscape. Read on for more detail about these expected changes in the commercial and tech world.

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The world of employment is always rapidly changing, and this year is no exception. We expect to see new legislation for carers’ leave and neonatal leave, not to mention rights for flexible working and extended protections for pregnant workers from redundancy. Employers should also be mindful of changes to flexible working requests and National Living Wage increases, more below.

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It has been a fairly busy start of the year on the intellectual property front – with some notable activity concerning lookalike products, bad faith filings and the Companies Act. While some judgments have clarified certain legal positions and there has been new law which should improve tracing and tackling concerning companies, there are further queries posed as to how such will be applied and interpreted going forth. We continue to be at the forefront of these developments and are ready to support existing and new clients as they seek to protect and enforce their intellectual property in the year ahead.

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The Levelling-up and Regeneration Act 2023 introduced the controversial mechanism allowing local authorities to auction off leases of vacant high street premises. The legislation will also amend the time limits for enforcement action in the Town and Country Planning Act 1990. The following article explores the new legislation in more detail and assesses its impact on the retail and consumer space.

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The prohibition on letting commercial property with a substandard EPC rating of F or G is now in force. Meanwhile, the Government’s proposal to increase the minimum energy efficiency standard from the current E to B for domestic and non-domestic properties in England and Wales is to be implemented in 2030. It was later announced that the proposals for domestic property would be abandoned but no further announcements have yet been made in relation to non-domestic (commercial) property. With the future position for commercial properties remaining uncertain, property owners and renters will want to stay up-to-date on the Government’s plans.

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Timetable for implementation is unclear, but some measures will come into force in 2024. Overseas entities will be required to disclose and verify their title numbers for their qualifying estates and give details about their trust structures.

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.

The ICO warns all organisations to proactively make advertising cookies compliant with data protection law after the positive response to their November call to action. The ICO is also developing AI technologies to help proactively identify websites using non-compliant cookie banners. Privacy practitioners should therefore be making their website cookie banners a priority.

With the rapid influx of AI, the ICO has warned businesses to address the privacy risks associated with generative AI technology before adopting it, stating that it will be taking action against businesses who fail to do so. Businesses looking to invest in generative AI must ensure that data privacy risks are carefully considered and addressed before any investment is made and stay proactive rather than reactive and risk hefty ICO fines and subsequent reputational damage to reputation.

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The ICO continues to issue fines to companies who have sent marketing communications to customers that have not opted-in to such marketing – organisations must ensure early steps are taken to ensure compliance with data protection legislation, to avoid fines for being in breach of such legislation when marketing to customers.

The protection of children’s data remains in the regulatory spotlight this year. The ICO is promoting the safeguarding of children through responsible data sharing through partnering with education, law enforcement and social service organisations to raise awareness, creating a toolkit of free resources to promote responsible data sharing, and launching a practical guide outlining how organisations can safely and lawfully share information to safeguard children from physical, emotional or mental harm. Organisations will need to consider risks to children’s data protection and follow such guidance to ensure protection.

The ICO will continue to monitor the evolution of live facial recognition technology to ensure its use remains lawful, necessary, for a legitimate interest, and proportionate – the threshold for collecting personal information in the form of facial image data. In the meantime, organisations looking to implement these technologies – including retailers as a means to tackle retail crime – should consider data protection and privacy issues upfront at the design stage and throughout the lifecycle of the system, to ensure that the high threshold is met. The ICO has stated that each new application will be considered on its own merits, balancing the privacy rights of individuals with the benefits of preventing crime.

As the bodies responsible for regulating data protection and online safety in the UK, the Information Commissioner’s Office (ICO) and Ofcom are both committed to protecting people online. Ofcom has set out its plans for putting online safety laws into practice following the passing of the Online Safety Act. The Act makes companies that operate a wide range of online services legally responsible for keeping people, especially children, safe online.

Ofcom will give guidance and set out codes of practice on how in-scope companies can comply with their duties, in three phases, as set out in the Act.

The EU’s Data Act entered into force on 11 January 2024 and will become enforceable by mid-2025. It requires affected entities to make personal and non-personal data accessible to other parties for repurposing. Affected entities include i) manufacturers of physical connected products which collect or generate data concerning their use, where such products are placed on the market in the EU, ii) suppliers of related digital services and software in the EU, iii) data holders which make data available to data recipients in the EU; and iv) providers of data processing services in the EU. Whilst the Act’s formal enactment appears in the far distance, affected organisations should begin assessing their compliance strategies as the Data Act’s obligations may require significant time to implement. Although the Data Act will not directly apply to the UK as a result of Brexit, organisations should continue to pay heed to their content regulation obligations in overlapping policy initiatives and legislation, including the Online Safety Act 2023.

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.

2023 saw a significant uptake on rooftop solar installations and it is expected that this will continue throughout 2024 due to the favourable environment produced by the relaxation of planning rules for rooftop solar installations last year.

With retail outlets, warehouses, distribution centres and manufacturing sites, the trend for rooftop solar is a continued opportunity for the Retail and Consumer sector given the advantages of generating on-site renewable energy via rooftop solar amid consumer attitudes valuing sustainability.

Retail and Consumer sector businesses can use their considerable presence as property owners but also as tenants in the commercial property market to tap into the benefits brought by on-site solar of reduced energy costs, decreased reliance on fluctuating grid prices and cushioning from potential energy shortages. Tenants have an opportunity to lead discussions with their landlords to push forward their sustainability strategies in this favourable environment for solar installations in 2024.

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As the importance of sustainability to consumers has risen in recent years and businesses focus on improving their environmental impact, a note of caution in promoting green credentials and net zero transition progress.

The Advertising Standards Authority (ASA) has increasingly singled out environmental claims as breaching advertising rules. It is expected this scrutiny will continue as part of ASA’s aim to ensure consumers are not being misled by “green” claims.

The general requirement is that the basis of environmental claims must be clear and that any unqualified claims omitting significant information could be found to be misleading for consumers. Absolute claims made must be backed up with a high degree of substantiation. The rules state that “comparative claims such as “greener” or “friendlier” can be justified, if the advertised product provides a total environmental benefit over that of the marketer’s previous product or competitor products and the basis of the comparison is clear.”

This fits with the wider context of cracking down on greenwashing outside of the UK. Building on the recent EU ban on greenwashing, the EU Parliament’s Internal Market and Environment committees are progressing with the Green Claims Directive. This Directive rules how firms can validate their environmental marketing claims and includes a verification system and penalties. It is expected that the Directive will continue through the European Parliament this year and indicates that closer scrutiny of green claims is here to stay.

A number of UK agencies and standards bodies have now ramped up their approach to greenwashing and other criticisms of misleading advertising. The Financial Conduct Authority (FCA), for example, has confirmed it will release new guidance to support the industry ahead of introducing new rules on 31 May 2024. The new rules consist of Sustainability Disclosure Requirements and are aimed at protecting customers by ensuring the products and services advertised and sold as sustainable are accurately described.

For more information please see the FCA’s press release.

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COP28 saw key direction setting on Net Zero for the road transport network of interest to the Retail and Consumer Sector particularly regarding supply and distribution. The ‘Global Zero Emission Vehicle Transition Roadmap’ was launched as the first of an annual publication by the Zero Emission Vehicles Transition Council (ZEVTC). The Roadmap aims to assist governments and international partners to bring about growth and target catalytic change across the road transport sector.

In support of this the UK government launched at the COP28 Transport Day a £70 million pilot scheme to improve rapid electric vehicle (EV) charge points at up to 10 trial sites in England.

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The UNEZA was launched by 31 partners including 25 global utilities and power companies with the pledge to advance electrification and renewables-ready grids, and increase the deployment of clean energy.

UK organisations such as EDF, the National Grid, Octopus Energy joined the collaboration which aims to overcome obstacles to the net zero pathway set out by the International Renewable Energy Agency and cited in the 2030 Breakthroughs led by the UN Climate Change High-Level Champions.

UNEZA will develop an action plan to address supply chain de-risking, capital mobilisation and skills development, and facilitate policy and regulatory support.

The provisions of the Building Safety Act 2022 (BSA) have been coming into force periodically since its enactment in June 2022, though the implications of some key changes are still emerging.  Recent key changes include the amendments to the Building Regulations and the Approved Inspector regime in October 2023, the latter now in force from April of this year.

As of 6 April 2024, Approved Inspectors have been abolished and replaced by Registered Building Inspectors.  All RBIs are required to register with the Building Safety Regulator and pass competency tests depending on what class of building they intend to work on (both of which should have been achieved by 6 April).  All construction projects must have a Registered Building Inspector who works for one of the three types of building control body (the Building Safety Regulator, local authorities or a Registered Building Control Approver).  Projects that began with an Approved Inspector pre-October 2023 and benefit from the Transitional Arrangements under the Act, particularly need to ensure that it has a properly registered and competent RBI in order to continue benefiting from that scheme.

Due to the speed at which the new regime has been introduced (with only a 6-month transition period from October 23 to April 24) there was widespread concern that not enough professionals would have completed the registration / competency process in time, leading to a dearth of Inspectors and Approvers who can work on projects.  Reports suggests that those concerns have been realised and a last-minute amendment on 5 April meant that only registration needed to have taken place by 6 April with competency assessments extended to 6 July 24).  It’s likely that this process will lead to delays and high demand for such professionals across the construction industry at least in the short term.

Whereas some provisions of the BSA apply to “higher risk buildings” only, the new Registered Building Inspector regime will apply to all construction projects (with the exception of minor works). Therefore, it is important for all clients – including those in the retail industry – to bear in mind if they are contemplating any development beyond minor works and ensure that any RBI is properly registered and competent to avoid potential financial and / or regulatory penalties.

Greenwashing and advertising standards continue to be themes in recent cases and decisions by regulators. Recent developments include a decision from the ASA which upheld a complaint against Volkswagen Group due to an advert which was considered misleading by consumers.

The advert in question was for the Audi Q8 e-tron range, advertised with 330 miles maximum range and separately (though in the same commercial) that the battery would achieve 80% charge in 31 minutes. Complainants claimed it was misleading as it suggested the 330-mile range could be reached on a 31 minute charge, which was not the case.

The complaint was upheld by the ASA in March 2024 and Volkswagen were told to ensure future adverts for electric vehicles avoided such ambiguity around charging time and mileage performance.

This decision marks a continuation of the approach by the regulator to ensure that the public are not mislead by claims of sustainability or “green” credentials. Clearly this is of significance to retailers who should take note of this approach in their advertising campaigns and communications with consumers.

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.

The High Court’s judgment in CCP Graduate School v NatWest and Santander [2024] EWHC 581 (KB) concerning Authorised Push Payment Fraud considered the possibility of a so-called “Retrieval Duty” on the part of a bank or payment service provider (“PSP”) in relation to payment (or receipt) of misappropriated funds. This alleged duty centres on a PSPs alleged failure to track or retrieve funds when put on notice of fraudulent or illegal activity after a misappropriation occurs. In this case, the originally pleaded claim against NatWest failed due to statutory limitation periods, so a full exploration of the scope and application of a so-called ‘Retrieval Duty’ upon fraud victim’s paying bank will not be taken further at this stage. However, that is not the end of this matter, as it was accepted that the so-called Retrieval Duty could apply to the second defendant Santander and the recipient bank – despite it having no direct contractual relationship with the Claimant. Please see full article here.

There is a continuing general rise in collective actions being brought before the Competition Appeals Tribunal (“CAT“), driven largely by the 2020 Supreme Court ruling in Merricks v Mastercard (which confirmed that the complexity of assessing damages, or the diversity of a ‘class’, should not be a bar to certification/ allowing a matter to proceed to trial), as well as a growth in the availability of third-party litigation funding. This puts any large business in a position of dominance at risk of facing claims for significant damages, with tech companies and finance providers being particular targets (and finding themselves facing claims for billions of pounds). In 2023 we also saw the first environmental collective action brought against Severn Trent Water (with further claims against other water companies threatened), the result of which will likely determine whether or not we will see a rise in similar cases centred on breaches of environmental law being issued.

The Economic Crime and Corporate Transparency Act has introduced a new responsibility for businesses to prevent fraud, meaning that corporates can be held liable if an employee or agent has committed an offence for the benefit of the organisation (without having reasonable fraud prevention measures in place). When surveyed as part of our Fraud Report, only 40% of senior managers in the Retail and Consumer sector were aware of the new failure to prevent offence (the lowest awareness across the eight sectors surveyed), and only 10% of companies surveyed in the Retail and Consumer sector have a dedicated and salaried fraud prevention role in place.

There is a continuing general rise in collective actions being brought before the Competition Appeals Tribunal (“CAT“), driven largely by the 2020 Supreme Court ruling in Merricks v Mastercard (which confirmed that the complexity of assessing damages, or the diversity of a ‘class’, should not be a bar to certification/ allowing a matter to proceed to trial), as well as a growth in the availability of third-party litigation funding. This puts any large business in a position of dominance at risk of facing claims for significant damages, with tech companies and finance providers being particular targets (and finding themselves facing claims for billions of pounds). In 2023 we also saw the first environmental collective action brought against Severn Trent Water (with further claims against other water companies threatened), the result of which will likely determine whether or not we will see a rise in similar cases centred on breaches of environmental law being issued.

ADR may soon become compulsory in all civil litigation disputes, after the Civil Procedure Rule Committee opened up a consultation inviting views on incorporating mandatory ADR into the CPRs.  The consultation flows from the recent Court of Appeal judgment in James Churchill v Methyr Tydfil Borough Council [2023] EWCA Civ 1416, which held that the court could stay proceedings or order parties to “engage in a non-court- based dispute resolution process”. The ruling and proposed consultation may have a significant impact on litigation – increased use of ADR will have may lead to either increased or decreased costs depending on the complexity of the litigation. In some instances, ADR may slow down proceedings but ultimately lead to earlier settlements and lower costs. In others, ADR may simply increase costs by introducing a further procedural step where parties have already explored ADR as an option and failed to reach a settlement.

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.

Since 4 March 2024, changes to the operations at Companies House have been implemented. The changes relate to companies providing:

  • An appropriate Registered Office address – In order for it to be deemed “appropriate” post/communication must (i) come to the attention of someone acting on behalf of the company and (ii) have the ability to have an acknowledged delivery.
  • A registered email address – this will not be published online. All companies will need to provide this on incorporation and will be prompted when filing their next CS01 to provide this information. It will be used for communication by Companies House so must be “appropriate”.
  • A Lawful Purpose Statement – on incorporation of a new company, the shareholders must confirm the company is being created for a lawful purpose.

Companies House have introduced new powers  query any information or remove inaccurate information and share data.

The next anticipated change will revolve around ID verification. This area will take time to develop however it is anticipated that verification will happen once and will not be required annually. Anyone registered at Companies House will need to be verified.

Companies House Fees are increasing from 1 May 2024. Some of these fee increases are substantial. Companies House have reiterated that the costs are to cover the services provided by Companies House, they do not make a profit. If an item is not on the new fee list, this means the fee is not changing.

Link: Changes to Companies House fees – Changes to UK company law

Companies are now expected and, in some cases, required to report on issues surrounding ESG to stakeholders. In relation to investment decisions, risk categories for companies which fail to adequately address ESG can lead to action from groups holding power outside of the organisation (including consumers and potential investors) and risks of non-compliance with future legislation and regulation soon to be introduced.

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

There is a greater focus on companies using IOT, AI and other technologies within their factories and subsequently across the supply chain. Smart Assets, such as devices that can track and monitor shipments – communicating the location and other characteristics such as temperature via blockchain, will see increasing development.

Sustainability efforts will be even more essential in 2024. Eco-friendly practices such as recyclable packaging, sustainable transportation methods, and responsibly sourcing of materials will be adopted more widely. These practices will reflect the consumer desire for more sustainable products and a greater concern for, and awareness of, the impact we have on the environment.

Data is an increasingly valuable business asset. Throughout 2024 companies will streamline their operations and improved their offerings in a revamped strategic approach. Companies such as John Deere, which uses a model of selling data from its sensor-laden farm equipment back to farmers and Mastercard Advisers using extensive transaction data to offer data driven insights to financial institutions will be increasingly democratizing AI driven analytics data. We can expect SMEs and new sectors to adopt these strategies in the year to come.

Advances in AI including neural networks, new ways of storing data and AI marketplaces  Navigating the AI Landscape of 2024: Trends, Predictions, and Possibilities | by Vincent Koc | Jan, 2024 | Towards Data Science

If a business produces or uses packaging, or sells packaged goods, it may be classed as an “obligated producer” under packaging waste regulations.

An obligated producer is a business that:

  • handled 50 tonnes of packaging materials or packaging in the previous calendar year
  • has a turnover of more than £2 million a year (based on the last financial year’s accounts).

Businesses need to register as a packaging producer with their environmental regulator by 7 April every year.

From 31st January 2024, the Online Safety Act has made the sharing of AI-generated intimate images without consent illegal. The Act has also brought in further changes around sharing and threatening to share intimate images without consent.

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.

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.

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In May 2023 the Government confirmed plans to limit non-compete clauses, which seek to prevent an employee working in competition with the business for a period of time after they have left, to 3 months. However, the Government has not confirmed when this intended legislation will be drafted or come into effect.

The draft Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 have been laid before parliament. The draft regulations propose to extend the period of special protection from redundancy for employees who are on maternity leave, adoption leave or shared parental leave such that those on such leave should be offered priority right of any suitable alternative employment available in a redundancy situation.

The Neonatal Care (Leave and Pay) Act 2023 has made provision for a right for parents whose babies spend time in neonatal care units to:

  • Statutory neonatal care leave of 1 to 12 weeks.
  • Neonatal care pay set at statutory rates.

The specific rules relating to neonatal care and pay are due to be clarified in future statutory instruments, with the new neonatal leave and pay entitlements expected to be delivered in April 2025.

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.

The Supreme Court decision in Lifestyle Equities v Amazon concerning Amazon’s liability for trade mark infringement relating to infringing goods being sold on Amazon.com has recently been handed down.

The Supreme Court unanimously dismissed Amazon’s appeal of the Court of Appeal’s decision which placed the burden on the marketplace operators to monitor and address purported infringement issues. Ultimately, the Supreme Court confirmed that Amazon targeted consumers in the UK by displaying the USA goods on its USA website and by making them available for shipment to the UK, which in turn infringed the UK/EU Marks. The decisions are useful to determine what and when such operators are liable for trade mark infringement.

There are ever-increasing judgments and decisions where brand-owners are taking action against supermarkets, like Aldi and Lidl, offering for sale lower priced own branded ‘lookalike’ products. In the past year alone, for instance, we encountered the judgments in Thatchers Cider Company Limited v Aldi Stores Limited [2024] EWHC 88 (IPEC), Lidl v Tesco [2023] EWHC 873 (Ch) and [2024] EWCA Civ 262 and Marks and Spencer plc v Aldi Stores Ltd [2023] EWHC 178 (IPEC), to name a few. In the more recent judgements, there has been a mixed reliance between trade mark infringement, passing off and registered design right infringement claims.

We expect to see more in this activity in 2024. It will be interesting to see the pattern of the claims made, particularly if there is an increasing reliance on unfair advantage claims following the decision in Lidl, and whether the court stick by their recent approach in Thatchers. In Thatchers, notwithstanding finding that Aldi using Thatchers’ product as a ‘benchmark’ for its own ‘new’ products and asking a design team for a hybrid of its own product with Thatchers’, there was no passing off or trade mark infringement. This rested largely on Aldi being found not to have the intention to take unfair advantage of Thatchers’ reputation and that there was no identifiable detriment; This decision suggests the court still upholds its historic approach that the mere lookalike product being named something different can be enough to bypass infringement.

As to whether or not Thatchers appeal the aforementioned judgment is awaited.

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We are still awaiting the outcome of the Sky v Skykick appeal where the Supreme Court will decide whether filing broad trade mark specifications can amount to bad faith. The judgment will also evidence whether UK law will have much divergence to EU law post-Brexit.

Bad faith following Sky v Skykick was recently considered in the judgment in Lidl v Tesco. In the latter decision, the Court of Appeal upheld the High Court’s finding that Lidl’s wordless trade mark registrations were filed in bad faith.

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Continuing clarity by way of an increasing amount of decisions on NFTs, the metaverse and virtual goods is likely to continue in 2024.

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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.

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