Snapshot
A summary of key UK legal and market developments affecting businesses
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// Edition 4, January 2026
Anna Janik, Managing Practice Development Lawyer D +44 20 7246 7384
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Adam Pierce, Partner D +44 20 7246 7789
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Economic Crime and Corporate Transparency Act 2023
This Act introduces major changes to the oversight and transparency of corporate entities in the UK. What is the latest on implementation?
This Act contains the most significant employment law reforms in a generation. What should employers be doing to prepare?
Employment Rights Act 2025
The Act introduces a range of new protections for residential tenants. How does it impact existing and new tenancies?
Sweeping changes to the private residential sector in England: the Renters' Rights Act 2025
Artificial Intelligence
How does this new regime streamline the raising of debt and equity capital on the UK markets?
New public offers and prospectus regime
Capital Markets
This Act represents a significant modernisation of the UK's data protection framework – what are the key changes?
Data Protection & Cyber Security
What has the FCA proposed and how will it affect motor finance lenders?
FCA motor finance redress scheme
All Developments
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Data Use and Access Act 2025 – implementation
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Timeframe Government statement in late summer 2025, but no specific timetable yet. What does it do? There is currently no set UK policy on AI but a strong indication of the government's intent was included in a mid-2025 statement: "The government is clear in its ambition to bring forward legislation which allows us to safely realise the enormous benefits and opportunities of the most powerful AI systems for years to come. The government is continuing to refine its proposals and will launch a public consultation in due course." Other key steps towards legislation include: the 2023 policy paper on "A pro-innovation approach to AI regulation"; the UK's agreement to the Framework Convention on Artificial Intelligence and Human Rights – the first legally binding treaty on AI; the UK's adherence to the OECD's AI Principles – the first intergovernmental standard on AI; and the Law Commission 2025 discussion paper on AI. How might a UK business be affected? For now, it remains firmly a case of "watch this space". In the meantime, considering and adopting appropriate AI policies within your business (covering issues such as data, IP, ethics, transparency and restrictions) will help stay one step ahead of the legislative curve.
When are we likely to see primary UK legislation to regulate AI?
Timeframe Published in July 2024, the Act has a general date of application of 2 August 2026. Several parts have other implementation dates with full implementation by 2027. What does it do? This EU regulation is the first of its kind across the globe. It regulates: AI systems according to the risks they pose; and general-purpose AI (GPAI) models according to their capabilities. Under the AI Act, systems are classified as follows: Banned AI systems AI systems which are considered a clear threat to the safety, livelihoods and rights of people are banned. Examples include harmful AI-based manipulation and deception, and social scoring. High risk AI systems AI systems that can pose serious risks to health, safety or fundamental rights are classified as high risk and subject to additional requirements. Examples include AI systems used for the administration of justice and democratic processes, and for remote biometric identification, emotion recognition and biometric categorisation. Limited risk AI systems These AI systems require transparency around their use and are subject to specific disclosure obligations (e.g. when using an AI chatbot, users should be made aware that they are interacting with a machine). Minimal or no risk AI systems No rules are imposed on AI systems that do not present a material risk. How might a UK business be affected? Although a European regulation, the AI Act is set to have a direct and significant impact on many UK businesses. A UK business should consider: whether it operates AI systems which are used in or affect the EU market (being located in the UK is irrelevant for this purpose, as the AI Act has extra-territorial effect); and if so, whether the system meets the statutory definition of AI. Assuming it does, the initial priority is to determine which of the above categories applies before considering what practical measures to implement.
EU AI Act – why UK businesses cannot overlook it
Paul Langford Managing Practice Development Lawyer D +44 20 7246 7032
Antonis Patrikios Partner D +44 20 7246 7798
Nick Graham Partner D +44 20 7320 6907
David Cohen Partner D +44 20 7246 7535
Timeframe Coming into force on 19 January 2026. What does it do? The new regime streamlines the UK rules on public offerings. The principal change, especially for equity issuers, is that a prospectus will not be required for most secondary offerings of listed securities. The prospectus exemption threshold for such offerings will increase from 20% to 75% of existing listed securities (and 100% for equity issues by closed-ended investment funds). Other changes include: application of a higher liability threshold (knowledge/recklessness) for "protected forward-looking statements", to encourage their inclusion in prospectuses; abolition of the distinction between retail and wholesale disclosure standards, to facilitate retail participation in bond issues alongside wholesale investors; additional regulatory relaxations for offerings of "plain vanilla listed bonds" by corporate issuers with equity listed in the LSE commercial companies category; and forward incorporation of financial statements by reference in a base prospectus, avoiding the need for debt programme supplemental prospectuses to update their interim or annual financial statements where there has been no material adverse change. How might a UK business be affected? The new rules remove structural obstacles to raising capital on the UK markets, so improving companies' access to debt and equity capital. The new regime has been designed to continue to allow a wholesale offering of securities on a pan-European and UK basis, with only one EU or UK prospectus being required.
Neil Nicholson Partner D +44 20 7246 7624
Nik Colbridge Partner D +971 52 153 0767
Michael Smith Head of DCM Winterflood Securities
The key advantage of the new FCA rules is that issuers can unlock an entirely new source of demand in both the primary and secondary markets simply by selecting a retail-friendly low denomination, with no additional disclosure burden relative to high-denomination bonds. Retail investors have demonstrated a consistent appetite for fixed income - evident in trading data from the 2011–2018 retail bond (ORB) era and, more recently, in the strong participation observed in new-issue Gilts over the last two years. This suggests that if retail investors are offered access to corporate bonds, they will buy and hold them, supporting deeper demand, improved liquidity, and potentially tighter spreads for issuers.
Timeframe Court of Appeal decision – August 2025 What does it do? How do you know for certain that you have formed a contract? The answer appears simple in theory, as all you need to do is show that all the elements of a contract are in place (offer, acceptance etc.). In practice, some of those elements are not always clear-cut and this sort of issue can only be resolved by considering the whole course of the parties' negotiations. In doing so, how relevant might the seemingly informal content of WhatsApp communications with another party be? This case provides an answer by way of a useful example. The appeal considered whether a binding contract was reached under which DAZN granted Coupang co-exclusive broadcasting rights in South Korea for the FIFA Club World Cup. The High Court held that the background of communications between the parties by WhatsApp messages and conversations were relevant in determining that a contract had been concluded between the parties. The Court of Appeal agreed with the approach and conclusion of the High Court and, finding in favour of Coupang, dismissed the appeal. How might a UK business be affected? Key lessons from this case: The informality, ease and excess of communication by methods such as WhatsApp means that some of the contracting conventions and protocols that apply to more formal correspondence by pen and paper have long since been discarded. However, such communications can nonetheless be relevant in determining whether a legally binding agreement exists. If you do not wish to ever be bound by a piece of paper with words on it, or its electronic equivalent, then placing "subject to contract" on it will ordinarily achieve that objective. The absence of such terms is not decisive. It all depends on the parties' words and conduct towards each other, considered in their context. Whenever you communicate by email using "subject to contract" within a header or within standard disclaimer language, make sure those words are removed before the final stage of formalising your offer and acceptance into a binding, enforceable contract.
Can WhatsApp messages help determine contract formation? DAZN Ltd v Coupang Corp
Timeframe In summer 2025, the government completed a public consultation to gather feedback on the proposed measures to tackle late payment. We await further details on the timeframe. What does it do? The government claims this will be "the most significant legislation to tackle late payments in more than 25 years" and will give the UK "the strongest legal framework on late payments in the G7". The proposals would update the Late Payment of Commercial Debts (Interest) Act 1998 and related legislation, and would introduce the following changes to the UK payments regime: make statutory interest mandatory by removing the ability to negotiate compensation rates lower than the statutory rate; remove the payment period exemption which currently allows businesses to agree to payment terms longer than 60 days if considered not "grossly unfair"; potentially subsequently reduce this maximum payment limit from 60 days to 45 days after five years; introduce a deadline for disputing invoices; require additional reporting on statutory interest; introduce financial penalties for persistent late payers; and give additional powers to the Small Business Commissioner, including assurance of payment reporting data. How might a UK business be affected? These measures are part of a package of legislative proposals designed primarily to protect small businesses. A key focus is to deal with the old problem of late payment, in particular to ensure that SMEs are paid on time. Options available to the government include introducing stricter maximum payment terms, mandatory interest on late invoices and fines against persistently late payers.
New package of measures announced aimed at tackling late payments
Rebecca Owen-Howes Counsel D +44 77 3330 7375
Competition in labour markets
Timeframe The CMA's revised guidance on jurisdiction and procedure took effect on 28 October 2025. What does it do? Following a "strategic steer" from the government in May 2025 directing the CMA to prioritise pro-growth interventions, the CMA may inform merging parties that it will adopt a "wait and see" approach to global deals i.e. it will take no action if a deal is cleared in other jurisdictions. However, the CMA may still decide to open an investigation if it considers that remedies in other jurisdictions do not fully address competition concerns identified in the UK. How might a UK business be affected? While it is likely that the CMA will now "step back" from multi-jurisdictional mergers, there is no guarantee that this will be the case. In practice, there is a risk of future call-in if the CMA does not agree with the parties' assessment that the transaction has no UK-specific impact.
CMA's new approach to multi-jurisdictional mergers
Timeframe Comprehensive CMA guidance published on 9 September 2025. What does it do? The CMA's guidance clarifies how competition law applies to the recruitment and retaining of staff. It identifies three principal types of anti-competitive behaviour in labour markets: no-poaching agreements; wage fixing agreements; and sharing competitively sensitive information (CSI), such as current and future pay information. The guidance confirms that genuine collective bargaining falls outside competition law. However, information sharing and co-ordination that go beyond what is necessary for collective bargaining are likely to be considered anti-competitive. How might a UK business be affected? Employers, HR personnel and recruitment teams need to understand how competition law applies to their roles. Sanctions for non-compliance include fines of up to 10% of worldwide turnover, with the CMA fining sports broadcasters in March 2025 a total of £4.2 million for sharing CSI relating to fees for freelance workers.
Timeframe 18 November 2025 What does it do? Following a review of more than 400 businesses in 19 sectors to assess compliance with price transparency rules, the CMA announced a major package of action aimed at tackling misleading online sales practices, including "drip pricing" and pressure selling. This included launching investigations into eight businesses suspected of having broken consumer law, and issuing advisory letters to 100 firms across multiple sectors. The CMA also published new and updated guidance for businesses. This is the first enforcement action taken by the CMA under the Digital Markets, Competition & Consumers Act 2024, allowing it to determine breaches of consumer law without recourse to the courts. How might a UK business be affected? Businesses should review their online pricing structures and ensure compliance with the CMA's price transparency and unfair commercial practices guidance. Where infringements are found, the CMA can impose fines of up to 10% of global turnover.
CMA investigates companies for misleading online sales practices
Construction & Infrastructure
Akin Akinbode Partner D +44 20 7320 3934
Mark Macaulay Partner D +44 20 7246 7544
Timeframe Ongoing What does it do? Following the Grenfell Tower fire in 2017, concerns about unsafe cladding and other building defects became a national priority. To ensure that defects in affected buildings were remediated, the Building Safety Act 2022 (BSA) extended limitation periods and introduced new legal tools such as a right to apply for remediation orders, remediation contribution orders and building liability orders. However, the implementation of these tools is raising procedural and liability issues. The courts are updating their guidance to make the process clearer, encourage early settlement and ensure fair case management. In the meantime, the government expects parties to work together in good faith to resolve issues and developers are working to meet their legal duties, identify unsafe buildings, plan and carry out remediation works, and keep residents informed about progress. How might a UK business be affected? Identifying defects, arranging for remediation, remediating safety defects and working out who pays can be a complicated and costly process. Those affected must keep up to date with the judicial guidance emerging from a growing body of case law on both the interpretation of the BSA and the dispute resolution process itself, as well as government guidance for those affected by the remediation process.
Easing the challenge of resolving safety disputes
Timeframe Ongoing What does it do? The Paris Pledge, launched by the International Hydropower Association, is a collective commitment by governments and stakeholders to support Europe's clean energy goals, particularly through pumped storage hydropower (PSH). PSH is crucial because it stores excess energy from intermittent renewables like wind and solar, providing grid stability and helping Europe move away from fossil fuels. The Paris Pledge is voluntary but we can expect governments and regulators to reference it in policy and procurement requirements as a means to improve environmental and social performance. While voluntary, once the Paris Pledge's principles are incorporated into contracts, they become enforceable obligations. How might a UK business be affected? Given the potential for legal, financial and reputational risk, businesses should: use independent assessments to help provide clarity and support due diligence; ensure that ESG commitments are clearly defined to avoid potential disputes; and ensure contracts are both flexible enough to adapt to evolving sustainability standards and include robust dispute resolution mechanisms. Also, businesses can expect project sponsors and investors to require, increasingly, strong ESG credentials and clear contractual commitments to sustainability, such as the Paris Pledge.
Powering Europe's green future: the Paris Pledge
Timeframe Ongoing What does it do? The construction industry continues to address issues raised by the Grenfell Inquiry, not least in its implementation of the Building Safety Act 2022 (BSA). The Grenfell Inquiry Final Report highlighted that everyone involved in construction bears responsibility for keeping people safe and that culture change across the construction industry is essential. This includes a shift beyond a focus on time and cost to one that prioritises safety and accountability at every stage. The implementation of the BSA and the industry's continued efforts to address its challenges are part of the shift towards a safety-first mindset. How might a UK business be affected? embedding safety into tender negotiations; rigorously complying with BSA competency requirements; selecting competent and compliant supply chain partners; providing early training for all contract and supply chain participants; and including robust dispute resolution processes, fair risk allocation, and clear roles and responsibilities in contracts.
Industry shift towards prioritising safety and accountability
Darren Acres Partner D +44 20 7246 7745
Timeframe Phased implementation until 2027. What does it do? The Act increases the oversight and transparency of corporate entities in the UK. This includes making changes to Companies House filing requirements and related matters. How might a UK business be affected? Mandatory identity verification is now in force for individual: directors of UK companies or overseas companies with a UK establishment; members of UK LLPs; and PSCs of UK companies and UK LLPs. Affected persons and businesses must ensure compliance within the applicable deadlines. UK companies and LLPs no longer need to keep certain registers (e.g. register of PSCs), with all information now filed at Companies House instead. Significant changes still to come include: the extension of identity verification to corporate directors of companies, corporate members of LLPs and officers of corporate PSCs; restrictions on who can make filings at Companies House; modernisation of the regulatory framework for UK limited partnerships; and new limitations on corporate directors of UK companies.
Brian Moore Partner D +44 131 228 7181
Timeframe 2025 onwards for a minimum of five years. What does it do? PISCES is an innovative new form of regulated trading platform for private companies. A PISCES platform operates as a secondary market for the trading of existing shares, not as a forum for raising capital through the issue of new shares. The PISCES regime has been established by HM Treasury and implemented by the FCA. Platform operators have scope to shape their individual operating models and service features. The FCA has so far approved two PISCES operators, with others expected to follow. How might a UK business be affected? With many companies choosing to stay private for longer, the primary objective is to increase the liquidity of shares in participating companies through intermittent trading events. These will give new investors easier access to growth companies pre-IPO, and early-stage investors and other shareholders, including employees, will have more opportunity to realise their investments.
PISCES: a new private company trading platform
Esther Rusling Senior Associate D +44 20 7320 6227
Timeframe The DUAA comes into effect in stages. Some provisions are already live. The remainder are due to come into force by April 2026. What does it do? The DUAA modernises the UK's data protection framework to better reflect current technology and business practices. It introduces statutory support for smart data schemes, digital identity and verification services, and automated decision-making tools, setting clearer rules for how organisations can deploy these technologies. It also provides for: reform of the Information Commissioner, including its governance structure, duties, enforcement powers, reporting requirements, data protection complaints processes and its development of statutory codes of practice; and changes to UK GDPR and DPA 2018, which potentially alter when and how businesses can lawfully process personal data, including a new lawful basis for certain data uses. How might a UK business be affected? Businesses should review data protection policies and procedures to reflect the DUAA, in particular noting that it: widens the scope for automated decision-making, easing some restrictions on decisions with legal or similarly significant effects, while still requiring key safeguards such as the ability for individuals to challenge outcomes; and creates new data-sharing and digital identity frameworks (e.g. smart data schemes and digital verification services), offering opportunities to streamline processes and develop new services, but also introducing corresponding compliance and governance duties.
Cyber Security and Resilience (Network and Information Systems) Bill 2025
Timeframe The CSRB was introduced on 12 November 2025. Consultation will take place throughout 2026 with Royal Assent expected later in the year. Not all measures will come into force immediately, with some requiring secondary legislation. What does it do? Under the Network and Information Systems (NIS) Regulations 2018, organisations involved in the delivery of essential services (energy, transport, health, drinking water and digital infrastructure) and some digital services (including online marketplaces, search engines and cloud computing providers) must comply with strict security and resilience duties. The CSRB: broadens NIS to cover additional critical services and infrastructure such as medium and large data centres, medium and large managed service providers, large load controllers (managing load for smart appliances) and designated critical suppliers (as designated by regulators); enhances the oversight and enforcement powers of the 12 sector-specific regulators; and gives the government more flexibility to direct regulators to take action in response to immediate threats. How might a UK business be affected? The CSRB brings more businesses in scope of the NIS regime. In-scope organisations: will be subject to stricter incident-reporting deadlines and stronger compliance obligations; and can expect increased operational and cost burdens due to new security requirements and regulator cost-recovery powers.
ICO reviews and updates its guidance for businesses
Timeframe Ongoing What does it do? The ICO's programme of updating its extensive guidance includes: Guidance/toolkit on AI and data protection Under review to reflect any changes as a result of the DUAA coming into force. The last substantive update was in 2023. Encryption guidance Updated rules and advice on how organisations should encrypt and protect personal data. Under review. Data protection enforcement procedural guidance This explains how the ICO carries out investigations and enforcement under data protection law. Currently under consultation. Cookies/online tracking guidance Updated in June 2025 to reflect the DUAA. New chapter due following recent consultation. General data protection guidance updates Multiple other guidance pieces in development, including: complaints guidance for organisations; data sharing for scams and frauds; and international transfers guidance. How might a UK business be affected? Businesses should take note of ICO guidance, monitor changes that are due/imminent and make sure that their own policies and procedures on personal data are constantly updated to reflect any changes.
Dan Bodle Partner D +44 20 7246 7540
Timeframe 1 January 2026 to 31 December 2027 What does it do? A new pilot scheme in the English High Court makes certain documents from trials and hearings in the Commercial Court (including the London Circuit Commercial Court) and the Financial List available to the public by default. The scheme applies to the following document types if used or referred to in a public hearing between 1 January 2026 and 31 December 2027: skeleton arguments; written submissions; witness statements (excluding exhibits); expert reports (including appendices/annexes); other documents considered by the judge to be "critical to the understanding of the hearing"; and other documents agreed by the parties. Parties wishing to withhold or redact a document will need to seek a court order. How might a UK business be affected? This scheme makes it procedurally easier for members of the public (including the media) to obtain court documents. Affected businesses should carefully consider whether there is potentially sensitive information in relevant documents and plan ahead if they wish to resist disclosure. A review is expected in six months' time. If deemed successful, the scheme may be extended to other courts (most likely initially other Business and Property Courts).
In the name of open justice: a shift in the approach to court documents (England and Wales only)
Timeframe Ongoing What does it do? The increasing incorporation of AI technologies (particularly generative AI) into organisations' commercial operations and supply chains represents a growing litigation risk. It may give rise to claims for breach of contract, tortious liability, copyright infringement and for breaches of consumer protection and/or competition law. AI-related litigation has been more prevalent in the US to date. However, proceedings have been brought in the English courts alleging: IP infringement in respect of the use of images to train an AI model; breach of contract following wrongful suspension from trading allegedly caused by AI; and misrepresentation as to the capabilities of an AI system. How might a UK business be affected? Given the increasingly widespread uses of AI, these disputes have the potential to affect corporates across all industry sectors. Businesses should ensure they understand the short-term and long-term legal and regulatory risks of their AI practices, develop a suitably comprehensive framework for AI oversight within their organisation and provide adequate training to staff on responsible AI use.
AI-related disputes – an emerging risk
Louisa Caswell Partner D +44 20 7320 6084
Tom Hanson Partner D +44 20 7246 7110
Timeframe November 2025 What does it do? Fraudulent misrepresentation (deceit) requires a false representation made dishonestly, which induces the claimant to act and suffer loss. In recent English cases, courts had added an additional hurdle – the claimant had to show they were consciously aware of the representation and understood it to have been made. In Credit Suisse Life (Bermuda) Ltd v Ivanishvili, the Privy Council held that this development was wrong. Awareness is not a legal requirement for deceit – it is enough that the defendant's conduct caused the claimant to hold a false belief. Although a Privy Council decision, the reasoning is expected to be followed in England and Wales. Further, although the Privy Council addressed fraudulent misrepresentation, its reasoning on the nature of inducement may well influence how English courts assess all forms of misrepresentation. How might a UK business be affected? This lowers the bar for deceit claims (and potentially other forms of misrepresentation) against corporates, financial institutions, auditors and other professionals whose conduct or documents may carry implied representations of honesty or compliance. Defendants can no longer argue that claimants were unaware of such representations. Businesses will need to consider the wide-ranging impact of this decision, including its potential impact on civil claims following regulatory findings of wrongdoing and reliance issues in claims under the UK listing and disclosure regime.
Privy Council resets the test for deceit
7% We are not incorporating AI technologies in our organisation
Generally speaking, how concerned, if at all, would you say you are about the litigation risks of your organisation using AI in its commercial operations and supply chains?
Thinking about your organisation incorporating AI technologies in its commercial operations and supply chains...which one, if any, of the following statements best applies to your organisation?
46% Some (or a few) areas of the organisation use AI technologies for specific tasks
34% Most areas of the organisation are incorporating AI technologies
11% All areas of the organisation are incorporating AI technologies extensively
3% Don't know
6% Don't know
10% Not at all concerned
36% Not very concerned
36% Fairly concerned
12% Very concerned
546
All senior decision makers of large businesses (250+)
Source: YouGov Plc. Total sample size was 546 adults. Fieldwork was undertaken between 1-10 December 2025. The survey was carried out online. Figures have been weighted and are representative of all senior decision makers of large businesses (250+ employees).
View from the market
Question 1
We have recently asked senior decision makers at large UK businesses these questions about this development:
Response
Question 2
Alison Weatherhead Partner D +44 141 271 5725
Timeframe First reforms took effect on or shortly after the Act received Royal Assent on 18 December 2025 and the second tranche in April 2026. What does it do? The Act contains the most significant employment law reforms in a generation. The changes taking effect on, or within two months of, the Act becoming law relate to trade union and industrial action reforms, including reducing ballot and notice requirements. The April 2026 changes are more wide-ranging and include: collective redundancy protective award period to increase (from maximum of 90 days' pay to 180 days' pay); day-one rights to paternity and unpaid parental leave; establishment of the Fair Work Agency; removal of lower earnings limit and waiting period for Statutory Sick Pay; simplified trade union recognition process; and voluntary disclosure of equality action plans. Further reforms will come into effect in October 2026 and 2027. How might a UK business be affected? Employers will need to update parental and sick pay policies, payroll systems and HR documentation in readiness for the first tranche of changes. Consider developing an equality action plan, setting out steps you are taking to address gender pay and menopause support, for voluntary publication if your organisation wishes to lead the way on this, rather than waiting until it is compulsory to publish a plan.
Timeframe The Supreme Court ruling applied immediately. What did the Supreme Court decide? The Supreme Court held that the terms "sex", "woman" and "man" in the Equality Act 2010 refer to biological sex at birth, not to a gender acquired under the Gender Recognition Act 2004. It reaffirmed that although individuals with a gender recognition certificate remain protected against discrimination under the separate protected characteristic of "gender reassignment", that does not change their classification for sex-based rights under the Equality Act. The ruling applies across England, Scotland and Wales. The Equality and Human Rights Commission has delivered an updated version of its Code of Practice for services, public functions and associations (Services Code) to the government. Whilst the Services Code does not apply to organisations in their capacity as employers, many are nonetheless hoping it will provide some practical guidance on how they should address issues such as access to facilities. The government has not yet taken steps to bring it into force. Two recent first instance decisions have begun to apply the Supreme Court's judgment in practice. They suggest that decisions about access to facilities should be evidence-based, proportionate and clearly documented, taking into account the particular workplace, available alternatives and the risk of detriment to different groups. They are not binding on other tribunals and both claimants are likely to appeal. How might a UK business be affected? Businesses need to review their equality and inclusion policies; audit single-sex facilities and services; and stay alert to forthcoming EHRC and further appellate guidance. In doing so, it is important to engage with affected people and groups, be mindful of privacy, manage individual cases with empathy and communicate sensitively.
Awaiting guidance from the Equality and Human Rights Commission on single sex services
3% Not at all prepared
8% Don't know
14% Not very prepared
52% Fairly prepared
23% Very prepared
We have recently asked senior decision makers at large UK businesses this question about this development:
Question
Thinking about your organisation's preparedness for the anticipated reforms to employment law under the Employment Rights Bill (including enhanced employee rights relating to paternity and unpaid parental leave, sick pay and redundancy), how prepared, if at all, do you think your organisation is for this?
Helen Bowdren Partner D +44 20 7246 4866
Timeframe Imminent: Expected publication of the final UK SRS versions (for voluntary use). Early 2026: Expected FCA consultation on requiring UK-listed companies to adopt UK SRS via listing rules. What does it do? On 25 June 2025, the government launched a consultation on the draft UK Sustainability Reporting Standards (UK SRS). These are based on the International Sustainability Standards Board's International Financial Reporting Standards S1 and S2, with minor UK-specific amendments. The consultation, which has now closed, sought feedback on whether the standards are suitable for the UK and the potential benefits and costs for stakeholders. The move marks a key step toward a UK-wide sustainability reporting regime aligned with global standards. The six amendments to the ISSB standards proposed in the consultation include the removal of transition relief permitting delayed reporting, the extension of transition relief that allowed a "climate-first" approach, and the removal of "effective date" clauses. How might a UK business be affected? Mandatory reporting against the UK SRS is currently only expected to apply to "economically significant" entities, including listed companies and potentially large private companies (subject to further government consultation). The standards will, however, be available for voluntary use by any organisation once finalised.
UK Sustainability Reporting Standards
Katharine Harle Partner D +44 20 7320 6573
Timeframe A policy statement with the final rules is expected in early 2026, following an FCA consultation in 2025. Registration for temporary permission opens on 15 May 2026 and closes on 1 July 2026. Regulation will go live on 15 July 2026. Firms with temporary permission can make applications for authorisation from this point. What does it do? Buy now pay later or deferred payment credit (DPC) are interest-free credit products repayable in 12 or fewer instalments, within 12 months. The government identified a risk of harm where third-party lenders were providers. From 15 July 2026, DPC agreements provided by third party lenders will become regulated credit agreements. How might a UK business be affected? From 15 July 2026, DPC lenders will need to be authorised by the FCA to enter into DPC agreements or hold a temporary permission for doing so. DPC lenders must also comply with the FCA rules. This does not include agreements provided directly by merchants which will remain exempt from regulation.
Regulating Buy Now, Pay Later
Timeframe Early 2026: publication of policy statement and final rules expected (if FCA decides to proceed with redress scheme). What does it do? On 1 August 2025, the Supreme Court determined in the cases of Hopcraft, Wrench and Johnson that dealers did not owe fiduciary duties to their customers, but that an unfair relationship between customer and lender may arise where a high commission and commercial tie are not disclosed. The FCA determined following this judgment that the criteria for an industry-wide redress scheme were met and on 7 October 2025 consulted on its proposals. The proposed scheme covers agreements from 6 April 2007 to 1 November 2024. The FCA estimates 14.2 million agreements are in scope and that 85% of affected consumers are expected to claim. The average redress is estimated at £700 per agreement (though a wide range is redress amounts is expected) and the expected redress bill is thought to be £8.2 billion with additional costs to firms of £2.8 billion. How might a UK business be affected? There remains uncertainty as to whether the FCA's proposals will be challenged, however lenders who provided motor finance loans within the timeframe covered by the scheme have been urged by the FCA to start preparations to implement the scheme now. This includes collating documentation and identifying customer contact details. When considering the redress scheme, directors should be mindful of their duties when facing financial stress arising from potential redress liabilities: ensuring early engagement with stakeholders, monitoring solvency, and taking professional advice where the company’s financial position may deteriorate.
Andrew Barber Partner D +44 20 7246 7291
Timeframe The new rules come into force on 7 May 2026. The FCA has confirmed that it will consult further before changing this Supplementary Regime. What does it do? Payments and e-money firms (Payments Firms) should safeguard funds they receive to make a payment or in exchange for e-money they issue. In 2024, the FCA consulted on major changes to safequarding requirements for Payment Firms, having found that certain Payments Firms did not have sufficiently robust safeguarding practices. On 7 August 2025, the FCA published Policy Statement PS25/12 setting out the final rules and guidance on the Supplementary Regime pending further reform to regulation. The new rules include safeguarding reconciliations at least once each day, an annual audit and a new monthly regulatory return to the FCA. How might a UK business be affected? The new regime should provide greater assurance to customers of Payments Firms that, in the event of insolvency of the payment firm, their funds will be returned in full. Payments Firms should be taking steps to implement the new regime and to improve their systems and processes to allow for daily reconciliations and regular reporting.
FCA strengthens safeguarding regime for payments and e-money firms
Venetia Jackson Counsel D +44 20 7246 7783
+44 20 7246 7783
Dan Lund Partner D +44 20 7320 3754
Timeframe Effective from 15 October 2025. What does it do? Since July 2024, UK sanctions authorities have had the power, under the Russia sanctions, to designate non-Russian entities who engage in certain dealings with Russia from which UK persons are prohibited. Recently, the UK has used this power to designate several Indian, Chinese and Emirati companies that are active in the Russian energy sector due to their substantial purchases of Russian crude oil. This is notable because it shows the UK exercising what is in effect a "secondary sanctions" power in the energy sector, giving rise to a UK and US secondary sanctions risk for entities in third countries. Secondary sanctions risk is widely perceived to be a risk associated only with US sanctions. This shows the UK exercising the same approach. How might a UK business be affected? The UK's use of secondary sanctions powers is arguably helpful to UK businesses in that it goes some way towards levelling the playing field – it imposes (in the areas where it applies) a compliance risk for non-UK companies who engage in dealings with Russia from which UK persons are prohibited.
UK Russia sanctions – UK uses secondary sanctions designation powers
Roger Matthews Partner D +44 20 7246 7469
Timeframe 1 January 2026 onwards. What does it do? The definitive phase of the EU's Carbon Adjustment Mechanism (CBAM) began on 1 January 2026, marking the shift from the transitional reporting phase to the financial stage. EU importers are now required to purchase and surrender CBAM certificates to cover the carbon emissions embedded in in-scope imported goods. Goods within scope of the CBAM regime include iron, steel, aluminium, cement, fertilisers, electricity and hydrogen. How might a UK business be affected? UK exporters of CBAM-covered materials to the EU will be required to measure, verify and report emissions data specific to their products to the EU importer. Indirect UK suppliers, who sell CBAM-covered materials to a business that subsequently exports them (or a finished product) to the EU, will also be required to provide the exporter with emissions data for the materials or products it sells. Failure to provide credible emission data is likely to make UK suppliers less attractive, as EU importers would be forced to apply default (higher emission) values, thereby inflating costs.
EU Carbon Adjustment Mechanism – definitive phase began on 1 January 2026
Carolyn Saunders Partner D +44 20 7320 6585
Timeframe Expected to come into force on 31 July 2026. What does it do? Collective Defined Contribution (CDC) schemes established by the Pension Schemes Act 2021 are a third type of scheme that pay a regular income for life on retirement. Aiming to combine the stability of a defined benefit (DB) pension with the contribution-based model of a defined contribution pension, they use collective risk-sharing to provide a target rather than guaranteed income. Previously limited to single or connected employers, the new draft Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 extend the framework to unconnected multi-employer CDC schemes. How might a UK business be affected? Unconnected employers can join CDC schemes (once set up by commercial providers and authorised by the regulator), following a Master Trust-style model. This may improve access to high-quality pension provision, funding stability and long-term investment outcomes through wider risk pooling without DB-style liabilities.
Government introduces framework for unconnected multi-employer CDC schemes
Timeframe Expected to receive Royal Assent in 2026 with phased implementation through to 2030. What does it do? The Bill modernises UK pension regulation and supports long-term investment. Once enacted it is expected to: enable defined benefit (DB) schemes to release surplus assets through new trustee powers and relaxed funding rules; promote consolidation across defined contribution (DC) schemes through "megafunds" and automatic small-pot transfers; strengthen governance with "value-for-money" tests and clearer default retirement pathways; and align trustee duties with the UK's productive finance agenda and confirm the PPF's ability to suspend its levy. How might a UK business be affected? Employers of DB schemes may gain access to surplus funds but face stricter funding, covenant and member outcome scrutiny. Employers with DC arrangements should anticipate major changes in scheme size, provider alignment and retiree phase modelling. Trustees should review governance, funding and investment strategies to align with the Bill's new powers and obligations.
Pension Schemes Bill 2025
Timeframe Expected to receive Royal Assent in 2026 and be implemented mid-to-late 2026. What does it do? Following the Virgin Media judgment, which cast doubt on the validity of certain pre-1997 amendments to contracted-out defined benefit schemes, draft amendments to the Pension Schemes Bill would validate historic changes where trustees acted in good faith. The proposed "retrospective actuarial confirmation" framework protects schemes from unintended legal and administrative consequences and safeguards member benefits. Carve-outs apply where trustees have treated amendments as invalid or proceedings began before 5 June 2025. Actuarial guidance is awaited and the forthcoming Verity Trustees v Wood judgment may determine whether the fix extends to scheme closures. How might a UK business be affected? Employers gain reassurance that many past amendments should stand, though some may fall outside the fix. Trustees and employers should review scheme records and support the actuary's assessment once the legislation is in effect.
Proposed fix for Virgin Media v NTL Pension Trustees II
Eleanor Hart Partner D +44 7741 323250
Michele Vas Partner D +44 20 7320 5448
Roy Pinnock Partner D +44 20 7246 7683
Timeframe First introduced to Parliament in March 2025, enacted in December 2025. What does it do? The Act makes significant reforms in the following areas. Acceleration of infrastructure delivery National Policy Statements will be reviewed at least every five years. Nationally Significant Infrastructure Projects will see simplified consent and consultation procedures, limiting opportunities to judicially review decisions, and reforms to electricity and transport infrastructure. Modernisation of planning processes Councils will be able to set cost-recovery-based planning fees. Planning committee members will have to undertake mandatory training to ensure competence. A national delegation scheme will streamline decision-making. Combined and unitary authorities will have to prepare spatial development strategies aligning local and strategic plans, and supporting climate and nature recovery objectives. Enhancing environmental protections A new Nature Restoration Fund, financed by a developer levy, will fund national conservation projects. Improving governance of development Development Corporations will gain broader powers for sustainable urban growth. Compulsory purchase processes will be simplified and accelerated. How might a UK business be affected? The reforms are designed to speed up infrastructure delivery and improve planning certainty. Businesses should consider their exposure to new compliance costs and environmental obligations. Early engagement on planning proposals will assist in budgeting and future planning strategies.
Planning and Infrastructure Act 2025
Timeframe Introduced into Parliament in July 2025, expected to be enacted later in 2026. What does it do? The Bill represents the most significant shift in local governance and planning powers in England for decades. It aims to rebalance power from central to local government, standardise and deepen devolution, streamline local government structures and empower communities. How might a UK business be affected? The objective is for the planning system, in particular, to see greater integration with transport and economic strategies, with Mayors having enhanced powers to drive growth and regeneration. How the Bill progresses through Parliament will be interesting to see given the wide-ranging changes and powers proposed by the Bill.
English Devolution and Community Empowerment Bill 2025
Brian Hutcheson Partner D +44 141 271 5431
Timeframe The Renters' Rights Act 2025 has received Royal Assent and the first phase of reforms will come into effect on 1 May 2026. What does it do? The reforms to the residential assured tenancy regime include: automatic conversion of assured shorthold tenancies (ASTs) and fixed-term assured tenancies into periodic assured tenancies; abolition of no-fault evictions for ASTs; tenants being required to give two months' notice to quit; restrictions on rental advances and the banning of rental bidding practices; and rent increases having to follow the prescribed statutory procedure. How might a UK business be affected? Landlords of residential premises should carefully consider the impact of the Act on both existing and new residential tenancies as, once in force, the Act has the potential to rewrite non-compliant provisions and there can be significant consequences arising from breach (e.g. fines and criminal liability).
Bryan Johnston Partner D +44 20 7320 4059
Timeframe Effective now. The relevant decision in London Trocadero (2015) LLP v Picturehouse Cinemas Ltd and others was handed down on 23 May 2025. What does it do? In most commercial leases, the tenant pays an insurance rent which covers buildings and loss of rent insurance. Often, a commission is paid to the landlord indirectly by the insurer as part of the broker's commission and as an incentive for placing the insurance. The payment of landlord's commission does not reduce the amount of the tenant's insurance rent, instead it inflates it. This judgment concluded that the terms of the relevant lease did not permit recovery of landlord's commission as part of the insurance rent payable by the tenant. How might a UK business be affected? Insurance rent charged to tenants may be subject to a partial refund where landlords have kept an undeclared commission which is not permitted by the terms of the relevant lease.
Landlord's commission not recoverable as insurance rent
Timeframe The English Devolution and Community Empowerment Bill 2025 is at Committee Stage in the House of Lords. What does it do? The Bill proposes to prohibit upwards-only rent reviews in commercial leases. The prohibition will apply to commercial leases which contain rent review terms where the future rent is incapable of determination at the start of the lease. The Bill captures leases with index-linked rent reviews, open-market rent reviews and turnover rents. The Bill as currently drafted applies to leases granted from the date provisions come into force, so there is no retrospective effect. The Bill does not appear to affect stepped rent increases. How might a UK business be affected? Commercial landlords should be aware that the default position of upwards-only rent reviews could, in the future, be banned. This may have a knock-on effect on the desirability of UK commercial property as an investment asset. Commercial tenants will want to track the progress of the Bill carefully and may be encouraged to seek upwards-downwards rent reviews in new leases.
Proposed ban of upwards-only rent reviews
Luci Mitchell-Fry Partner D +44 7795 618258
Timeframe 2020–2025 cases; Practice Statement effective January 2026 What does it do? Five years on, the Part 26A restructuring plan has matured into a core tool for corporate rescue. Key cases – Virgin Atlantic, DeepOcean, Houst, Petrofac, Consort Healthcare (Tameside) and Thames Water – show the English courts’ intensifying focus on valuation evidence, cross‑class cram‑down fairness and process discipline. The forthcoming Supreme Court appeal in Waldorf Production Ltd is expected to clarify how judicial discretion will apply to dissenting creditors. Meanwhile, the revised Practice Statement 2.0 (Sept 2025) modernises procedure for both schemes and plans, promoting transparency, stakeholder engagement and efficient case management. Commentators note that plans have become increasingly litigation‑intensive and costly – security‑for‑costs, appeal and case‑management burdens are now material factors. How might a UK business be affected? Lenders, sponsors and boards should expect greater scrutiny, higher costs and tighter procedural timelines. Early creditor engagement, transparent valuation and strong evidence preparation are essential to minimise cost risk and ensure sanction. The updated Practice Statement should improve efficiency and predictability, but only for well‑designed, well‑resourced plans. Given increased cost and litigation risk, many businesses are exploring alternative restructuring routes such as CVAs, loan-modification exercises (LMEs) and consensual restructurings to achieve similar outcomes with lower execution risk.
Restructuring plans and schemes in the English courts: maturity, modernisation and cost pressures
Susan Moore Partner D +44 20 7320 5420
Ian Fox Partner D +44 20 7320 5487
Timeframe 2025 court decisions What does it do? Recent judgments clarify how English insolvency jurisdiction and recognition operate in cross-border contexts. In Bridging Finance Inc v Lyons, the court examined the reach of the English bankruptcy jurisdiction under section 265(1)(c) of the Insolvency Act 1986. It confirmed that a bankruptcy petition may proceed where the debtor has carried on business in England within the preceding three years, even if their COMI lies elsewhere. The case offers guidance on the evidential threshold for “carrying on business” and illustrates the limits of English jurisdiction in cross-border personal insolvency. At Supreme Court level, Kireeva v Bedzhamov revisited the long-standing “immovables rule”, confirming that foreign receivers cannot dispose of UK real estate assets without English judicial authority – reinforcing protection of domestic property rights. How might a UK business be affected? Together, Lyons and Bedzhamov illustrate the courts’ measured approach to jurisdiction and recognition. Lenders and insolvency practitioners should ensure clear evidence of English connections before commencing proceedings and foreign officeholders must anticipate local law hurdles when seeking to realise UK assets.
Cross-border insolvency jurisdiction and recognition: Lyons and Bedzhamov
Luci Mitchell-Fry Partner, Restructuring and Insolvency Group, Dentons
Restructuring plans are no longer experimental – they’re mainstream but increasingly resource‑intensive. Preparation and transparency now decide outcomes.
Ian Fox Partner, Restructuring & Insolvency Group, Dentons
Lyons underscores that jurisdiction turns on substance, not form: the English courts will act where there is genuine business activity here, but not otherwise.
Neil McKnight Partner D +44 20 7246 7341
Alex Thomas Partner D +44 20 7246 7547
Timeframe Summer 2025 – ongoing What does it do? Recent HMRC successes in the Court of Appeal have highlighted the loan relationships "unallowable purpose" rule, which restricts the UK corporation tax deductibility of interest on debts which have a non-business or non-commercial purpose, including that of tax avoidance. Even when forming part of a wider transaction or arrangement which is commercially motivated, financing structures implemented to secure tax benefits are at risk of challenge. This is particularly acute in larger groups, where the purposes of other group members may be imputed to a UK member. Following its successes in the Court of Appeal, in spring 2025 HMRC updated its published guidance in this area. Subsequently it sent "nudge" letters to some businesses with financing arrangements considered vulnerable to challenge, offering settlement discussions. This targeted nudge campaign is expected to continue and may ultimately lead to a much broader HMRC campaign targeting financing structures, as HMRC's investigation and enforcement capabilities are bolstered to "close the tax gap". How might a UK business be affected? Many common financing structures may be susceptible to challenge. Dealing with an HMRC enquiry is both expensive and time-consuming, and outcomes can be unpredictable where the key factor is "purpose" – particularly where there is a lack of contemporaneous documentary evidence. The loss of deductions for interest and financing costs can significantly increase the tax liabilities of a business, impacting cash flows and profitability. It may also lead to breaches of banking covenants. Boards should give full consideration to the commerciality of financing structures, both new and existing, and ensure the decision-making process is carefully and contemporaneously documented.
Unallowable purpose and interest deductions
Technology & E-commerce
Dr Kuan Hon Of Counsel D +44 20 7320 3940
What are the key developments? Work continues on the Online Safety Act's (OSA) commencement, with key developments in the following areas: Guidance and deadlines In December 2024, Ofcom published guidance documents and codes of practice on illegal harms. Organisations must now: conduct a risk assessment evaluating the risks of illegal harms on their in-scope services, by 16 March 2025 (for which exercise Ofcom released an online tool and template record-keeping document on 21 January); and start taking steps to ensure that, by 17 March 2025, they will have implemented the safety measures for their in-scope services required by the codes (if approved by Parliament by then), or take other effective measures to protect users from illegal content and activity. On 16 January 2025, Ofcom published its final documents on children's access and age assurance. All services that allow pornography must implement "highly effective age assurance" (as per Ofcom's guidance) to ensure that children are not normally able to access pornographic content by July 2025 at the latest. All regulated user-to-user and search services must carry out a children's access assessment by 16 April 2025 to determine whether they are likely to be accessed by children. If "highly effective age assurance" measures (per Ofcom's guidance) have not been implemented for a service, Ofcom will probably consider it likely that children can access the service, with the result that a separate children's risk assessment will also need to be conducted. For Part 5 services (certain pornographic content), the duty to implement highly effective age assurance and some related duties came into effect on 17 January 2025, following commencement of this aspect of Part 5 of the Act. Ofcom has stated it will take enforcement action on their services if providers do not act promptly to address the risks. This includes fines of up to £18 million or (if greater) 10% global worldwide revenue. Updates A new priority offence in respect of "Intimate Image Abuse offences" was added in December 2024 to the OSA. The duties on certain online services to protect users from illegal content/activity now also extend to the Sexual Offences Act offence of sharing or threatening to share intimate images (photographs or films, including deepfakes) of others without their consent, as a priority offence under the OSA. A draft statutory instrument was laid before Parliament in December 2024. The draft sets out the threshold conditions for so-called "categorised" services under the OSA, which will be subject to further and more stringent obligations. The draft is expected to become law in early 2025. On 17 January 2025, various OSA provisions regarding regulated provider pornographic content were brought into force. OSA updates Further OSA provisions coming into force are outlined in Ofcom's updated timeline. We are already advising clients on their assessments and preparing for their children's access assessments. If you would like to discuss Dentons assisting with your assessment, please get in touch. The EU Digital Services Act may also apply (to some degree) to the same online services. Therefore, a practical approach to the overlaps and conflicts will be important.
Online safety
Financial Services & Banking
Business Crime & Investigations
What are the key developments? Online marketplaces will need to prepare for the following: Product Regulation & Metrology Bill Online marketplaces will be caught under the recently-introduced Product Regulation & Metrology Bill. This is designed to give wide-ranging powers to the government to make provisions in relation to the UK's product safety and metrology regulatory framework, taking into account technological advances, such as AI. Delegated legislation will set out substantive obligations which should be monitored. The definition of "online marketplace" is currently very broad, extending to "website, mobile app or any other platform by means of which information is made available over the internet", in each case "which facilitates the marketing of products in the United Kingdom by that means". The definition can be amended by secondary legislation. Online Safety Act Online marketplaces will also need to consider the OSA generally, in respect of risks such as those arising from the sale of offensive weapons. In November 2024, the government consulted on proposals that include giving the police the power to issue notices to senior executives of online companies, being able to order them to remove specific pieces of content, potentially within two days. If a company fails to act on this, the police will send a second notice to the senior executive in that company, who would then be personally liable for a significant fine if they too fail to act. Defences similar to those afforded to senior executives under the OSA may be available.
Online marketplaces
Sarah Partridge-Smith Senior Associate D +44 20 7320 5527
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Timeline The Economic Crime and Corporate Transparency Act 2023 introduced a new corporate strict liability offence of "failure to prevent fraud" (FTP). Following publication of guidance for firms, the offence will come into effect from 1 September 2025. What does it do? The FTP offence holds in-scope organisations criminally liable in specific circumstances for fraud offences committed by associated persons which benefit the organisation or its customers. How might a UK business be affected? The offence applies to incorporated entities and partnerships across all sectors meeting at least two of the following criteria: more than 250 employees; turnover exceeding £36 million; and/or assets exceeding £18 million. The offence applies where a fraud offence is committed which is capable of being prosecuted under UK law – i.e. where the offence is committed in the UK, or by a UK-based employee, or where the gain or loss occurred in the UK. If committed by a UK subsidiary, legal action can be taken against the parent company, even where based outside the UK if the fraud was intended to benefit the parent company. Organisations will have a defence against corporate liability where they have reasonable procedures in place to prevent fraud, or where they can demonstrate that it was not reasonable to expect the organisation to have such measures in place. In assessing "reasonable" measures, the focus is on six principles: top management commitment; risk assessment; proportionate prevention procedures; due diligence; communication and training; and monitoring and review.
UK government publishes guidance on "failure to prevent fraud" offence
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Sarah Partridge-Smith, Senior Associate D +44 20 7320 5527
Timeline Expected to come into force in the second half of 2024.
Find out more
Economic Crime and Corporate Transparency Act 2023: new failure to prevent fraud offence
Timeline From 26 December 2023. What does it do? The ECCTA has expanded the "identification doctrine" for all UK firms, by attributing criminal liability for financial crime offences – including fraud, money laundering, sanctions breaches and bribery – to a corporate entity where the offence is committed with the involvement of a "senior manager" of that entity. Previously, corporate criminal liability could only attach where a prosecuting agency could evidence that the "directing mind and will" of the company possessed the required state of mind. How might a UK business be affected? This expansion will deliberately make it much more straightforward for criminal prosecutions to be taken against firms as a result of individual misconduct. Where senior managers are involved, it will be harder for firms to distance themselves both financially and reputationally. If charged, firms face potentially unlimited financial penalties from the court. We expect a significant increase in corporate crime prosecutions across each of the key economic crime offences (fraud, bribery and money laundering). Senior individuals within a firm with responsibility for financial crime compliance and oversight will want to ensure the firm's internal controls are robust, to ensure that risks are managed effectively and any misconduct identified early. Where misconduct is identified, firms will want to consider their own potential criminal liability as part of any internal investigation.
Economic Crime and Corporate Transparency Act 2023: extension of the identification doctrine
Jessica Thorpe, Dentons Global Advisors, Business Intelligence
DGA's Business Intelligence team anticipates that the new failure to prevent fraud offence will lead to increased requests for pre-employment checks or due diligence reports for executive management. It may also lead to increased internal investigations into suspected or alleged violations of FCPA or the UK Bribery Act.
What does it do? The ECCTA has introduced a new corporate offence of failure to prevent fraud. Following the failure to prevent offences set out in the Bribery Act 2010 and Criminal Finances Act 2017, the ECCTA has introduced strict corporate liability (with no requirement to show misconduct by senior managers or the "directing mind and will" of the company) where: In these circumstances, the relevant corporate entity will be deemed to be liable for failure to prevent it, unless it can show that it has reasonable systems and controls in place at the time of the offence. How might a UK business be affected? The "failure to prevent" offence will initially only be applicable to "large firms" (those with at least two of the following: more than 250 employees; more than £36 million in annual turnover; more than £18 million in assets). However, all firms in scope or approaching those metrics should think about reviewing their internal financial crime control framework to ensure that it is sufficiently robust to provide a potential defence in the event of a fraud. Guidance on government expectations of "reasonable systems and controls" will be published this year. Firms should consider this carefully as part of their compliance horizon scanning. We are already working with clients on what this review work should cover.
a fraud is committed by a person "associated" with the business; and the fraud is intended to benefit the business, its subsidiaries, or a person to whom services are provided on behalf of the business (e.g. customers or clients of the business).
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// Edition 3, October 2024
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Capital Markets (Equity)
Neil Nicholson, Partner D +44 20 7246 7624
Timeline The FCA is currently consulting and working towards substantial progress by the end of 2023, though there is no firm date for adoption. What does it do? The core proposal is for a single listing category for equity shares in commercial companies (ESCC) to replace the current prem ategory, the ESCC will be a simpler, more disclosure-based regime, including reduced eligibility criteria for companies seeking to IPO. The proposal is designed to streamline and enhance the competitiveness of the UK listing regime for equity shares and promote access to listing for a wider range of companies. How might a UK business be affected? Commercial companies (wherever incorporated) with an existing UK premium or standard listing of equity securities will move to the new ESCC segment (subject to transitional arrangements). Separate listing categories and rules will remain for equity shares issued by investment vehicles and for issuers of non-equity securities. However, certain proposed changes will cut across listing categories and therefore may, to some extent, affect issuers outside the n ew ESCC segment.
No Further Material
Timeline The Financial Conduct Authority expects the new rulebook to be in force early in the second half of 2024. What does it do? The key change is a new single listing category for equity shares in commercial companies (ESCCs) which will replace the current premium and standard categories. Compared with the current premium listing category, key features of the ESCC listing category are reduced eligibility criteria for companies seeking to IPO and a simplified, more disclosure-based continuing obligations regime. How might a UK business be affected? The change is designed to encourage a more diverse range of companies to list and grow on UK markets and promote more investment opportunities for investors. Commercial companies with an existing UK premium listing of equity securities will automatically move to the ESCC category. A new transition category will preserve the status quo for existing standard listed companies (pending any decision to move into the ESCC category). For other issuers not falling within the ESCC category (such as companies with a secondary listing, investment vehicles and issuers of non-equity securities), separate listing categories will remain.
New UK Listing Rules
Nik Colbridge, Partner D +44 20 7246 7102
Timeline Proposals are currently subject to FCA engagement with market participants, with formal consultations on rules expected in 2024. What does it do? Fundamentally reforms the structure of the UK prospectus regime, by repealing the current UK Prospectus Regulation and introducing a new regime which gives the FCA enhanced rule-making powers. An overarching aim is to improve the flexibility and responsiveness of the markets by providing a prospectus regime better tailored to the type of capital raising (e.g. on regulated market, off-market primary, rights issues, acquisition related). How might a UK business be affected? Companies accessing public markets for the first time and those raising further capital should benefit from more proportionate and streamlined processes. While a prospectus will remain a key feature of an IPO in the UK, the FCA will have greater discretion to determine when a prospectus is required and power to make rules on disclosure requirements, allowing for a more proportionate disclosure regime.
Further materials
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UK Prospectus Regime Review Outcome: replacement of the UK Prospectus Regulation
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Capital Markets (Debt)
Timeline The Regulations were made on 29 January 2024, but will have limited practical effect until the FCA has made new rules on public offers and admissions to trading. The FCA will consult on these proposed rules in summer 2024. What does it do? The Regulations provide the framework to allow the FCA to make the rules that will replace the UK Prospectus Regulation. This forms part of the UK's Smarter Regulatory Framework. An overarching aim is to improve the flexibility and responsiveness of the markets by providing a prospectus regime better tailored to the type of capital raising (primary, secondary etc.) and facilitate greater access to capital for companies that are not publicly traded. How might a UK business be affected? Equity issuers should benefit from more proportionate and streamlined processes. While a prospectus will remain a key feature of an IPO in the UK, the FCA will have greater discretion to determine when a prospectus is required and power to make rules on disclosure requirements, allowing for a more proportionate disclosure regime. Until the new FCA rules come into effect, the UK Prospectus Regulation continues to apply to any public offers of securities in the UK, or applications to list securities on a UK regulated market.
Reform of the UK Prospectus Regime – the Public Offers and Admissions to Trading Regulations 2024
Timeline Published in January 2024, applicable from 2025. What does it do? The 2024 Code updates the 2018 edition. The substantive changes largely focus on those parts of the Code that deal with risk management and internal controls. Most significantly, there are new reporting obligations which will require a board to include in its annual reporting a declaration as to the effectiveness of the company's material controls. New guidance providing advice, further detail and examples of good practice accompanies the updated Code. How might a UK business be affected? Premium listed and other companies that apply the UK Corporate Governance Code will have to apply the 2024 Code for financial periods beginning in 2025 onwards. However, the requirement for the new board declaration will come in one year later, giving boards additional time to strengthen their internal control processes and implement the new arrangements.
New UK Corporate Governance Code
James Melville Ross, Dentons Global Advisors, Complex Communications
Given the ongoing uncertain macroeconomic picture and political landscape, we anticipate a lag in IPOs until year end 2024, with 2025 seeing a possible capital markets rebound. DGA's Complex Communications team is on hand to guide companies through the listing process, providing an effective communications strategy throughout.
Commercial Contracts Blogs v Snodrgass
Brief details here Due to be in force by September 2024
Employment Development
Insolvency Item
Capital Markets Economic Crime & Corporate Transparency Bill
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// Edition 2, March 2024
Economic Crime and Corporate Transparency Act 2023 How does the Act change the risk of a business incurring liability as a result of financial misconduct by an individual?
Paul Langford Managing Knowledge Development Lawyer D +44 20 7246 7032
Adam Pierce Partner D +44 7795 618323
View Business Crime & Investigations
Reforms to UK listing rules and prospectus regime What's changing for issuing companies and investors using the UK public capital markets?
View Capital Markets (Equity) and Capital Markets (Debt)
Commercial contracts - case law update Is it ever possible to exclude liability for fraud? Is a unilateral right to extend a contract repeatedly enforceable? Once a novation has taken place, can it be cancelled?
View Commercial Contracts
International trade - UK importing rules How will changes to rules on EU imports and the proposed UK Carbon Border Adjustment Mechanism affect UK manufacturers and UK importers?
View International Trade & Sanctions
UK AI Roadmap With the EU introducing a statutory legal framework for AI, how is AI regulation progressing in the UK?
View Data Privacy & Cybersecurity
Employment law update How are obligations on employers changing, including obligations to consult staff during a redundancy process, and to offer family friendly employment terms?
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Antonis Patrikios, Partner D +44 20 7246 7798
Timeline The UK currently has no concrete plans for comprehensive AI regulation. By contrast, the EU is a significant step ahead, courtesy of the AI Act. However, there are various domestic AI activities and actions currently in motion. We set out below a snapshot of key aspects, as flagged in the UK government's recent response to its consultation on AI regulation, in our UK AI roadmap/timetable for 2024. What are the key components of the UK AI roadmap?
UK AI roadmap 2024
Nick Graham, Partner D +44 20 7320 6907
Dr. Kuan Hon, Counsel D +44 20 7320 3940
The UK government now considers that "some mandatory measures" will be necessary in all jurisdictions to address potential AI-related harms. How might a UK business be affected? Nothing has yet materialised in terms of domestic legislation. This is despite plenty of activity and discussion in this important area, as illustrated by the roadmap. We can expect to see proposals put forward and developed in 2024, particularly for advanced AI systems such as foundation models. In the meantime, businesses are advised to keep track of the above developments and make use of the numerous resources available, so that they are in the optimal position when UK AI regulation eventually arrives.
Ben Lewis, Dentons Global Advisors, Complex Communications
Cyber risk is also reputational risk. A business is judged on its ability to keep people's data safe, maintain business continuity and provide a safe operating environment for its people and customers. It is important to have a robust playbook which can be deployed during cyber-related crises, as the quality, timeliness and transparency of communication all feed into the regulatory process where penalties are assigned after major breaches.
DRCF AI and digital hub cross-regulatory advice: Pilot launch, where organisations can seek advice on innovative AI/digital issues that engage at least two UK regulators and benefit consumers, businesses or the UK economy. AI Safety Institute: Update on the new UK Institute's approach to evaluating/testing advanced AI systems – this update is now out. AI assurance introduction: For practitioners interested in finding out how assurance techniques can support the development of responsible AI. Also now out. An outline summarises this introduction. Monitoring/evaluation plan: The UK government will conduct a targeted consultation with a range of stakeholders on its proposed plan to continuously assess the effectiveness of the regulatory framework.Monitoring/evaluation plan: HR/recruitment AI use: Updated DSIT guidance is due in the spring. AI management essentials: For AI vendors to the public sector – there will be a consultation on whether this should be mandatory. Science of AI safety: An international report is due out. Securing AI models: A consultation will consider issues such as a potential Code of Practice for AI cybersecurity based on the NCSC AI cybersecurity guidelines. (Note that the UK PSTI Act applies from April, affecting consumer smart IoT products such as smartphones.) Regulators' approach to AI: UK regulators must issue updates on their approach to AI by 30 April. Responses from UK regulators and other UK public bodies have just been published.
Summer 2024
AI guidance to regulators: The UK government's initial guidance to UK regulators on implementing the UK's AI principles is to be expanded "by" the summer. Highly capable AI systems, including their open release: The government will engage on possible interventions regarding such systems. On possible scenarios that may arise in the context of AI development, proliferation and impact, a "non-policy" report is to be published "shortly".
During 2024
AI-related risks to trust in information, deepfakes, disinformation etc.: There will be a call for evidence ("shortly", possibly in the spring). Regulatory powers/remits: There will be a review to highlight any gaps. Cross-economy AI risk register: There will be a targeted consultation on the register, which will include risk assessment methodology. Democracy and electoral interference risks: We now have the Online Safety Act and an international dialogue will be promoted before the next AI Safety Summit. Creative industries: The government will explore the approach to take here (e.g. transparency on IP rights holders' content input into AI models). Bias/discrimination in AI systems – solutions: Further work with the Equality & Human Rights Commission and ICO. Criminal law scope: To consider AI-enabled offences/harms.
Probably in 2024
Automated decision-making (ADM): The Data Protection and Digital Information Bill will clarify various aspects of ADM and provide more lawful bases for ADM. AI-driven markets' competitiveness: The CMA will have tools in this regard, under the Digital Markets, Competition and Consumers Bill. Automated Vehicles Bill: This will regulate self-driving technologies.
By end of 2024
Highly capable general-purpose AI systems: There will be an update on possible developer responsibilities/obligations in relation to such systems. Frontier AI safety emerging processes guide: An update will be issued.
Ongoing
AI Safety Institute: This will continue its testing and other work. There will be broad information sharing, including with other countries. AI lifecycle accountability: Consideration may be required with regards to the possible legal responsibilities and liability for other actors in the AI supply/value chain, including data or cloud hosting providers. Potentially, this could also extend to AI users. AI governance: The UK is working on increasing international collaboration on AI governance.
Spring 2024
Ultimately
