What legal developments can businesses in the UK expect in 2024?
Published on 12th Jan 2024
Our Knowledge Team looks at what lies ahead for business law
Our Knowledge Lawyers have picked out particular legal developments affecting business, as certain already legislated-for regulatory changes and rules come into effect, new legislation passes, and long-awaited litigation on complex points continues to progress through the courts.
- Digital regulation
2023 saw the UK's Online Safety Act (OSA) finally receive Royal Assent and 2024 will see much work by Ofcom, the designated online safety regulator, to bring it into effect. Ofcom is taking a phased approach to implementation. Consultations on draft guidance and codes of practice for the first phase (covering illegal harms) are already under way and should be finalised in the autumn of 2024.
In fact, 2024 will be "the year of the consultation" in online safety in the UK. Ofcom plans to begin consulting on the second phase of implementation (covering child safety duties) by launching consultations in the spring, and will kick start the third phase (covering transparency, user empowerment and other duties on "categorised services") with a call for evidence in early 2024, followed by a consultation on draft transparency guidance in the middle of the year. This is unlikely to start happening until the beginning of 2025. However, it is possible that the three-month period within which in-scope businesses must complete their illegal content risk assessments (part of the first phase of implementation) might begin in the last quarter of 2024.
New legislation to be passed
2023 also saw the reintroduction to Parliament of the Data Protection and Digital Information Bill (which aims to make data protection law simpler and more flexible as well as providing a statutory foundation for smart data regimes, and for digital identify verification services) and the Digital Markets, Competition and Consumer Bill (which makes substantial changes to UK consumer protection law and gives the CMA stronger enforcement powers).
We also saw the introduction to Parliament of the Media Bill, which will reform public service broadcasting and video-on-demand laws. The government expects all three bills to become law during 2024. On 29 April 2024, we will also see secondary legislation under the Product Security and Telecommunications Infrastructure Act 2022 come into force, which will set out specific security requirements for "internet of things" products.
New EU obligations
Meanwhile, in the EU, while "designated" services have been obliged, since August 2023, to comply with the Digital Services Act (which, like the OSA, aims to protect online users from illegal and harmful content and applies to services received by users in the EU, regardless of where the provider is located), obligations will come into force for most providers on 17 February 2024. In addition, the Digital Markets Act, which applies to large providers designated as "gatekeepers" that operate in the EU (again, regardless of where they are based), will come into full effect on 6 March 2024.
2024 will also see the enactment of the EU's Data Act, which becomes law on 11 January 2024. This new legislation will introduce extensive new rules around data sharing, going far beyond personal data. In particular, it will create new rights of access to data, particularly Internet of Things and machine-generated data. Such data is often controlled by the business that gathered it but is inaccessible to the entity whose activities generated it. The Data Act will also introduce new rules in other areas including fairness in data contracts between businesses, switching between cloud services providers, and for smart contracts used to execute data contracts. Most provisions will come into effect on 12 September 2025.
As for data protection and privacy, the EU Commission should publish its review of the GDPR in 2024. As technology continues to evolve at speed, particularly in relation to AI, we are likely to see a continued focus on privacy issues throughout the year, with the balance between innovation and privacy presenting an ongoing challenge for regulators and lawmakers.
The EU's Cyber Resilience Act (which introduces cyber security requirements for products with digital elements) is also likely to become law in 2024, although manufacturers will not have to comply for a further 36 months.
Preparation for compliance
There will be much for businesses offering digital products, services and platforms in the UK to get to grips with in terms of compliance in 2024 and beyond, and businesses operating in both the UK and the EU will face the additional, tricky task of having to comply with two distinct regimes in certain areas, and with intentional divergence by the UK in certain areas (many of which concern platforms, software and hardware). Compliance will therefore need to be considered in good time, with appropriate planning for the resources required to understand, design and implement any necessary changes to software, hardware, data collection or storage, or compliance with new standards issued to support the new regulations.
- Artificial intelligence
The UK government's response to its consultation on the AI White Paper is expected in the first part of the year. New legislation is not expected, but the finalisation of policy in this field will mean that UK regulators are able to firm up their own approach to addressing the impact of AI within their own areas of jurisdiction. More generally, we expect to see a continuation of the increased focus across all sectors on adoption of AI, and evaluation and mitigation of the wide range of legal and regulatory risks that it can generate.
The EU's AI Act (which introduces a tiered system of regulation based on the level of risk as well as regulation of "general purpose AI", including the models underlying some generative AI systems) will be finalised over the coming months, after political agreement was reached on its terms in December 2023. It is likely to become law in summer 2024, with provisions coming into force in stages over the following two years. Again, compliance will need planning. The proposed AI Liability Directive is unlikely to be completed before the European Parliament elections in June 2024. It may be relaunched as part of the work programme for the new European Commission that will be appointed by the new Parliament.
Interplay with intellectual property
With the increasing role generative AI is playing on our day-to-day lives, and hot on the heels of recent cases in the English courts dealing with AI inventorship and the patentability of inventions involving AI, obtaining clarity on the interplay between AI and IP will be high on the agenda next year. With the UK government changing its position on whether to extend the current text and data mining (TDM) exception to copyright, there is some debate about whether AI developers should be able to train AI models on content freely available on the internet (regardless of whether it is protected by IP rights or not) or whether they should have to enter into some kind of licensing arrangement with rightsholders.
The government has committed to producing a voluntary code of practice, which would give clarity on the relationship between intellectual property law and AI and would be developed in collaboration with the AI and creative sectors. This code of practice was originally due to be released in summer 2023 but the AI and IP minister has admitted the difficulties in reaching agreement between the different parties. It is possible that it will be agreed and released in 2024. Although the government has not ruled out a legislative intervention if agreement cannot be reached or the code is not adopted.
We will also see a landmark case between Getty Images v Stability AI head to trial. This will be the first case in the English courts to decide whether copyright and database right infringement has been committed in the UK by the training and development of a generative AI system. This is especially important because of the diverging views from AI developers and the creative sector on how the issue should be treated in law. Stability AI had sought to have some of Getty's claims struck out or to have reverse summary judgment given. However, Mrs Justice Joanna Smith recently dismissed those applications and the case will proceed to a full trial on all of the issues. There are novel issues of law to be determined and a factual investigation into the exact location of the training and development of Stable Diffusion will need to be conducted before a conclusion on Getty's infringement claims can be reached.
- Intellectual property
Platform liability for third-party infringing content
A recent Court of Appeal decision highlighted the different approaches taken in the UK and the EU in relation to the hosting defence for platform providers.
In the UK, there is no obligation for platforms to undertake content review and, if they choose to do so for their own commercial reasons, then they have to accept the risk that they might not be able to rely on the hosting defence in article 14(1) of the eCommerce Directive. This is in contrast to the position in the EU, where article 7 of the Digital Services Act stipulates that providers of intermediary services are not ineligible for the hosting exemption solely because they undertake "voluntary own-initiative investigations" in good faith and in a diligent manner to identify and remove illegal content. It is possible that in 2024 this could have the dual effect of increasing the number of infringement claims being brought against platform providers and encouraging some platform providers to reduce the extent of their content review process in the UK.
We are also awaiting an important ruling from the Supreme Court on whether the overseas sale of trade marked goods on Amazon to UK consumers amounts to trade mark infringement in the UK. It remains to be seen how the judgment from the CJEU in a similar case involving Amazon will affect platform liability in light of the implementation of the Digital Services Act in the EU.
The Unified Patent Court (UPC) has now been in full operation since June 2023 and has proved itself to be an important venue in the European patent litigation landscape. Although the UK is not participating in the new system, it remains a key jurisdiction for parallel litigation and we will continue to watch how the two systems interact.
We have had clear decisions from the UPC on the effect of opt-outs and it has demonstrated willingness to act speedily to grant preliminary injunctions and in applications for evidence preservation. We have also seen disputes over the language of proceedings and the tight timelines for submissions being adhered to, with mixed decisions on time extensions. There has been disagreement between different divisions of the court on whether third parties should be granted access to written pleadings and documents in cases before the court and we await clarity on the issue from the Court of Appeal. How the court's case law and practice develop over the coming year will be keenly monitored, especially as we start to receive decisions on the merits of proceedings. Will how the UPC decides to shape the law affect the popularity of the new system? Watch this space…
SEP licensing disputes
Standard essential patent (SEP) licensing disputes continued to be a mainstay in the English courts in 2023 and the trend is set to carry on in 2024. The increasing number of FRAND (fair, reasonable and non-discriminatory) disputes in the UK courts had previously prompted the UK Intellectual Property Office (UKIPO) to launch a consultation to seek views on whether the SEP ecosystem is functioning efficiently and whether there is a need for UK government intervention. The UKIPO's response to the consultation suggested that the government would seek views on how best to "encourage and promote greater use of arbitration" and whether there should be government intervention. This echoed separate calls for a system of mandatory arbitration made by Lord Justice Arnold, an experienced IP judge, in the Court of Appeal's judgment in Optis v Apple (in which Osborne Clarke acted). It is possible that we may see further activity from the UKIPO in 2024 as SEP licensing disputes continue to occupy the English courts.
Separately, the European Commission released a draft regulation, which, if enacted, would drastically change the SEP litigation and licensing landscape in the EU (with potentially global ramifications). The Commission's proposal leaves many questions unanswered and has prompted differing opinions from different European Parliament committees and the president of the European Patent Office. This leaves lots of room for debate as the proposal makes its way through the legislative process, which will continue in 2024. The vast majority of Commission proposals are agreed at first reading, taking an average of just below 18 months from publication to adoption. The divergence of views and the Parliamentary election in 2024 may slow this down but we wait to see its progress this year and what impact any agreed regulation will have on global SEP litigation and licensing landscape, including in the UK.
In the world of trade marks, bad faith will continue to be on the agenda in 2024. The Supreme Court appeal in Sky v Skykick was heard in 2023 and we await the court's decision. The Supreme Court will have to decide whether filing broad trade mark specifications can amount to bad faith. The Court of Appeal had overturned the High Court in this case, setting a high bar for establishing bad faith allegations. It remains to be seen whether the Supreme Court will maintain a strict view of bad faith. Clarity is particularly needed after a finding of bad faith in the dispute between Lidl v Tesco, where it was acknowledged that bad faith is an evolving area of law.
The increasing role of artificial intelligence is set to drive HR agendas during 2024. Remaining aware of the inherent risks within AI tools that may be used directly or indirectly within businesses will be important, as will ensuring that appropriate checks and balances are in place and that practices reflect regulatory and other guidance on the use of AI in the workplace.
While for many businesses AI may not replace current jobs in their entirety, it is becoming clear that generative AI tools are a potential replacement for some of the tasks that employees have routinely performed and employers will need to assist employees in re-focusing their duties and ensuring that they have the appropriate skill set to do so. However, employers will need to be alive to the potential need for restructurings involving changes to terms and conditions and/or redundancies and the legal and practical issues these processes bring.
A statutory right to request flexible working will become a day one right for all employees (now expected to come into effect on 6 April 2024). It is likely that a spotlight will fall again on flexible working in the run-up to April, particularly where employers look to clarify and draw back on more flexible hybrid working arrangements. The revised Acas Statutory Code of Practice on Flexible Working is due to be published in 2024; while it is not binding on employers, it may be taken into account by tribunals when considering relevant cases. We are also expecting updated Acas guidance in 2024.
The new day one right to carer's leave is also due to come into force on 6 April 2024, and there is to be enhanced protection on redundancy for those taking family leave (for employees who have informed their employer of their pregnancy on or after 6 April 2024).
Fire and rehire code of practice
The government's response to the consultation on the draft Statutory Code of Practice on "fire and rehire" practices, and the final version of the code, is expected to be published in spring 2024.
The government has released its five point plan in relation to immigration, with the Home Secretary announcing that the plan was "to slash migration levels and curb abuse of the immigration system, delivering the biggest ever reduction in net migration." While a robust and fair system which benefits the country is the goal, the changes announced will particularly affect spouses of British nationals, students and the health and care industry (which is already struggling with staff shortages). Changes to salary requirements for sponsored workers may restrict who can apply as a skilled worker, with an impact on industries with talent shortages, such as the hospitality and construction sectors.
The Electronic Travel Authorisation visa waiver programme, for visitors from the EU and other countries whose nationals do not require a visa to visit the UK, will continued to be phased out in 2024.
We expect the government to publish its response to the recent call for evidence on tax-advantaged all-employee share plans. There is cross-industry support for improvements to these much-valued plans (in particular, a reduction in the holding period under the Share Incentive Plan), so it is to be hoped that an update will be provided soon –perhaps around the time of the spring Budget.
A response to HMRC's targeted consultation on employee ownership trusts and employee benefit trusts is also expected during the course of 2024.
For companies operating enterprise management incentive (EMI) plans, the final measure to simplify the process for granting EMI options is coming in soon. From 6 April 2024, the deadline for notifying the grant of an EMI option is to be extended from the current 92 days following grant to the 6 July following the end of the tax year. HMRC is expected to publish updated guidance, forms and returns for employers to use in the coming months.
2024 is likely to be another busy year for UK pensions. Focusing purely on legislation, the latest Finance Bill will deliver a major change to pensions tax: the abolition of the lifetime allowance from 6 April 2024. The new Finance Bill provides some of the detail that schemes and employers need and HMRC has confirmed that it will issue more guidance. Addressing this change will be a key project for schemes in early 2024. Actions include considering impact on policies, administrative and actuarial systems and procedures, member communications, retirements and the scheme's trust deed and rules.
The coming year should also see the culmination of a number of long-running legislative and regulatory change projects. The Financial Services Regulatory Initiatives Forum (which includes the Pensions Regulator, Financial Conduct Authority and others) has published the latest edition of its regulatory initiatives grid. This suggests that, subject to parliamentary timetable, the new scheme funding regulations for private sector defined benefit (DB) schemes might be laid in parliament the first quarter of 2024 and that the Pensions Regulator's new DB funding code could come into force in the second quarter of 2024. Separate reports suggest that the new DB scheme funding regulations will first apply to schemes with valuations from autumn 2024. We are expecting the final versions of the regulations and code to include some changes, for example more clarity around the risk that can be taken by ongoing schemes and around the possible role of illiquid assets. Overall, it will be helpful for trustees and employers to have clarity on the new expectations.
Code of practice
The regulatory initiatives grid also says that the Pensions Regulator's new general code of practice is "expected to be in force in April 2024, subject to parliamentary timetable". The general code will combine (and replace) a number of existing codes of practice. Once it is in force, it will require pension schemes to have an effective system of governance, including internal controls, proportionate to the size, nature, scale and complexity of the activities of the scheme. Trustees and public service pension schemes will need to consider the code and decide what action they need to take in response to it. We have created an online tool to help schemes to complete this assessment and a number of other documents to support them.
Schemes have been waiting for clarity on planned changes to the employer notifiable events regime. The regulatory initiatives grid includes "[n]o milestones" for this change "due to significant uncertainty around delivery".
The Pensions Dashboards regulations have already been amended to allow for a new staging timetable to be confirmed through guidance. Trustees will be looking out for that guidance. Trustees and employers will also be looking out for government consultations on changes to the law to widen the scope of automatic enrolment and for the next steps in the Mansion House reforms (discussed in our Insight on the pensions aspects of Autumn Statement 2023).
The UK is pushing ahead with implementing the OECD-led initiative to introduce a global minimum corporate tax rate for large multinational groups. The first part of the reforms (the multinational top up tax and domestic minimum top up tax) is already in force in the UK (from 1 January 2024) but we expect to see more developments this year with regards to the "backstop mechanism" (the undertaxed profits rule). This is expected to come into force from 1 January 2025 and will require other amendments to be made (for example the repeal of the Offshore Receipts in respect of Intangible Property (ORIP) regime). Further changes may also be required to ensure the new rules work as intended and accord with OECD guidelines.
A further development on the international tax side which we expect to see this year involves the outcome of HMRC's consultation on improving the UK international tax legislation (notably transfer pricing, permanent establishments and diverted profits tax), although specific policies may take time to formulate. We may also see progress on HMRC's proposal to introduce a corporate re-domiciliation regime to support companies seeking to relocate to the UK, which was first mooted in April 2022, following conclusion of the government's consultation.
We are awaiting the outcome of HMRC's consultation to modernise stamp taxes on shares which we expect will lead to the introduction of a single tax on securities (rather than stamp duty). This would form another step in the digitalisation of the UK tax system, with the overall aim of modernising and simplifying what the UK government itself acknowledges is an anachronistic regime for stamping that can cause uncertainty, overlap and delay in registering share transfers. For further detail see our Insight.
Tax policy is likely to be a focus in the general election expected this year. We have previously considered what policies we might expect from the Labour Party, and we will see the Conservative Party proposals at the next Budget on 6 March.
In 2023 we predicted that we would still be talking about inter-bank offer rates (IBORs) in 2023, and here we are, yet again. But this time we really will see the end of three-month synthetic LIBOR on 28 March and the end of one, three, and six-month synthetic USD LIBOR at the end of September. It has been a long process, but the majority of transactions in the UK have now transitioned away from the use of IBORs, and efforts continue in other currencies with the Loan Market Association recently publishing an exposure draft facilities agreement incorporating term €STR fallbacks from EURIBOR. We look forward to seeing the published recommended form in 2024 following comment from market participants.
Real estate finance
Real estate finance lenders will be grappling with various developments in 2024. Lenders are still finding their feet with the requirements of the Building Safety Act as they continue to perfect the contractual provisions to ensure their position is properly protected. We await further details on the Regeneration Act 2023 (LURA) – but Part 11 of LURA will provide the Secretary of State with an enabling power to require certain information to be provided to the Chief Land Registrar (or another government body) which may delay completion of Land Registry registrations and thereby affect security. When in force, Part 10 of LURA will provide local authorities in England and the Isles of Scilly with powers to conduct a compulsory rental auction of vacant commercial premises in designated high streets or town centres. Any tenancy granted will be deemed to have been granted with the mortgagee's consent which could contradict the consent requirements generally included in real estate finance loan agreements.
We expect to see further developments relating to sustainable lending. The FCA has proposed new disclosure requirements for ESG-labelled bonds which may be set out in new FCA rules in 2024. The EU Green Bond Standard will apply from 21 December 2024, we wait to see whether this voluntary standard will be widely adopted in the market. The LMA, in conjunction with the Association of Corporate Treasurers, has published a guide for those new to the sustainable lending market, the "Getting Started in Sustainable Finance guide" and is now working on a template mandate letter for sustainability coordinators to sit alongside the model clauses and term sheet provisions that were published in 2023.
The risks posed by greenwashing remain high on the regulatory agenda in the financial services sector as supervision is ramping up in both the EU and the UK. We expect to see a continuation of these supervisory developments throughout 2024.
Basel 3.1 standards
And finally, on 12 December 2023, the Prudential Regulation Authority (PRA) published the first of two near-final policy statements covering the implementation of the Basel 3.1 standards for market risk, credit valuation adjustment risk, counterparty credit risk, and operational risk. These near-final rules aim to facilitate effective competition, promote the safety and soundness of the firms the PRA regulates and make capital ratios more consistent and comparable. We expect to see the second near-final policy statement in Q2 2024 on the remaining elements of the Basel 3.1 package, which includes credit risk, the output floor, reporting and disclosure requirements. These "near-final statements" will become a single final policy statement once HM Treasury has revoked the relevant parts of the Capital Requirements Regulation by way of statutory instrument. Full implementation of Basel 3.1 should be completed by 1 July 2025 with a 4.5-year transitional period ending on 1 January 2030.
New Companies House powers
The Economic Crime and Corporate Transparency Act 2023 will be implemented in 2024. Early in 2024, Companies House will gain new powers to interrogate the information submitted to it and towards the end of the year, identity verification for company directors/LLP members and persons with significant control will come into effect. Alongside this, the government intends to bring in a ban on corporates acting as company directors other than where all the directors (or equivalent) of the corporate director themselves are verified natural people. See our Insight for further details.
National Security and Investment Act changes
Changes are expected to the regime under the National Security and Investment Act 2021, following a call for evidence which opened in November 2023. The regime requires mandatory notification to the UK government of transactions involving companies in 17 high-risk sectors and gives the government the power to investigate and ultimately block transactions on national security grounds. The government has indicated that it is minded to remove internal restructures from the notification regime as the ultimate beneficial owner does not change, as well as redefine some of the high-risk sectors.
Further developments are expected in the area of corporate ESG reporting following publication in June 2023 of the IFRS' Sustainability Disclosure Standards. The UK government is expected to make its decision on endorsement of the standards by July 2024 and the UK's financial regulator, the Financial Conduct Authority (FCA), is expected to consult later in 2024 on proposals to implement disclosure rules for listed companies to refer to the UK-endorsed standards. At the same time, the FCA will consult on expectations for listed companies’ transition plan disclosures (which follows on from the October 2023 publication by the Transition Plan Taskforce of its Disclosure Framework, setting out good practice recommendations to assist companies in making robust and credible disclosures about their climate-related transition plans).
Intermittent Trading Venues
The first Intermittent Trading Venue (ITV), a new way for shareholders in private companies to find a market for their shares, is expected to launch in 2024.
ITVs will facilitate the sale of existing shares in private companies through intermittent auctions, but they will not facilitate the offer or sale of new shares. They are therefore expected to be geared towards providing late-stage liquidity rather than new funding. The regulatory regime for them is being developed by the UK government (HM Treasury), UK financial regulator (the FCA) and market participants such as the London Stock Exchange. A consultation on the regulatory sandbox is expected in Q2 2024, with the sandbox up and running by the end of 2024. The London Stock Exchange Group is expected to launch the first ITV.
Prospectus regime reforms
Reforms to the UK prospectus regime, which applies when a company is making an offer of securities, are expected to come to fruition in 2024. These reforms have been in gestation since 2021 and came out of Lord Hill's UK Listing Review. The reforms will replace the Prospectus Regulation inherited from the EU with a new system designed by UK regulators. A draft statutory instrument was published in November 2023 and the FCA is aiming to consult on its rules in summer 2024.
- Financial services
2024 will be a busy year for financial services legislation.
Against the backdrop of the Edinburgh Reforms, 2023 brought significant changes to the regulation of the UK financial services sector, including extensive amendments to existing financial services legislation through the Financial Services and Markets Act 2023. In 2024, the main expected amendments are:
- the establishment of a regulatory gateway through which authorised firms must pass before being able to approve the financial promotions of unauthorised firms;
- finalised rules from regulators for bringing activities facilitating the use of certain stablecoins where used as a means of payment, into the UK regulatory perimeter;
- finalised rules from regulators for the designation of critical third parties, including cloud providers to the financial services sector;
- the laying of groundwork for financial market infrastructure sandboxes; and
- the introduction of protections for victims of authorised push payment scams, such as mandatory reimbursements.
The Financial Conduct Authority (FCA) will progress its reforms of the UK asset management regime, in addition to working on the Wholesale Markets Review, prioritising a more proportionate regime for alternative investment funds, updating the retail funds regime, and supporting technological innovation.
The FCA's Consumer Duty, that sets higher standards of consumer protection across the financial services sector, will expand to closed products and services from 31 July 2024. This is also the deadline for the boards of firms that have had to comply with the duty since 31 July 2023 to produce the first annual report on compliance with the duty.
We expect that final rules creating a new regulatory framework supporting diversity and inclusion (D&I) in the financial sector will be introduced in 2024, covering all firms with a Part 4A permission under the Financial Services and Markets Act 2000. The rules are expected to include non-financial misconduct rules and guidance, regulatory reporting, and additional requirements for firms with more than 250 employees, relating to a mandatory D&I strategy, target setting, and risk and governance requirements.
Given the growing focus of regulators on greenwashing claims (for instance, new FCA rules for financial firms), we are expecting to see civil claims based on misrepresentation being brought by a range of parties (such as investors, shareholders and consumers) against companies that have made overly ambitious or misleading environmental claims.
Lord Justice Birss recently used AI to help write a judgment: 2024 may see more judges starting to use this technology to summarise law which they already know, in order to speed up the handing down of judgments and to conduct other administrative tasks. However, the judiciary is feeling its way still on this topic and recent guidance has warned the judiciary that AI should not yet be used to conduct research or provide analysis on topics with which a judge is not otherwise familiar.
The recent Court of Appeal decision confirming that judges have the power to order unwilling parties to take part in mediation or other forms of non-court based dispute resolution may lead to an increase in adjournments to allow for this to happen. Pressure on court time and resources has been a theme that has run through many cases in 2023 and is likely to continue into this year. The Commercial Court, in particular, is pushing back strongly on hearing cases worth below £1 million and we may see an increase in cases transferred out from that court in 2024.
The fallout from the Paccar Supreme Court decision is likely to continue into 2024. We may see an increase in claimants whose cases have settled or been decided seeking to recover payments made to litigation funders which the funders were not legally entitled to.
- Real estate
Progress of the Renters (Reform) Bill is expected to pick up pace this year, having been carried over into the current government session. While the abolition of "no fault" evictions remains on the agenda, the government has indicated this measure will not be implemented until new court processes are in place, for which timings are uncertain.
CMA report on housebuilding
The CMA's report on the housebuilding industry is due by 27 February 2024. In November, the regulator published working papers on estate management, land banks and the planning system, addressing issues in these areas and potential solutions. Further action by the CMA is expected, which could include detailed recommendations for government action through the introduction of new legislation and potentially a market investigation, which could have significant implications for housebuilders.
Biodiversity net gain rules
The new 10% mandatory biodiversity net gain (BNG) rules come into force for most developments in England from January 2024. This year we will begin to see how local planning authorities will apply the new rules and we expect to see a rise in the use of conservation covenants to secure BNG commitments. The development of habitat banks and a new market for BNG unit sales are likely to pick up pace. We also expect development of environmental insurance to protect risk holders prevented from meeting their legal obligations.
Building safety regime
With the new building control regime for higher risk buildings now in force, in 2024 we anticipate construction delays as the new gateways affect project schedules and parties get to grips with their new obligations. We also expect to see enforcement action from the new Building Safety Regulator, with the potential for severe penalties for non-compliance.
We await publication and implementation of the government's proposals for a second staircase in new residential buildings in England over 18 metres, which will then be subject to an initial 30 month transition period.
The Building Safety Levy is yet to come into force. A response to the government's second consultation and key details are still awaited.
Consultation on the reform of the security of tenure regime is anticipated in early 2024. The Law Commission has committed to a wide-ranging review of the existing regime, which is widely considered to be in need of modernisation, clarity and procedural simplification. The review has sparked keen interest from the industry and key areas of focus may include a simplified contracting out procedure, the scope for modernising a renewal lease, a review of landlord grounds of opposition and a reduction in court involvement.
Widespread reforms to the leasehold sector continue with the Leasehold and Freehold Reform Bill which was introduced to Parliament on 27 November 2023, and with the ground rent consultation "Modern leasehold: restricting ground rent for existing leases" which closes on 17 January 2024. Both seek to provide greater rights and protections to long-leasehold home owners by implementing reforms that the government has proposed for some time.
Finally, in a look ahead for case law, we have the anticipated appeal to one of The Lawyer's Top 20 Cases of 2023, Annington Property Ltd and others v Secretary of State for Defence: where it was held that the Ministry of Defence could use its rights as a freeholder to benefit from the enfranchisement rules to buy back eight properties that made up the test case for the estate now valued at £8bn. The judge dismissed the case, but as Annington has confirmed it will appeal, it is a high-profile one to watch.
See more predictions for the commercial real estate industry in 2024.
- Health and safety
Will 2024 see sentences in health and safety cases increase dramatically as environmental prosecutions have done? Will the Health and Safety Executive (HSE), which allows written responses to in-person interviews as its usual practice, start to insist on in-person attendance and raise this with courts if this is declined? We have seen the Department for Environment, Food and Rural Affairs strengthen its civil sanction scheme and remove the cap of £250,000 for variable monetary penalties.
It will be interesting to see whether the HSE might take heed and ask the government to strengthen its own civil sanction regime (beyond the "Fees for Intervention" scheme) to allow for it to impose such penalties rather than rely on sentencing by the courts.
Finally, with an increasing trend of Environment Agency prosecutions against individuals, we wonder whether the HSE might be encouraged to investigate and prosecute more individuals. While it has not explicitly stated any intentions of following this approach, with the crossovers between environmental and health and safety issues, we wonder whether the HSE changes its prosecution tactics in 2024.
In the UK, the Digital Markets, Competition and Consumer Bill continues to make its way through the parliamentary process with the Lords committee stage of the Bill scheduled for 22 January 2024. It is currently anticipated that this legislation will come into force in the first half of 2024. The EU has already legislated to control competition in digital markets with the Digital Markets Act. Please see our Regulatory Outlook for more on this.
On 13 November 2023, the Cabinet Office issued a call for evidence in relation to the National Security and Investment Act 2021 (NSIA) to collect views on how the national security and investment regime can be more business-friendly while maintaining and refining the protections needed to protect national security. This call for evidence closed on 15 January and we can expect any changes to the functioning of the NSIA in the first half of 2024.
The Procurement Act 2023 received Royal Assent in October last year and the Cabinet Office is anticipating a "go-live" date for the new regime of October 2024. However, with the likelihood of a general election this year and "resource changes" that may result from this, the government has indicated that the go-live date may slip. Despite this speculation, both contracting authorities and suppliers should continue to prepare for the changes.
We have published a series of webinars and Insight articles on the key changes in the new Act on our microsite.
If you would like to discuss any of the issues raised in this Insight, please get in touch with your usual Osborne Clarke contact, or one of our experts listed below.