Launch of the new Fair Payment Code (FPC)

As reported in our September edition, the Government introduced the new Fair Payment Code (FPC) to address late payment of invoices for small businesses, replacing the Prompt Payment Code (PPC). The FPC launched on 3 December 2024 and offers gold, silver, or bronze status to businesses that meet the following payment criteria:

1. Gold for businesses paying 95% of all invoices within 30 days;

2. Silver for businesses paying 95% of their small business suppliers within 30 days and all other suppliers within 60 days; and

3. Bronze for businesses paying 95% of suppliers within 60 days.

Applicants of the FPC must also sign up to fair payment principles, which include being "clear, fair and collaborative" with suppliers.

Existing PPC signatories will be invited to join the FPC, but they won't be automatically transferred.

How could it impact your business?

If there are concerns that an award holder is not meeting the FPC requirements or principles, complaints can be filed with the Small Business Commissioner (SBC).

Despite FPC not directly impacting reporting obligations under the Payment Practice Reporting Regulations (PPRR), given the update requiring large companies to publicly report on their payment practices and the SBC having the power to investigate breaches and enforce penalties for non-compliance, there is increased scrutiny and public exposure around ensuring timely payments to small businesses in particular.

The PPC ceased to operate on 3 December 2024. Going forward, supplier contracts that previously required businesses to be a PPC signatory should now specify that businesses are FPC award recipients. While businesses can make FPC a mandatory requirement in a contract, they should carefully consider the commercial implications of doing so given the administrative requirements that come with being an award holder.

What steps should you take?

FPC is voluntary and businesses of any size can apply. If your organisation would like to apply to become an FPC award holder, an ‘expression of interest’ form must be completed. The SBC will then send a detailed application and guidance to your organisation directly. A senior member of the business applying to the FPC must be prepared to personally sign the application before it is submitted. The award will last 2 years after which businesses will need to reapply.

Digital Markets, Competition and Consumers Act

The new UK merger control regime under the Digital Markets, Competition and Consumers Act (the DMCCA) will come into force on 1 January 2025. The new thresholds will apply to any deal that has not completed by 1 January 2025, unless the Competition and Markets Authority (CMA) has already launched a review into the transaction by that date.

The key immediate changes implemented under the UK merger control regime and effective from 1 January 2025 are as follows:

1. The threshold for a target entity’s UK turnover for CMA review will be raised from £70 million to £100 million (Turnover Threshold);

2. A safe harbour exemption will be introduced for transactions where both entities each have an annual turnover under £10 million (De Minimis Safe Harbour); and

3. An additional ground for review permitting the CMA jurisdiction where the acquirer, has both (i) an existing 33% or more market share of supply of goods or services in the UK or a substantial part of the UK in any market and (ii) has a UK turnover exceeding £350 million, provided that the other party has a UK nexus (Killer Acquisition Condition).This removes the current requirement that both the buyer and the target must have overlapping UK activities, or that the target has substantial UK operation.

Further changes to be introduced include:

1. The CMA’s power to impose larger penalties for failure to respond to an information request by the CMA or providing false or misleading information; and

2. The designation of ‘Strategic Market Status’ (SMS) firms by the Digital Markets Unity (DMU) if firms have substantially entrenched market power. Strict notification obligations will be imposed on these firms to report to the CMA when acquiring shares/voting rights exceeding 15%, 35% or 50% in a target with a UK nexus and with a deal value exceeding £25 million. Read more about the digital markets regime in our digital market update this month.

How could it impact your business?

As previously mentioned in our August 2024 horizon scanning, we expect the DMCC to bring more transactions into the scope for merger control review, with the introduction of the new merger threshold. If your business is carrying out merger and acquisition (M&A) activities in the near future, and these deals involve a target with UK sales or activities, you should now be considering and preparing for whether the CMA will have jurisdiction to review the transaction.

On a positive note, enterprises within the small and/or mid-market for mergers may benefit from the newly introduced Safe Harbour exemption. The Safe Harbour exemption will reduce the risk of CMA investigating deals for small and/or mid-market mergers where turnover for both merging parties is under £10 million. Therefore, legal advisors should be live to all parties turnover when engaging in a transaction before relying on the Safe Harbour exemption. Historically there has been a tendency to rely on the de minimis exemption which, if argued successfully, would prevent referral to a phase two investigation. With the introduction of the Safe Harbour, organisations should be wary of relying on this exemption when one or both parties exceeds the turnover threshold as set out in the Safe Harbour. Legal teams should therefore engage with external advisors and monitor CMA guidance to gain a greater understanding of the thresholds to be met, whilst in turn assessing whether any of the thresholds will catch the future planned mergers and acquisition transactions of the business.

However, larger businesses and their investors and stakeholders, which plan on undertaking mergers and acquisitions, should be aware of the Killer Acquisition Condition. This change will be particularly critical to market consolidation and amalgamation, as the requirement to prove overlapping market is no longer in play. Legal teams should engage with external legal support in reviewing the call-in risk for M&A transactions and ensure that their internal policies are updated to reflect the CMA guidance and the revised thresholds.

What steps should you take?

Businesses should prepare now by updating their internal policies in alignment with the CMA guidance and DMCCA. Competition risk should be assessed in all corporate transactions, it is no longer enough to ask if the business of the entities overlap. Any M&A transaction should be assessed and documented by legal experts and businesses with a growth by acquisition strategy should open communication lines with the CMA. This is particularly important due to the ramifications of increased fines imposed by the CMA for not acting and responding to information requests or providing misleading information. The maximum fines will increase to 1% of annual worldwide turnover, with the potential for daily penalties of 5% worldwide turnover.

Equally, a transaction whereby parties have failed to carry out a risk assessment and submit a notification may result in the CMA calling in the transaction post completion. At which point, the CMA may prevent pre-emptive action through its powers to make an initial enforcement order (IEO), which will stop the merging parties from starting integration or undertaking further integration. In addition, the CMA has the power to order the divestment and disposal of the acquired business, and even segments of the existing business of the acquirer where CMA clearance has not been obtained prior to completion. Any divestment imposed will be at whatever price the acquirer can achieve, and is often referred to as “fire sale process”. For more information on Competition Assessment in the context of M&A, please contact our Competition Team.

New Regulations on Companies’ accounts and reports

On 10 December 2024, the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 were laid before Parliament, together with an Explanatory Memorandum. This introduces some changes to how companies prepare and file their accounts and reports, aiming to modernise reporting requirements and align them with evolving business practices.

Increased size thresholds for company categories
The Regulations increase the turnover and Balance Sheet Total (BST) thresholds for determining a company's size for reporting and audit requirements. The revised thresholds can be found on page 6 of the Explanatory Memorandum.

Removal of redundant directors' report requirements
Several reporting requirements in the directors' report that duplicate or have been superseded by other reporting requirements are being removed. This aims to reduce the administrative burden on companies.

The Regulations come into force on, and affect the financial years beginning on or after, 6 April 2025.

How could it impact your business?

The impact of these changes will vary depending on your company's size and specific circumstances and could include:

• Reduced reporting burden: Companies that fall into the newly defined smaller size categories will likely experience a reduced reporting burden, potentially leading to cost savings and improved efficiency.

• Streamlined reporting: The removal of redundant directors' report requirements will simplify the reporting process for all companies.

• Compliance: Current reporting practices will need to be reviewed to ensure compliance with the new Regulations.

• Reclassification: This reclassification can affect a significant number of companies, moving them into different size categories which could impact their reporting obligations.

The Regulations include transitional provisions to ensure a smooth transition for companies affected by the changes.

What steps should you take?

To ensure a smooth transition and compliance under the new Regulations, consider the following steps:

• Review the Regulations: Carefully review the full text of the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303) and the accompanying Explanatory Memorandum.

• Assess your company size: Determine your company's size category based on the revised thresholds.

• Review your reporting processes: Identify any changes needed to your accounting and reporting procedures to comply with the new requirements.

• Update your accounting processes: If necessary, adjust your accounting software or processes to ensure compatibility with the new Regulations.

• Seek professional advice: If you have any questions or require further guidance, consider consulting with an accountant or financial advisor.

By proactively reviewing these changes and taking appropriate action, companies can navigate the new reporting landscape and minimize potential disruptions to their operations.

AI and privacy: reflections from Europe

With the rise of AI, Europe taking the lead on AI regulation, a new UK Government, and the election of a new US administration, 2024 has seen seismic changes, all of which will impact privacy. Knights recently joined the International Association of Privacy Professionals at the Europe Data Protection Congress in Brussels, where the potential effects of these developments were explored.

The privacy implications of AI took centre stage against the wider geo-political backdrop. Two of many takeaways were:

1. The emergence of differing global approaches to regulating AI, ranging from the prescriptive approach of the EU to the more principles-based approach developing in the UK; and

2. The rise of AI governance and the importance of allocating responsibility for this.

How could it impact your business?

Global approaches
One view put forward was that there are three competing frameworks in the ‘global battle to regulate AI’: the American market-driven model; the Chinese state-driven model; and the European rights-driven model. These frameworks look set to shape the global digital landscape.

The UK notably falls outside of this, positioning itself as more pragmatic in its approach by using new laws to target innovation, investment and productivity. Recent UK developments include proposed revision of the UK GDPR, implementation of the Online Safety Act and the development of a National AI Strategy advocating a focus on outcomes.

AI Governance
Businesses across the world are approaching AI governance differently. Some are focused on expanding existing teams’ responsibilities to include AI, whilst others are establishing brand new ‘AI offices’. What is agreed is the need for good governance and robust processes to ensure the responsible adoption of new technologies.

What steps should you take?

Companies should explore and understand:

1. the regulatory approach to AI and privacy risk, governance and accountability in your jurisdiction; and

2. how potential divergences and/or commonalities in approach might impact upon and/or be leveraged within your business. Given the already disparate approaches emerging at national and regional levels, remain vigilant regarding the real risk of incompatibilities and fragmentation as between, and within jurisdictions, (for example, as between the UK and EU, and between member states within the EU).

If you are looking to adopt new technologies, start thinking about AI governance and who within your organisation should be responsible for it. Test, evaluate and document all components of an AI system, including the data and models it uses. Establish processes for adequate lifecycle monitoring. Safeguarding data to improve customer trust remains front and centre, regardless of your industry. AI literacy and training around legal obligations will be key, as will understanding and applying available guardrails appropriate to your context.

Digital Markets Regime: in force from 1 January 2025

The digital markets provisions of the Digital Markets, Competition and Consumers Act (DMCC) will come into force on the 1 January 2025, and designation investigations are set to be launched imminently. Whilst we will not see changes immediately (the first designation decisions are expected in September 2025) this marks the watershed of a new era in competition regulation and could open the door to more effective regulation in digital markets.

How could it impact your business?

As discussed in our June Horizon scanning update, the digital markets regime brings in an ex-ante regulation for digital markets. In practice this means that firms who are designated by the CMA as having strategic market status (SMS) will be presented with a rule book, setting out certain conduct requirements that must be followed and granting the CMA greater powers of intervention into digital marketplaces.

Whilst the exact conduct requirements are not yet known, and will be tailored specific to each designated entity, there are strong indications that requirements will be included in relation to fair data use, self-preferencing, fair trading practices and interoperability. In deciding which conduct requirements to place on SMS firms, the CMA will seek the opinions of third parties and interested stakeholders, giving non-designated organisations the opportunity to feed into the contents of the regulations placed on the largest players in the digital sphere.

In addition, the digital markets regime imposes requirements on SMS firms engaging in merger activity, introducing a mandatory notification requirement for SMS firms engaging in transactions with a transaction value exceeding £25 million. In addition to the Killer Acquisition Threshold (as discussed further in our competition round up this month) this is expected to bring a larger proportion of digital mergers under the threat of increased scrutiny by the CMA.

Interestingly, the DMCC also enables the CMA to make “pro-competition interventions” (PCIs). Whilst exactly how the CMA will use these powers is yet to be determined, the CMA will be able to use PCIs to make behavioural or structural changes to a market. Market investigations in relation to PCI’s will have a 9-month statutory deadline and could have far reaching consequences, including the breaking up of firms currently holding a monopoly in relation to a digital activity.

By way of penalties, the DMCC introduces fining provisions of up to 10% group worldwide turnover for breach of any conduct or behavioural requirements by an SMS firm. Whilst this is not an insignificant penalty, arguably the larger penalty for SMS firms is the increased cost of compliance once the new regime is introduced.

What steps should you take?

For risk and compliance teams at SMS firms, the DMCC introduces a new era of regulation, bringing with it an increased cost and a need for specialist advisors to assist with the complexities of the new digital regulation regime. Firms should fully and wholeheartedly engage with the CMA to feed into the designation and conduct requirement assessment process, establishing an ongoing collaborative strategy with the CMA. Most firms at risk of designation in the first year (for example, Google, Apple, Meta, Microsoft, and Amazon) will already be in contact with the CMA, trying to establish rules of play before the new year arrives. The CMA has been candid about its resource constraints; we can expect 3-4 designations a year, and it is likely those first four designations will be the “usual suspects”. However, other organisations should not rest on their laurels, the CMA is likely to push the boat out further than its European counterparts in terms of designation. Organisations exceeding the turnover threshold for SMS designation (£1 billion UK turnover or £25 billion worldwide turnover) should seek advice immediately regarding the risks of being designated and how best to engage with the CMA.

For firms not designated, this is very much a watching brief. Initially, the CMA will be preoccupied with the designation of the “usual suspects”, but will be seeking the views of customers, competitors and consumers engaging with SMS firms. After this period, those competing with an SMS firm (or potential SMS firm) may wish to consider discussing a possible designation investigation with the CMA.

Threshold for interim anti-suit injunction clarified

In Marsh Ltd and another v Greensill Bank AG (in Insolvency Administration) and another [2024] EWHC 3068 (Comm), the High Court clarified that an applicant for an interim anti-suit injunction must establish with a “high degree of probability” that there is an exclusive jurisdiction clause (or arbitration agreement) which covers the dispute in question.

Specifically, the judge commented that the “high degree of probability” threshold would, in practice, mean something close to the summary judgment standard. This is an extremely high bar.

How could it impact your business?

Anti-suit injunctions restrain respondents from starting or pursuing proceedings in another jurisdiction. They can stop a party from pursuing a claim where those proceedings would be in breach of a contractual jurisdiction clause, or are otherwise vexatious.

The court is now making it clear that the purpose of such an injunction is to hold counterparties to a “contractual bargain”. This new high bar of proving there is a “high degree of probability” of an exclusive jurisdiction clause will mean that this remedy will not be available to parties if the relevant contract is not clearly drafted to include an unambiguous dispute resolution clause.

What steps should you take?

Companies should ensure that all contracts entered into include unambiguous exclusive jurisdiction clauses, making it clear that all disputes will be dealt with in the English Courts. Specifically, we would recommend to clients that they consult with lawyers to ensure all the necessary contractual terms are included before contracts are entered into.

Without this provision, it is almost certain that the interim remedy of anti-suit injunctions will not be available. This means that vexatious parties may be able to issue proceedings in other jurisdictions, which could have the knock-on impact of skyrocketing legal costs for businesses.

Guidance on the failure to prevent fraud offences under the Economic Crime and Corporate Transparency Act 2003

On 6 November 2024, the Home Office published guidance on the new failure to prevent fraud offence introduced in the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

Under the ECCTA, large organisations may be held criminally liable where an employee, agent, subsidiary or other "associated person" commits a fraud intending to benefit the organisation. To establish a defence, the organisation will have to demonstrate to the court that it had reasonable fraud prevention measures in place at the time that the fraud was committed.

How could it impact your business?

The offence will only apply to large companies, not-for-profit organisations and incorporated public bodies. Large organisations are those meeting two out of three of the following criteria:

• having more than 250 employees;

• generating over £36 million annual turnover; and

• holding more than £18 million in total assets.

The offence includes those under the Fraud Act 2006 including fraud by:

• false representation;

• failing to disclose information;

• abuse of position;

• participation in a fraudulent business;

• obtaining services dishonestly;

• cheating the public revenue (common law);

• false accounting;

• false statements by company directors under the Theft Act 1968; and

• fraudulent trading under the Companies Act 2006.

Notably, the offence can be committed even if the organisation and the relevant employee are based outside of the UK.

Failure to prevent fraud will come into force as an offence on 1 September 2025.

What steps should you take?

Now is the time to get to grips with the Guidance and start to think about what steps need to be taken in advance of September 2025.

To avoid prosecution, organisations will need to demonstrate that they have reasonable fraud prevention procedures in place, or be able to persuade the court that it was not reasonable in all the circumstances to expect the organisation to have such fraud prevention procedures. The guidance states that to discharge its obligations to prevent fraud, organisations will be expected to demonstrate their adherence to the following principles:

• Top level commitment;

• Risk assessment;

• Proportionate risk-based prevention procedures;

• Due diligence;

• Communication (including training); and

• Monitoring and review.

The principles are intended to be flexible and outcome-focused, allowing each organisation to tailor its fraud prevention procedures to its own risk profile.

Privilege: Confirmation that the “Shareholder Rule” does not exist in English Law.

In legal proceedings, can a company refuse to disclose documents to a shareholder on the grounds that they are confidential by virtue of them being legally privileged?

It has long been understood that the protection afforded by legal professional privilege (including the right to keep legal advice confidential) does not stretch to shareholders. As such, individuals who bring claims against companies to which they are shareholders could force disclosure of earlier advice given to the company which is relevant to their dispute (albeit not advice given once the litigation was in the company’s contemplation).

This was known as the “Shareholder Rule”.

However, the High Court has confirmed in the recent case of SARL v Glencore plc and others [2024], that the “Shareholder Rule” does not exist in English Law. This is despite submissions that it had stood for 135 years and had been approved in both the Court of Appeal and Supreme Court.

How could it impact your business?

This judgment is good news for companies, particularly those with a wide shareholder base which is regularly changing.

The principles of protecting privileged documents still apply, such as ensuring that privileged documents are not shared externally or too widely within your organisation. Any legal advice should only be shared with those employees who are receiving and acting upon the advice and should always be marked as “privileged and confidential”.

Privileged documents should not be shared with non-director shareholders unless there is a genuine common interest in doing so. If you need to share legal advice with any non-director shareholder due to common interest, it should be marked as “privileged and confidential” and it should be made clear to that shareholder that the document is to remain confidential and should not be shared externally or with any other shareholder.

What steps should you take?

This case is likely to see an appeal in the not too distant future, as this is a very significant departure from settled caselaw, and it will be important to keep abreast of developments in this area.

25% uplift to Collective Consultation Awards in Fire and Re-Hire cases

The “Code of Practice on Dismissal and Re-Engagement” (the Code) came into force in July 2024. The Code sets new procedural safeguards and limits around some employers’ practice of unilaterally ending employees’ terms and conditions and offering less favourable terms instead (often called “fire and re-hire”).

The Code provides for financial consequences if an employer unreasonably fails to follow it. It includes an uplift of up to 25% in related employment tribunal awards. One anomaly, however, was that the 25% uplift didn’t apply to one of the most obvious types of claim in this area: failures in collective consultation for mass dismissals (technically under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992).

The Labour Government has now addressed this and, on 20 January 2025, a new statutory instrument will enter into force.

How could it impact your business?

The new law will give a Tribunal the power to uplift any award of compensation by 25% in collective consultation claims. After that point, any employer implementing large-scale dismissal and re-engagement exercises will need to proceed more carefully, given the increased financial risks involved.

What steps should you take?

This change could have significant financial implications for employers. It would be worth becoming familiar with the Code and taking detailed legal advice if you plan to undertake any fire and re-hire exercises.

It is also important to note that this area of law is rapidly changing, and it set to change further under the upcoming Employment Rights Bill. Please see our Horizon Scanning update for October for further details.

‘Day one’ right to Neonatal Care Leave

In April 2025, the Neonatal Care (Leave and Pay) Act 2023 will come into force. It is likely to introduce a right for employees to take up to 12 weeks of paid leave (in addition to other leave entitlements) where a baby is born prematurely, or a baby requires neonatal care in hospital or another healthcare setting. This will apply to parents of babies who are admitted to hospital up to the age of 28 days, who have to stay in hospital for a period of 7 full days or more.

Many of the finer details remain to be put before Parliament. We will provide more details when we have them.

How could it impact your business?

The leave itself is designed to be a “day one” right for employees. There will, however, be a qualifying service period of 26 weeks for employees to claim neonatal pay and a lower earnings limit is set to be introduced to qualify for that pay (similar to other parental leave). Any payments should be paid via the usual payroll process.

What steps should you take?

Employees who are in the position to qualify for this leave are likely to be going through a very worrying and difficult period. It is important to be considerate and make the process as easy as possible. This could include creating a separate policy or adding this to your current parental leave policy and raising awareness of this leave with HR staff and managers.

What is “improper behaviour” during a protected conversation?

Initiating a protected conversation under S111a of the Employment Rights Act 1996 can be a useful tool for an employer. It allows employers to initiate an off the record honest and frank conversation (without there being an existing dispute), where a proposal can be made leading to the termination of employment by way of settlement. This protection is appealing for employers as such conversations are not admissible, provided there is no “improper behaviour” as outlined in the Code of Practice, if the employee later decides to bring proceedings for unfair dismissal.

The recent case of Gallagher v McKinnon’s Auto and Tyres Limited considered an employer’s actions during a protected conversation. Specifically, whether the ‘off the record’ and inadmissible nature of those discussions had been forfeited due to the employer’s “improper behaviour”. The Claimant wanted to rely on evidence of the offer made to him in support of his unfair dismissal claim. He argued that the offer put to him could be brought into evidence, due to the following examples of improper behaviour:

• Being invited to a false “return to work” meeting which was actually a protected conversation;

• Being informed that if he did not take the settlement offer, he would be at risk of redundancy; and

• Being given only 48 hours to decide whether to accept an exit offer (when the Code of Practice states that, as a general rule, a minimum period of 10 calendar days should be allowed to consider the proposed formal written terms of a settlement agreement unless otherwise agreed).

The Employment Tribunal disagreed with the Claimant and held that, in context, the behaviours did not amount to improper behaviour. The exit conversation therefore remained inadmissible in subsequent legal proceedings. The employer was entitled to initiate the protected conversation, the risk of redundancy was reasonable to mention, and the Claimant had sufficient time to consider the preliminary offer, as it was only an initial verbal offer.

The Claimant appealed against this decision not to admit settlement discussions in evidence, but this was dismissed by the Employment Appeal Tribunal.

How could it impact your business?

This case provides some reassurance to employers in taking a robust approach to protected conversations. Nevertheless, it is still important to take care when initiating and holding discussions.

What steps should you take?

When holding protected conversation, it may be beneficial to consider the following tips:

1. Scope whether the potential exit situation is suitable for a protected conversation within the narrow range of section 111A at all (Gallagher concerned an unfair dismissal situation). S111A is likely to be unsuitable for more complex situations, potentially bearing on discrimination or whistleblowing;

2. Invite the employee to a separate meeting face-to-face, by telephone/or by video call;

3. Consider allowing employees to be accompanied to the meeting if they have a disability or other need. This is not a legal requirement but can often progress settlement discussions;

4. Make it clear that you intend that this conversation is to be protected;

5. Even after Gallagher, employees should be given reasonable time to assess and consider the proposed offer. Acas recommends giving employees 10 days to consider formal written offers (as stated, the distinction to Gallagher which was an initial verbal offer); and

6. Finally, keep a clear record of your offer and what you have discussed.

Transition to a fully digital UK immigration system Digital

As part of the Home Office’s switch to a fully digital immigration system they are in the process of rolling out eVisas. An eVisa is digital proof of a migrant’s immigration status using online Home Office records.

As part of the change, most Biometric Residence Permits (‘BRP’) and Biometric Residence Cards (‘BRC’) held by migrants will expire by 31 December 2024. This doesn’t mean their immigration permission will expire and they will still be able to evidence their immigration permission using an eVisa. However, the eVisa must be set up by the migrant first.

How could it impact your business?

As this is a significant change to the UK’s immigration system, it is expected that there may be issues when migrants try to evidence their immigration status using an eVisa. This includes when providing employers with proof of right to work or when travelling. There is also a significant number of migrants who have still not yet set up their eVisa despite the imminent changes.

Whilst the Home Office have announced some measures to help the transition to eVisas after 31 December 2024, staff involved in recruitment and right to work checks should be aware of these issues to minimise any disruption to the business.

What steps should you take?

The Home Office is advising that all existing visa holders with a BRP, BRC or a passport containing a visa vignette or ink stamp, will need to act now by creating a UKVI account to access their eVisa.

Employers can help with this by reminding all employees holding a visa that they should set up their eVisa now and link it to their travel document. You can download the Home Office Partner Pack here which includes useful information to help with this.

Employers should continue checking the status of all current and prospective employees holding a BRP, BRC or an eVisa using the Home Office online right to work checking service. Where a check was conducted using the online service, you can continue to use the expiry date recorded for the purpose of diarising the date for a follow up check. An exception is where a manual check was conducted using the physical BRP or BRC. In this case you will need to carry out a follow-up check before the document expires.

Acquiescence in the General Court

On 9 December 2024, in the case T-136/23, the General Court of the EU provided further affirmation that the fact that a trade mark has been registered without opposition, does not mean that the applicant has a free pass and conflicts (in the registry and the courts) can arise many years later. The threshold for the defence of “acquiescence” remains high and applicants often assume if no one complains at the application stage, they are risk free.

The Case

On 23 April 2007, a luxury wine specialist, Vintae, filed for registration of an EU trade mark for the VINTAE logo. This was registered shortly after in 2008 for ‘alcoholic beverages (except beers)’ in class 33 and ‘commercial retailing and wholesaling of alcoholic beverages’ in class 35. Given there was no opposition, Vintae continued to trade under the brand for many years.

However, in 2020, some 13 years later, another company Grande Vitae filed an application for invalidity based on its earlier German trade mark VITAE and EU trade mark VITAE, which were both registered for ‘alcoholic beverages (except beers)’.

Understandably, Vintae argued that Grande Vitae had acquiesced in the use of the contested mark. However, neither the EUIPO or their Board of Appeal accepted Vintae’s defence and their mark was invalidate because of a likelihood of confusion. Vintae then appealed further to the General Court.

The General Court focused upon whether the conditions of acquiescence were fulfilled. While Vintae evidenced several trade shows they and Grande Vitae were present, the fact that Vintae’s wines were “Best of Spain Top 100”, and that both parties had participated in various competitions, this was insufficient for a conclusion that Grande Vitae was aware of Vintae’s operations. As such, Vintae’s appeal to the General Court also failed.

How could it impact your business?

It is common for businesses to assume that once their trade mark is registered in any given jurisdiction, they are free to use that brand therein. This case shows that using a brand is rarely without risk of stepping on the toes of another business and their brand rights.

This case highlights that the threshold to establish actual awareness and acquiescence is high and therefore a defence that the earlier rights holder was aware of the latter’s activities is not going to assist, even if the action comes many years later.

In the circumstances, many businesses could be in a situation similar to the one Vintae now finds itself in. Namely, operating for many years on the assumption that their use of a brand is risk free and not harming another’s brand rights. The investment Vintae put into its brand over those years is likely to have been significant and now at risk.

In addition, it also highlighted that businesses should take specialist IP advice before launching a brand, so that the brand can be cleared for use in any given jurisdiction for their intended field of operations. If Vintae had done so, it is highly likely that their IP specialists would have highlighted that Grande Vitae’s mark posed a high risk to Vintae’s future intended use. Vintae may have progressed knowing that risk, or taken a commercially sensible route and chosen an alternative safe brand from the outset.

What steps should you take?

Given this heightened judicial scrutiny, businesses should adopt the following measures:

• Review existing trade mark portfolios: depending upon the size of your business' portfolio, it may be worth seeking retrospective trade mark clearance advice on your key brands. This would highlight any risks of the nature Vintae found itself and the business can then act accordingly and upon advice.

• Clearance searches for new brands: instruct IP specialists to conduct clearance search when looking to register a new trade mark. This will ensure that your business knows the risks from the outset and avoids investing in a brand you may need to change in the future.

By refining your trade mark strategy, your business can better protect its' IP rights and reduce the risk of future disputes.

Revised National Planning Policy Framework

As part of the Government’s commitment to delivering 1.5 million homes, a new National Planning Policy Framework (NPPF) has been published, which includes fundamental changes to Green Belt policy, which could provide many clients, landowners and developers with realistic opportunities to get planning permission on their land.

Housing targets are now mandatory, with many areas seeing significant increases in the numbers of homes they need to deliver. This will also increase the number of sites that will need to be allocated in Local Plans.

Councils are now required to undertake Green Belt reviews and a new “Grey Belt” policy has been introduced which includes brownfield land or other land which does not contribute strongly to Green Belt purposes where new development may be acceptable in principle. Planning permission may also be granted on Green Belt land where councils cannot demonstrate a 5-year housing land supply.

How could it impact your business?

If you are a landowner, developer or land promoter bringing forward land for development, you need to understand how the NPPF impacts on any planning strategy. You should consider:

• What are the Council’s housing requirements?

• Can they demonstrate a 5-year housing land supply and is the “tilted balance” engaged?

• What do the latest housing delivery test results show?

• Is your site in the Green Belt and can it be defined as “Grey Belt”?

• If within the Green Belt, can the scheme meet the “Golden Rules” (providing affordable housing, improving green spaces and improving infrastructure)?

• Does the draft Local Plan benefit from the NPPFs transitional arrangements?

In situations where the Council cannot demonstrate a 5-year housing land supply, or if your site comprises “grey belt” land, then the prospects of securing planning permission for development has improved. Alternatively, more opportunities will arise to secure a site allocation for development in a new local plan for an area.

What steps should you take?

Now is the time to revisit planning strategies to pursue a planning application and/or an allocation in a Council’s new local plan.

Reform of landlord and tenant law

In November, The Law Commission published a consultation on business tenancy rights in England and Wales, following 70 years without too much significant change.

The Landlord and Tenant Act 1954 (the “1954 Act”) introduced a statutory right to give business tenants the option to renew their leases (‘security of tenure’), with a handful of grounds on which a landlord could oppose a new lease. There is further potential for a business tenant to be entitled to compensation where the landlord can prove either an intention to redevelop or occupy for its own purposes. Parties could choose to ‘opt out’ of the provisions that provide security of tenure by following a ‘prescribed’ process.

The Law Commission is planning two consultation papers. The first consultation will continue until 19 Feb 2025 and will consider the following:

1. Abolition of security of tenure: The removal of security of tenure would place emphasis on the content of drafted leases and offers greater ‘flexibility’. Opponents could argue that it would provide tenants little protection at a time where there is great uncertainty.

2. Ability to ‘opt in’: A reverse of the current starting position, parties would have to ‘opt in’ to protection, thus reducing the current administrative burden on contracting parties.

3. Current model but ‘better’: The current system does provide landlords flexibility to avoid security of tenure, albeit this does require a rather cumbersome and bureaucratic process that must be completed prior to the parties entering in any lease. The consultation will look at opportunities to streamline the ‘contracting out’ process.

4. Mandatory security of tenure: Everything remains as it is with regards to the renewal process and grounds of opposition, but parties can no longer opt out, providing tenants further protection.

Whilst forming part of the consultation, the two extremes of no protection for tenants or mandatory protection for tenants are likely to be considered an inappropriate shift from the current status quo.

The second consultation will set out implementation of whichever is considered the desired new model.

How could it impact your business?

For business the location of its operations may form a very important part of its long-term planning. The possible abolition, or even just changes to security of tenure, may present a threat to business and continuity from both a service perspective but also staffing and investment. Therefore, understanding the potential changes should form part of long-term planning for any business.

What steps should you take?

There is no doubt that real estate use has changed greatly in the last 15 years, particularly in relation to retail and office space, firstly as a result of the expansion of online shopping and more recently as a result of the COVID 19 pandemic. In-house Counsel and Estate Managers should therefore consider responding to the first consultation to help shape reform of a system that is now over 70 years of age.

Consultation on the Reforms to the Energy Performance of Buildings Regime

On 4 December the Government published its open consultation on reforms to the Energy Performance of Buildings Regime which outlines the proposed changes to the way EPCs will be calculated, which include:

• Updating what EPCs measure through additional metrics, which include carbon emissions, fabric performance and heating system;

• Updating when and how frequently EPCs are required;

• Managing energy certificate quality;

• Improving accessibility of data; and

• Strengthening the quality of air conditioning inspection reports.

How could it impact your business?

A reform of the EPC regime will impact nearly all property owners who let out their properties (both commercial and residential). The proposed changes to the regime mean that landlords will be required to commission new, more detailed EPC assessments more frequently. The Government hopes that the proposals will encourage landlords and property owners to invest in low carbon heating technologies, however this in turn could lead to higher costs for tenants.

The consultation also proposes to reduce the number of years for which an EPC is valid (they are currently valid for 10 years). The Government are consulting on a range of validity periods including the possibility of less than two years between assessments. The intention is to improve the accuracy of the information contained within the certificates.

The proposals also include the need for private landlords to commission a new EPC once their current one expires. Other proposed changes include removing the ability of heritage sites to claim exemption and bringing all HMO’s and short-term lets into scope.

What steps should you take?

The consultation is open until 26 February 2025 and it is anticipated that any changes to the EPC regime will be implemented in the second half of 2026. If you will be affected by the proposed changes, you can respond to the consultation on the government website via this link.

Sanctions and insolvency proceedings

From 5 December 2024, new sanctions regulations came into force for the purpose of giving the Office of Financial Sanctions Implementation (OFSI) the power to grant licences for activity in insolvency proceedings that would otherwise breach financial sanctions.

How could it impact your business?

Financial sanctions impose asset freezes and financial restrictions on certain individuals and entities known as “designated persons”. There is a prohibition, for example, on directly or indirectly making any payments to a designated person. OFSI is responsible for implementing financial sanctions and has the power in certain circumstances to grant a licence to permit an activity that would otherwise be prohibited (for example, to allow a payment to a designated person for reasonable living expenses).

This latest change helps with problems and delays that were being encountered when one of the creditors of an insolvent company was a designated person. This was causing adverse consequences for the non-designated creditors because the insolvency proceedings could not progress. However, OFSI now has the power to issue licenses to enable actions to be taken in insolvency, restructuring and related proceedings, provided that any payments made to a designated person are credited to a frozen UK bank account (so that the designated person does not have access to the funds).

What steps should you take?

Whilst there is no specific action required, this welcome amendment will help keep insolvency proceedings moving (and payments flowing to non-designated creditors as appropriate) without the burden of court applications when financial sanctions are involved.