Upcoming changes in 2024

Below we have set out an overview of some of the changes anticipated in relation to Capital Markets in 2024. However, it is important to note that the planned general election this year may impact these changes.

Listing and prospectus reform

The UK Financial Conduct Authority (FCA) has initiated a significant reform to the listing regime. The reform proposes replacing the premium and standard listed share categories with a single category for companies seeking a primary equity share listing in the UK. Existing premium listed issuers would be automatically moved to this new category.

The eligibility and continuing obligations for commercial companies are expected to be reduced, with changes in requirements for financial information and a more permissive regime for dual and multiple class shares.

The reform introduces new categories like equity shares for international companies and shell companies. It also includes modifications to the sponsor regime.

The creation of a UK Listing Rules sourcebook (UKLR) is suggested to replace existing Listing Rules, with a phased publication plan. Listed companies, and those looking to list, should be aware of the changes to the Listing Rules, as well as the changes they may have to incorporate on the basis of the two listed share categories merging into one.

Public Offers – POAT Regulations

Proposed changes to the UK prospectus regime have been under consideration since 2021, with the draft Public Offers and Admissions to Trading Regulations 2023 (POAT Regulations) published in late November 2023. These regulations outline a new framework for public offers and admissions to trading, delegating more responsibility to the FCA. Key changes include a general prohibition on public offers of transferable securities, exemptions for certain cases, and new regulations for admission to regulated markets and Multilateral Trading Facilities (MTFs).

The FCA is considering reforms for non-equity securities, including:

• a new single standard for prospectus disclosure;

• reduced requirements for debt securities issuances; and

• potential distinctions between different types of non-equity securities.

The FCA aims to consult on proposals and draft rules in summer 2024, with final rules expected in the first half of 2025.

UK Corporate Governance Code

On 22 January 2024, the FRC announced the publication of the long-anticipated revisions to the 2018 UK Corporate Governance Code (Code). The updates to the revised Code (UKCG Code 2024) are intended to enhance the transparency and accountability of UK public companies and assist in the growth and competitiveness of the UK and its attractiveness as an investment centre.

Following the extensive consultation in 2023, the FRC has kept changes to the Code to a minimum. In November 2023, the FRC issued an update stating that, having considered its own policy objectives and feedback to the consultation, it had decided to only proceed with a small number of its original proposals. The FRC dropped its earlier proposals for revisions to the Code relating to the role of audit committees on ESG issues, expanding diversity and inclusion expectations, over-boarding provisions and expectations on Committee Chairs' engagement with shareholders. The revised version of the Code reflects this policy decision.

The key changes in the UKCG Code 2024 prioritise revisions in relation to internal controls. While the existing expectations in the Code will remain, boards will now be required to make a declaration in their annual reports concerning the effectiveness of their material internal controls. A small number of other more minor changes have also been made to the Code with the aim of streamlining the expectations or to clarify the language. These relate to Code provisions on malus and clawback and audit committee minimum standards.

The main changes to the Code in the 2024 version are:

Section 1 – Board leadership and company purpose

The FRC has reframed Principle C in Section 1, which now states that companies should, when reporting on their governance activity, focus on board decisions and their outcomes in the context of the company's strategy and objectives. Where the board reports on departures from Code provisions, it should provide a clear explanation. Provision 2 has also been enhanced to state that the board should assess and monitor culture, including how the desired culture has been embedded.

Section 3 – Composition, succession and evaluation

The FRC's changes in Section 3 emphasise the importance of diversity and inclusion in a board's composition without introducing duplicative targets or regulations. Principle J has been amended to promote diversity, inclusion and equal opportunity (removing the list of factors previously provided) and Provision 23 has been updated to reflect the fact that companies may have further initiatives in place alongside their diversity and inclusion policy.

Section 4 – Audit, risk and internal control

Most of the revisions to the Code have been made in Section 4. Principle O has been amended to make the board responsible for not only establishing but also for maintaining the effectiveness of the risk management and internal control framework. In addition, Provisions 25 and 26 have been updated to reflect the publication of the Minimum Standard: Audit Committees and the External Audit and to remove duplicative language. Provision 29 has also been significantly augmented, with boards now required to provide in the annual report a description of how they have monitored and reviewed the effectiveness of the internal control framework and a declaration concerning the effectiveness of material internal controls.

Section 5 – Remuneration

Amendments to Section 5 include the insertion of a new Provision 38 which asks companies to include in the annual report a description of its malus and clawback provisions.

Application date

The UKCG Code 2024 will apply to financial years commencing on or after 1 January 2025, with the 2018 version remaining in place until that time. In response to stakeholder feedback indicating that boards need more time to develop their approaches to internal controls, the new UKCG Code 2024 requirement for a board declaration (Provision 29) will come into effect from 1 January 2026, i.e. a year after the remainder of the UKCG Code 2024.

Guidance

On 29 January 2024, the FRC published guidance to accompany the newly revised UK CG Code 2024 (Guidance: UKCG Code 2024). The guidance is not mandatory but rather intended to support companies and their advisers in applying the Code, providing advice, further detail and examples of good practice. It consolidates previously published FRC guidance in a single document and is accessible via links within the UKCG Code 2024. The earlier guidance will remain available for those who wish to consult it.

Critical Imports and Supply Chains Strategy

The UK Government has launched its Critical Imports and Supply Chains Strategy, its first overarching strategy focussed on reliable access to goods. The objective is to secure the supply of critical goods such as medicines, minerals, and semi-conductors.

Launched on 17 January 2024 the strategy identifies 5 priorities, which are being worked towards. However, it is important to note that there is no direct change in law as a result of the strategy at this time.

How could it impact your business?

The priorities of the strategy are:

a) making the UK government a centre of excellence for supply chain analysis and risk assessment;

b) removing critical imports barriers;

c) building the UK’s response to global supply chain shocks;

d) ensuring the UK can adapt to long-term trends; and

e) expanding collaborations between government, business and academia.

The strategy is aspirational and there are no current changes to be implemented by UK businesses. However, changes discussed in, and arising from, the strategy may impact businesses separately as and when they are implemented, for example, the extension to the recognition of CE marking is proposed and will be legislated for separately if approved. Likewise, work is also ongoing as part of the strategy, via the British Standards Institute, to create internationally recognised standards for critical goods.

What steps should you take?

As stated above, no direct action needs to be taken as a result of the launch of the strategy at this time. However, businesses should expect regular updates on supply chain risks identified by the taskforce, guidance aimed at helping businesses maintain supply levels and details of more tangible developments.

The strategy views the engagement of UK businesses as vital in the UK’s response to supply chain disruption and hence businesses are encouraged to actively participate in the response to the strategy. An online portal is to be introduced which will allow businesses to report supply issues regarding relevant goods and we will provide further updates once the portal is available.

Companies House & The Economic Crime and Corporate Transparency Act 2023 (ECCTA)

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023 and will come into force in 2024. It provides Companies House with new and increased powers to improve the quality and reliability of its data by verifying the identity of directors and PSCs and playing a more active gatekeeping role over company creation and filings. Companies House will also have stronger investigation and enforcement powers with the ultimate aim of protecting personal information and preventing fraud.

The following objectives have been introduced by the ECCTA which the Registrar of Companies must promote:

• those delivering a document to the registrar do so in a manner compliant with the proper delivery requirements;

• information contained in the register is complete and accurate;

• records kept by the registrar do not create a false or misleading impression to the public; and

• Companies and others are prevented from carrying out (or facilitating others to carry out) unlawful activities.

The first set of changes set out below are likely to be introduced on or shortly after 4 March 2024.

The Act will also see the introduction of a new failure to prevent fraud offence, which is detailed in our Dispute Resolution update below.

How could it impact your business?

Registered Office Address: Companies will be required to have an ‘appropriate address’ as the registered office address. An ‘appropriate address’ is one where any documents sent to that address should be expected to be marked for the attention of a specific person acting on behalf of the Company and any documents sent to that address can be recorded by an acknowledgement of delivery. As such, companies will no longer be able to use a PO Box as a registered office address. Companies who do not comply with the obligation to have an appropriate registered office address risk being struck off the register. Directors have a continuing duty to maintain the appropriate address and should be aware that failure to maintain is a criminal offence.

Registered Email Address: Companies will be required to provide Companies House with a registered email address, either on incorporation or with its next confirmation statement (with a prompt to do so when filing the confirmation statement online). Companies House will use this email address to communicate with the company and, as such, this email address will not be made available to the public. As above, directors have a continuing duty to maintain this information at Companies House and should be aware that failure to maintain is a criminal offence.

Lawful Purpose Statement: On incorporation, shareholders will be required to confirm that the company is being formed for a lawful purpose. Each year, on filing the confirmation statement, the directors will need to confirm that the company’s intended future activities will be lawful.

The Act will give Companies House greater powers to scrutinise and reject information which may be incorrect or inconsistent with information already on the register. In some cases, Companies House will be able to remove information. More specifically, Companies House will have the ability to conduct stronger checks on company names, annotate the register to make the public aware of any potential issues with the information filed at Companies House, tidy up the register (using data matching to identify and remove inaccurate information), and share data with other government departments and law enforcement agencies to meet the objectives set out in the ECCTA.

Further guidance from Companies House is expected as to the above and other changes arising from the ECCTA.

What steps should you take?

As Companies House will be working closely with government departments and law enforcement agencies, these changes at Companies House should not be overlooked. The changes resulting from the ECCTA provide for stricter sanctions for non-compliance, which include financial penalties, prosecution, and an annotation on a company’s record at Companies House which is likely to cause reputational damage to a company, its directors, and its shareholders.

Companies should ensure that both the appropriate registered office address and registered email address each meet the requirements of the ECCTA. Directors should ensure these details are maintained to avoid the company being struck off the register, potential reputational damage, and sanctions in their capacity as director.

Existing companies currently using a PO Box as their registered address should note that this will need to be updated by 4 March 2024 to an address which meets the requirements for an appropriate office address.

Upcoming changes in 2024

Below we have set out an overview of some of the corporate changes anticipated in 2024. However, it is important to note that the planned general election this year may impact these changes.

Financial Promotions

Amendments to the Financial Promotion Order 2005 to reform exemptions relating to High Net Worth individuals and sophisticated investors are expected to come into force on 31 January 2024. The window for applications to the FCA by authorised firms who wish to continue to approve financial promotions for unauthorised persons closes on 6 February 204. The new regulatory gateway for financial promotions created by s20 Financial Services and Markets Act 2023 comes fully into force on 7 February 2024.

M&A and Investment transactions

The Cabinet Office call for evidence on the impact, scope and operation of the National Security and Investment Act 2021 closed on 15 January 2024 with announcements on proposed changes to the regime anticipated later in the year.

Intermittent trading venues

The Chancellor of the Exchequer has announced the creation of a new intermittent trading venue (ITV) to facilitate the auction-based sale of existing shares in private companies. This initiative aims to enable private companies to attract new investors, including institutional ones, through secondary transactions without having to go public.

The first ITV is expected to be operational by the end of 2024, likely launched by the London Stock Exchange (pending FCA approval). The ITV will be implemented through the Financial Market Infrastructure (FMI) sandbox powers within the Financial Services and Markets Act 2023, with plans for consultation on the ITV sandbox in the second quarter of 2024.

Private businesses should look into ITV’s as a potential option for considering capital investment.

Digitisation of shares

The Digitisation Taskforce, initiated in response to the Secondary Capital Raising Review, is due to release its final report in March 2024. The taskforce addresses issues like eliminating paper share certificates for traded companies and improving the intermediated system for share ownership.

The interim report suggested seven potential recommendations, with the final report likely requiring legislative and regulatory changes. Implementation timelines will vary, but the interim report proposes swift action, including stopping the issuance of new paper certificates within six months.

The move from paper share certificates to solely electronic share certification is not only beneficial from an environmental perspective but also a data management perspective, allowing all shareholding to be logged and recorded will be hugely beneficial for share administration.

Companies should ensure they are equipped to move to purely electronic share certificates and have appropriate infrastructure to manage and access shareholding information.

Corporate Governance

The revised UK Corporate Governance Code 2024 (UKCG Code 2024) was published on 22 January 2024 with guidance published on 29 January 2024. The UKCG Code 2024 will apply to financial years commencing on or after 1 January 2025, with the 2018 version remaining in place until that time. Further details of the new UKCG Code 2024 can be found in our Capital Markets legal update.

Parker Review Committee recommends that FTSE 250 companies should have at least one director from a minority ethnic background on their board by 2024. FTSE 350 companies are expected to set out their chosen target for ethnic diversity within senior management in the annual reports they publish in 2024.

In November 2023 the Quoted Companies Alliance (QCA) published the first revised version of the QCA Corporate Governance Code in 5 years. The QCA Code is tailored for small and mid-sized UK quoted companies and is adopted by the majority of AIM companies. The new version will apply in respect of accounting periods commencing on or after 1 April 2024.

The Corporate Sustainability Reporting Directive 2022 came into force in the EU on 5 January 2023, with reporting requirements phased in from 1 January 2024. The European Commission proposes extending the timeframe for sector-specific standards until June 2026.

Financial Reporting Requirements

The UK government is set to develop detailed proposals to reform non-financial reporting requirements for consultation during 2024, considering the inclusion of the International Sustainability Standards Board's (ISSB) IFRS Sustainability Disclosure Standards.

The draft Companies (Strategic Report and Directors’ Report) (Amendment) Regulations 2023, aimed at introducing new reporting requirements, were withdrawn in October 2023. However, the government plans to propose a new reform package for a more targeted reporting framework.

Upcoming changes in 2024

Below we have set out an overview of some of the changes anticipated in relation to Cyber Security in 2024. However, it is important to note that the planned general election this year may impact these changes.

Product Security and Telecommunications Infrastructure Act 2022 (PSTI)

The PSTI received royal assent back in December 2022. Part 1 of the Act imposes obligations and liability on certain manufacturers, importers and distributors of smart products caught by the provisions of the Act to comply with minimum security requirements to secure the products against possible cyber-attacks.

Manufacturers, distributors and importers that will have specific duties under the Act should look to put in place suitable procedures and policies to facilitate performance of their responsibilities.

The obligations are scheduled to go live on 29 April 2024.

Code of practice for app store operators and app developers

The government has produced codes of practice for app store operators and app developers to protect app users. The voluntary code sets out eight principles that app store operators and app developers should comply with, including adhering to baseline security and privacy requirements, and taking appropriate steps when a data breach arises. The code can be accessed here.

The code was updated in the second half of 2023 and, as a result, the implementation period has been extended to June 2024. Annex A of the code contains the ICO comments about the legal obligations from the UK data protection law relevant to the code. Annex A can be found here.

Any business that develops apps, or operates an app store, should be aware of the code and take steps to ensure compliance with the principles as part of its security and privacy compliance regime.

Online Safety Act 2023

As mentioned in our November Horizon Scanning, the Online Safety Act 2023, which aims to make internet services safer for users, achieve Royal Assent in October last year. Ofcom has been selected as the regulator and has announced it will be running consultations where interested parties can comment on draft guidelines and codes of practice.

We recommend any business caught by the provisions of the Act considers taking part in the consultations in 2024:

• Phase one, containing the draft proposals in relation to protecting people from illegal harm, is now live and is expected to close on 23 February 2024. For more information on phase one, click here.  

• Phase two, containing draft proposals for child safety duties and pornography, is scheduled to begin in Q1 2024.

• Phase three, containing draft proposals for duties on categorised services, including transparency, is expected to start around Q2 / Q3 2024.

ICO consultation on draft guidance for employers and recruiters

The ICO is in the process of building an online resource centre that will contain guidance on specific employment practices and data protection principles. The aim of the guidance is to help organisations assess how to comply with their data protection obligations.

The centre already includes published guidance on “Information about workers’ health” and “Monitoring workers”. The ICO has also recently released draft guidance on “keeping employment records” and “recruitment and selection”. Further guidance on employment related topics is expected.

A consultation has opened whereby interested parties can provide their comments on this draft guidance. This is expected to close on 5 March 2024.

How could it impact your business?

The guidance lists what organisations must, should and could be doing to comply with their obligations. Checklists are provided which contain helpful lists that organisations can follow.

Employee records

The guidance includes suggestions as well as detailing employer obligations as to what information can be retained, the lawful basis for retention, whether consent is required, conditions for special category information, record keeping, workers right for their information, and who is responsible within the organisation for data protection.

It also lists what organisations must tell their workers. This includes the purpose of collecting and using the personal information, the lawful basis, condition for processing, retention periods, where the information will be shared, and employees’ rights over the information, as well as where the information was obtained from, how you will use it and who it will be disclosed to.

Recruitment and selection

The first section of this guidance contains an overview of how data protection law applies to processing candidates’ information for recruitment purposes, looking at the data protections principles and basis for compliance.

The remaining part of the guidance focuses on the specifics of the recruitment process and details what the law requires organisations to do, with hints for good practice.

What steps should you take?

Firstly, businesses should consider whether it should take part in the consultation process. This could be helpful if you have a large number of employees and a detailed recruitment process which involves the processing of a large amount of personal data.

Whilst the guidance is only in the draft form, it provides a clear indication as to how the regulator expects organisations to be approaching matters of retention and recruitment, and interpreting the legislation. It would be prudent to review your policies and procedures to assess if they are consistent with the draft guidance, and of course keep an eye out for the final version.

Upcoming changes in 2024

Below we have set out an overview of some of the changes anticipated in relation to Data in 2024. However, it is important to note that the planned general election this year may impact these changes.

Data Protection and Digital Information Bill (DPDI)

In our 2023 Horizon Scanning updates we monitored the progress of the DPDI. The Bill is continuing its journey through the legislative procedure, with the government expecting it to be implemented in spring 2024. However, as stated above, the planned general election may impact the progress of the DPDI.

The DPDI plans to make a raft of ‘common-sense’ changes to the data protection regime in the UK by changing current obligations on businesses. The changes may affect the current practices and policies that businesses have in place and it’s important that businesses are aware of the possible changes and poised to implement any necessary updates to their compliance regime when the Bill becomes law.

Information Commissioner’s Office (ICO)

The ICO is currently following its ICO25 plan which details the risks and opportunities the ICO believes needs its most urgent attention, as well as where it intends to focus its efforts, both for the long-term and in next 12 months.

The ICO Audit: a year in focus (2022/2023) details what the organisation has done, what it has found and its recommendations from the audits it conducted across various sectors in the previous year. Common themes for recommendations included documenting processing activities, risk assessing projects using DPIAs, providing privacy information to individuals, embedding privacy management frameworks, training staff on data protection, and ensuring data sharing and data processing relationships are appropriately managed, both contractually and practically. Prudent data controllers will be keen to assess the recommendations within the ‘ICO Audit: a year in focus’ against their own current practices.

Looking forward to 2024, the ICO plans to cover the following areas:

• The use of Artificial Intelligence in recruitment;

• Financial services;

• Data sharing in child protection / safeguarding project;

• Mobile Phone Extraction; and

• Privacy & Electronic Communications Regulations audits.

Statutory Debt Repayment Plans

2024 is expected to see a proposal for a new Statutory Debt Repayment Plan (SDRP). The proposed legislative change is intended as an alternative mechanism for debtors to repay their debts over a period of up to ten years, while benefiting from a pause on creditor action.

The proposals include greater contributions being made to the administration of the SDRP than are currently required under non-statutory Debt Management Plans.

The government is currently consulting on draft regulations to introduce the new statutory debt solution, the result of which is unlikely to be implemented quickly, due to the necessary changes to be made to secondary legislation.

How could it impact your business?

Creditors may be negatively impacted as a result of the greater protection afforded to debtors utilising the scheme, the risk of limited control of the process and an obligation to make greater contributions to fund the administration of the SDRP.

It is recognised in the proposals that creditors will face front-loaded costs arising from the development of new systems required to comply with and deliver SDRPs, which will include initial familiarisation, training, and dissemination of the scheme. It is also likely that creditors will face a certain degree of additional administration costs.

However, it is estimated that creditor businesses could gain longer-term benefit by improving returns and increased recoveries from SDRP in the first 10 years of the scheme.

What steps should you take?

Businesses may wish to consider implementing a statutory debt repayment plan and breathing space scheme in their company policy.

Debtor control teams should be aware of the impending changes and to start considering changes to policies, training and managing the administration of the changes in advance of their implementation.

The Economic Crime and Corporate Transparency Act 2023

As mentioned in our corporate update for January 2024, The Economic Crime and Corporate Transparency Act 2023 comes into force this year.

The Act will see the introduction of a failure to prevent fraud offence, which will impose criminal liability on a large organisation that fails to prevent fraud if the fraud is intended to benefit the organisation.

Corporate criminal liability will be extended to a broader class of persons, for example, an organisation will be guilty of an offence where a “senior manager … acting within the actual or apparent scope of their authority” commits a relevant offence.

Organisations will have a defence if they can demonstrate that adequate procedures were in place to prevent fraud.

ECCTA will also see reforms being made to Companies House, which will impact on filing requirements and are detailed in our Corporate update above.

How could it impact your business?

The offence of failing to prevent fraud will impact companies which satisfies two or more of the following criteria in the preceding financial year:

• Have a turnover of over £36M

• Balance Sheet total of more than £18M

• More than 250 employees

Or the parent company of a group where the group has:

• Aggregate turnover of £36M net or £43.2M gross

• Aggregate balance sheet of £18M net or £21.6M gross

• More than 250 employees.

What steps should you take?

Companies should already be thinking about:

• Reviewing existing policies and risk assessment processes.

• Communicating policies to employees.

• Carrying out internal training (on an on-going basis).

• Reviewing and amend third party contracts.

• Monitoring compliance and carrying out risk assessment reviews.

Alternative Dispute Resolution (ADR)

Following the government’s proposal to introduce automatic mediation sessions for all small claims (valued up to £10,000), the Ministry of Justice confirmed on 25 July 2023 that this proposal would be implemented. This would mean that, unless the court were to grant an exemption, parties to a small claim will be required to attend a free one-hour mediation session before they will be able to progress to a hearing. This goes further than the Civil Justice Council’s recommendation in their report (“The Resolution of Small Claims” published on 28 January 2022) to implement compulsory attendance at a mediation appointment for claims up to the value of £500.

No date has been given for when this change will be implemented; the government have said that details will be announced in “the coming months”. However, we expect to see the implementation take place in 2024.

How could this impact your business?

Currently, this will impact all civil claims valued up to £10,000 (i.e. small claims). The aim is to implement this change for all specific money claims issued through the Part 7 procedure and allocated to the small claims track. The future aim is for the policy to apply to all standard Part 7 small claims with there being no case type exceptions to this requirement to mediate.

The Ministry of Justice have estimated this scheme will positively affect circa 92,000 claims annually. This would have the impact of freeing up to 5,000 court sittings each year which would significantly increase their capacity. Justice Minister Lord Bellamy KC commented that “A vast number of cases that go through the civil courts each year could be settled far more swiftly and with less stress through mediation.” and that “By integrating mediation for small civil claims we will create valuable court capacity, freeing up time for judges and reducing pressures on the courts.”

Under the scheme, if a party does not comply with the requirement to mediate, the judge will be able to exercise their discretion to impose such sanction as they deem suitable, whether that be striking out their application or sanctioning the party on their costs.

What steps should you take?

No immediate action is required as the scheme has not yet been implemented. It is important to monitor the government updates to stay informed on when the changes will take place and what action needs to be taken as a result.

Justice Select Committee call for evidence on work of County Court

An inquiry was launched by the Justice Select Committee to examine the work of the County Court due to the long-standing concerns over Court capacity and resources. The committee expressed concern over “significant increase in delays” in certain cases in the County Court.

On 14 December 2023, the Committee completed their call for evidence and the outcome of this is awaited. More details can be found here.

How could it impact your business?

Other than the growing delays and frustration in the County Court system, this will have no immediate impact but this will be an interesting one to follow.

Delays in the County Court are extreme and so any improvement in the efficiency and effectiveness of the County Court service will be welcome.

What steps should you take?

Pending the outcome of the inquiry, the County Courts are likely to remain a bottle-neck for dispute resolution.

Pre-Action Protocols review

In August 2023, the Civil Justice Council published Part 1 of its report on Pre-Action Protocols full details of which can be read here.

In addition to a review focusing on potential reforms to the litigation-specific PAPs and potential creation of dedicated litigation PAPS, the report included the following recommendations:

• introducing a new General Pre-Action Protocol (PAP);

• amending the overriding objective to include reference to the need to comply with, and enforce, the PAPs;

• making PAPs mandatory pre-action processes which result in sanctions for non-compliance when litigation is formally commenced (with urgent cases exempt);

• the potential for digital pre-action portals to make dispute resolution more accessible and more efficient;

• adding questions about compliance with the PAPs to the DQs;

• replacing the Practice Direction on Pre-action Conduct and Protocols (PD-PAC) with a practice direction (PD) that contains the general PAP and creating a separate PAP for small claims worth £500 or less (small claims PAP).

The recommendations contained in the report are still at “review/proposal” stage and will require policy and Civil Procedure Rule Committee (CPRC) consideration.

How could it impact your business?

When this comes into effect, this will impact all areas of dispute resolution. Parties will need to ensure the PAPs are being followed and any digital solutions are understood and used. If not complied with, the Court may make and order for costs against the offending party.

What steps should you take?

As policy is required to bring these changes into effect, no action is currently needed beyond monitoring these changes. Once introduced, parties engaged in pre-action dispute resolution will need to ensure they are aware of the requirements and any digital solutions.

Upcoming changes in 2024

With plenty of employment law changes on the horizon, and a general election expected in the next 12 months, this year is set to be yet another busy one for employers and HR professionals. So, what does 2024 have in store? Here is our summary of what to expect.

Statutory Rates of Pay

The Department for Work and Pensions has published its proposed increases to the statutory benefit payments which are expected to apply from 8 April 2024. In particular:

• Statutory sick pay (SSP) is expected to increase to £116.75 (up from £109.40).

• Statutory maternity, paternity, adoption, shared parental pay, and statutory parental bereavement pay, together with maternity allowance will increase to £184.03 (up from £172.48).

National Minimum Wage (NMW) and National Living Wage (NLW)

From 1 April 2024, there will be steep rises in the National Minimum Wage. The NLW (i.e. the highest rate) will, in future, apply to workers aged 21 and over will rise from £10.42 to £11.44 an hour. The age threshold has been lowered from 23.

NMW rates will also rise as follows:

Accommodation offset:

£9.99 per week (up 9.8%)

16–17-year-olds: £6.40 an hour (up 21.2%)

Apprentice rate:

£6.40 an hour (up 21.2%)

18–20-year-olds: £8.60 an hour (up 14.8%)

The Retained EU Law (Revocation and Reform) Act

This Act has the potential to have a huge impact on employment law over time. It revokes the principle of EU supremacy in UK law and removes all directly effective UK rights, meaning that UK judges will no longer be bound to apply the main principles of EU law and they will be permitted to depart from case law of the Court of Justice of the European Union (CJEU).

The Equality Act 2010 (Amendment) Regulations 2023

These regulations came into effect on 1 January 2024 and have been introduced to ensure that some of the most important principles of anti-discrimination and equality law, previously derived from the EU, are safeguarded and enshrined in UK domestic legislation.

This move has been required because the Retained EU Law (Revocation and Reform) Act has otherwise reversed the direct effect and principles of EU law from 1 January 2024.

Under the saving provisions of the regulations, some notable updates to the Equality Act 2010 are as follows:

1. The legislation has now been extended specifically to provide for claims of indirect discrimination by association. This means that employees are now able to claim discrimination, even where they do not directly have a protected characteristic, if they have suffered similar disadvantages by association to those who do, because of an employer’s policies, practices, or criteria.

2. The definition of disability has been extended so that a person’s ability to carry out normal day to day activities will now include their ability to participate fully in working life on an equal basis with other workers.

3. Less favourable treatment on the grounds of breastfeeding will now specifically constitute direct discrimination and will fall under the protected characteristic of sex.

4. There will be increased protection against discrimination in recruitment.

5. A ‘single source test’ (derived from wider treaty and principles of EU law) is enshrined for establishing an equal pay comparator. This ensures the continuity of the principle that a pay comparator could work for a different business, if the entity responsible for setting the terms is the same.

Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

These regulations have simplified some aspects of holiday pay/annual leave calculations. Entitlement for part-year and irregular hours workers can now be calculated at 12.07% of hours worked in a pay period. The decision to reform the entitlement reverses the decision in Harpur Trust v Brazel, which had resulted in part year workers receiving more holiday entitlement than part time workers who worked the same number of hours on an annual basis.

In addition, there are changes to the TUPE regulations, so that organisations with fewer than 50 employees will now be able to consult directly with their employees about a transfer, without needing to consult with elected representatives. These changes will also allow businesses of any size undertaking a small transfer of less than 10 employees to consult directly with employees. Further, under the new regulations, businesses will not be required to keep detailed records of workers’ daily working hours under the Working Time Regulations 1998. This change is subject to the proviso that organisations must be able to demonstrate adequate compliance in other ways. These regulations came into force on 1 January 2024.

Employment Relations (Flexible Working) Act 2023

Under this Act, the requirements on employees in order to apply for flexible working will be relaxed. Employees will be allowed to make two requests for flexible working in any 12-month period instead of one (as long as they are not made concurrently). Employees will not need any prior period of service to make a request and they will no longer have to formally explain the anticipated impact of their request; instead, it will be the responsibility of the employer to consider the impact. Employers will have two months to respond and must consult with the employee before rejecting their flexible working request. Employers will still be able to refuse a flexible working request for one of the eight permitted grounds for doing so. It is expected that relevant regulations, when introduced, will bring the changes under the Act into force from July 2024.

Separately, employees will have a ‘day one’ right to request flexible working from 6 April 2024 under the Flexible Working (Amendment) Regulations 2023.

Carer’s Leave Act 2023

This Act comes into force on 6 April 2024, and it will allow employees to apply for up to one week’s unpaid leave in a 12-month period to provide/arrange care for a dependant with a long-time care need (i.e. more than 3 months), which must be taken as a minimum of half a working day at a time. This will be a ‘day-1’ right, and though employees must give notice to take leave, notice need not be in writing, nor do they need to provide their employer with evidence. Employers cannot decline a request, but in some cases may be able to postpone leave if they reasonably consider that the operation of the business would be unduly disrupted if it was approved. For more information about this, please see our December update. 

Protection from Redundancy (Pregnancy and Family Leave) Act 2023

Taking effect on 6 April 2024, this Act will extend protection from redundancy to pregnant employees and those who have recently returned from maternity/adoption and shared parental leave. It will require employers to offer suitable alternative employment (where a vacancy is available with the employer or an associated employer). The period of protection will be 18 months (from the child’s date of birth, or date of adoption placement and for those who have taken more than six weeks’ shared parental leave). For those employees who have taken less than six weeks’ shared parental leave, the period of protection ends on their return from that parental leave.

Changes to paternity leave

Changes will come into force for children whose expected week of birth/placement for adoptions is on or after 6 April 2024. The changes will allow fathers or partners to take their two weeks of paternity leave in two non-consecutive periods of 1 week, or a 2-week block, within 52 weeks of the birth of the child. They will also only need to provide 28 days’ notice before taking leave.

Workers (Predictable Terms and Conditions) Act 2023

This Act (expected to come in to force in September this year) establishes a statutory entitlement for workers to seek more predictable terms and conditions of work. Employees who have a minimum of 26 weeks’ service will be able to make two requests for a predictable working pattern in any 12-month period. Employers can refuse a request, but they must deal with applications reasonably and within one month.

Worker Protection (Amendment of Equality Act 2010) Act 2023

This Act will introduce a new positive duty for Employers to take “reasonable steps” to prevent sexual harassment in the workplace from 26 October 2024. If an employer breaches this duty, the Employment Tribunal will be able to increase any compensatory award by up to 25%. For more information about this, please see our December update. 

Finally, the results of a general election this year would undoubtedly impact upon UK employment law. The Labour Party’s plans, if they come to power, include a ban on zero-hour contracts, an end to fire-and-rehire practices, strengthening of employment/workers’ rights and reform of employment status.

Upcoming changes in 2024

Below we have set out an overview of some of the changes anticipated in relation to ESG and Sustainability in 2024. However, it is important to note that the planned general election this year may impact these changes.

Environmental Outcomes Report (EOR)

In December, the environmental impact assessment (EIA) and strategic environmental assessment (SEA) were replaced by the environmental outcomes report (EOR). Part of the Levelling Up and Regeneration Bill, the EOR introduces a more straightforward process to assess plans and projects against environmental outcomes.

As part of the changes, the government has significant powers to set specified outcomes that reflect its environmental priorities, against which plans will be assessed.

Between March and June 2023, the Department for Levelling Up. Housing and Communities conducted a consultation on the Development of EORs and more detail on this can be found here.

Product packaging

With several changes expected in relation to ESG and sustainability this year, two schemes which the government are expected to focus on are the Extended Producer Responsibility (EPR), which requires companies to cover the net costs of managing their products at end of life in relation to packaging, and the Deposit Return Scheme (DRS) for drinks containers.

Whilst the government have deferred implementation until 2025, businesses should be aware of the impact of covering the net costs of managing their products at end of life. It may be worth reviewing their packaging in order to reduce end of life costs to reduce the impact of the new framework.

Corporate Reporting on ESG

The FCA will consult on updated climate-related disclosure rules for listed companies to reference the Transition Plan Taskforce disclosure framework and IFRS S1 and S2 during 2024

The Financial Stability Board has requested that the International Sustainability Board (ISSB) reports on progress in companies' climate-related disclosures during this year.

ISSB Sustainability Disclosure Standards IFRS S1 and S2 are effective for annual reporting periods beginning on or after 1 January 2024 and the new sustainability reporting requirements created by the Corporate Sustainability Reporting Directive will start to apply from 1 January 2024.

UK Corporate Governance Code

Following the policy statement by the Financial Reporting Council (FRC) in November 2023, the long awaited amendments the UK Corporate Governance Code were published on 22 January 2024. As announced, the FRC dropped its earlier proposals for revisions to the Code relating to the role of audit committees on ESG issues, expanding diversity and inclusion expectations, over-boarding provisions and expectations on Committee Chairs' engagement with shareholders. The revised UKCG Code 2024 reflects this policy decision and omits the emphasis on ESG issues. For example, the previously suggested requirement for an annual report description on how environmental and social factors are considered in the company's strategy has not been included, although companies can, of course, voluntarily adopt such practices.

Regarding diversity and inclusion, there is no reference to protected and non-protected characteristics, despite previous proposals in this direction. Although the UKCG Code 2024 lacks reference to this, companies should continue to focus on diversity and inclusion. Businesses can voluntarily adopt practices that promote diversity at all levels and create an inclusive workplace culture.

Further information on the new UKCG Code 2024 can be found in our Capital Markets legal update.

Incoming changes to the visitor rules

The Home Office has implemented changes in relation to the rules that govern visits to the UK, in particular, the restrictions on working for visitors.

The ability to work when in the UK as a visitor is greatly limited but the changes to the rules, due to come into effect on 31 January 2024, do offer some greater flexibility in certain respects.

How could it impact your business?

The amendments clarify that visitors are permitted to work remotely whilst in the UK if it is not the primary purpose of their visit. In addition, the amendments relax the restriction that those completing intra-corporate activities as a visitor cannot work directly with clients, allowing client-facing work subject to prescribed limitations. Extensions have also been made to the ability for scientists, researchers, and academics to conduct research in the UK.

Another key change is that the provisions regarding Permitted Paid Engagements (PPE) will be amended so that all visitors will be able to undertake PPE without the need for a special visa (although specific rules still apply to the PPE work). Speakers at conferences will be able to be paid for this activity as they will be added to the PPEs.

What steps should you take?

The visitor rules are very restrictive in relation to work and will continue to be despite the changes. Therefore, employers need to take great care where any work involves visitors and should ensure to consult and familiarise themselves with the new rules. Failure to do so leaves the company at risk to being in an illegal working situation which can lead to penalties.

Migrant workers and dependants

Many visa routes allow for the dependants of a migrant worker, such as their partner and children, to come to the UK. However, under the Home Office’s 5-point plan, announced in December, this will be restricted. In particular, the Home Office intends to prevent overseas care workers from bringing their dependants to the UK, following a similar approach applied to student visas.

The Home Office intends to implement the changes as soon as possible this year. However, the plans need to follow the legal procedure of being laid before Parliament before they are implemented as law.

However, the Home Office has announced that care workers and senior care workers already in the care worker route will be able to remain with their dependants, including for visa extensions, changing employer within the same occupation code and settlement.

Those already on the route before the Immigration Rules change, who have not yet brought their dependants, will be allowed to bring dependants during their sponsorship on this visa, according to the announcement.

How could it impact your business?

If dependants are not able to apply for a visa to join the lead applicant in the UK, this is likely to reduce the attractiveness of the UK to many overseas care workers and senior care workers. This may lead to greater difficulty in recruiting care workers in future and affect service lines.

What steps should you take?

Employers considering sponsoring care workers and senior care workers may wish to review these applications, to ensure they are progressed as soon as possible.

Minimum salary for Skilled Workers

As part of the 5-point plan, the Government announced an increase in the minimum salary requirement for the Skilled Worker visa from £26,200 pa to £38,700 pa, unless the employment falls within an exemption, such as those coming to the UK on the Health and Social Care visa route.

How could it impact your business?

If the measures announced are introduced, the increase of nearly 50% in the salary requirement will hinder employers who rely on international workers to meet resourcing gaps. The Home Office’s intention appears to be to increase the salary requirement incrementally starting in Spring 2024, although it is not clear if this will be possible under immigration law.

Until draft provisions are put into place it will not be possible to say with any certainty how the salary increase may impact those already in the UK where their salaries do not meet the higher level. The rules in place when a visa is granted will usually continue to apply to that individual’s visa.

In addition, the Home Office announced that those already on the Skilled Worker route before the changes are made should be exempt from meeting the new salary level when they change sponsor, extend their visa or settle in the UK. However, their salaries will be expected to increase over time and therefore, they will need to meet a higher salary requirement in their next application than is currently the case (this should be the “25th percentile of earnings” figure which the Home Office says is currently £29,000 for skilled work).

What steps should you take?

Although a great deal of uncertainty remains in relation to the Home Office plans, businesses may wish to carry out an assessment of their employees who have visas due to expire over the next year that will need sponsorship. For these individuals, employers may wish to consider bringing their applications forward, so they are dealt with before April 2024.

In addition to the above, employers should note that the Immigration Health Surcharge is due to increase from £624 per year (for most applicants) to £1,035 per year. This is due to come into force on 6 February 2024 and will therefore increase the fees for visa applications, including Skilled Workers, if they are submitted after this date.

Fraudulent trading under section 213 of the Insolvency Act 1986

In 2024, there is potential for clarification and broadening of the scope of fraudulent trading under section 213 of the Insolvency Act 1986. Traditionally, this has given rise to claims against directors or controlling minds of a company known to be carrying on a business to defraud creditors.

However, the Supreme Court has granted permission to appeal the Court of Appeals decision in Tradition Financial Services Ltd v Bilta (UK) Ltd and other [2023] EWCA Civ 112, to consider whether the Court was correct to hold that a fraudulent trading action can be brought against “outsiders” (i.e. a third party who did not have a controlling or managerial function within the insolvent company).

How could it impact your business?

This may impact all third parties including suppliers, collaborators, joint venture partners with companies that are at risk of insolvency. Outsiders who are party to the carrying on of a business trading to the deliberate detriment of creditors, may be exposed to offences and claims pursuant to section 213 of the Act.

What steps should you take?

Directors should remain aware of their duties and obligations in circumstances where a company is at risk of insolvency and the potential risk of allegations of wrongful or fraudulent trading. However, organisations will want to consider ensuring that there is wider understanding among their employees of the risks of claims against third parties in circumstances where other companies, including contracting parties, suppliers and joint venture partners, become insolvent.

On the positive side, the judgment will be welcomed by creditors as it strengthens the liquidators' ability to make recoveries for the benefit of creditors. Unsecured creditors who have been the victim of fraudulent trading should consider whether there is potential third-party liability for fraudulent trading.

Applying for trade marks in bad faith

There has been a development in the ongoing case of SkyKick UK Ltd and another (Appellants) v Sky Ltd and others (respondents) concerning trade mark infringement and the test to determine when a party acts in bad faith.

Proceedings for the case were first brought by Sky against SkyKick for trade mark infringement. SkyKick stated that the trade marks relied upon by Sky were invalid, as a result of Sky deliberately registering overly broad marks containing specified goods and services which are not used by the party.

How could it impact your business?

If Skykick is successful, this may set a precedent that puts owners of broad trade mark specifications at greater risk.

What steps should you take?

• Ensure that any trade mark applications filed only contain specified goods and services which you currently use or are planning to use within five years.

• Consult a trade mark solicitor or trade mark attorney to ensure all specified goods and services included in an application are relevant.

Patents involving Artificial Intelligence

The UK Supreme Court (UKSC) has ruled that an ‘inventor’ as contained in the Patents Act 1977 must be a ‘natural person’.

This ruling follows the case of Thaler v Comptroller [2023] UKSC 49, where Dr Thaler tasked an AI system dubbed ‘Dabus’ to create a patentable design. Despite Dabus creating such a design, Dr Thaler was unable to convince the court that he obtained any rights as owner of the system as no inventor could be established.

Whilst the UKSC did not accept that under the current law an AI could create patentable designs, they referenced the Court of Appeal judgment that stated if this were to occur in the future, the Patents Act 1977 would need to be amended.

How could it impact your business?

This ruling reduces ambiguity as to the true owner of patentable designs and also opens the door for discussions on future legislative amendments which would impact businesses operating in the UK.

What steps should you take?

Businesses should ensure that AI is not the sole creator of any potentially patentable designs as this may invalidate the design.

Issues with generative AI training

Since proceedings in the first case of Getty Images (US) Inc v Stability Al Ltd were issued in early 2023, key questions have arisen on the legitimacy of generative AI training.

In this dispute, Getty claimed that Stability AI unlawfully used millions of images from their website to train an AI system without having any consent to do so.

Further to the High Court’s decision to reject Stability AI’s application for reverse judgement on some aspects of the claim, the case is expected to go to full trial, where copyright and database infringement issues will be reviewed through judicial examination.

How could it impact your business?

The outcome of this case will significantly impact the development of future AI systems and so the courts will be keen to balance the needs of the copyright holder against those of the AI innovator.

Should the courts limit the ability for generative AI to be trained through readily available content then this may slow AI innovation.

What steps should you take?

Business should ensure that they have obtained consent to use any content that is not owned by their company.

Upcoming changes in 2024

Below we have set out an overview of some of the changes expected to occur in relation to Intellectual Property in 2024. However, it is important to note that the planned general election this year may impact these changes.

Further work on the IPO’s five-year digital transformation programme ‘ONE IPO’.

Launched in April 2021, the programme seeks to deliver ‘fast, flexible and high quality digital services’, whilst also aiming to remove barriers to innovation and access to intellectual property services.

As part of ONE IPO, new digital services will be launched, with a pilot for the patents service launching this Spring. If the pilot is successful, then further digital services will follow in late 2025, which include a trade mark and design service as well as a digital hearings and tribunals service.

The Government has also demonstrated their support for this programme, confirming last year that they would be open to amending legislation to facilitate IPO changes to processes or practices, as well as providing clarification to the IPO’s powers on intellectual property hearings and tribunals.

More information can be found here.

Code of practice on copyright and AI

A new voluntary code of practice on copyright and AI is being developed after the Government’s initial intention to introduce copyright and database exceptions to Text and Data Mining (TDM) received backlash from the House of Lords Communication and Digital Committee.

The voluntary code follows Sir Patrick Vallance’s March 2023 ‘Pro-innovation Regulation of Technologies Review’. The Review looked to strike a balance between the rights of copyright holders and the need to Text and Data Mine by AI developers, with the new code attempting to make TDM more readily available.

If the code is not adopted, the Government has confirmed that legislation may be drafted to ensure barriers for AI companies can be overcome and that protections are in place for copyright holders.

Requirement for a UK agent

As mentioned in our December update, from the 1 January 2024 all new proceedings and requests through the UKIPO require an address for service, to be located in the UK, Gibraltar or Channel Islands.

There may be instances where comparable marks, that were created when the UK left the EU, do not require a representative or owner to have an address in one of the above locations, however this will only apply if no action is required to the mark. This exception will apply to all trade marks (excluding those derived from international registrations) registered on or before 31 December 2023.

More information can be found here: Embracing the changes to the IP landscape in 2024

AI Guidance

The UK Government has recently published an AI white-paper to provide additional guidance entitled, A pro-innovation approach to AI regulation.

The policy paper aims to encourage UK regulators to publish guidance on the use of AI within five principles:

1. Safety, security, and robustness;

2. Transparency and explainability;

3. Fairness;

4. Accountability and governance; and

5. Contestability and redress.

Included in the policy is a commitment by the Government to the key regulators that if they have not published guidance by April 2024 they will be assisted to do so.

The Government’s ‘light touch’ approach to AI regulation has further been demonstrated in their response to the House of Commons Committee’s interim report, where they confirmed that there are no plans for immediate AI legislation.

Shortly after the Government’s response, the Artificial Intelligence (Regulation) Private Members Bill was introduced to the House of Lords with an aim to create a central AI Authority to oversee the regulation of AI.

Procurement Act 2023 – Mandatory Exclusions

The rules governing public procurement are changing. The new Procurement Act (which is likely to come into effect in October 2024) will improve the way public procurement is done and will include changes to the mandatory exclusion grounds and the introduction of a debarment register.

Under Schedule 6 of the Act, a mandatory exclusion ground applies to a supplier if they or a connected person have been convicted of a relevant offence, including but not limited to theft, fraud tax evasion, bribery, cartel offences, money laundering and being a threat to the national security of the UK.

Equally, the failure to provide documents or assistance required by a contracting authority for the purpose of establishing whether an exclusion ground might apply will also apply to mandatory exclusion grounds.

The government will introduce a new National Security Unit for Procurement which will investigate suppliers who may pose a security risk, the suppliers will be given notice of an investigation and be given the opportunity to make representations.

How could it impact your business?

Where a supplier is made subject to a mandatory exclusion and placed on the debarment list, it is generally excluded from all procurements. If the reason for exclusion is due to a finding that the supplier poses a national security threat to the United Kingdom, the exclusion may only apply to those types of contracts.

Decisions may be challenged by way of an application to remove the debarment at any time but only if there is significant new information or a material change in circumstances.  Furthermore, the supplier may also appeal to the Court within 30 days of the date of notification.

In summary, the impact of being placed on the debarment list may therefore be serious both commercially and in terms of reputation.

What steps should you take?

Suppliers may want to consider what information they may need to disclose in advance if they consider that they are at risk of an investigation.

Suppliers (particularly those which are part of complex or international group structure) should carry out due diligence on their corporate structure to ensure that none of their parents, subsidiaries, or any connected persons fall foul of the grounds of exclusion under the Act.

If you are a contracting authority, you should keep a look out for the statutory guidance which the government has promised to issue to assist contracting authorities in considering and applying the exclusion grounds.

Minimum Energy Efficiency Standards and Green Leases

The Minimum Energy Efficiency Regulations (MEEs) are back in the spotlight after the Government announced in that there would be changes to their environmental targets.

Since April 2023 it has been unlawful for Landlords to let commercial properties with a rating below “E” (subject to certain exceptions). As stated on our September Horizon Scanning update, it was widely expected that the minimum rating would rise to “C” by 2027 and “B” by 2030 in order to meet the Government’s net-zero emissions target by 2050. It is estimated that 90% of offices have a rating of “C” or below and at the current rate of improvements properties would not obtain a “B” rating until 2036. However, it is now uncertain when the changes to the ratings will be implemented, so the rate of improvements are likely to slow even further. As leases are often over 10 years the parties need to consider the implications of changes to the minimum rating.

How could it impact your business?

A breach of the regulations does not make the lease invalid but the landlord would be subject to a penalty of 20% of the rateable value up to a maximum of £150,000. In a multi-let building this could be substantial.

We have also seen increases in “Green Lease” provisions in leases which place the obligations on complying with any changes on the tenant. In addition, Green Leases may restrict alterations which reduce environmental performance and include the costs of audits and works to improve performance in the service charge, as well as extensive provisions for data monitoring and sharing. Consequently, tenants could face higher rents or service charges to cover the costs of improving the EPC rating. As energy costs rise, tenants may want to look for buildings with lower ratings to reduce current costs and which have less risk of increased payments to cover the costs of improvements.

What steps should you take?

We would recommend that any businesses that either let, or occupy let properties review their EPC ratings and consider what improvements need to be made to increase the ratings and the likely costs. You should consider whether the lease covers the costs of the improvements and if the costs fall on the landlord or the tenant.

If you are entering into a new lease, particularly longer-term leases, you should request information and factor in the energy costs and the cost of improvements to the property costs. Although the timescales are now uncertain it is only a matter of time until the ratings increase.

Upcoming changes in 2024

Below we have set out an overview of some of the changes expected to occur in relation to Property / Real Estate in 2024. However, it is important to note that the planned general election this year may impact these changes.

Review of Landlord and Tenant Act 1954

The Law Commission’s consultation on Part 2 of the Landlord and Tenant Act 1954 (LTA) is anticipated to be published in early 2024. The review aims to ensure that the LTA 1954 works for the current commercial leasehold market and will look at the security of tenure, notices and renewal lease terms.

Fixed recoverable costs

The Civil Procedure (Amendment No 2) Rules 2023 (SI 2023/572) came into force on 1 October 2023, implementing extensive changes to the rules on fixed recoverable costs.

The new rules apply to all proceedings issued on or after 1 October 2023 in the fast or intermediate track, with an important exception: housing claims will be excluded for a period of two years. Housing claims are essentially claims or counterclaims relating to possession, disrepair or unlawful eviction of a residential property or dwelling apart from boundary disputes.

Property claims which are likely to be eligible for the new fixed costs rules are relatively straightforward boundary disputes, trespass claims, claims for possession of commercial property and possibly terminal dilapidations claims.

House Building: CMA market study

The Competition and Markets Authority (CMA) is expected to publish its market study report into housebuilding in England, Scotland and Wales before the statutory deadline of 27 February 2024.

Levelling-up and Regeneration Act 2023

The Levelling-up and Regeneration Act was passed on 26 October 2023. Part 10 contains statutory powers for local authorities to conduct compulsory rental auctions of empty high street premises. Part 11 requires parties to provide detailed transactional information about interest and dealings in land to the Chief Land Registrar. The finer details will be set out in the regulations which are awaited.

Register of Overseas Entities

There is likely to be an amendment to the regulations in 2024 which will affect overseas entitles that hold UK property as a nominee. Currently if property is owned by the overseas entity as a nominee there is no requirement to disclose the ultimate beneficial owner. The amendment will expand the definition of beneficial owner and a new condition for beneficial ownership of an overseas entity with be introduced.

Charity land: reforms under Charities Act 2022

Important reforms to dealings with charity land contained in the Charities Act 2022 are expected to be implemented early in 2024. The reforms include changes to the information that must be included in statements and certificates for both charity land disposals and mortgages.