CMA launches dynamic pricing project

The Competition and Markets Authority (CMA) has launched a market-wide project on dynamic pricing practices. This project is separate from the CMA’s work regarding the Oasis ticketing scandal, pursued by the CMA in relation to its consumer powers.

Unusually, this project is not sector specific, nor is it an investigation seeking to penalise anti-competitive behaviour, instead it aims to collate information regarding the use of dynamic pricing practices employed by organisations across all sectors in order to inform the direction of policy.

How could it impact your business?

Dynamic pricing is a variable pricing method whereby products and services do not have fixed prices, rather the price varies depending on demand, supply changes, and other external factors. In recent months, largely due to public outrage at ticketing practices in the live events sector (famously with Oasis and Taylor Swift), the legality of dynamic pricing has been brought into question in a number of jurisdictions.

With the Financial Times estimating that between 25-30% of businesses in the UK currently use dynamic pricing, this project from the CMA and any change in the law has the potential to impact a range of industries. However, for certain industries, namely event organisers, airlines, travel agents and transport operators, dynamic pricing is central to their business model, and any change would require a significant review of business practices.

What steps should you take?

In order to collate information, the CMA has indicated it will be contacting businesses across a range of sectors who use dynamic pricing, however businesses that wish to feed into the project may also contact the CMA direct to express an interest. Our team have frequent contact with the CMA and are able to assist you in approaching the CMA regarding this project.

For businesses currently using dynamic pricing (or considering using dynamic pricing models), whilst this project is not an investigation or a change in the law, it marks an increase of regulator scrutiny in this area and could lead to legislative change further down the line. Organisations that use dynamic pricing should ensure that their practices are compliant with competition and consumer law and are not simply used to maximise prices.

The UK-EU Competition Cooperation Agreement

On 29 October 2024, the UK and the EU formally concluded negotiations on the UK-EU Competition Cooperation Agreement (the CCA), supplementing the EU-UK Trade and Cooperation Agreement of 1 May 2021.

The CCA facilitates closer cooperation between the UK’s Competition and Markets Authority (CMA), the EU Commission (Commission) and all EU Member States’ national competition authorities on anti-trust and merger investigations. The CCA is a step forward in terms of cooperation between the UK and EU on competition law matters and should streamline the process of cross-border merger and anti-trust investigations. However, as the full text of the CCA has not yet been released, the full scope of cooperation, and limitations upon this co-ordination is unknown at this stage.

The UK and EU have concluded technical negotiations of the CCA and the next stage for it is to be considered by Parliament and therefore subject to ratification on both sides. It has been noted that the CCA has been negotiated with a view to signature in the coming year. Whilst the CCA does not mark a change in the law, it indicates greater collaboration and co-operation between the UK and EU on competition law matters.

How could it impact your business?

The CMA and Commission both oversee the application and enforcement of competition law in the UK and EU respectively.

Under the current regime, the UK does not have a mandatory notification regime in relation to the majority of transactions. The EU, by contrast, has a mandatory notification system for mergers reaching specific thresholds. As a result of the CCA, the CMA may learn of transactions which have been notified to EU national competition authorities (or the Commission) before it might otherwise have, therefore impacting businesses engaged in cross-border merger activity and what notification requirements exist in both the UK and EU. However, consent will still be required from the parties to a merger in relation to the disclosure of confidential information between the regulators.

It is also expected that the CCA will likely lead to increased co-ordinated enforcement action by competition authorities including in relation to dawn raids. This is particularly relevant on the eve of the introduction of the expanded dawn raid powers for the CMA under the Digital Markets, Competition and Consumers Act, and could lead to an increased number of investigations being mirrored across both jurisdictions.

What steps should you take?

Businesses should take this opportunity to review their current internal policies and procedures in relation to competition compliance and ensure that dawn raid policies deal with the potential of co-ordinated cross jurisdictional dawn raids.

For parties involved in merger activity, the CCA should, in theory, streamline the transaction review process, but could also lead to heightened scrutiny. This increased cooperation and information sharing may require the transaction parties to prepare for parallel review of their deals and / or conduct, and to consider at which stage of the transaction each authority is notified of the deal.

On a brighter note, the CCA marks a real step-forward in EU/UK relations post-Brexit, and is hopefully an indication of greater co-ordination to come between regulatory authorities across both jurisdictions.

CMA action against EMMA

On 25 October 2024, the UK’s Competition and Markets Authority (“CMA”) announced it has initiated court action against well-known mattress retailer Emma and its directors (the “Emma Group”). This follows an investigation by the CMA into the behaviours of the Emma Group regarding its online selling and marketing practices.

The CMA expressed serious concerns regarding the practices employed by the Emma Group, alleging that such practices are likely to mislead consumers and are in breach of consumer protection law. The CMA is particularly concerned about the Emma Groups use of “dark patterns”- harmful use of online choice architecture (“OCA”), whereby the configuration of a web page or application leads consumers to make decisions or actions which are not in their best interests.

In this case, the CMA focussed on Emma Group’s use of false urgency and price reduction claims in their marketing practices, including the use of countdown timers. The CMA is therefore concerned that consumers are being encouraged to make purchases under false pretences, rushed into making purchases in order to avoid missing out on a good deal, due to a falsely manufactured sense of urgency.

How could it impact your business?

Under the current consumer enforcement regime, the CMA is unable to take direct enforcement action in relation to breaches of consumer law, and so is instead pursuing action against the Emma Group through the courts. However, this is set to change from April 2025 as the Digital Markets, Competition and Consumers Act 2024 (the “DMCC”) provides the CMA with the power to bypass the traditional court process altogether, and directly investigate and penalise businesses who are in breach of consumer law, including issuing fines of up to 10% of their group worldwide turnover. This is expected to lead to much more frequent enforcement against businesses who infringe consumer law.

Despite not receiving the additional enforcement powers until April 2025, the CMA is taking these issues surrounding dark patterns and the harmful use of OCA seriously, having issued extensive guidance on discounting and urgency claims earlier on this year, and investigated a number of organisations for consumer law infringements relating to urgency claims. This should serve as an indication as to how the CMA will continue to approach these practices when the DMCC comes into effect.

As well as the action taken against the Emma Group, other organisations including Simba Sleep have recently provided undertakings to the CMA over their own sales tactics, in order to avoid further court action being taken against them.

What steps should you take?

Despite the CMA’s focus on the online mattress selling sector, the expansion of enforcement powers available to the CMA are going to affect all consumer businesses. Any business which sells or advertises to consumers via the web needs to ensure that its practices are not in breach of consumer law, and that dark patterns are not being used to pressure consumers into making quick purchases and spending more than they otherwise would. The CMA is not waiting for the expansion of their enforcement powers before taking action against these tactics, and are taking action through the courts now against non-compliant businesses.

We anticipate that enforcement action will continue to be taken by the CMA both in the lead up to the DMCC taking effect and beyond. It is therefore important that any business which sells to consumers engage in an immediate review of their online sales practices, to ensure that they are compliant with consumer law, under the DMCC prior to April 2025. The CMA has indicated that it believes the majority of organisations are breaching consumer law in one way or another, however weak enforcement and lack of resource has previously prevented effective action being taken. Our team can assist you in reviewing and remedying any potentially non-compliant practices.

UK Takeover Code amendments: narrowing the scope of companies to which it applies

The UK Takeover Code ("Code") is a set of rules and principles governing the conduct of takeovers and mergers involving “quoted companies” (companies listed on the London Stock Exchange or other UK-regulated markets). The Takeover Panel ("Panel"), the UK’s independent regulatory body responsible for overseeing the Code, recently published a statement setting out amendments to narrow the scope of companies to which the Code applies. From 3 February 2025 ("Relevant Date"), subject to transitional arrangements, the Code will only apply to a company if it has its registered office in the UK, the Channel Islands or the Isle of Man and either:

• any of its securities are admitted to trading on a UK regulated market, a UK multilateral trading facility or a stock exchange in the Channel Islands or the Isle of Man; or

• any of its securities were admitted to trading (on one of the markets above) at any time in the two years prior to the date of an announcement of an offer or possible offer for it, or any other event which has significance under the Code occurs.

How could it impact your business?

When the changes take effect from the Relevant Date, subject to a transitional period, the Code will not apply to:

• a public or private company which ceased to be a UK quoted company more than two years prior to the Relevant Date;

• a public or private company whose securities are, or were previously, admitted to trading solely on an overseas market;

• a public or private company whose securities are, or were previously, traded using a “matched bargain facility”, such as Asset Match or JP Jenkins;

• any other public company which is not a UK quoted company (unless it is a recently UK quoted company); and

• a private company which filed a prospectus at any time during the 10 years prior to the Relevant Date (unless it is a recently UK quoted company).

The Panel will implement the changes from the Relevant Date, although the Code will continue to apply for a further two years in respect of companies that will cease to be subject to the Code as a result of these changes.

Other companies falling outside the Code’s remit will benefit from ceasing to incur the additional costs and regulation associated with compliance with the Code.

What steps should you take?

The two-year period between the Relevant Date and 3 February 2027 will allow companies to make “transitional arrangements” such as making appropriate amendments to their articles of association or enabling shareholders to exit their investment if they do not wish to be shareholders in the company without the protections afforded by the Code.

Companies should use this time wisely to consider their options moving forward with an eye on 3 February 2027 to implement any necessary changes.

The response statement contains useful appendices and diagrams to help assist companies with understanding the changes and can be viewed here.

Economic Crime and Corporate Transparency Act 2023 (ECCTA) – Timetable

As stated in our October Horizon Scanning, the ECCTA will introduce additional powers to regulatory bodies, such as Companies House. Companies House has provided guidance on how it will perform its role enforcing aspects of the ECCTA and the timetable for the upcoming changes.

Additionally, new regulations have been published that will apply aspects of the ECCTA to LLPs. These new regulations give the Registrar of Companies the ability to impose financial penalties on a person directly if satisfied beyond reasonable doubt that the individual has committed offences under LLP law. The Registrar will also have the ability to remove an LLP from the register (resulting in dissolution) if there are reasonable grounds to believe its application contained false or misleading information.

How could it impact your business?

Under Companies House’s timetable it will now begin issuing financial penalties for offences under ECCTA and the Companies Act 2006.

By Spring 2025, it should be carrying out checks on authorised corporate service providers (ACSPs) to authorise them to carry out identity verification (IDV) services.

By Summer 2025, increased access will be available to certain trust information on the Register of Overseas Entities.

By Autumn 2025, IDV will become compulsory on incorporation for new directors and new people with significant control (PSCs), and a 12-month transition period to require IDV for existing directors and PSCs shall begin.

By Spring 2026, presenters filing any document will require IDV, third-party agents filing on behalf of a company will need to be registered as ACSPs and documents that are filed by a disqualified director on their own behalf will be rejected.

By the end of 2026, additional filing requirements for limited partnerships will be introduced, the transition period for requiring IDV will be complete and compliance activity will commence

What steps should you take?

Companies impacted by the changes should now undertake an audit of their compliance with the ECCTA and Companies Act to avoid the risk of fines being imposed for non-compliance.

Additionally, current identity verification systems should be reviewed and new directors and PSCs should be subject to IDV on inception. To get ahead on complying with IDV requirements, companies should begin verifying existing directors and PSCs and ensure that any third-party agents they engage to file on their behalf will take the requisite steps to register as ACSPs by Spring 2026.

Institute of Directors new Code of Conduct for Directors

On 23 October 2024, the Institute of Directors published a new Code of Conduct for Directors. This being the same content as the Code published earlier this year for consultation.

It is a voluntary guidance document, with currently no formal enforcement mechanism. It is intended as a tool to assist Directors in making better decisions and to aid in building and maintaining the trust of the public in the activities of businesses.

It is structured around six principles of Director conduct; each principle being underpinned by undertakings and outcomes. The intention is, by applying these principles and fulfilling the undertakings, Directors can achieve the relevant outcomes. These principles are:

• Leading by example

• Integrity

• Transparency

• Accountability

• Fairness

• Responsible business

How could it impact your business?

This new Code of Conduct is directed at individual Directors, and anyone fulfilling a Director or Director-equivalent role in the private, public and not for profit sectors. This is for businesses of all sizes, including listed and publicly owned entities.

This Code supports existing policies and processes and is there to assist Directors in fulfilling their role in the expected manner.

At this point in time, there are no associated penalties with not complying, however, Directors should have these conduct principles at the forefront of their mind when carrying out actions in their role as Director.

What steps should you take?

Company boards are being encouraged to publicly commit to this new Code of Conduct. There have been suggestions of mechanisms to include disclosure in annual reports and websites, communication to employees and other stakeholders, as well as through publications on social media.

Directors should be mindful of complying and acting in accordance with these new principles to encourage the public’s faith in Directors and companies carrying out their activities in a manner to be expected and encouraged.

Whilst there are no direct legal ramifications of not complying, the Institute of Directors is encouraging businesses to be live to this new guidance and use it as a tool to signify commitment to these ethics which should underpin the role of Director in any event. Companies should ensure that this Code is understood and applied within their business, and outwardly demonstrated.

Data (Use and Access) Bill introduced to Parliament

A new Data (Use and Access) Bill (DUA) was introduced to Parliament on 24 October 2024.

This comes as the previous Data Protection and Digital Information Bill (DPDI) (mentioned in our January horizon scanning update) failed to make law prior to dissolution of Parliament ahead of the general election in the summer. Since then, in our July horizon scanning update, we covered the announcement of the Digital Information and Smart Data Bill, which appears to have now morphed into the DUA.

The DUA is currently making its way through Parliament and promises to reform certain aspects of UK data protection law.

How could it impact your business?

The DUA boldly promises to ‘boost the UK economy by £10 billion’ and ‘unlock the power of data to grow the economy and improve people’s lives’. It includes measures designed to:

• Cut down on bureaucracy for the police, freeing up time and resource;

• Make patient data more easily transferable within the NHS (involving the implementation of data sharing standards across IT suppliers in this sector);

• Simplify identity verification in contexts such as rental accommodation, employment, and birth and death registration;

• Enable new ‘smart data schemes’ to allow consumers and businesses to share information in order to ‘generate personalised market comparisons and financial advice’;

• Reduce restrictions on the use of automated decision making;

• Clarify the boundaries of ‘legitimate interests’ as a lawful basis for processing;

• Allow data to flow out of the UK more easily where recipient countries offer adequate protection. Notably, at this stage the ICO does not consider the DUA a threat to the UK’s adequacy status; and

• Strengthen the ICO’s enforcement powers (particularly in relation to breaches of marketing rules).

It is hoped that these measures will allow organisations in both the public and private sector to harness the power of data and use it as a strategy for innovation and growth, while in turn, reducing public spending and time-wasting on admin.

What steps should you take?

At this stage, the DUA is making its way through Parliament and data protection compliance in the UK continues to be governed predominantly by the UK GDPR and Data Protection Act 2018.

Organisations are advised to monitor the DUA’s progress in readiness to take advantage of the new flexibility and reduction in red tape it promises. However, it should be noted that privacy and security will remain fundamental in the new regime, and whilst the DUA is anticipated to allow data to be used more freely in certain situations, the individual’s privacy and rights will remain a paramount consideration. A ‘data protection by design’ approach should be taken by any business looking to adopt or participate in the initiatives promised by the DUA, including an analysis of the privacy impact from the outset.

ICO issues recommendations relating to AI recruitment tools

On 6 November 2024, the ICO issued a series of recommendations to AI developers and providers, intended to ensure that job seekers’ information rights are better protected. This follows an audit of multiple organisations in this space, which resulted in almost 300 recommendations to individual AI providers and developers. Helpfully, the ICO has also published a short set of key considerations for organisations considering using AI to assist in recruitment – meaning that this update is relevant for any business looking to develop, provide or use such a tool.

How could it impact your business?

AI-based products offer candidate sourcing, screening and selection tools and can even predict a candidate’s personality type. These solutions promise to increase efficiency by assessing information and making predictions, but the privacy impact must be assessed to ensure safe deployment. Businesses involved in the development, provision or use of AI-based recruitment tools should take heed of the ICO’s recommendations, which cover matters such as:

• Fairness (including monitoring accuracy and bias issues);

• Transparency and explainability, i.e. informing candidates how their data is used;

• Data minimisation and purpose limitation, at the development, training, testing and operational stages of the product;

• Data Protection Impact Assessments – even where the AI provider is acting exclusively as a processor;

• Lawful bases for processing, including specific recommendations for ‘legitimate interests’ and ‘consent’.

The ICO breaks down its recommendations and states which apply to providers and which apply to businesses using these products (such as recruiters).

What steps should you take?

AI recruitment product providers should ensure that privacy is baked into their product and must not expect the customer (as controller) to be solely responsible for data protection considerations. Indeed, the provider will likely be responsible for data protection compliance in relation to personal data used to train the tool, and thereafter should expect to support the customer with safe deployment.

Likewise, the business procuring the product must not rely on generalised claims given by the provider that the tool is ‘GDPR compliant’ and must conduct its own risk assessment and identify its own lawful basis.

Certain responsibilities naturally sit with one party – mitigating bias, for instance, will in most cases be the provider’s primary responsibility, but that does not absolve the business deploying the tool from seeking assurances and evidence that this has been adequately taken care of. This issue is particularly important because (historically), 1st generation AI recruitment tools have proved vulnerable to developing biases and amplifying discriminatory hiring decisions, on the grounds of race or sex. Recruiters using AI tools are therefore expected to verify with the product-providers they buy from how they check for and eliminate bias, through testing, sampling and other means.

Likewise, transparency requirements will sit with the recruiting business, but the provider will need to feed into this to ensure that the product is accurately and comprehensively described. A combined effort is the key to compliance here.

Non-payment of wages during suspension

The legal battles of French International, Benjamin Mendy, began another chapter this month when he won his claim against his former club (Manchester City) over non-payment of wages. The Employment Tribunal judgment is a useful reminder that suspension (even by a third-party regulator rather than an employer) won’t normally entitle an employer to withhold wages.

Mr Mendy was suspended from play for almost two years. Despite being suspended by the FA throughout, he is likely to receive more than £8m in backpay following the judgment.

Background

Benjamin Mendy played for Manchester City Football Club from 2017.

In the summer of 2021, serious sexual offences were alleged against Mr Mendy in connection with parties at his house in Cheshire. In August 2021, Mendy was subject to a precautionary suspension by the FA from “all football related activity”. The following month (September) Manchester City notified Mendy they would stop paying his wages. The legal basis the club cited, common to all employment contracts, was that Mr Mendy was not “ready and able to perform [his] obligations under the contract of employment”.

Mr Mendy’s suspension ultimately lasted for nearly two years until his playing contract with the club expired in June 2023. One factor which featured heavily in arguments over entitlement to wages was the relevance of Mr Mendy being remanded into custody on two occasions (for three months between September 2021 and January 2022 and for 18 days in January 2023).

Mr Mendy was ultimately cleared of all criminal allegations and brought a claim against Manchester City for unlawful deduction of wages from September 2021 to June 2023 (wages that, if fully awarded, amounted to approximately £11.1m).

Legal Principles and Decision

Mr Mendy’s claim was for unlawful deductions from his wages under section 13 of the Employment Rights Act 1996. There are no financial limits to such claims, save that such a claim cannot ordinarily go back more than two years from the date payment was due.

In the absence of a contractual authority entitling Manchester City to withhold wages, the club had to argue in defence of the claim that Mr Mendy was not “ready, willing and able” to play for the club. Mr Mendy, in his turn, argued that suspension was “unavoidable” on his part.

The Employment Tribunal ultimately decided that a precautionary suspension, which did not imply guilt or culpability, was an unavoidable factor on Mr Mendy’s part and that he was entitled to be paid the majority of his backdated wages. Only for the periods when he was remanded in custody (as a result of breaching bail conditions) was he considered to have contributed (legally speaking) to his own unavailability. For those combined periods of 3 and a half months, no wages were due.

How could it impact your business?

This case is a high-profile and useful reminder that a precautionary suspension for misconduct does not imply culpability on the part of an employee. They should ordinarily be paid their wages during the full disciplinary investigation.

Perhaps surprisingly, even where a third-party regulator, like the FA, intervenes to ban the individual from participation in their regulated activity, that is not necessarily a basis for withholding wages.

What steps should you take?

In addition to being a useful reminder of the principles of paid suspension, this case is also a reminder to employers to check their basis for suspension of employees for misconduct, under both their employment contracts and any employment handbook.

Particularly in regulated industries, and where criminal charges may prolong a suspension, an employer will want to take careful advice before deciding not to pay wages during an extended absence.

Creating a neuro-inclusive workplace

A study carried out by Zurich UK was published this month which explores the treatment of neurodivergent people in the workplace, with a particular focus on how neurodiversity impacts the recruitment process.

“Neurodiversity”, in this context, is the term used to describe people who think, experience and interact with their surroundings in a different way to ‘neurotypical’ people. This is commonly recognised in conditions such as Autism, ADHD, Dyslexia and Tourette Syndrome (amongst others).

Zurich UK spoke to 1,000 neurodivergent adults and their findings were concerning:

• 63% said employers think neurodiversity is a “red flag”;

• 51% said they were concerned to disclose their neurodiversity due to stigma;

• 50% had experienced discrimination during the hiring process; and

• 21% had been laughed at because of their neurodiversity during the hiring process.

This indicates that neurodivergent adults face clear barriers when finding employment and many employers are falling short of providing a neuro-inclusive environment which, in consequence, poses various risks to them as a business.

How could it impact your business?

Employers are well-versed in their legal obligation to avoid discrimination during the recruitment process in relation to protected characteristics such as sex, race, religion, pregnancy and maternity (and so on).

Employers may not be aware that neurodiversity requires the same treatment. Many neurodiverse conditions meet the legal definition of a ‘disability’ under the Equality Act 2010 and are protected. Therefore, employers may have a duty to make reasonable adjustments from the outset of the employment relationship for neurodivergent adults, which includes during the recruitment process.

There is also potentially a liability risk for employers where hiring managers have knowledge (or reasonably ought to have knowledge) that someone has a neurodivergent condition that amounts to a disability and do not take the appropriate action. It is important to remember that a discrimination claim for treatment during the recruitment process can be brought in the Employment Tribunal by job candidates.

The study also highlights that there is a group of people in society with talent and skill who may be being overlooked. Being alert to making appropriate reasonable adjustments during the recruitment process is not only a legal requirement but can open up a more diverse talent pool.

What steps should you take?

Training and awareness is key; it could be beneficial to prove targeted training for your managers and any employees involved in recruitment to ensure they are well equipped to recognise neurodiversity and what reasonable adjustments they could look like.

Practically, steps can be taken to promote a neuro-inclusive workplace such as:

• inviting people to disclose their neurodiversity at an early stage;

• ensuring recruitment materials are clear and accessible; and

• having a degree of flexibility in your assessment and interview process.

Insisting on a traditional recruitment process could place your business at a disadvantage by excluding neurodiverse people and risk liability for discrimination. Employers should see this as more than a ‘box ticking’ exercise and instead recognise that there is a significant opportunity to unlock untapped potential from neurodivergent candidates and employees by making small changes.

SkyKick v Sky UK Supreme Court Decision

On 13 November 2024, the UK Supreme Court delivered a landmark Intellectual Property decision in the long running case of SkyKick UK Ltd v Sky Ltd, with far reaching consequences for businesses with trade marks and those looking to register trade marks.

The case arose when Sky complained that SkyKick’s use of the name “SkyKick” for its IT services infringed Sky’s trade marks, which had been registered for a vast array of goods and services, including some related to IT services. SkyKick countered by alleging that Sky’s trade mark registrations were so wide ranging that they constituted an abuse of the trade mark system. SkyKick argued that Sky’s trade marks should be regarded as invalid because they were made in bad faith, given that the trade marks encompassed goods and services unrelated to Sky’s actual business, and given that Sky could not have had a genuine intention to use the trade marks for all of those goods and services.

The Supreme Court decided that while a broad trade mark registration does not automatically imply bad faith, a registration made with no genuine intent to use the trade mark for all of the goods and services for which it is registered, does open that trade mark up to being declared invalid on bad faith grounds, at least in respect of the unused goods and services.

How could it impact your business?

Whereas previously it was common practice to register a trade mark for a broad array of goods and services, using broad category terms (thereby seeking the widest possible scope of protection, regardless of commercial intent), the Supreme Court has now served warning that the trade mark owner’s precise commercial intentions will be carefully scrutinised.

This means that without proper planning, brand owners will find it harder to take action against potentially infringing competitors, and those with overly broad trade mark registrations will find their marks vulnerable to expensive invalidation proceedings.

In addition, it also highlighted that businesses should take specialist IP advice before making threats of trade mark infringement, as businesses are now at risk of both losing their mark and groundless threat proceedings.

What steps should you take?

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

• Review Existing Trade Mark Portfolios: IP specialists should carry out regular audits of your existing trade mark registrations to ensure that they are aligned with genuine business intentions and likely future expansions. Be prepared to remove or narrow overly broad specifications where there is no intent to use the trade mark for certain goods and services, and give particular thought to these issues before embarking on a trade mark dispute and seeking to rely upon those broad specifications.

• Carefully Consider and Document Commercial Intentions: When looking to register a new trade mark, think carefully about the likely uses that mark will be put to, and keep comprehensive records documenting the intended use and development plan for each category of goods and services specified in trade mark applications. This documentation will be critical evidence if your trade marks are later challenged.

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

EU Product Liability Directive

As reported in our October edition, the EU Council adopted the Product Liability Directive (Directive) in October. On 18 November 2024, the Directive was published in the Official Journal of the European Union. The Directive therefore enters into force on 9 December 2024. The former Product Liability Directive (85/374/EEC) is repealed with effect from this date, save for in relation to products that are already on the market, or put into service before 9 December 2026.

How could it impact your business?

As reported last month, the Directive expands the definition of “product” to include software (including AI systems) and digital production documents. It also extends liability from manufacturers to include importers, distributors, fulfilment service providers and those within the control of the same. Whilst the UK regime is not currently changing, the Directive will affect organisations supplying products in the EU.

What steps should you take?

Please refer to the steps set out in the Product Liability section of our October Horizon Scanning. Companies must have the appropriate procedures in place by 9 December 2026.

Use it or lose it. The end of no-fault evictions

The Renters’ Rights Bill has been introduced to Parliament and it proposes a seismic reform of the residential letting sector.

How could it impact your business?

The Bill promises to give greater security to tenants whilst imposing more onerous obligations on landlords and is likely to come in to force in spring 2025.

Here is what you need to know.

Regaining Possession of a Property

Ending of No Fault Evictions: Abolishing section 21 “no fault evictions” meaning that a landlord will need to establish certain grounds for requiring possession of a property.

Grounds for Removing the Tenant: Landlords’ grounds for possession under Section 8 HA 1988 have been amended to restrict eviction to limited circumstances including:

1. occupation by the landlord or their family;

2. sale of the property; or

3. redevelopment.

Where these grounds are used, the property cannot be advertised for rental or re-let for 12 months. Failure to comply will result in a fine of up to £7,000.00 per breach.

New Tenancy Structure

Abolishing all fixed term tenancies.

All existing residential tenancies will become periodic tenancies except where a section 21 notice has already been served.

Rent

Rental restrictions will include:

1. A new statutory procedure to prevent excessive above-market rents;

2. Rent increases will be limited to one per year to market rate only;

3. The ability of tenant to refer market rent disputes to a Tribunal for determination; and

4. Abolishing “rental bidding” - Landlords and Agents will be prohibited from seeking or accepting offers above the advertised rent.

The ability for tenants to seek rent repayment orders (being an order that a landlord repay rent for committing certain offences) are being explained to include:

1. Misusing possession grounds;

2. Breaching restrictions on marketing and letting properties; and

3. Continuous failure to register with a redress scheme.

Decent Homes Standard

Landlords will be obliged to follow strict timescales to inspect and repair hazards including damp and mould.

Extends the “Decent Homes Standard” to the private rental sector and provides fines of up to £7,000.00 or up to £40,000.00 for breaches of previous enforcement action.

Protection from Discrimination

Landlords cannot discriminate against tenants who have children or receive benefits.

Private Rented Sector Database (PRSD) and Private Rent Sector Landlord Ombudsman (PRSLO)

Databases will provide transparency for tenants and local councils to include details of landlords who have committed any landlord and tenant offence.

Landlords will be obliged to join a new ombudsman, who can provide a binding resolution on matters raised by tenants. It can compel landlords to apologise for behaviour, provide information, take remedial action and pay compensation.

What steps should you take?

Knights will continue to monitor the Bill and review all amendments as it makes its way through Parliament.

As the Bill is expected to come into force by spring 2025, you should take advice in respect of your tenancies, especially if you wish to evict tenants prior to the abolition of section 21 notices.

The Sanctions (EU Exit) (Miscellaneous Amendments) (No 2) Regulations 2024

On the 5 December 2024, the vast majority of provisions under the Sanctions (EU Exit) (Miscellaneous Amendments) (No 2) Regulations 2024 will come into force. It brings into effect a number of key provisions, principally:

1. There are 4 new categories of “relevant firms” who have increased reporting obligations (namely, high-value dealers, art market participants, insolvency practitioners, and letting agents).

2. All relevant firms have increased reporting requirements, principally, to report suspected (as well as actual) breaches of sanctions or licensing requirements.

3. The definition of a designated person is extended to include all legal entities owned or controlled by that designated person.

How could it impact your business?

With the regulations coming into effect on the 5 December 2024, firms should act quickly in updating existing sanctions policies to comply with the updated regulations.

The potential consequences of failing to comply with the newly implemented regulations will be in line with the existing consequences, likely a civil monetary penalty; however, for a serious breach, there is a real risk that an officer of the company could face imprisonment.

What steps should you take?

As always, all companies, especially reporting firms and those that are newly considered reporting firms, should closely monitor and regularly review their sanctions policy.