Payment practices and reporting regulations

In our September 2024 horizon scanning update we reported on the Government's proposals regarding payment practices and reporting regulations; these proposals were implemented on 1 January 2025 under the Reporting on Payment Practices and Performance (Amendment) Regulations 2024.

The regulations introduce new reporting requirements regarding invoice payments (such as the total sum of payments which were not made within the payment period, the number of disputed invoices causing delays in payment, and the value of invoices not paid within the specified periods).

Companies and LLPs are subject to the reporting requirements if and of the below are met:

• • £36 million annual turnover; or

• • £18 million balance sheet total; or

• • 250 or more employees.

The report must be published on the web-based service provided by the government within 30 days of the end of the reporting period.

This extension and enhancement widen the existing reporting obligations to enhance transparency and compliance. Organisations caught by the reporting requirements could be prosecuted if they do not comply, or if they provide false information.

Increase in CMA enforcement action

We have recently seen a notable increase recently of both public enforcement action taken by the Competition and Markets Authority (CMA), and private action by businesses, in relation to the Chapter I prohibition as set out in the Competition Act 1998. Chapter I prohibits agreements which have as their object or effect the restriction, prevention or distortion of competition within the United Kingdom, and which have an effect on trade within the United Kingdom. 

This trend mirrors that seen in the warning letters which were issued by the CMA to potentially non-compliant businesses in 2023. In the recently published report, the CMA confirmed that all of the letters which were issued in the past year warned against behaviour that could infringe on the Chapter I prohibition. These trends indicate the proactive approach being taken against non-compliant businesses, and that the CMA and private parties alike are utilising a number of mechanisms to ensure and encourage compliance.  

Examples of enforcement action so far

Fragrances and Fragrance Ingredients 

On 2 December 2024, the CMA provided an update on its ongoing investigation into suspected breaches of the Chapter I prohibition in the fragrance sector. The investigation concerns suspected anti-competitive conduct in relation to the supply of fragrances and fragrance ingredients for use in the manufacture of consumer products such as household and personal care products. 

The CMA launched its investigation at the same time as, and in consultation with, the Antitrust Division of the US Department of Justice, the European Commission and the Swiss Competition Commission. This multi-departmental, cross-jurisdictional coordination demonstrates the closer cooperation which has been seen between the competition and justice authorities. This approach has been emboldened by the recently concluded negotiations on the UK-EU Competition Cooperation Agreement (CAA) in October, streamlining the process of cross-border merger and anti-trust investigations. 

In January, the investigation was extended to also include within its remit, review of no-poach and non-solicitation agreements between the parties. Whilst the legal standpoint and enforcement approach to these agreements is currently an area of divergence between the UK, the EU and the US, the fact that the relevant investigatory authorities from each of these jurisdictions are continuing to work together on this investigation suggests that there may be a further streamlining and consistency between the national authorities, and that we may be moving closer to the US approach with a hardline on such non-solicitation clauses. This would track with recent CMA work on the labour markets and the general direction of travel for policy. 

The next update is due from the CMA in April 2025, at which point we should expect to see further developments in the investigation and further insight into the approach which will be taken going forward. 

Data Centre Construction Sites 

On 18 November 2024, the European Commission (EC) announced that it had conducted dawn raids at the premises of several data centre construction sites, due to suspected anti-competitive practices. Specifically, the EC suspected that the organisations may have breached Article 101 of the Treaty on the Functioning of the European Union, in relation to no-poach and non-solicitation agreements. The EC simultaneously sent formal requests for information to several other companies involved in the sector in relation to the same issue. 

The CMA could consider taking similar action in the UK, not least due to the CAA coming into effect, and the closer collaboration and global approach being taken to suspected anti-competitive practices. The interconnected and global nature of this sector in particular may make it a target for the CMA, but recent trends have shown the CMA to be taking enforcement action in a number of sectors, including, most notably, dawn raids in relation to suspected bid rigging in the construction and roofing sectors and so should not be expected to limit its remit. 

Up and Running (UK) Limited 

On 31 October 2024, the Competition Appeal Tribunal (CAT) handed down its judgment on the issue of liability in the claim brought by Up and Running (UK) Limited against Deckers UK Ltd. The claim concerned two business in the running shoes and accessories sector, with the claimant operating a retail business in the sale of products to consumers, and the defendant supplying ‘HOKA’ branded stock to the claimant. 

The claimant had presented a proposal to the defendant involving the launch of a new website, on which excess stock would be sold at a discount. The defendant had declined the proposal, as it would be in breach of the terms and conditions (T&C’s). This required retailers to seek prior approval for websites on which they wished to sell HOKA branded products. Despite this, the claimant set up the website, and the defendant subsequently ceased supply to the claimant. The claimant claimed that the T&C’s were in breach of the Chapter I prohibition, as they restricted its ability to market and sell products online and make effective use of the internet as a sales channel. The Claimant also claimed that it was an attempt to engage in retail price maintenance (RPM), with the intention being to maintain higher prices for HOKA products. 

Justin Le Patourel v BT Group PLC  

On 19 December 2024, the Competition Appeal Tribunal (CAT) handed down its Judgment in the claim brought by Justin Le Patourel, which brought collective proceedings on behalf of approximately 3.7 million affected BT customers, and backed by a litigation funder. The claim alleged that BT had abused its dominant position in the telecoms market by imposing unfair prices, contrary to s.18 Competition Act 1998. This was the first “opt-out” Competition claim of its kind, whereby affected claimants did not have to sign up or opt-in to the action- if damages were payable, the affected class of claimants would be entitled to the damages unless they had opted out. 

However, the CAT found that whilst BT’s prices for residential landlines were excessive, and that they did hold a dominant position in the telecoms market, the prices were not unfair.  

This is a significant decision, which is likely to dampen the appetite of investors in funding such collective actions going forward. A failure on proving liability based on the initial legal test does not bode particularly well for similar stand-alone claims, which are looking to succeed in the CAT in the absence of already binding decisions, or following a decision of the CMA. 

The CAT concluded in the claimant’s favour  that the defendant had infringed the prohibition on both the online sales restriction and RPM restriction grounds. The defendant was therefore found to be in breach of statutory duty, and liable for damages which are to be determined. 

What steps should you take?

Businesses should take note of the recent enforcement trends, both by way of public and private enforcement action, in relation to alleged breaches of the Chapter I prohibition. In particular, the global trend towards collaboration and a consistency of approach with regards to no-poach and non-solicitation clauses should be a consideration when reviewing your internal policies and procedures. 

Aside from potential liability for damages in private claims brought in the CAT, such as in the Up and Running case, the CMA powers of enforcement apply from a public authority perspective. Where the CMA identifies that an organisation has breached competition law, they are able to take the following actions: 

• Fines of up to 10% group worldwide turnover; 

• Director disqualification, potentially for up to 15 years; and 

• Potential criminal liability for those deemed to have entered into cartel arrangements. 

Given the trends and the range of mechanisms being utilised by the CMA in terms of enforcement, all businesses should review their existing dawn raid and wider competition compliance policies, procedures and training.

We expect that enforcement action will only increase in the new year with the introduction of the CMA’s new powers under the DMCC, including increased fines for non-compliance in relation to information requests. Our team can assist you in preparing a strategy to address any concerns, including reviewing and remedying any con-compliant behaviours. 

Upcoming changes in 2025

In April 2025, the consumer provisions of the DMCC come into force. The DMCC makes changes both to the enforcement process (bringing consumer law under the direct enforcement powers of the CMA), and the law itself, amending key definitions and introducing new banned practices. Key changes include:  

• Drip pricing: Drip pricing occurs when consumers are shown an initial price for a product and additional fees are introduced (or ‘dripped’) as consumers proceed with a purchase or transaction. The UCP guidance set out that the DMCC seeks to achieve a higher level of consumer protection and obligates traders to include the total price of the product in the headline price, including any fees, taxes, charges or other payments that consumer will or is likely to incur when purchasing the product (for example, core price plus the delivery charge). This also includes costs to enable the product to work, such as, installation and activation fees or mandatory pricing information which would be revealed gradually as the purchase proceeds (for example, the total price must be given for a 12-month fixed subscription and not just the monthly fee). Failure to do so could amount to an infringement of the prohibition of omission of material information from an invitation to purchase or a misleading omission more generally.  

• Fake reviews: Commissioning or displaying fake or misleading consumer reviews is a new banned practice under the DMCC. This prohibition includes a business submitting or commissioning fake reviews and concealing incentivised reviews and also goes further to include a proactive duty upon a business who publishes or provides access to consumer reviews to take reasonable and proportionate steps as necessary to precent and remove from publication any banned or false reviews, concealed incentivised reviews or false or misleading consumer review information. Including evidence of compliance programmes. Publishers cannot avoid implementing effective measures solely due to the lack of resources.  
• Direct Enforcement: Consumer law will be brought under the jurisdiction of the CMA, and subject to direct enforcement. This regime permits the CMA to carry out dawn raids in relation to consumer law, run investigations, and issue fines, without utilising the court system.  

Why it is of significance to businesses 

These changes will undoubtedly lead to an increase in enforcement activity in the consumer law space, which the CMA has been pre-trailing with a number of high-profile investigations into consumer-facing businesses. The risk profile of engaging in activities which could constitute infringements of consumer law has increased significantly, and organisations should ensure they are familiar with the changes and what this means for their current consumer-facing activities.  

When the change is anticipated to take place?  

April 2025 

Increased verification required by Companies House in 2025

As reported in our 2024 horizon scanning, the Economic Crime and Corporate Transparency Act 2023 introduces significant reforms aimed at improving corporate transparency and combatting economic crime. These reforms will be implemented in stages and will have notable implications for businesses in the UK.

The key changes introduce, and the rough implementation dates, include:

• Autumn 2025: all new company directors and individuals who hold significant control over a company (e.g. those who own more than 25% of shares or voting rights) (PSCs) will need to undergo a compulsory verification process. This requires them to confirm their identity before being officially registered at Companies House. This applies to newly appointed individuals and newly incorporated companies. A 12-month transition period will begin for existing directors and PSCs already registered to verify their identity.

• Spring 2026: any person making a filing must be a verified individual (having undergone identity verification) or be an Authorised Corporate Service Provider (ACSP), which is a regulated and authorised firm (e.g. legal or accountancy firms) that can submit filings on behalf of a company.

• End of 2026: Companies House may end the transition period for identity verification and start compliance action against individuals who have failed to verify their identity.

How could it impact your business?

It is estimated that there are over 7 million directors and PSCs currently listed at Companies House. The implementation of these changes will therefore increase the compliance burden on businesses as all directors and PSCs (current and future) will need to be listed and properly verified. This increased burden comes hand-in-hand with the time it will take to go through the verification process, the cost of using an ACSP for assistance and any additional complexities such as verifying documents from a foreign jurisdiction.

Companies House will have the power to issue fines and penalties to companies who have not undergone the verification process. They will also be able to remove non-verified directors and PSCs from the filing register. Incomplete details and non-compliance could affect a company’s ability to conduct business, make applications requiring these details to be up to date and could be the subject of further investigations.

Whilst the burdens above may be viewed as a negative, the requirement for transparency in ownership and control will make it harder for businesses to hide illicit information and activities, limiting the possibility of money laundering or tax evasion. This overall is a positive change for combating economic crime.

What steps should you take?

Companies should ensure that all directors and PSCs (both new and existing) undergo the verification process in advance to avoid action being taken by Companies House against them in the future. Companies should review their ownership structure to determine who qualifies as a PSC, these individuals will need to be verified and this information should be updated at Companies House.

Companies may want to speak to an ACSP in advance of the requirements taking place, so assistance is ready and waiting.

Please note implementation of these new requirements have already been pushed back so further delays are possible. The best way to stay updated is by following Companies House to ensure you are aware of specific deadlines and changes in compliance requirements.

The EU’s Corporate Sustainability Reporting Directive (CSRD) entered into force in January 2023, with the first reporting deadlines falling this year for the largest firms.   

The CSRD requires in-scope companies to report on 12 key areas: 

• Environment: climate change, pollution, water and marine resources, biodiversity and ecosystems, and resource use / circular economy 

• Social: own workforce, workforce in the value chain, affected communities, consumers and end-users 

• Governance: business conduct. 

Reporting deadlines relevant in 2025 involve the following entities: 

2025 (based on FY24 deadlines)

EU firms that: 

• Averaged more than 500 employees during FY2024; and 

• Are “Public-Interest Entities” - i.e. those firms with stock trading on a regulated EU market, including credit institutions, insurance undertakings or designated by national government. 

Non-EU firms that: 

• Averaged more than 500 employees during FY2024; and 

• Have securities trading on a regulated market. 

2026 (based on FY25 deadlines)

EU firms exceeding 2 of the 3 criteria: 

• An annual net turnover exceeding EUR 50,000,000 

• A balance sheet (assets) exceeding EUR 25,000,000 

• At least 250 employees on average throughout the year 

Non-EU firms which meet the criteria for Large Undertaking and have securities trading on a regulated EU market. 

What steps should you take?

Businesses in scope should conduct a gap analysis on their existing sustainability reporting practices against the CSRD requirements.

Businesses could address those gaps by defining their reporting process against the CSRD requirements and establishing procedures for data gathering, verification and ultimately preparing for reporting. Failure to comply with the obligations under the directive could result in significant fines.  

Data Use and Access Bill (DUA)

The DUA will progress through Parliament this year, promising to regulate smart data, improve the UK’s digital infrastructure and reform certain aspects of data protection law. It will not replace or repeal the UK GDPR or Data Protection Act 2018 in full but will change how certain provisions work and supplement the existing framework.

How could it impact your business?

The DUA will largely be a welcome change for many organisations, with several changes designed to make the requirements of UK data protection law less burdensome in low-risk situations.

For instance, with regard to lawful bases for processing, the DUA introduces ‘recognised legitimate interests’, a concept under which certain processing activities are presumed to be legitimate (without the need to undertake a legitimate interests assessment).

The DUA also changes the landscape of automated decision making (ADM), relaxing the rules to allow ADM to be used more freely where special category data is not affected. It is anticipated that this will be particularly refreshing for those navigating the ever-complex world of AI.

Partial relaxation of cookie consent requirements is also expected, along with clarity around international transfers of personal data and, in particular, the role of adequacy regulations. The UK is set to see a revised adequacy threshold which will likely increase the number of countries meeting the criteria, therefore allowing data to flow more easily. It is hoped this will assist the UK in its trade ambitions.

On the other side of the coin there are some proposed changes that are perhaps less welcome, including the requirement to maintain a defined complaints process (separate to the organisation’s general complaints process and data subject requests procedures). It is thought that this may be accompanied by a requirement to publish this information or make it available to the regulator.

The reforms will also increase the potential financial penalties for non-compliance with the Privacy and Electronic Communications Regulation from £500,000 to the significantly higher UK GDPR maximum penalty level.

The DUA is covered further in our November 2024 Horizon Scanning piece.

AI Regulation

Regulation of AI in the UK (or lack thereof) remains a hot topic for 2025. The UK government recently published a policy paper responding to the AI Opportunities Action Plan, in which it commits to ‘building cutting-edge, secure, and sustainable AI infrastructure’. The paper acknowledges that our regulatory regime will need to address risk and actively support innovation, in order to drive AI trust and adoption across the economy. The nod to the need for regulation refers to ensuring we have a ‘competitive copyright regime’ but does not mention data protection specifically. We therefore await further direction as to what the landscape of AI regulation in the UK will look like. In the meantime, businesses developing, procuring or using AI in practice will need to continue to comply with the principles and requirements of the UK GDPR and apply these to their AI-based data processing activities.

How could it impact your business?

Whilst the exact legal requirements vary depending on how personal data is processed by the AI tool, key considerations are likely to be:

• Ensuring that the developer of the tool has complied with data protection law as part of the training and testing phase, and that tools to ensure and monitor fairness and accuracy are inbuilt.

• Considering the organisation’s lawful basis for using the tool and ensuring that this is properly documented and communicated to data subjects, together with a user-friendly explanation of how the tool works and its outputs. Transparency can be particularly difficult to achieve where the tool involves generative AI, as highlighted in the ICO’s response to its recent consultation on this topic.

• Ensure that the contract between the provider and the business using the tool clearly defines the parties’ roles and obligations.

A Data Protection Impact Assessment is the logical place to explore and document the above considerations, and is likely to be mandatory for many AI use cases involving personal data.

From a UK perspective, any specific AI regulation or legislation is yet to be introduced, so for now we ‘stay tuned’. For organisations operating outside of the UK, in Europe or elsewhere, the position is trickier, with disparate approaches to AI regulation emerging across the globe. For UK businesses processing personal data of EU citizens within an AI product or tool, the European regime is likely to bite – regardless of the UK’s intended pragmatic approach in this area.

Updated draft ICO guidance on cookies, device fingerprinting and tracking pixels

The ICO has issued updated draft guidance on the use of storage and access technologies, covering technologies such as cookies, tracking pixels, local storage, device fingerprinting and scripts and tags.

How could it impact your business?

Nearly all businesses with an online presence will be using cookies to understand how their website users move around their website and improve their experience. Likewise many businesses undertaking direct marketing will use tracking pixels to inform and improve their marketing strategy, as this type of technology enables the sender to understand whether the recipient has opened the email (and often extract further information such as the time, location and device type). Whilst such technologies offer valuable insight for the business in a way that may not seem to be privacy-intrusive, the rules around consent and the exemptions are stringent and require careful navigation (pending the partial relaxation to these rules expected to be brought in by the Data Use and Access Bill). The ICO is anticipated to become quite keen in taking enforcement action in this area, and we have also seen multiple data subject complaints around use of these technologies without proper consent.

What steps should you take?

Whilst the guidance is in draft form at this stage, it sets out the regulator’s current thinking and position on these technologies and how the regulations apply to their use so is likely to be very relevant in practice even at this stage. Prudent businesses will be reviewing how they use these technologies and what their consent mechanisms look like to ensure they do not fall foul of the guidance – noting that the potential financial penalties for non-compliance with these requirements is due to rise to match the astronomical UK GDPR levels.

Upcoming changes in 2025

Digital Markets and Competition sections of the DMCC came into force on the 1st January 2025.  The CMA has launched two investigations already: the first into Google for its search services, the second into Apple and Google for their mobile eco-systems. An additional investigation is expected later this year. The Digital Markets regime introduces an entirely new regulatory regime for the largest digital businesses, and could see significant obligations placed on these firms with Strategic Market Status, particularly in relation to fair data use, self-preferencing, fair trading practices and interoperability. Further investigations are expected later in the year.  

How does this impact businesses  

The vast majority of organisations will not be considered to be in a position of strategic market status. However, they will deal, in one way or another, with designated organisations, whether that is in relation to advertising, cloud storage, operating systems, or app stores. In deciding which conduct requirements to place on SMS firms, the CMA will seek the opinions of third parties and interested stakeholders, giving non-designated organisations the opportunity to feed into the contents of the regulations placed on the largest players in the digital sphere.  

When will it take place?  

The changes came in from the beginning of January 2025. 

Upcoming changes in 2025

2025 is predicted to be a year of considerable change for Employment law. The key changes are summarised below. 

Employment Rights Bill

This has been a hot topic for months and consultation on its implementation continues. Keep an eye out for developments in key areas, including the proposal to compensate workers for cancelled, moved or curtailed shifts, redundancy and collective consultation, the duty to provide reasonable notice of shifts and how probationary period will modify day 1 unfair dismissal rights.

For further details on these topics, please refer to our October Horizon Scan.

It is important to be aware of your employees’ legal entitlements and to be well equipped to deal with any issues. In particular, for businesses making use of zero/limited hour workers, it is essential to stay informed of any updates regarding guaranteed hours. 

Increases in Employers’ National Insurance payments

From 1 April 2025 there will be an increase to employers’ national insurance contributions from 13.8% to 15%. At the same time, the threshold at which that 15% rate will apply will reduce for employees from £9,100 to £5,000.

These combined changes will add significantly to payroll costs - adding £866 to the cost of hiring an employee on a £30,000 per year salary. 

Increases in the National Minimum Wage

From 1 April, the National Living Wage will increase from £11.44 to 12.21 (amounting to a 6.7% increase) and there will be a double-digit increase for workers in the 18-20 year old bracket to £10.00 per hour (a 16.3% increase).

The combined financial implications for employers who have large numbers of staff at or near the National Minimum Wage/National Living Wage (when added to the national insurance hikes above), will be very significant.  

Neonatal Care (Leave and Pay) Act 2023

In addition to an employee’s other statutory rights to leave and pay, in April 2025 this Act will introduce a statutory ‘day one’ right for employees to take leave if their child requires at least 7 full days of continuous neonatal care within 28 days of birth. There is a further right to receive statutory neonatal care pay if an employee meets certain eligibility criteria. It is important to make sure your staff are aware of this to ensure that any eligible parents receive the support, time off and pay that they are legally entitled to. 

Draft Equality (Race and Disability) Bill

This Bill is expected to be the subject of consultation over the course of the year. It is likely to create further obligations for employers in relation to equal pay with a focus on race and disability. This is likely to include an extension of equal pay rights to include the protected characteristics of race and disability (currently only sex is recognised in equal pay legislation).

The Bill is also likely to include mandatory pay gap reporting for race and disability for employers with over 250 staff and a new Regulatory Enforcement Unit to deal with equal pay issues. Employers could take a “watch and wait” approach to this Bill, but it may be advised to consider to the pay profile of your workforce, and look at issues around Equality, Diversity and inclusion now (to get ahead of the curve). 

Thatchers v Aldi Court of Appeal Decision

On 20 January 2025, the Court of Appeal delivered a decision in the case of Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5, concerning trade mark infringement. The Court found that Aldi’s packaging for its Taurus cloudy lemon cider took unfair advantage of the reputation of Thatchers’ trade mark for its cloudy lemon cider product.

The dispute arose after Thatchers, a leading cider producer, claimed that Aldi’s lemon cider packaging closely resembled its own. The High Court had initially dismissed Thatchers’ claim, holding that Aldi’s packaging did not unfairly take advantage of, or tarnish, the reputation of Thatchers’ trade mark. However, the Court of Appeal overturned this decision, finding that Aldi’s packaging was intentionally designed to remind consumers of Thatchers’ product, enabling Aldi to benefit from Thatchers’ marketing investment without incurring promotional costs of its own.

The Court emphasised that Aldi’s departure from its usual packaging style was deliberate and intended to convey the message that its product was similar to Thatchers’ cider, but cheaper. The Court concluded that this amounted to unfair competition and was not in accordance with honest practices in industrial and commercial matters.

How could it impact your business?

For brand owners, this decision strengthens protections against "lookalike" products that may erode their market share and reputation, and it supports their ability to take action against infringers.

Businesses seeking to introduce new products must exercise great caution when benchmarking their designs and marketing strategies against established brands. Even if there is no likelihood of confusion, adopting elements that evoke a competitor’s branding could lead to allegations of trade mark infringement.

What steps should you take?

To mitigate the risks highlighted by this decision, businesses should consider the following:

1. Conduct a Trade Mark Audit: Review existing trade marks to ensure that they provide adequate protection for key products, including distinctive packaging elements. Consider registering designs or trade marks for unique packaging styles.

2. Benchmark with Care: When developing new products, document benchmarking activities thoroughly, ensuring they focus on quality and functionality rather than mimicking the visual identity of competing products.

3. Evaluate Packaging Designs: Before launching new products, seek specialist IP advice to evaluate the risk of trade mark infringement or allegations of unfair advantage. This is especially critical for designs that share elements with established competitors’ branding.

4. Monitor the Market: Brand owners should actively monitor the market for potential lookalike products and act swiftly to protect their trade marks. Evidence of consumer perception, such as social media commentary, can strengthen claims of unfair advantage.

Upcoming changes in 2025

The Procurement Act 2023 (the Act) will come into force on 24 February 2025. The Act will standardise and streamline the procurement process by revoking various regulations and consolidating their areas of coverage into one Act. 

The changes enforced by the Act include :  

• Introduction of a new competitive flexible procedure which replaces more prescriptive procedures and enables contracting authorities with more opportunity and flexibility to design their own competitive tendering procedure; 

• The introduction of a central digital platform which will enable bidders to register and store their business details on a platform, enabling them to search at no cost and make multiple bids, whilst sharing and providing contracting authorities with their information instantly; 

• An expanded exclusion regime (including for poor performance and infringement of competition law), alongside a new centralised debarment list;  

• Increased, smaller, procurement lots, facilitating increased participation from SMEs in the public procurement process; and 

• Finally, the Act aims to improve contract management by setting new obligations on contracting authorities on contract performance and termination, (such as provisions requiring prompt 30-day payment terms which to the benefit of SME’s) whilst having regard to procurement objectives when making contract management and award decisions. The Act refers to a central debarment list and new exclusion grounds with which prospective bidders should remain live to. 

Why it is of significance to businesses 

The changes will impact businesses and bidders within sectors such as utilities, concessions and defence contracts, for example, the NHS, universities, local authorities, police or utility companies.  

These changes will make it easier for these businesses, specifically SMEs and voluntary, community and social enterprises, to bid and engage with the procurement process as the administrative burden is reduced by, for example, submitting shorter questions through the new Procurement Specific Questionnaire, a reduced questionnaire in comparison to the Standard Supplier Questionnaire.

In addition, there will be fewer procurement procedures (from previously four procedures to two, open procedure and competitive flexible procedure) to simplify the bidding processes to make it easier to bid, negotiate and work in partnership with the public sector and greater flexibility as they are less prescriptive.  

Commercial and legal teams of businesses should be live to the risk of debarment and the new exclusions when assessing terms and conditions early in the procurement. The central debarment list contains a list of suppliers whereby contracting authorities notified Ministers to exclude the supplier on both mandatory or discretionary grounds.

The new exclusions will see contracting authorities now consider recent past behaviour when awarding contracts. Therefore, prospective bidders and their counsel should review their internal policies and procedures, particularly ensuring compliance with the grounds for exclusions of suppliers when selecting suitable suppliers to be awarded a public contract. 

When the change is anticipated to take place

The new act comes into force on 24 February 2025. 

Upcoming changes in 2025

Below we have set out an overview of some of the changes anticipated in relation to property litigation matters in 2025.

• The Renters Rights Bill, which we covered in our July 2024 horizon scanning article, is anticipated to become law in March / April 2025. 

• Throughout the year there will be moves to further reform leasehold law and leaseholder’s rights, including a White Paper on Commonhold ownership and the possible replacement of leasehold ownership.

• For existing leaseholders and freeholders, the full implementation of the Leasehold Reform Act 2024 will take place, changing the law in relation to lease extensions, service charges and the right for leaseholders to manage freeholds.

• In addition to the changes to the law, this year is also likely to see consultations aiming to improve standards within property management which may result in qualification requirements for property managers and estate agents.

• With regards to the commercial property world, as reported in our December 2024 horizon scanning article, there is likely to be the first significant changes in 25 years to the Landlord and Tenant Act 1954 which governs business tenancies.

• 2025 will likely see the first cases of compulsory rental auctions of empty high street premises pursuant to Levelling-up and Regeneration Act 2023. This type of action can be brought by Local Authorities in England in relation to empty shop premises.

• As reported in our December 2024 horizon scanning, in November 2024, The Law Commission published a consultation on business tenancy rights in England and Wales following 70 years without too much significant change.

• In the summer of 2025, the Royal Institute of Charters Surveyors will update its Professional standard, Service charges in commercial property. This publication details RICS professional standards for its members relating to the charging and recovery of service charges.

• The ever more apparent pervasiveness of the Building Safety Act 2022 will be demonstrated by a number of cases being heard by the Court of Appeal, including cases relating to recovery of costs via leases and Remediation Contribution Orders.

How could these impact your business?

For businesses with property interests, residential and commercial, this year will be an eventful one.

For businesses whose operation revolves around the ownership or management of residential premises, it is important that they are working closely with third parties that keep abreast of change and understand new legislation that increases the burden on those that own properties. New legislation such as the Building Safety Act 2022 and the Renters Rights Act 2025 will see the risk of penalties for non-compliance increase.

For those with commercial property, it’s a similar story with a possible impact on those operating on the high street. Further, the potential changes to the Landlord and Tenant Act 1954 may directly affect rights to remain in situ.

What steps should you take?

The first response to potential changes should be for affected parties to liaise with those with responsibility for management of property to ensure that they are keeping up to date with changes to the law; how this may affect your interests/operations and what plans are in place to mitigate any risks. Changes within the residential property sector are imminent, so we recommend that this action is taken immediately.

Whilst changes in the commercial property market are not as imminent, a similar course of action outlined above is recommended. Careful consideration should be taken by those that interests located on the ‘High Street’.

The ramifications of not taking steps regarding management of property (both residential and commercial) will likely put at risk returns on the asset/property interest, diminished by fines or even loss of asset in the case of compulsory auctions.

Updated guidance on “No Re-Export” clauses

The European Commission has updated its Guidance on the requirement in Article 12g of Council Regulation (EU) No 833/2014 for EU-based exporters. The updated guidance includes:

• a ‘no re-export to Russia’ clause in contracts for the export of specific types of goods from the EU to certain third countries (the “Russia Clause”); and

• the ‘no-export to Belarus’ requirement under Article 8g of Council Regulation (EC) No 765/2006 (the “Belarus Clause”).

The Russia Clause is applicable from 1 January 2025; all in-scope contracts concluded before 19 December 2023 must include such a clause unless they have already expired with no remaining obligations.

In contrast, the Belarus Clause applies only to new contracts entered into on or after 1 July 2024.

How could it impact your business?

The updated Guidance sets out a number of key changes that impact any EU or UK based exporters, principally:

• Adequate Remedies: As before, any remedy included in contract should be “reasonably strong and aim to deter non-EU operators from any breaches”. Now, alongside financial and termination penalties, the Guidance refers to ceasing deliveries and suspending/interrupting a contract as soon as an EU exporter is aware of a breach of a Russia Clause.

• Public Contracts Exemption: The Guidance provides:

  • Information to be notified to the EU exporter’s national competent authority where the exporter benefits from this exemption;

  • For contracts made before 19 December 2023, this authority may request notification within an “appropriate timeframe”; and

  • Further guidance on what the European Commission considers to be a “public authority” for the purposes of this section.

• Unilateral Communications: In exceptional cases, where an EU exporter cannot include a Russia Clause in an existing contract due to the other party’s refusal, their Article 12g obligations can be fulfilled by issuing unilateral communication prohibiting re-exportation to/for use in Russia.

• No Prescribed Format: Whilst a template clause is provided, it is now clear EU exporters can draft their own form of clause, provided requirements of Article 12g are met. For those concluded before 19 December 2023, general clauses respecting sanctions regimes may be sufficient.

• Returns/Re-Exports: A Russia Clause is mandatory for sale, supply, transfer or export of in-scope goods to certain third countries. This Guidance clarifies returns and re-exports are captured, unless otherwise exempt.

• Export Control Procedures: Existing contracts authorised in an EU Member State under individual export control procedure aimed at prohibiting the export/re-exportation to Russia and Belarus do not need to be reopened to include a relevant clause.

• Intra-EU Contracts: There is no obligation to include a Russia Clause in intra-EU contracts on the basis all EU operators are bound by EU sanctions.

What steps should you take?

The Guidance in respect of the Russia Clause and Belarus Clause affects any new in-scope contracts EU-based exporters enter. However, relevant businesses should also be alive to the risk of how these apply to in-scope contracts already in existence. Where necessary, the relevant clauses and conditions must be incorporated and complied with.

This new guidance further clarifies the applicability of both clauses and requirements and assists in the interpretation, application, and adherence to the same.

Those EU-based businesses in the export industry must be mindful to act in compliance with these sanctions, as is emphasised further by the European Commission offering such clarifying advice.