UK: Reviewing Our UK Business Law Predictions For 2023: How Are We Doing At The Half-Way Point?

In January 2023 our Osborne Clarke Knowledge Lawyers made their business law predictions for 2023. Here, we see how those predictions are faring.

General

We thought that "businesses and their advisers are likely to sharpen their focus on the Opposition's emerging plans for the economy"- perhaps not the craziest of predictions, and we can put a tick next to that one. The Labour Party has been setting out its "five missions" for when and if it enters government, one of which is to "make Britain a clean energy superpower", as we discuss in this Insight.

On Brexit, we expected a "growing awareness and frustration, extending beyond the business community, of the frictions that Brexit has introduced into UK-EU relations". In polling results released in June 2023, the think tank UK in a Changing Europe found that only 18% of 2016 "Leave" voters thought Brexit is going well. Although, optimistically, 61% of those voters think it will turn out well in the end.

Still in Brexit-land, we guessed that the Retained EU (Revocation and Reform) Bill would "run into the sand amid opposition in the Lords and overwhelming scepticism in Whitehall". This was spot on. The bill made it into law, but its principal feature - the "sunset" of all retained EU law on the statute book at the end of 2023 - was abandoned, as we discuss in our detailed Insight.

Employment

Our experts expected "further legislative reform on industrial action and strike law". With strikes continuing across a number of sectors, the Strikes (Minimum Service Levels) Bill has not yet received Royal Assent but has passed through both the Commons and the Lords, with amendments now being considered.

Regulations the government introduced back in 2022 essentially permitting the use of agency staff to cover for striking workers or those taking part in other industrial action (or to cover the work of an employee who is covering the work of an employee taking part in a strike) have been subject to legal challenge. The High Court has now ruled that the regulations are unlawful and are quashed with effect from 10 August 2023. The position will therefore revert back to that pre-July 2022, meaning that the use of agency workers to cover these specific circumstances are once again prohibited. Read more.

In January, we noted that "there are currently a number of proposed legislative reforms progressing through parliament aimed at supporting employee wellbeing throughout employment", and indeed legislation has now been passed which provides for a new right for one week's unpaid carer's leave, paid neo-natal leave and extending the special protection on redundancy for those who are pregnant or returning from a period of statutory family leave - although we are awaiting regulations which set out further details of these rights, with speculation that we may see carer's leave and the extended redundancy protections coming into force in April 2024 and neo-natal leave in April 2025. Read more in our Insight.

The government has confirmed that it is not proposing any changes to the system of shared parental leave following an earlier consultation but some relatively minor changes to statutory paternity leave are proposed; again we do not anticipate these being introduced before April 2024.< a href="/redirection.asp?article_id=1345574&company_id=1316&redirectaddress=https://www.osborneclarke.com/insights/uk-employment-law-coffee-break-ageing-workforce-report-philosophical-beliefs-and-paternity" target="_blank">Read more.

And with more attention being paid to the "older" workers, we recently produced areporton the ageing population, based on research carried out on our behalf by Censuswide, which looks at the challenges for employers in recruiting and retaining older workers. You can read observations from the report in our Insight.

We thought that employers would "see more individual and collective grievances", and it is clear that businesses are reacting to the challenges of a tough economic climate through redundancies and restructurings. The government has now published a draft statutory code on fire and re-hire and the consultation closed on 18 April 2023, on which we await further developments.

There is a continuing backlog of claim in the tribunals; to address the increasing number of complex discrimination and whistleblowing claims, the President of the Employment Tribunals has recently published new guidance on alternative dispute resolution mechanism, including a new process of dispute resolution appointments which were trialled in one tribunal region during Covid-19.

Finally, we expected an important Supreme Court decision on the ongoing holiday pay litigation; this has not yet been forthcoming, but in the meantime the government has published a consultation on proposed amendments to the Working Time Regulations 1998. It has also issued a response to the consultation on non-compete provisions, and announced that when "parliamentary time allows" it will introduce legislation which will cap non-compete provisions in employment contract to three months. Read more hereandhere.

Real estate

We thought there would be "widespread non-compliance with the requirement for overseas entities holding UK real estate to register their beneficial ownersat Companies House by 31 January 2023". But compliance appears to have better than we expected; it has been reported by Companies House that as at 23 June 2023, more than 28,000 out of some estimated 30,000 overseas entities have now registered.

As we approach the first anniversary of the opening of the register, the government now appears to betoughening its approach to non-compliance(as demonstrated by the publication in June of the Register of Overseas Entities (Penalties and Northern Ireland Dispositions) Regulations 2023 (SI 2023/696) and by Companies Houseguidance on how the registrar intends to use its powers of enforcement). So we see a stricter road ahead.

Those overseas entities who first registered last year will shortly be required to file their first annual update to Companies House, confirming whether there has been any change to the entity's beneficial ownership. Failure to do so is a criminal offence and will render the overseas entity ID invalid - which may causefresh delays to certain land transactions involving overseas entities.

The Economic Crime and Corporate Transparency Bill, which is nearing Royal Assent, will (in its current form) amend the updating duty so it is triggered upon any change to an entity's beneficial ownership and also upon disposal of a qualifying estate, adding further administrative burden and scope for transactional delay.

Perhaps uncontroversially, we predicted that investors and occupiers are likely to continue the push for greener buildings, and companies continue to make public commitments to address climate change. Implementation is now a key focus, as is a growing awareness of the legal and reputational risks associated with greenwashing. Tightening legal requirements have also compelled property owners to examine their buildings and to make energy efficiency improvements to comply with new (and where economically feasible, anticipated future) standards.

Similarly, we thought decarbonisation ambitions would drive an increase in agreements between landlords and tenants to reduce the environmental impact of their building, and in the market we have seen requests for green lease provisions in leases becoming more prevalent, demonstrating an elevated focus on ESG (environmental, social and governance) and an acceptance of the need for a collaborative approach. The rise in smart building technology, with the capability of collecting data and analysing building performance, is also driving the need for parties to consider these issues in legal agreements.

Further green initiatives are expanding the scope of the traditional landlord-tenant relationship as occupiers seek more from their premises: with requests for rooftop solar installations for the generation of green energy and onsite electric vehicle charging points.

As expected, the minimum energy efficiency standards (MEES) rules tightened on 1 April 2023. As property owners are still grappling with this, many properties are still in breach, but we are still waiting to see the level of enforcement action from Local Authorities. Our Insight on the situation is here.

Also as expected, implementation of requirements under the Building Safety Act 2022 for management of fire and structural risks in high rise residential buildings continues. Read our Insight on registration requirements for existing high-risk buildings. Publication of regulations to support the implementation of a more stringent building control regime under the Act is, however, still awaited.

Finally, we expected judgment from the Supreme Court on the finely-balanced point of law in the high-profile Fearn and others v The Board of Trustees of the Tate Gallery, where the Tate gallery's neighbours, whose residences feature floor-to-ceiling windows, created a "self induced incentive to gaze", as the Court of Appeal ruled.

Judgment was indeed forthcoming, with the Supreme Court holding that the Tate Modern's viewing platform, from which members of the public could look directly into a number of luxury residential flats within the Neo Bankside development, subjected the appellants to a substantial interference with their ordinary use and enjoyment of their properties (which was more than "mere overlooking") and did constitute a private nuisance. Whilst this decision was highly anticipated, given the unique facts of the case, it is unlikely to have a substantial practical impact or lead to a flood of similar claims. Read our Insighton this case.

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