Sustainability/ESG

The Financial Stability Board published a report on the relevance of climate transition plans for financial stability. See Walker Morris’ recent briefing on a step-by-step approach to climate transition planning.

A reminder that the Corporate Sustainability Due Diligence Directive (CSDDD) will, on a staggered basis between 2027 and 2029, require in-scope companies to take various steps to manage actual and potential adverse impacts of their/their supply chain partners’ activities. Check out our briefing for information and advice to help you stay ahead.

On 21 January 2025 the UK Joint Committee on Human Rights opened an inquiry into forced labour in international supply chains. The purpose of the inquiry is to consider the UK legal and voluntary framework to ascertain whether changes are required.

The Green Claims Directive is expected to become law in 2025. EU Member States will then have 2 years to transpose it into national law, and suppliers to the EU will need to comply.

Increasing energy demand and the move to decentralised supply from a range of renewables sources has meant that the UK electricity grid connections process is no longer fit for purpose. The grid connection queue has become a major barrier to investment in, and development of, projects. Alongside the government’s plans for achieving clean power by 2030, imminent sweeping grid connection reform should transform energy and infrastructure development.

Corporate/corporate reporting

For financial years beginning on or after 1 January 2025, more extensive reporting requirements (under The Reporting on Payment Practices and Performance (Amendment) Regulations 2024) apply to large companies and LLPs subject to the statutory duty to report on their payment practices.

The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 come into force on 6 April 2025. They increase the financial thresholds that determine company size for the purpose of non-financial reporting obligations under the Companies Act 2006. The regulations also remove several reporting requirements in the directors’ report for large and medium sized companies.

The Financial Reporting Council’s (FRC) 2024 revision of the UK Corporate Governance Code applies to financial years beginning on or after 1 January 2025 (with the exception of Provision 29 of the 2024 Code, which applies to financial years beginning on or after 1 January 2019 and before 1 January 2026).

The Department of Business and Trade (DBT) is expected to launch a consultation on the Future of Corporate Reporting during 2025, aimed at simplifying and modernising the UK’s non-financial reporting framework.

The government has published guidance on the information-sharing measures in the Economic Crime and Corporate Transparency Act 2023.

Data protection/cyber security/tech and digital

The EU’s Data Act will apply from September 2025. UK businesses could fall within scope if they use, collect or manage data in the EU. Among other things, manufacturers will have to design their products in a way that allows both business and consumer users to take full advantage of the data created while using connected devices.

Guidance from the Information Commissioner’s Office on recruitment and selection and employment records is expected this autumn and winter.

A government consultation on workplace surveillance technologies is also expected this year.

The government has responded to a 2024 call for views on AI cybersecurity and published a final voluntary code of practice and accompanying implementation guide. The code sets out baseline cybersecurity principles to help secure AI systems and the organisations which develop and deploy them. It will be used as the basis for a new global standard.

The Home Office is consulting until 8 April 2025 on proposals to counter ransomware, including a mandatory incident reporting regime. Also see the NCSC’s press release.

The government announced a major initiative to ‘unleash’ AI across the UK, to ‘deliver a decade of national renewal’. The initiative will take forward all 50 recommendations in the AI Opportunities Action Plan. See the government’s response. Our briefing covers and comments on the key points.

A reminder that the first obligations started to kick in under the EU AI Act on 2 February 2025. This includes a requirement for the providers and deployers of AI systems to take measures to ensure that staff and others dealing with the operation and use of AI systems on their behalf are ‘AI literate’.

Also on AI, the Master of the Rolls said in a recent speech that “one of the biggest fields of legal activity in years to come is likely to be the claims that will be brought in respect of the negligent or inappropriate use of AI, and also the negligent or inappropriate failure to use AI“. The UK Jurisdiction Taskforce is due to publish a legal statement on issues of AI liability.

Our Technology & Digital team have published ‘The world of tech & digital in 2025: A legal and regulatory perspective‘, looking in more detail at what’s in store over the coming year. They cover: getting on board with AI; data; cyber and product security; tech and financial services; and digital markets.

Commercial/general

On 16 January 2025, the House of Lords European Affairs Committee opened an inquiry and call for evidence on the “UK-EU reset”. This is an opportunity for organisations trading in or with the EU to join the discussion on how UK businesses and the economy could benefit from potential changes to trading principles or terms. The call for evidence is open until 7 March 2025.

On 23 January 2025, the government published the third Parliamentary Report on revocation and reform of assimilated law (previously known as retained EU law), covering the period 24 June – 23 December 2024. The report states that the government will reform assimilated law where desirable to support its Industrial Strategy. It also notes that the Product Regulation and Metrology Bill, Employment Rights Bill and Data (Use and Access) Bill will all potentially reform assimilated law. An updated assimilated law dashboard has also been published.

Changes to the UK merger control regime, set out in the new Digital Markets, Competition and Consumers Act (DMCCA), came into force on 1 January 2025. Businesses doing deals involving a target with UK sales or activities should consider whether the Competition and Markets Authority (CMA) will have jurisdiction to review the transaction under the new rules and what impact that may have. The CMA has published guidance on how the UK’s new digital markets competition regime works under the DMCCA, and is consulting on both consumer protection enforcement guidance and unfair commercial practices guidance.

The CMA and DBT announced, on 22 January, that CMA chair Marcus Bokkerink is stepping down, amid ministers’ concerns that the regulator hasn’t been sufficiently ambitious in terms of growth.

24 February 2025 is the in-force date for the Procurement Act 2023. The publication of two new Procurement Policy Notes (PPN 015 and PPN 018) set out how a supplier’s approach to payment can be taken into account in the procurement of major government contracts under the Act. In related news, the Government Commercial Function has published further guidance: Contracting authorities: An overview of the Central Digital Platform, the enhanced Find a Tender service; and the Welsh Government has published template documents, Guidance on utilities contracts and a Procurement Act 2023 notice flowchart.

A new report from the Payment Systems Regulator (PSR) shows how fraudsters are exploiting major platforms to scam consumers.

Also in PSR news, the body confirmed competition concerns about cross border card fees and is consulting on a proposed price cap remedy to protect UK businesses.

The new failure to prevent fraud offence, under the Economic Crime and Corporate Transparency Act 2023 is coming into force on 1 September 2025. In-scope organisations in all sectors need to start taking steps to ensure necessary fraud prevention controls are in place ahead of the deadline. In this briefing our Regulatory specialists offer legal and practical advice.

The Civil Justice Council has concluded an extensive review of pre-action protocols (PAPs) which should be followed before litigation is progressed. The review has culminated in publication of a final report which recommends reform of various existing PAPs, including those for Personal Injury, Housing, Judicial Review, Debt, Construction and Engineering, Professional Negligence and Media and Communications. The report also recommends the creation of a new PAP for Multi-Track Claims in the Business and Property Courts of England and Wales.

The Law Commission’s ongoing review of the security of tenure regime in England and Wales could prompt transformational reform in the UK commercial real estate market. In our briefing, we explain what’s at stake, and consider the implications for commercial landlords and tenants.

People

New employment tribunal rules are in operation as from 6 January 2025. The new rules are set out in the Employment Tribunal Procedure Rules 2024 (SI 2024/1155). A new Practice Direction on the presentation of claims and responses also applies from the same date. It removes email as a method of presenting a response (other than in exceptional circumstances), and requires claims and responses to be presented online, by post or by hand.

Our Employment specialists published a summary of everything you need to know about family leave and the Employment Rights Bill. In related news, Lucy Gordon (Partner) and Giulia Patti (Senior Associate) are hosting a webinar on 26 February 2025, where they’ll be discussing some of the practical and helpful ways in which employers can manage employees on family leave and keep them engaged and connected during their absence. Lucy and Guilia will be joined by guest speaker Kay Simpson (HR Director at Menzies Distribution Limited), to explore further some of the difficulties employers face. If you’d like to join the webinar, register here.

The Neonatal Care (Leave and Pay) Act 2023 is expected to come into effect in April 2025. It will give parents up to 12 weeks of paid leave if they have babies who are admitted into hospital, in addition to other maternity, paternity, and shared parental leave entitlements. To qualify, an employee must be employed for a minimum of 26 weeks prior to the leave being requested, and be earning an average of at least £123 a week.

The government’s guidance for employers on how to apply for a licence to sponsor a person on the Worker and Temporary Worker immigration routes was updated to reflect the prohibition on the passing on of Skilled Worker sponsor licence or Certificate of Sponsorship fees to sponsored workers by the end of 2024, and to prohibit sponsors from sponsoring workers in a personal capacity.

Check out our January 2025 Employment Matters newsletter, which covers employment status, use of generative AI, business protection, payment of wages when an employee is charged with a criminal offence, ‘fire and re-hire’ developments, and more.

The national minimum wage increase will come into force on 1 April 2025. The national living wage will increase by £0.77 to £12.21. For 18-20 year olds, minimum wage will increase by £1.40 to £10.00 an hour, and for 16-17 year olds, it will increase by £1.15 to £7.55 an hour.

From April 2025, several statutory payments rates in the UK will increase. Statutory sick pay will rise from £116.75 to £118.75 per week, with a qualifying threshold of £125 per week. Under the proposed Employment Rights Bill, sick pay could soon be payable from the first day of being ill, however this will likely not be in effect by April. Statutory maternity pay, maternity allowance, statutory adoption pay, statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay will rise from £184.03 to £187.18 per week. The lower earnings limit will increase to £125 (from £123), while the threshold for maternity allowance will remain at £30 per week.

From 6 April 2025, the government is implementing four significant changes to employer national insurance contributions. Two of these changes represent substantial tax increases. The secondary Class 1 national insurance (employer) threshold will be lowered from £9,100 to £5,000 per year, while the main rate of secondary Class 1 National Insurance (employer) contributions will rise from 13.8 per cent to 15 per cent. The rates for Class 1A and Class 1B employer contributions, which apply to taxable benefits-in-kind, will increase accordingly. To partially offset these increases, the employment allowance will become available to all employers, and the maximum amount employers can save through the allowance will increase from £5,000 to £10,500.