Dispute resolution & litigation

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The consumer and retail sector has faced relentless strain in recent years. How can in house legal teams ensure supply chain contracts are both robust and flexible enough for their business to thrive in the current - and future - commercial landscape?

Published: 14 August 2026
Authors: Emma Carr

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Over the past five years, few sectors have faced more relentless strain than consumer and retail. Inflation, geopolitical instability, supply chain disruption, cyber-attacks, tariff uncertainty and margin compression have become recurring features of the commercial landscape.

For many businesses, disruption is no longer the exception. It is the operating environment.

For in-house legal teams, that creates a dual challenge: ensuring contracts are prescriptive enough to allocate risk clearly, but flexible enough to allow the parties to adapt to changing market forces.

Those challenges often require different legal perspectives.

In this article, Simon McArdle, a Partner in the Commercial team and co-head of the Consumer and Retail Sector considers what effective supply contracts should achieve, while Emma Carr, a Partner in the Commercial Litigation team, examines how those contracts are tested when commercial relationships come under pressure. Together, they look at some of the contractual provisions that matter most, not just when a deal is negotiated but also when it is put to the test.

Simon: “The best supply agreements aren’t designed to predict every possible disruption; they’re designed to give businesses a practical framework for managing change without renegotiating the relationship every time market conditions shift”

1. Price review clauses: Certainty and flexibility

What the contract should achieve

In a volatile market, pricing mechanisms need to do more than just state the price. They should establish a clear process for dealing with increases in raw materials, freights, energy, tariff or currency costs, identifying what can trigger a review and how negotiations will be conducted if agreement cannot be reached.

When commercial pressure tests the contract

Many disputes do not begin with a refusal to perform. They begin with suppliers issuing revised invoices, seeking temporary surcharges or asking customers to absorb part of an unexpected increase in costs.

Commercial teams quite rightly focus on keeping product moving. Temporary arrangements are agreed, payment terms are relaced and pricing concessions made.

Those decisions are often commercially sensible. The difficulty however is that unless they are carefully documented, they may later become the subject of disputes about contractual variation, waiver or estoppel.

Emma: “The difficult cases are rarely those where the contract has been followed, they’re the ones where sensible commercial decisions were made under pressure, but nobody stopped to consider how those decisions might be interpreted if the relationship later broke down”

Risk management

Commercial concessions may often be the right answer, however the risk is allowing them to evolve without recording exactly what has been agreed and on what basis. Temporary pricing arrangements should identify their duration, who approved them and whether both parties intend to preserve their underlying rights.

2. Force majeure: The clause is only the starting point

What the contract should achieve

Force majeure provisions should identify the relevant events, prescribe notice requirements, allocate responsibility for mitigation and explain what happens if disruption continues beyond a specified period. Under English law, force majeure is contractual rather than statutory; the wording therefore matters.

When commercial pressure tests the contract

Whether disruption falls within the clause is only the beginning. The debate quickly mores to whether notice was given on time, whether reasonable mitigation steps were taken and whether performance was genuinely prevented, rather than simply made more difficult or expensive.

These issues are often determined as much by contemporaneous evidence as the wording of the clause itself.

Risk management

Operational teams should be primed to anticipate when legal input is needed. A missed notice or poor record of mitigation can undermine an otherwise strong contractual position before any formal dispute has begun.

3. Termination rights: Commercial urgency and legal entitlement

What the contract should achieve

Termination provisions should distinguish clearly between material breach, persistent breach, insolvency and termination for convenience, while setting out the procedural steps required before the agreement can be brought to an end.

When commercial pressure tests the contract

When a supplier cannot perform, procurement teams understandably want certainty and alternative supply. The legal risk is different. Some of the most protracted disputes arise because a party terminates before the contractual or common law right to do so has arisen.

Emma: “Some of the most expensive supply chain disputes we see aren’t caused by the original breach. They’re caused by the otherwise innocent party terminating before it was legally entitled to do so”

Risk management

Before issuing a termination notice, ask whether the business is exercising a specific contractual right or simply reacting to commercial frustration. The distinction may well determine who ultimately becomes claimant and who becomes defendant (or receives a counterclaim).

4. Limitation of liability: Understanding the real value of the dispute

What the contract should achieve

Liability caps and exclusions should reflect the commercial allocation of risk agreed by the parties and should be tested against realistic disruption scenarios, not just negotiated in the abstract.

When commercial pressure tests the contract

The question is often not whether there has been a breach but whether the losses that matter commercially are recoverable (either at all, or up to a capped amount).

Emergency procurement costs, production downtime, retailer penalties and lost profits may all arise from the same disruption. Whether they can be recovered depends on the contractual allocation of risk. That in turn will shape litigation strategy, settlement discussions and the commercial value of the claim.

Risk management

Review limitation and exclusion clauses at an early stage, considering how they would be interpreted by the Courts if tested, how they operate in practice, and whether statutory restrictions¹ might be engaged. These clauses often – assuming they are enforceable - determine the commercial value of pursuing a claim long before proceedings are contemplated.

5. Change control: Today’s solution can become tomorrow’s dispute

What the contract should achieve

Supply agreements should contain clear, practical mechanisms for agreeing changes to specifications, delivery schedules, volumes or substitution arrangements as commercial circumstances evolve.

When commercial pressure tests the contract

Periods of disruption often require pragmatic solutions. Alternative products are supplied, delivery schedules change and operational teams reach sensible commercial compromises.

Problems arise where those changes are never formally documented. Once relationships deteriorate, parties may fundamentally disagree about which version of the agreement governs their obligations.

Risk management

Ask a simple question. If this relationship ended tomorrow, could someone unfamiliar with it understand why the parties have departed from the contract? If not, document the current position and how the parties got there.

6. Notice provisions: Small details with significant consequences

What the contract should achieve

Notice provisions create certainty around price reviews, claims, termination and force majeure.

When commercial pressure tests the contract

Notice provisions are often the easiest contractual requirements to overlook. However, failure to adhere to their terms can scupper the execution of an otherwise legally and commercially sound response to a challenging situation.

By the time lawyers become involved, opportunities to preserve important contractual rights may already have been lost.

Risk management

Ensure procurement and operational teams know which contractual issues require immediate legal escalation.

7. Evidence: The contract is only half of the story

What the contract should achieve

Well-drafted contracts remain essential, but disputes are rarely won on contractual wording alone.

When commercial pressure tests the contract

Internal emails explaining why a commercial decision was taken, records of mitigation supplier performance data and correspondence with customers frequently become the documents that determine the outcome of a dispute.

Emma: “By the time external lawyers are instructed, the most important evidence has usually already been created, the question is whether it has been preserved and whether the business’s communications support the position it ultimately wants to take.”

Risk management

Document presentation should begin when a significant contractual issue emerges, not just when proceedings are threatened. Encourage disciplined communications and involving legal early enough to preserve privilege where appropriate.

Looking ahead

Supply chain disruption is unlikely to disappear. Whether driven by geopolitical events, energy market turbulence, cyber incidents or continuing economic uncertainty, commercial pressure will continue to test long-term contractual relationships.

For in-house legal teams, effective risk management therefore has two stages.

The first is ensuring that contracts allocate foreseeable risks clearly and provide practical mechanisms for managing change.

The second is equipping operational teams to recognise when a commercial issue is becoming a legal one. At that point, the quality of the business’s response often becomes just as important as the quality of the drafting.

As Simon observes:

“A good contract gives the business options when circumstances change”

Emma’s experience is that what happens next is equally important: “It is rarely the wording of the contract alone that determines the outcome of a dispute. More often, it’s how the parties exercised those contractual options once the relationship came under pressure”

For in house legal teams, that is where commercial drafting and dispute management meet. The objective is not simply to have a well drafted contract, but to ensure that when commercial reality requires the business to depart from it, those departures are managed in a way that preserves both the commercial relationship and the business’s legal position.

¹ In particular the Unfair Contract Terms Act 1977

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New tech, old law (part 2): UKJT confirms its position on liability for AI harm

Tue, 11 Aug 2026 00:00:00 +0100

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New tech, old law (part 2)

UKJT confirms its position on liability for AI harm

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What's new in the UKJT's final legal statement on civil liability for AI harm, and what does this mean for businesses in the supply chain and/or as end users?

Published: 11 August 2026
Authors: Alex Bishop, Peter Richards-Gaskin, Alex Kirkhope, Sarah Reynolds, Claire Kershaw & Stefanie Hughes

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The UK Jurisdiction Taskforce (UKJT) has published its final legal statement on liability for AI harm, following consultation on its draft legal statement published earlier this year. While the UKJT’s core conclusions (as discussed in our previous article) remain largely unchanged, the final statement incorporates some further analysis in certain areas. This article focusses on those developments and the key takeaways for businesses, both in the AI supply chain and as end users.

Summary of key updates

Vicarious liability and non-delegable duties

the final statement discusses a further important aspect of potential liability for harm caused by another, namely where there is a non-delegable duty to protect against that harm¹. Giving the example of an NHS Trust procuring an AI diagnostic tool from a third-party developer, the statement notes the Trust would not be able to avoid liability for any harm caused to a patient as a result of a defect in the tool by arguing the defect was the developer’s fault. The Trust would, however, likely consider seeking a contribution from the developer under the Civil Liability (Contribution) Act 1978 – subject to the usual analysis on causation, contributory negligence and so on.

Factual causation and material contribution to damage

the final statement also includes a new discussion around the principle of ‘material contribution to damage’ – to date predominantly applied in cases involving industrial disease and clinical negligence, but arguably of general application. The principle essentially fills a gap left where, through multiple wrongdoers, harm was caused, but on a strict ‘but for’ analysis no single wrongdoer’s act or omission caused the harm. An example is given of two waste plants, one using human employees only and the other an AI system, negligently discharging equal amounts of waste into a river which together take the pollution level above a particular threshold.

Contributory negligence

the potential impact of contributory negligence was not addressed in the draft statement – the final statement now considers how such arguments may play part of the assessment of liability for harm caused by AI. The statement does not suggest that any particular new principles or analysis need apply, but emphasises that the question will always be highly fact specific, and the nature of the user (commercial or non-commercial) and the level of verification of the AI output will be key themes.

Defamation

the expanded discussion in the final statement emphasises that the extent to which anyone in the AI supply chain may be considered a publisher is highly fact specific. This may be most straightforward to establish in the case of commercial publishers using AI tools to generate content for their website. At the other end of the scale, the UKJT suggests that a Foundation Model Developer, with no involvement in publication of a statement beyond having licensed the use of their model, may potentially be deemed a publisher of a defamatory statement generated by it - if they have sufficient practical ability to prevent further publication.
the final statement also acknowledges that how the defences available under s.1 of the Defamation Act 1996 and s.5 of the Defamation Act 2013 may apply in relation to AI-generated content is unclear. In relation to s.5 of the 2013 Act for example (Operators of websites), the potential defence is predicated on the basis of there being a ‘poster’ of a statement with whom the website operator must seek to correspond, but query whether/who a court would consider to be a ‘poster’ of an AI-generated statement.

What does this mean for businesses?

As noted in our previous article, in most commercial contexts the contractual arrangements between the parties in an AI supply chain will be the most important legal framework governing liability for any harm arising. For businesses operating in this space and their advisers negotiating commercial contracts, meticulous attention to detail must go hand in hand with a thorough understanding of the technology (both as it stands and how it may evolve) as well as its intended/likely deployment downstream.

For businesses as end users of AI tools the key points to note include:

generally speaking, an organisation could not be held vicariously liable for harm caused by an AI tool it is using since the tool itself, in the absence of its own legal personality, could not be held primarily liable. An organisation could however be held vicariously liable for wrongdoing, such as negligence, by an employee in connection with their use of an AI tool. Moreover, an organisation using an AI tool in the performance of a non-delegable duty could not avoid primary liability to anyone harmed as a result of a defect in the AI tool, but could seek to recoup (at least partially) any such liability incurred by way of a contribution claim against the tool developer (subject of course to the usual analysis and any contractual arrangements preventing or limiting their ability to do so).
more particularly, organisations using chatbots may potentially be liable for false statements made by it if the chatbot is held out as communicating on the organisation’s behalf, if there is an express or implied representation that the chatbot’s output is accurate, and/or if the chatbot makes a defamatory statement. Such organisations should make clear to users that the chatbot is AI-powered, that its output may be inaccurate/contain hallucinations, and that any views expressed do not represent those of the organisation. Those organisations in scope of the EU AI Act are likely to be familiar with these types of requirements, given their alignment with the Act’s transparency obligations.
for professional services firms, consideration of whether, when and how to deploy AI tools must form part of their ongoing assessment, exercising reasonable care and skill, of how to carry out their client’s instructions. While any guidance from relevant regulators and professional bodies will be instructive in this respect, given the implications for their own liability, amongst other good reasons, professionals must exercise their own judgment in the context of the particular matter and their client’s objectives. In some scenarios, a client may prefer to forego a potential benefit of using AI in order to avoid a potential risk. The critical foundational step is to identify and explain competently the potential options and the risks and benefits of each.

¹ Such duties are rare and their defining features were articulated by the Supreme Court in Woodland v Essex County Council [2013] UKSC 66 (23 October 2013) at paragraph [23]. In short where it is established that Party A owes a non-delegable duty of care to Party B and outsources an integral part of its functions to Party C, if Party B suffers harm as a result of Party C’s negligence in the performance of that particular function, Party A will still be liable to Party B. Non-delegable duties may arise for example in the context of prisons, care homes and schools.

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Peppa Pig is granted an international injunction

Tue, 11 Aug 2026 00:00:00 +0100

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Peppa Pig is granted an international injunction

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Decision: Hasbro Consumer Products v Công ty TNHH & Ors
Court: High Court (Intellectual Property List)
Judge: Mr Justice Richard Smith
Citation: [2026] EWHC 1957 (Ch)
Decision: Here
Key issues: Injunctions

Published: 11 August 2026
Authors: Eloise Ryan

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Introduction

In Hasbro Consumer Products v Công ty TNHH & Ors, the English High Court has granted an (unusual) worldwide injunction in relation to aspects of Wolfoo, a popular preschool YouTube series.

Wolfoo was launched in 2018 and now has over 20 million subscriptions across its three major channels. It follows a young wolf, who lives with his family and friends, with episodes exploring everyday situations, adventures and games with Wolfoo.

In 2022 the makers of Peppa Pig brought infringement proceedings in the English courts, alleging, among other things:

in the UK, copyright infringement, trade mark infringement and passing off
in the EU, copyright infringement and trade mark infringement
in jurisdictions subject to various international copyright conventions and treaties (such as the Rome Convention, TRIPS and WPPT), copyright infringement

The sound recording copyright claim

In June this year, the court granted summary judgment on a discrete aspect of the wider proceedings.

Here, the Claimants alleged that audio clips from Peppa Pig had been copied in Wolfoo, resulting in infringement of copyright in the sound recordings. To support their case, the Claimants relied on detailed technical evidence, using spectrogram analysis in respect of Peppa Pig videos and a representative sample of Wolfoo videos, showing identity.

In turn, the Defendants sought to raise doubts such as the identity, authorship and ownership of the copyright works, but failed to substantively challenge the evidence advanced by the Claimants.

The issue fell before Mr Justice Richard Smith, who concluded that the Defendants had no realistic prospect of successfully defending this aspect of the claim, giving summary judgment.

International copyright claims and the presumption of similarity

The question arose as to whether the finding of copyright infringement under English law may apply to other jurisdictions and, if so, whether an injunction should be granted.

The Defendants argued that copyright is territorial in nature and that the Claimants could not simply rely upon English copyright law when alleging infringement across numerous jurisdictions.

Having examined the "default rule" and the "presumption of similarity" in private international law, the Court explained that, where foreign law is pleaded and properly engaged, English law may nevertheless play a role if it is reasonable to assume that the foreign law is materially similar to English law such that it is unlikely to lead to a different substantive outcome.

The Claimants argued that this test was satisfied in relation to EU jurisdictions because UK copyright law historically developed in line with the Information Society Directive. In relation to other countries, they relied on the harmonising effect of international copyright instruments including the Rome Convention, TRIPS and the WIPO Performances and Phonograms Treaty (WPPT).

The Court accepted those arguments and found that the Defendants had failed to identify any material differences between English law and the laws of the relevant foreign jurisdictions. In particularly forceful terms, the judge stated that it was not enough for the Defendants merely to assert a "bald belief" that material differences might exist and that further investigation would reveal them.

Representative sampling and large-scale online infringement

Another question arose as to whether the Defendants should obtain relief only in relation to the representative sample of Wolfoo video on which it relied, or all of them (which exceed some 30,000 videos).

The Court accepted evidence that the sampled videos were genuinely representative of the wider corpus, and that analysing every Wolfoo video would have been wholly disproportionate. As a result, the Court was prepared to infer that further infringements would likely be identified if wider analysis were undertaken.

Injunction

The practical consequence of this was a remarkably broad injunction. The Court ordered the removal of all Wolfoo videos falling within the scope of the findings in all jurisdictions that are parties to the relevant international copyright conventions and treaties (rather than limiting relief to specific videos or specific jurisdictions).

Key takeaways

The key takeaways from the decision are that:

in certain circumstances, the English courts are open for business to grant pan-jurisdictional injunctions in copyright disputes, which may serve as a cost-effective way of resolving international disputes
the presumption of similarity remains a powerful procedural tool where Defendants fail to identify concrete differences between English law and applicable foreign laws
courts may be willing to accept representative sampling as evidence of infringement across large bodies of online content where full analysis would be disproportionate
international copyright treaties and harmonised copyright frameworks can provide strong support for cross-border enforcement strategies

Caveat

While the judgment is a buoy to copyright holders looking to enforce their rights globally and cost effectively, a note of caution:

the success masks a prolonged (some four years to date) and ongoing dispute, with the court already having wrestled with pleading disputes and jurisdictional challenges
sound recordings carry no originality threshold and the infringement was clear, meaning it was harder for the Defendants to point to any material difference between English law and other jurisdictions. This may not apply to other copyright claims
the Defendants did not always attend the hearings and were not always legally represented
this is a first instance decision

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Court of Appeal considers case management of ‘omnibus’ claims

Tue, 11 Aug 2026 00:00:00 +0100

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Court of Appeal considers case management of ‘omnibus’ claims

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Judgment holds that c5,000 motor finance claims against various defendants meet the 'convenience' test in CPR r.7.3.

Published: 11 August 2026
Authors: Mahesh Vara & Claire Kershaw

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The Court of Appeal has dismissed an appeal by various lender Defendants against a High Court decision permitting c5,000 motor finance claims to proceed by way of multi-party ‘omnibus’ claim forms. While this is a case management decision specific to its facts, it will nonetheless be of interest to parties engaged in similar disputes.

Background

The Claimants all purchased motor vehicles with the assistance of finance provided by the Defendants. The Claimants claim repayment of monies paid by them under relevant credit agreements on the basis they gave rise to an unfair relationship within the meaning of s.140A of the Consumer Credit Act 1974 (the Act) due to alleged undisclosed commissions paid by the Defendants to the relevant car dealers.

The claims were issued in the County Court in 2022 by way of 8 Claim Forms, grouping the claims against each of the Defendants. Generic Particulars of Claim were served pleading the overarching allegation that the Defendants’ failure to disclose commission agreements between them and the car dealers was a breach of the Financial Conduct Authority’s Consumer Credit Sourcebook and meant that every relationship between the Claimants and Defendants was unfair.

The Defendants sought to disaggregate the claims, arguing that determination of an unfair relationship was entirely fact specific.

At first instance the County Court agreed, finding that the convenience test under CPR r.7.3 had not been met. Following the Divisional Court’s judgment in Abbott¹, the circuit judge concluded he was not satisfied that “there were common issues of sufficient significance that their determination would constitute real progress towards the final determination of each claim in a set of claims”.

The Claimants appealed. However, before the appeal hearing had taken place, the Court of Appeal handed down judgment in Morris² an unrelated professional negligence case in which the use of an omnibus claim form was also being challenged. In Morris, the Court of Appeal concluded the test set out in Abbott was too restrictive. While the factors identified in Abbott may be relevant to the question of convenience under r.7.3, they should not operate as exclusionary rules. What is ‘convenient’ is a matter for the Court’s discretion according to the facts of the case.

Morris was plainly going to influence the High Court’s approach in these the present proceedings, and so it did. The High Court judge essentially concluded that, since Abbott had been overturned by Morris, the approach taken by the circuit judge could not stand, and that he was entitled to re-exercise his discretion on the question of convenience. He identified³ 9 separate factors to consider, and on analysis found that the vast majority supported the convenience test having been met. He therefore allowed the appeal and gave directions for the Defendants to serve generic Defences, and to provide certain disclosure.

The Defendants sought permission to appeal on 4 grounds. Permission was granted on the fourth only, namely (in short) that the Judge had failed to re-exercise the discretion properly.

Court of Appeal decision

The Court of Appeal (unanimously) dismissed the appeal.

The judgment addresses 5 different aspects of the Judge’s exercise of discretion. The key points can be summarised as follows:

Unfairness

there was some criticism of the Judge’s approach insofar as he identified, as part of the common issues exercise, cases where (in his view) there was “a very clear case of unfairness”. This went against numerous authorities, including Johnson⁴, establishing that unfairness is an entirely fact-specific inquiry. This point did not, however, go to the heart of the Judge’s judgment.

Common issues

the Court reaffirmed that “[c]ommonality of issue is different to whether the result of an issue will be binding on everyone”. Claims which are very similar in nature are likely to give rise to common issues of law and fact, even if they require separate evaluation “in the final act”.
while the Court was sceptical as to the utility of the two “broad common issues” identified by the Judge, it could not say that he was wrong, in the exercise of his discretion, to conclude that there were some common issues and that that was relevant to the question of convenience.

Lead cases

the Court rejected the submission that it wasn’t enough for results in lead cases to be persuasive - as opposed to binding - to point towards convenience. The Court considered that even where claims are fact-sensitive, it would be surprisingly uncommercial and contrary to common sense not to extrapolate the results as part of considering remaining claims.
the Court agreed with the Judge that trial of lead cases would plainly be a sensible step and a “clear pointer” towards convenience. Disclosure of the brokerage agreements, as ordered by the Judge, would assist in identifying lead cases through the usual method.

Remedy

the Court rejected the criticism that the Judge had failed to consider remedy in his reasoning, observing that questions of remedy always turn on the individual facts of each case, but this was “manifestly not a reason to find that the convenience test under r.7.3 had not been made out”.

The case management directions

while the Court was doubtful that the provision of generic Defences would particularly progress matters, it could not say that the Judge was wrong to require them; it was consistent with the view he had formed about common issues and it would be more cost effective than pleading +5,000 Defences individually
as for the disclosure required from the Defendants, the Court recognised the burden this placed on them, but noted it was an inevitable part of responding to these claims (however formulated), rather than a function of the Judge’s order. The documents were necessary for the inquiry into unfairness which the Defendants urged be undertaken

Key takeaways

Due to the limited scope of the appeal (on one ground only, against a case management decision), “the result cannot easily be extrapolated into setting out any new or wider principles to be followed” in other cases on the question of convenience.

It can nonetheless be added to the growing list of authorities (going in various directions) from which parties on all sides may seek to draw analogies and/or distinctions as against their facts. It clearly illustrates the generous ambit of the courts’ discretion in relation to case management and confirms, subject to any contrary finding by the Supreme Court, that even cases involving highly fact-sensitive matters such as the assessment of unfairness under the 1974 Act are not inherently unsuitable for omnibus proceedings.

The Court did however note that the effect on court resources is relevant to the question of convenience and suggested data including lost fee revenue be compiled by HMCTS. It also gave a clear nod to the Civil Procedure Rules Committee to revisit its post-Morris decision⁵ that no amendment of either r.7.3 or r.19.1 was needed. This may potentially form part of a wider review of Part 19 which the CPRC has previously indicated would be added to its future work programme. It is also worth noting the Law Commission’s consideration of a potential new consumer class actions regime.

One thing is for certain: potential parties to large group claims should expect plenty of further developments as to how such claims should be managed.

¹ Abbott v Ministry of Defence [2022] EWHC 1807 (KB)
² Morris & Others v Williams & Co Solicitors [2024] EWCA Civ 376
³ At paragraph 89
⁴ Hopcraft and another v Close Brothers Ltd; Johnson v FirstRand Bank Ltd (London Branch) (t/a MotoNovo Finance); Wrench v FirstRand Bank Ltd; (London Branch) (t/a MotoNovo Finance) (Rev1) [2025] UKSC 33 (01 August 2025)
⁵ Recorded in the minutes of its meeting on 5 July 2024

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Duty of fair presentation in action: Insurer avoids policy after non-disclosure

Thu, 6 Aug 2026 00:00:00 +0100

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Duty of fair presentation in action

Insurer avoids policy after non-disclosure

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The Commercial Court has held that an insurer was entitled to avoid a charterer's liability policy after the insured failed to disclose a number of fires involving its cargo.

Published: 6 August 2026
Authors: Susie Wakefield

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The recent Commercial Court decision in Cometsambre SA v Lloyd's Insurance Company SA HIG 5321 provides a compelling illustration of the courts’ approach to assessing whether an insured has complied with its duty of fair presentation under s.3 of the Insurance Act 2015 (the Act), and the consequences of failing to do so.

Background

The dispute relates to a Charterer’s Liability (C/L) insurance policy underwritten by AMICA, as coverholder for the Defendant (Lloyd’s), in favour of the insured Claimant (Cometsambre), a scrap metal dealer.

Lloyd's Insurance Company SA writes European risks for Lloyd’s syndicates; the policies are then 100% reinsured by Lloyd’s syndicates, in this case Hartford's Syndicate 1221.

Cometsambre first approached AMICA through a broker in 2008 seeking C/L insurance in respect of the planned shipping of scrap from its base in Ghent, Belgium. Through various exchanges, AMICA was informed that the scrap would be non-oily, non-radioactive, non-dangerous shredded steel scrap, excluding motor blocks, borings and turnings, to HMS 1 / HMS 1+2 or ISRI specifications.

Between 2010 and 2022 cover was renewed every year on almost identical terms with little correspondence. One small claim was made in 2012 in respect of stevedore damage, and in April 2021 Cometsambre gave notice of a potential claim against it in respect of a grounding at Alexandria.

In June 2022 a cargo of Cometsambre’s scrap metal was involved in a fire on board the chartered vessel LOWLANDS MIMOSA, resulting in a claim against Cometsambre under the charterparty. AMICA were subsequently informed of various other fires involving Cometsambre’s scrap; 10 in total between 2014 and 2022, either quayside or once loaded onto vessels, with 5 of these taking place between May 2020 and October 2021.

Lloyd’s declined to cover Cometsambre in respect of the LOWLANDS MIMOSA charterparty claim on the basis that Cometsambre had breached its duty of fair presentation both in terms of (i) the nature of the scrap being shipped and (ii) the failure to disclose the 5 fires between May 2020 and October 2021.

Cometsambre issued proceedings in December 2024 seeking a declaration that Lloyd’s was obliged to indemnify it in respect of its costs of dealing with the charterparty claim and, to the extent necessary, for any substantive liability incurred in that respect.

Commercial Court judgment

The Court (Mr Justice Butcher) dismissed the claim, finding that Lloyd’s was entitled to avoid the 2022 policy.

On the key issues the Court found as follows:

Materiality

Cometsambre sought to argue that the fire record was not ‘material’ for the purposes of s.3(4) of the Act since:

none of the fires had given rise to a claim against Cometsambre (in particular, none of the vessel fires had led to a claim by the owners and were therefore not material to a C/L underwriter)
the quayside fires were not material to a C/L underwriter because any resulting claim would be on Cometsambre’s property insurance policy.

The Court rejected these arguments, preferring Lloyd’s underwriting expert’s evidence that fires were “a paradigm example of an incident capable of giving rise to a claim” which must be disclosed, even if a claim did not materialise. In particular, the fact that five fires occurred in the 18 months between May 2020 and October 2021 was significant as it indicated a change in the risk profile.

Insurers on notice

Cometsambre argued that since AMICA was aware of the nature of the cargo it should have been aware of the general risks of the business, and had not asked for an updated questionnaire on renewal each year, AMICA was on notice, for the purposes of s.3(4)(b) of the Act, that it needed to make further enquiries.

The Court regarded this as an improper attempt to reverse the burden of ensuring fair presentation of risk; that obligation lies primarily with the insured. Nothing AMICA was told could be said to have put AMICA on notice of the change in the incidence of fires over the relevant period, in particular the five fires in c. 18 months prior to the 2022 renewal. Even if (which the Court did not consider necessary in any event) AMICA failed to insist on loading surveys being performed as a matter of course, this would not excuse Cometsambre from disclosing the fires it had actual knowledge of.

Insurers’ presumed knowledge

It was also argued that underwriters could be presumed to know, for the purposes of s.3(5)(d) of the Act, that fires of this nature would probably have occurred.

Again, the Court was not persuaded, finding that Cometsambre failed to establish presumed knowledge of the relevant fires, still less that they had occurred in such quick succession after a long period of none at all, which suggested “a change in the risk profile”.

Disclosure waived

Cometsambre further submitted that the fact it was not asked to fill in an updated questionnaire or to provide further information about risk management, losses, incidents, claims and so on over the years meant a reasonable insured would understand AMICA was “only concerned with Cometsambre’s claim history and were indifferent about fires not giving rise to a claim”.

The Court disagreed. AMICA’s enquiries at the outset of the relationship were designed to ensure that fire-risky cargo was not being covered. The fact the initial questionnaire – prepared by the broker rather than by AMICA – only requested information about Cometsambre’s ‘claims record’ could not reasonably be understood as indicating that underwriters were not interested in any fires which had not given rise to a claim. Neither the absence of renewal questionnaires in subsequent years, nor the dealings between the parties in the round, reasonably be understood to amount to a waiver of disclosure of material circumstances.

Inducement

The Court stressed the need to be circumspect about evidence provided by underwriters on whether they would have declined the risk. The Court’s have recognised that there is an inherent risk that, whilst truthful, such evidence may be incorrect as it may be influenced by the fact that the loss has arisen and the witness is asked to consider what they would have done with the benefit of that knowledge.

Despite that the Court accepted the underwriter’s evidence that disclosure of the fires would have caused him to decline to renew. Key factors included the low premium, the expense of sending an expert to investigate each incident, the risk any single fire claim could result in substantial exposure, and the change in risk profile evidenced by the increase in fires.

Accordingly, and having already tendered a return of the premium, Lloyd’s was entitled to avoid the policy under paragraph 4 of Schedule 1 to the Act.

Comment

There are still relatively few judgments addressing insurers’ rights to avoid a policy for a failure to give a fair presentation of the risk under the Act.

Whilst the judgment largely turns on the facts of the case, it is a helpful guide to see how the Court will approach the detail of the analysis required under Act, and the various elements that must be established by insurers. On the facts before the Court, the judgment:

adopts a holistic approach to materiality, not limited to actual or potential claims against the specific policy, and extending to anything affecting the “overall picture of the risk”
reinforces that while the Act makes provision for insurers to be on notice or to have presumed knowledge in certain circumstances, this does negate an insured’s primary obligation to disclose material circumstances of which it has the requisite knowledge
rejects the idea that a ‘failure’ by insurers to specifically to seek out detailed information upon renewal could reasonably be understood as meaning the insurer is indifferent about being informed of material circumstances.

Notwithstanding the outcome in this case, the judgment and its underlying facts also serve as a reminder to insurers and insureds alike of the importance of ongoing meaningful risk assessment and clear forthright communication in reducing the risk of claims and coverage disputes arising in the first instance.

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When is occupation not occupation? Rates mitigation under the spotlight

Thu, 6 Aug 2026 00:00:00 +0100

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When is occupation not occupation?

Rates mitigation under the spotlight

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A “box shifting” rates mitigation scheme did not amount to occupation for non-domestic rating purposes where the sole purpose of placing items in the premises was to secure a rates saving.

Published: 6 August 2026
Authors: Sophie Tracey

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The Court of Appeal has allowed the appeal in The Mayor and Commonalty and Citizens of the City of London (CoL) v 48th Street Holdings Limited and Principled Offsite Logistics Limited (POLL), holding that a “box shifting” rates mitigation scheme did not amount to occupation for non-domestic rating purposes where the sole purpose of placing items in the premises was to secure a rates saving. The decision reverses the High Court ruling discussed in our earlier article, Strategic occupation or rates loophole?, which had found the scheme effective.

Legal position

Liability for non-domestic rates arises through occupation under section 43 of the Local Government Finance Act 1988, or ownership of unoccupied property under section 45. Empty property relief is available to the owner for the first three months after premises become unoccupied. At the time the facts in this case arose, a period of occupation of at least six weeks (the “reset period”, now 13 weeks) was required before that relief could be claimed again.

The leading test for rateable occupation, from John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area, requires: actual occupation; exclusive occupation for the occupier’s purpose; occupation of some value or benefit to the occupier; and occupation that is not too transient. The appeal focused on whether POLL’s occupation provided any real value or benefit.

What happened?

The case concerned empty office units at 2 America Square, EC3. After the initial empty rates relief period expired, POLL took a short lease at a peppercorn rent and simultaneously served a break notice ending the lease after six weeks. During that period it placed boxes in the premises, accepted liability for rates and claimed to be the occupier. Once the lease ended, the boxes were removed and the owner claimed a fresh period of empty property relief. POLL received a share of the resulting rates saving.

It was common ground that the boxes served no business or commercial purpose and were present solely to create occupation for rating purposes. The lease was not a sham; the dispute was whether the arrangement amounted to occupation to constitute a reset period.

What did the court decide?

At first instance, the High Court followed R (Principled Offsite Logistics Ltd) v Trafford Council and held that POLL’s scheme was effective. It accepted that the benefit of the occupation was the rates mitigation achieved by the arrangement.

The Court of Appeal disagreed and held that the Trafford Council case was wrongly decided. Relying on the Supreme Court’s reasoning in Rossendale BC v Hurstwood Properties, it emphasised that the empty rates regime is intended to discourage properties being left vacant and encourage productive use.

Applying a purposive interpretation, the Court held that Parliament cannot have intended temporary placement of items in an otherwise empty property to constitute occupation where there is no commercial or business purpose beyond rates mitigation. The Court described the arrangement as “pure rate mitigation occupation”.

The Court rejected the argument that the rates saving itself supplied the necessary benefit. That reasoning was circular. While storage can amount to occupation where the stored items have utility to the occupier, occupation must have some independent use, value or benefit. Activity undertaken solely to obtain a rates saving cannot satisfy that requirement.

The Court stressed this was not a motive test. Occupation may still qualify even where reducing rates is one objective, provided the occupation has genuine utility beyond the tax advantage. The difficulty for POLL was that the alleged benefit was the rates saving itself.

What next?

The judgment is a significant setback for intermittent occupation schemes that rely on minimal activity with no independent purpose. Owners, occupiers and advisers should review existing arrangements and consider whether the occupation has genuine commercial or practical utility. Rates mitigation remains possible, but only where occupation has a real use, value or benefit beyond securing a rate saving.

Sophie Tracey, Real Estate Litigation Principal Associate and a rating expert at Shoosmiths, comments: “This decision is likely to signal the end of many rates mitigation schemes based on token occupation. While the Court confirmed that occupation need not be wholly commercial in nature, it must provide a genuine use, value or benefit beyond the rates saving itself. Property owners and occupiers should therefore review existing arrangements carefully, as the courts are increasingly willing to assess such schemes against the underlying purpose of the rating regime.”

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Law Commission consultation: Reforming interim rent on lease renewals

Tue, 4 Aug 2026 00:00:00 +0100

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Law Commission consultation: Reforming interim rent on lease renewals

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Our next article considering the Law Commission's consultation on the future of the Landlord and Tenant Act 1954 (the Act) tackles one of the more complex and frequently misunderstood aspects of the lease renewal process: interim rent.

Published: 4 August 2026
Authors: Elinor Sandbach

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The Act currently contains detailed provisions dealing with interim rent. However, the Law Commission has concluded that the existing regime is difficult to understand, can produce uncertainty and tactical behaviour, and may lead to unfair outcomes both for landlords and tenants.

The consultation therefore considers whether the current approach should be replaced with a simpler system or retained in a more streamlined form.

Interim rent

When the contractual term of a lease protected by the Act expires, the tenant will often remain in occupation under a statutory continuation tenancy while the parties negotiate the terms of a renewal lease.

As a starting point, the terms of the existing lease continue during that continuation period. This means the tenant generally continues to pay rent at the level specified in the existing lease, even if market rental values have changed significantly since the lease was originally granted or the level of rent last reviewed.

Either party may, however, apply to the court for an interim rent determination.

The interim rent period starts from the earliest date that could have been specified in the relevant section 25 or section 26 notice, and continues until either:

1. the renewal tenancy is completed

2. the continuation tenancy comes to an end (for example, because the landlord successfully opposes renewal or the tenant decides not to proceed).

The current statutory regime is complicated because different valuation assumptions can apply depending on the circumstances. Where a renewal lease is ultimately granted, interim rent is often agreed to be the same as the rent payable under that new lease. However, the legislation contains a number of exceptions, particularly where:

1. rental values have changed substantially during the continuation period

2. the terms of the renewal lease differ from the existing tenancy

3. no renewal tenancy is ultimately granted.

Further complexity arises because the rent under the renewal tenancy is currently linked to the court's determination process. Legally, the valuation date is the commencement date of the renewal tenancy i.e. three months and three weeks after the court decides the provisions of the tenancy. Since future market conditions cannot be known, in practice the valuation date is generally treated as the date of the final hearing, even though that date may be itself uncertain (with final hearings sometimes listed for in excess of 12 months from the date of a Court application). This can create difficulties for valuers and encourage tactical delays in both rising and falling markets.

The Law Commission also highlights a practical cashflow issue. Until interim rent and renewal rent are agreed or determined, tenants continue to pay rent at the existing level. Once the final figures are established, a substantial balancing payment may become due from either landlord or tenant, potentially many months after the relevant period has ended.

Proposals for reform

Rather than abolishing interim rent altogether, the Law Commission has developed two alternative reform models.

Option A: fixed valuation and commencement dates

Under Option A, both the valuation date and commencement date for the renewal tenancy would be fixed by reference to the section 25 or section 26 notice.

The intention is to create a clearer and more predictable system in which the parties know from the outset the dates that will be used for valuation purposes.

If adopted, this approach would largely remove the need for separate interim rent provisions because the rent under the renewal tenancy would effectively apply from a date linked to the notice itself.

The principal advantages are greater certainty, simpler valuation evidence and reduced scope for tactical delay.

However, the proposal could create difficulties where the renewal tenancy differs materially from the existing tenancy. For example, if the renewal lease relates to only part of the premises, it may be unfair for the tenant to continue occupying the whole property during the continuation period while paying rent calculated by reference to the smaller demise.

The Law Commission therefore proposes that, in certain cases, adjustments could be made to reflect significant differences between the continuation tenancy and the renewal tenancy.

The consultation also seeks views on whether the notice-linked date should be:

the earliest date that could have been specified in the notice (which, following the amendments introduced by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, is the date from which interim rent is currently payable); or
the actual termination date specified in the notice.

This distinction could have significant strategic implications. The 2003 Order deliberately severed the link between interim rent and the date actually specified in the notice, instead tying interim rent to the earliest date that could have been specified. The intention was to prevent parties from obtaining a tactical advantage by choosing a longer notice period. Reverting to the actual termination date would risk reintroducing those tactical considerations, as parties may seek to influence both the valuation date and the commencement of any revised rent by controlling the timing of their notices.

Option B: retain interim rent but simplify it

Option B would preserve the current structure of the Act, keeping the commencement date and valuation date broadly unchanged, and with interim rent continuing to exist as a separate concept.

However, the basis on which interim rent is assessed would be substantially simplified.

Rather than the current array of different valuation exercises and exceptions, interim rent would be assessed by reference to the open market rent of a hypothetical tenancy on the same terms as the continuation tenancy.

This approach is simpler than the current statutory scheme, and avoids both bringing forward the lease renewal cycle and the need to account for differences between the continuation tenancy and the renewal tenancy.

However, it would not eliminate uncertainty around valuation dates and would continue to allow scope for tactical delay because the renewal rent would still be linked to the timing of the court process.

Application of interim rent in more complex scenarios

The consultation also examines how either option should work where circumstances do not fit the traditional lease renewal model.

For example, issues can arise where the rental model changes on renewal, such as a transition from a conventional rack rent to a turnover rent arrangement. The ability of the court to order a turnover rent is discussed in Chapter 7 of the Consultation and in our article here: Commercial leases: On what terms and rent can a lease be renewed?

The Law Commission recognises the practical difficulties of retrospectively calculating turnover-based rents for periods when tenants may have had no obligation to keep or provide the relevant trading data. Under Option A, the court could be given power to make an appropriate adjustment. Under Option B, interim rent would instead remain based on the rental model used in the original tenancy.

The consultation proposes a similar approach where no renewal tenancy is granted, suggesting that the rent should continue to be assessed using the same rental structure as the original lease.

The Law Commission also seeks views on whether parties should be able to apply for interim adjustments to rent during the continuation period and how balancing payments should be enforced once the final rents have been determined.

Comment

From a corporate occupier perspective, Elinor Sandbach, partner in the real estate litigation team, comments:

“From an occupier perspective, the strongest argument for reform is greater certainty. The current regime can leave occupiers carrying a significant contingent liability for many months while lease renewal proceedings progress, only for a substantial balancing payment to arise long after the relevant period has passed. That uncertainty can make budgeting and financial planning particularly challenging for businesses with large property portfolios.

Option A has obvious attractions because it creates a clear valuation framework from the outset and reduces the scope for tactical delay. However, fixing the valuation date at the notice stage also means that the parties are effectively pricing a lease before the terms have been finalised and, in some cases, before market conditions have fully evolved. In volatile occupational markets, a significant period may elapse between the service of a notice and completion of the renewal lease, creating a risk that the rent ultimately paid is detached from conditions prevailing at the point the new tenancy is actually granted.

Many occupiers may therefore see merit in the simplicity offered by Option B, which preserves the existing renewal timetable whilst streamlining the valuation exercise.”

Laurence Matthews, a Senior Associate in the real estate litigation team who acts for investors and developers, agrees:

“Option A gives both parties greater certainty from the outset, but the trade-off is that it could accelerate the lease renewal cycle. Fixing the valuation and commencement date at an earlier stage means that a lease that takes a year to negotiate may have already lost a substantial part of its term by completion, bringing the next renewal process into view much sooner. While parties may respond by agreeing longer lease terms, that will of itself affect value and, potentially, the new level of rent under the renewal lease."

This article forms part of our series examining the Law Commission's consultation on reform of the Landlord and Tenant Act 1954. Our separate article on Chapter 7 Part 1 considers the Law Commission's proposals regarding the assessment of rent under renewal tenancies.

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Orwell's legacy meets trade mark reality: Why Animal Farm and 1984 could not be protected by trade mark law

Mon, 3 Aug 2026 00:00:00 +0100

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Brand interchange | 3 min read

Orwell's legacy meets trade mark reality

Why Animal Farm and 1984 could not be protected by trade mark law

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Decision: ANIMAL FARM and 1984
Court: EUIPO Grand Board of Appeal
Citation: R1719/2019-G and R1922/2019-G
Decision: Here and here
Key issues: Descriptiveness, distinctiveness

Published: 3 August 2026
Authors: Eloise Di Pasqua

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Introduction

While Animal Farm and 1984 remain two of the most influential literary works ever written, a recent EUIPO Grand Board of Appeal decision demonstrates that fame alone does not guarantee trade mark protection. The ruling provides an important reminder that trade mark law protects indicators of commercial origin, not cultural significance.

Background

The Estate of the late Sonia Brownell Orwell sought to register the titles Animal Farm and 1984 as EU trade marks for a range of goods and services, including books, films, digital content, educational materials, games and entertainment services.

At first glance, the applications may have appeared straightforward. Both titles enjoy worldwide recognition and are intrinsically associated with George Orwell's works. However, the EUIPO examiner partially refused the applications on the basis that the marks were descriptive and lacked distinctive character for many of the goods and services applied for.

The matter ultimately reached the EUIPO Grand Board of Appeal, which was asked to address an important question: can the title of a famous literary work function as a trade mark, or will consumers simply view it as describing the content of the goods and services concerned?

Decision

The Grand Board upheld the refusal to register both marks for a significant number of content-related goods and services.

The Board's key findings included:

Animal Farm and 1984 are widely recognised by the relevant public as the titles of Orwell's novels
where the mark describes its subject matter of the goods and services then it may be liable for refusal under Article 7(1)(c) EUTMR
where goods or services convey creative, educational or entertainment content, literary titles may directly describe that content
copyright ownership, editorial control and licensing arrangements do not determine whether a sign functions as a trade mark; consumer perception remains the decisive test

Importantly, the Board emphasised that there is no blanket prohibition on registering book titles as trade marks. However, exceptionally famous titles may face difficulties where the public primarily associates them with the underlying work rather than with a commercial undertaking.

Commentary

This decision highlights the distinction between copyright and trade mark protection. The Grand Board found that consumers are likely to perceive Animal Farm and 1984 as the titles of famous literary works and as descriptions of their content, rather than as indicators of commercial origin.

The ruling also demonstrates that fame can sometimes hinder, rather than help, trade mark registration. While brand owners often seek widespread recognition, highly famous titles may become so embedded in popular culture that they are no longer perceived as trade marks.

For rights holders, the decision is a reminder that trade mark protection cannot be relied upon simply because a work enjoys significant cultural prominence. The key question remains whether the sign functions as a badge of origin for the relevant goods and services.

Key takeaways

fame alone will not secure trade mark registration and, in some cases, may make registration more difficult where consumers associate the sign with a well-known work rather than a commercial source
the decisive question is how consumers perceive the sign in relation to the relevant goods and services
titles of creative works may be refused registration where they are perceived as describing the content or subject matter of the goods or services
applicants should carefully assess specifications and consider whether the sign will be viewed as a badge of origin, particularly in the publishing, entertainment and educational sectors
evidence of acquired distinctiveness may be important where a title has become culturally ubiquitous.

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AI-generated workplace disputes: Burden or opportunity?

Mon, 27 Jul 2026 00:00:00 +0100

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AI-generated workplace disputes: Burden or opportunity?

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AI is changing how employment disputes are raised and pursued. We look at the practical steps employers can take to cut through the noise and deal with AI-generated disputes proportionately.

Published: 27 July 2026
Authors: Darlia Williams

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Employees can now use free online tools to generate detailed grievances, tribunal pleadings, correspondence and broad data subject access requests in minutes. While that can help employees articulate their concerns clearly, it can also add complexity to the issues and bring in arguments that may not be legally correct. As a result, it means employers are receiving lengthy, legalistic documents from employees whose expectations for resolution may be shaped by AI, rather than qualified legal advisers. Given AI’s propensity to agree with the prompter, an employee’s expectations can be inflated without having an actual legal basis, making resolution of the issue more difficult.

For employers, this creates both burden and opportunity: more material to manage and more time and cost involved in dealing with disputes, but also more scope to narrow the issues, test the evidence and focus on the facts.

Practical steps for employers

Speak to the employee, not the document

One of the weaknesses of AI produced content is that it is only as good as the prompt and information provided to it. Where an employee gives an incomplete or one-sided account, the AI output is likely to amplify their perspective and present it in a more persuasive and often lengthy form.

For employers, a meeting, whether in person or online, will often be the quickest way to understand what the employee is really saying. It allows the employer to ask the employee to explain their concerns in their own words, identify the facts they rely on and clarify what outcome they want. In practice, employers should ask: what happened, who was involved, when did it occur, what evidence is available and what outcome is the employee seeking? The discussion should be documented carefully and used to define the scope of any investigation.

Follow the process

The ACAS Code of Practice on disciplinary and grievance procedures remains the minimum standard employers should follow when handling workplace issues. In AI-assisted disputes, that discipline matters even more. It gives employers a structure for dealing with lengthy correspondence: follow internal policies, keep clear records, investigate reasonably and communicate outcomes proportionately.

Don’t match volume with volume

Employers should not assume that a document is stronger because it is longer, or more persuasive because it cites legislation or case law. AI generated content may look daunting at first glance, but it can also reveal weaknesses in the employee’s case: missing dates, vague allegations, unsupported assumptions or legal points that do not match the facts or which are, in fact, incorrect. Employers should avoid validating inaccurate AI generated content and do not necessarily need to respond line by line to every aspect. A better approach is to identify the core allegations, investigate them properly and explain the outcome clearly.

Employers should also resist being pulled into legal arguments with employees. An employer’s role is not to debate the law or provide legal commentary; it is to understand the factual complaint, reach a sensible conclusion and decide what, if any, action should be taken. Where a grievance cites case law or legal principles, the employer can say that it has considered the points raised but has focused its investigation on the underlying factual concerns.

Put clear guardrails around AI use

Employers should consider introducing or updating an AI policy. This should explain:

when employees may use AI tools
whether tools should be limited to company approved ones only rather than publicly available tools
what information must not be entered into public AI platforms in any circumstances
the need for employees to check accuracy before relying on AI generated content and
potential confidentiality, data protection and privilege risks.

A clear policy will not prevent every issue, but it should give employers a framework for managing AI use consistently and help identify where a breach of confidentiality or data protection has occurred for which disciplinary action against an employee may then be taken.

AI in the employment tribunal

AI is also making employment tribunal claims harder to manage and settle. Employees who rely on AI for an assessment of their claim may receive a confident, claimant-friendly output as well as suggested legal arguments, strategy and an overinflated estimation of the claim value. This can reinforce the claimant’s view of their case and entrench their position, particularly where the output has not been checked by a legal adviser.

For employers, this means receipt of more claims, more complexity, more ambitious applications and difficult settlement discussions. However, AI generated content often contains factual errors, incorrect case law, misconceived claims and disproportionately lengthy correspondence. This is where employers may have an opportunity. The Employment Tribunal may strike out misconceived claims and, whilst cost awards remain relatively rare, may award costs where an employee pursues meritless claims or otherwise acts vexatiously or unreasonably during proceedings by generating excessive correspondence.

AI use may also create targeted disclosure opportunities. Where employees use AI to generate content related to their dispute, the AI prompts used and their output may not be legally privileged and therefore may be disclosable in Employment Tribunal litigation. Employer requests for disclosure about AI use should however be targeted, proportionate and linked to the issues in dispute. They should not be used as a fishing expedition or as a substitute for engaging with the merits of the claim. The same point cuts both ways: if an employer has used AI in preparing correspondence, pleadings or evidence, it should be ready to explain and justify that use if challenged and ensure that all aspects are checked and accurate.

Key takeaway

AI is not going away. Employers should expect more lengthy grievances, more legalistic correspondence and more AI assisted tribunal claims. The answer is not to match volume with volume, or to treat every AI generated point as equally important. Instead, employers should keep the process disciplined: speak to employees directly, focus on the facts, comply with the ACAS Code and their internal policies, keep clear records and respond in a way that is proportionate, accurate and commercially sensible.

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easyGroup v Easyfeetstore: How far does a “family of marks” really extend?

Fri, 17 Jul 2026 00:00:00 +0100

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easyGroup v Easyfeetstore

How far does a “family of marks” really extend?

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Decision: easyGroup v Easyfeetstore [2026] EWHC 767 (IPEC)
Court: Intellectual Property Enterprise Court (IPEC)
Judge: HHJ Hacon
Decision: Here
Key issues: Family of marks

Published: 17 July 2026
Authors: Ellen Hughes-Jones

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Introduction

The Intellectual Property Enterprise Court has handed down an important decision on the limits of the “family of marks” doctrine in easyGroup v Easyfeetstore. The judgment will be of particular interest to brand owners that manage portfolios of marks sharing a common prefix or naming convention, and to businesses facing claims based on alleged brand ‘families’.

At the heart of the dispute was a question that has surfaced repeatedly in easyGroup litigation over the years: does the widespread use of the EASY prefix across a portfolio of brands mean that consumers will assume any EASY+suffix sign originates or is associated with easyGroup?

HHJ Hacon’s answer was clear: not without evidence.

Background

easyGroup, the owner and licensor of the well-known EASY brand portfolio, brought proceedings against Easyfeetstore, its director and an associated US company. The defendants sold orthopaedic and orthotic insoles online using the signs EASYFEET and EASYFEETSTORE.

easyGroup relied on a number of registered trade marks, including marks such as EASYJET, EASYGROUP, EASYFOOD, EASYFOODSTORE and EASYTRAVELSEAT. It alleged infringement under sections 10(2) and 10(3) of the Trade Marks Act 1994, passing off, and sought invalidation of the defendants’ UK EASYFEET registration.

Although a number of issues arose, the case was ultimately driven by easyGroup’s contention that it had established a recognised ‘family of marks’ built around the word EASY.

The key issue: did easyGroup have a protectable family of marks?

The concept of a family of marks is well established in trade mark law. In principle, where consumers recognise a series of marks sharing a common characteristic as originating from the same undertaking, the use of a new mark displaying that characteristic may give rise to indirect confusion.

easyGroup argued that consumers had come to recognise EASY marks as denoting businesses connected with easyGroup. According to that argument, a consumer encountering EASYFEET would assume it was another member of the easyGroup stable of brands.

The difficulty for easyGroup was that the only feature common to all of the marks relied upon was the word EASY. That placed substantial weight on the proposition that the word EASY alone had become a source identifier for easyGroup across a broad spectrum of goods and services.

Why the argument failed

HHJ Hacon concluded that the evidence fell well short of establishing the existence of the claimed family.

A particularly striking aspect of the judgment is the court’s observation that easyGroup has brought numerous similar actions over the years (approx. 76 since 2015), yet had not produced evidence demonstrating that the public recognises EASY+suffix marks as identifying businesses associated with easyGroup.

The judge also relied on earlier authorities, including easyGroup v Beauty Perfectionists [2024] EWHC 1441 (Ch), where similar arguments had been rejected.

The court characterised easyGroup’s position as effectively requiring consumers to assume that any mark consisting of EASY coupled with a descriptive suffix belonged to easyGroup. HHJ Hacon regarded that as an extreme proposition which had not been established on the evidence before him.

This finding proved decisive throughout the remainder of the infringement analysis.

No likelihood of confusion

Once the family of marks argument fell away, easyGroup faced a more conventional comparison between its marks and the defendants’ signs.

The court held that the only common element was the word EASY, which the judge regarded as descriptive and lacking inherent distinctiveness. The suffixes (such as JET, FOOD, TRAVELSEAT, FEET and FEETSTORE) were quite different.

In those circumstances, the court found no relevant visual, aural or conceptual similarity capable of generating either direct or indirect confusion. Importantly, there was also no evidence of actual confusion notwithstanding the parties’ concurrent trading.

The section 10(2) claim therefore failed.

No link, unfair advantage, detriment to distinctive character or detriment to reputation

easyGroup also advanced claims under section 10(3) of the Trade Marks Act.

The court accepted that EASYJET enjoyed a substantial reputation and that EASYFOOD had acquired a reputation within its own field. However, even where reputation existed, easyGroup still had to show that consumers would form the requisite ‘link’ between the defendants’ signs and the relevant trade mark.

The court found that no such link had been established. Nor was there evidence of unfair advantage, detriment to distinctive character or detriment to reputation.

As a result, the section 10(3) claims also failed.

Passing off and invalidity

The remaining claims met a similar fate.

The passing off claim failed because the underlying allegation of consumer confusion was not made out. Likewise, the challenge to the defendants’ EASYFEET registration stood or fell with the infringement case and was dismissed.

Commentary

This decision provides one of the clearest recent judicial statements on the evidential burden involved in establishing a family of marks.

The judgment does not undermine the doctrine itself. Rather, it demonstrates that a claimant must prove that consumers genuinely recognise the common element of the alleged family as an indicator of trade origin. Mere ownership of multiple registrations using the same descriptive component will not suffice.

The case is also a useful reminder that descriptive or laudatory terms remain inherently weak foundations on which to build broad exclusivity claims. The larger and more commercially successful a brand portfolio becomes, the more tempting it may be to argue that a naming convention has acquired independent significance. However, courts will still expect robust evidence that consumers perceive it in that way.

For brand owners, the practical lesson is straightforward: if a family of marks argument is going to form a central part of an enforcement strategy, evidence of consumer recognition should be gathered before litigation begins. For defendants, the judgment provides useful support where the alleged similarity rests primarily on a common descriptive element.

In short, easyGroup v Easyfeetstore confirms that a family of marks can be a powerful doctrine, but only where the family is recognised by consumers rather than assumed by its owner.

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No free ride for privilege: White v Uber, litigation privilege and funding communications

Wed, 15 Jul 2026 00:00:00 +0100

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No free ride for privilege

White v Uber, litigation privilege & funding communications

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The High Court has held that litigation privilege does not extend to documents created for the purposes of assessing the the commercial viability of funding litigation.

Published: 15 July 2026
Authors: Emma Carr

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The High Court’s decision in Uber London Ltd & Ors v White & Ors (Re Disclosure) [2026] EWHC 1610 (Comm) serves as a useful reminder for prospective parties to litigation, their legal teams and potential funders that privilege cannot safely be assumed simply because a document discusses the merits of a claim or was created against the backdrop of contemplated proceedings.

The judgment does not itself establish any new law. Rather, it reinforces a principle that has become increasingly clear since the Court of Appeal’s decision in WH Holding Ltd & Anor v E20 Stadium LLP [2018] EWCA Civ 2652, a case with which the author was involved, namely that litigation privilege protects communications created for the dominant purpose of conducting litigation, not every commercial decision made because litigation is contemplated.

Background

The judgment arose out of a disclosure application in claims for unlawful means conspiracy brought against three entities in the Uber group. The Claimants include around 13,000 black cab drivers and the assignee of claims formerly held by two private hire businesses. The claims are proceeding to a preliminary issue trial on limitation, specifically whether the Claimants discovered, or could with reasonable diligence have discovered, Uber’s alleged wrongdoing only after late June 2018.

Against that background, Uber sought disclosure of pre-October 2018 communications between Mishcon de Reya (the Claimants’ solicitors), Harbour¹ (the litigation funder) and the Licensed Taxi Drivers’ Association (of which some individual Claimants are members). Uber contended that those documents could be relevant to what was known by, or reasonably discoverable to, the Claimants before the key limitation dates. The Claimants resisted disclosure on the basis of relevance, privilege, control and proportionality.

Why litigation privilege mattered

Litigation privilege is one of the most important protections available to parties preparing for disputes. It enables parties to investigate claims, obtain evidence and seek advice without fear that those communications will later have to be disclosed.

The difficult question is not usually the existence of the principle, but where its boundaries lie.

White v Uber asks a similar question in the funding context.

The funding context

Before proceedings were issued, Harbour had engaged Mishcon de Reya to investigate potential claims against Uber. At that stage, Mishcon de Reya had not yet been retained by the individual Claimant drivers. The documents in issue were generated while Mishcon de Reya was retained by Harbour and before it later acted for the Claimants.

The Court accepted that some material was relevant, particularly documents that might shed light on what individual drivers knew or understood about possible claims against Uber before June 2018. It also accepted that material showing what Mishcon de Reya and Harbour had discovered might, in principle, be relevant to what the Claimants could with reasonable diligence have discovered, although that category was more indirect.

The privilege decision

Mr Justice Birt held that the relevant Harbour communications did not attract litigation privilege on the evidence before the Court. Their dominant purpose was to enable Harbour to decide whether to fund the litigation. That was a commercial funding decision, not the conduct of litigation itself.

The judgment is not authority for the proposition that communications with funders can never be privileged. Nor does it remove the protection of legal advice privilege where a funder is receiving legal advice and the relevant test is satisfied – as the Court acknowledged would likely be the case here. Its significance is narrower, but important: litigation privilege will not arise merely because the documents concern contemplated litigation, analyse merits or quantum, or are created in the course of a proposed funding exercise. Instead the key question the court will ask is why the documents were created.

That focus on purpose is consistent with the approach in WH Holding. The fact that a communication may be commercially important to litigation, or may affect whether litigation can practically be pursued, does not necessarily mean that it was created for the dominant purpose of conducting the litigation.

Control and informed consent

The judgment also contains an important control point. Where a law firm first acts for a funder in assessing a potential claim and later acts for the claimants, relevant material from the earlier engagement with the funder may be within the claimants’ control for disclosure purposes. That will be difficult to avoid unless (i) the claimants have given properly informed consent to the firm withholding that information² and (ii) that information is in fact withheld.

Practical takeaways for in-house teams (acting as claimant or defendant) and funders

where material is created primarily to enable a prospective funder to decide whether to invest, litigation privilege should not be assumed simply because legal analysis and the contemplation of litigation appears within it. Funding workstreams should be structured with privilege in mind from the outset.
second, there is a practical tension. Funders will need enough information to assess merits, quantum and risk, but claimants and their advisers should consider carefully whether material prepared or shared for that purpose is privileged, and on what basis.
funders and funded parties should distinguish between documents created for a funding decision and documents created, if applicable, for the conduct of litigation. The former may not attract litigation privilege, even where the proposed claim is analysed in detail. The latter may still be protected if the dominant purpose test is satisfied and/or if legal advice privilege applies.
defendants facing a funded action should scrutinise claims of litigation privilege where funding-related communications are withheld on a blanket basis. Privilege claims need to be properly made and explained. It is not enough simply to describe a class of documents as “privileged” without identifying the type of privilege claimed and the basis for it.
in-house legal teams should focus on purpose from the outset. The label attached to a document, or even the presence of detailed legal analysis, is unlikely to be determinative if the communication was created to facilitate a commercial decision rather than the conduct of litigation. As ever, careful consideration should be given to who within the organisation can properly be regarded as the “client” for privilege purposes.

Read alongside WH Holding, White v Uber illustrates a consistent judicial approach rather than a change of direction. The Courts are maintaining a distinction between communications created for the conduct of litigation and communications created to support commercial decisions associated with litigation, such as commercial decisions surrounding settlement and funding.

That distinction is likely to become increasingly important as third party funding and ATE insurance continue to play a greater role in commercial disputes.

¹ There are various Harbour entities and for reasons explained at para 80 of the judgment none were party to the application however it appears the relevant entity was Harbour Fund IV LP.
² For the purposes of paragraph 6.4(b) of the SRA’s Code of Conduct

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Supreme Court confirms narrow scope of issue estoppel

Fri, 10 Jul 2026 00:00:00 +0100

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article | 4 min read

Supreme Court confirms narrow scope of issue estoppel

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The Supreme Court has unanimously confirmed that issue estoppel remains a doctrine of narrow application and should not be expanded beyond its established limited scope.

Published: 10 July 2026
Authors: Emma Carr

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In its recent judgment in Skatteforvaltningen (The Danish Customs and Tax Administration) v MCML Ltd (previously known as ED&F Man Capital Markets Ltd) the Supreme Court held that SKAT’s present claim should not be struck out on the basis of issue estoppel, despite earlier proceedings between the parties concerning many of the same tax vouchers.

The judgment provides helpful clarification of when issue estoppel will arise and reinforces the distinctions between issue estoppel, abuse of process and precedent.

Background summary

The 2018 claim

In 2018, SKAT commenced proceedings in the Commercial Court against EDFM (and others) in respect of 420 tax vouchers issued by EDFM (a financial brokerage business) to its clients, which those clients had then used in support of applications to SKAT for refunds of withholding tax. The claim against EDFM was pleaded in negligent misrepresentation and EDFM was designated as a “Non-Fraud Defendant” in contrast to other “Alleged Fraud Defendants”.

The Commercial Court held that SKAT’s claims were inadmissible under the ‘Revenue Rule’ (a common law rule which says that English courts have no jurisdiction to entertain an action for the direct or indirect enforcement of a penal, revenue, or other public law of a foreign state). SKAT successfully appealed this decision as against the other Defendants, but chose not to pursue that ground as against EDFM, with the result that the Commercial Court’s finding that the Revenue Rule barred SKAT’s claim against EDFM was final in the 2018 proceedings.

The 2022 claim

In 2022, SKAT issued the present second set of proceedings against EDFM in respect of some of the same tax vouchers and five additional ones. This time SKAT alleged certain statements in the tax vouchers were fraudulent, as opposed to negligent, misrepresentations. EDFM applied for strike out and argued that the earlier proceedings gave rise to an issue estoppel and an abuse of process preventing the second claim from proceeding.

At first instance the Commercial Court dismissed that argument as the claims involved different causes of action and different factual allegations, and an examination of the circumstances in which SKAT raised the allegation of fraud revealed no Henderson¹ abuse.

EDFM appealed and the Court of Appeal partially upheld the appeal. It agreed with the Commercial Court that the 2022 claim was not an abuse of process, but found that the 2022 claim was barred by an issue estoppel (albeit with some differences in reasoning) and should therefore be struck out.

SKAT appealed to the Supreme Court.

Supreme Court judgment

The Supreme Court unanimously allowed SKAT’s appeal, such that the 2022 claim should not be struck out. Giving the leading judgment, Lord Sales and Lord Doherty held that the Court of Appeal had adopted an overly broad approach to identifying the issue said to have been determined in the earlier proceedings.

The Court reaffirmed that issue estoppel is a doctrine of substantive law which operates only in limited circumstances, and highlighted a number of well-established legal principles:

the issue said to give rise to the estoppel must have been necessary and fundamental to the earlier decision.
whether the issue arose in the parties’ pleading is an important consideration when assessing whether its determination was necessary and fundamental to the earlier decision.
only an issue which formed the immediate foundation of the earlier judgment can give rise to an issue estoppel. Wider reasoning of observations made in reaching that decision cannot.
issue estoppel should remain narrowly confined – the Court emphasised that issue estoppel operates inflexibly and involves a serious interference with the ordinary entitlement of litigants to present their claims and to defend themselves. For that reason, the doctrine has consistently been applied narrowly. Expanding the doctrine beyond its established limited would risk preventing parties from litigating issues that had never truly been determined between them.
issue estoppel is distinct from abuse of process – the Court rejected any suggestion that issue estoppel should be expanded to achieve similar outcomes to abuse of process. Unlike issue estoppel, abuse of process provides a flexible framework for regulation of a situation similar to that in the present case, balancing the interests of the parties and seeking to achieve overall justice between them. Giving issue estoppel an expansive interpretation would cut across and significantly displace the rules on abuse of process.
similarly, the judgment also draws a clear distinction between issue estoppel and the doctrine of precedent. Issue estoppel is concerned with identifying the factual and legal issues that were necessary to the earlier judgment. By contrast precedent concerns identifying legal principles established by a previous decision for application in future cases. Conflating the two doctrines would risk extending issue estoppel beyond its proper limits.

With all this in mind, the Supreme Court concluded that the issues determined in the earlier 2018 proceedings were not the same as those raised in the 2022 claim. Although the 2022 proceedings concerned many of the same tax vouchers, the claims rested on different factual allegations and different causes of action. The earlier 2018 decision did not therefore create an issue estoppel.

Why does this matter?

The decision does not change the law of issue estoppel. Rather it emphasises its narrow scope, helpfully distils the key principles from the authorities, and clarifies the delineation between the three doctrines which may or may not come into play in a similar situation.

For businesses involved in complex commercial disputes, claims frequently evolve as new evidence emerges or different causes of action become available. The judgment confirms that a subsequent claim will not necessarily be barred simply because it arises from the same underlying events. The critical question is whether the specific issue said to found the estoppel was actually determined, was necessary and fundamental to the earlier judgment, and formed the immediate foundation of it.

The judgment also provides useful guidance on the relationship between issues estoppel, abuse of processes and precedent. Parties considering whether earlier proceedings preclude subsequent claims should analyse each doctrine separately rather than assuming the existence of one will determine the application of another.

Key takeaway

This is a relatively concise judgment but one with practical significance for commercial litigants. While it does not change the underlying law, it provides authoritative guidance on identifying issues capable of giving rise to an issue estoppel and confirms that the doctrine remains a narrow one, to be applied within carefully defined limits

Businesses involved in complex litigation should carefully assess whether an earlier judgment truly determined the issue said to found an estoppel before concluding that subsequent proceedings are barred.

¹ Henderson v Henderson (1843) 3 Hare 100)

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Are you sure? HMRC’s consultation on the uncertain tax treatment regime

Fri, 10 Jul 2026 00:00:00 +0100

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article | 4 min read

Are you sure? HMRC’s consultation on uncertain tax treatment regime

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When HMRC introduced the Uncertain Tax Treatment (UTT) regime in 2022, they did so only after abandoning some of their most controversial ideas. Four years later, those ideas are back.

Published: 10 July 2026
Authors: Kate Garcia

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HMRC’s latest consultation, which closed on 4 June 2026, proposes a significant expansion of the regime beyond large businesses: bringing individuals, trusts and additional taxes within scope, tightening the existing exemption and, most importantly, introducing a notification trigger based on competing legal interpretations.

The proposal has attracted significant criticism because it effectively returns to territory that HMRC retreated from during the original UTT consultations.

This article explains the current regime, what HMRC now want to change and why the proposals have attracted such a strong response from professional bodies and advisers.

The Current UTT regime

The current UTT regime applies to large companies and partnerships with UK turnover exceeding £200 million or a UK balance sheet total exceeding £2 billion. Notification is required where the tax advantage exceeds £5 million and the taxpayer either:

adopts a position that is contrary to HMRC’s known position, as apparent from materials published in the public domain or dealings with HMRC; or
makes a provision in its accounts for potential challenge.

It currently applies to corporation tax, income tax (including PAYE) and VAT, and businesses are exempted from making a notification to HMRC where it is reasonable for them to believe that HMRC are already aware of the uncertainty.

The notification is tied to the relevant tax return, and penalties start at £5,000 for a first failure to notify, rising to £25,000 and then £50,000 for repeat failures.

Why HMRC want change

HMRC point to a “legal interpretation” tax gap of £5.4 billion and the relatively small number of notifications made under the existing regime (30 as at 1 January 2026). HMRC appear to believe that significant uncertainties remain outside the current framework and that broader notification requirements are needed.

What HMRC are proposing

The consultation sets out six main proposed changes:

adding extra taxes: HMRC propose to include Stamp Duty Land Tax, National Insurance contributions, the Construction Industry Scheme, Capital Gains Tax and Inheritance Tax within the UTT regime.
extending the regime to apply to individuals and trusts: All individuals and trusts would be included within scope where the tax advantage exceeds a £5 million threshold, with no wealth, income or turnover test applying.
introducing a third notification trigger: Notification would be required where there is more than one credible legal interpretation and HMRC’s view is not known.
a single annual notification date: notification would no longer be tied solely to the filing of the relevant tax return.
a narrower HMRC knowledge exemption: For the exemption to apply, the taxpayer would need to hold confirmation from HMRC that the uncertainty has been brought to their attention, rather than having a belief that HMRC are reasonably aware of the uncertainty.

The proposed third trigger is the most controversial element of the consultation. HMRC want taxpayers to notify where HMRC’s view is not known and there is more than one credible interpretation of the law. The aim is to capture novel or difficult points that may currently fall outside the regime.

Why the trigger is controversial

The difficulty is that the proposal revives many of the concerns that led HMRC to abandon a similar trigger when the UTT regime was first introduced. The core problem is uncertainty about the word “credible”. It is not clear whether this means reasonably arguable, more likely than not, or something else entirely. The consultation provides no clear answer.

This matters because tax advice often involves weighing a range of possible interpretations, particularly where the amounts at stake are significant. If the threshold for “credible” is set too low, taxpayers may feel required to consider and disclose alternative interpretations even where they ultimately adopt a well-supported position.

The test also depends on whether HMRC’s view is ‘known’ or ‘not known’, which is often difficult to determine in practice. This is particularly the case where guidance is incomplete, out of date, unpublished (either because it relates to new policy or has simply never been published) or inconsistent with HMRC’s known operational approach. It is also not unheard of for HMRC to adopt a position that is different from a previously generally understood position.

Practical difficulties

The proposals may be particularly difficult for individuals and trusts. Unlike large businesses, individuals and trusts generally do not have formal tax governance procedures, Customer Compliance Managers or dedicated tax teams. Similar obligations would therefore be imposed on taxpayers who have fewer routes to obtain certainty from HMRC.

It could be argued that some taxes are poor candidates for inclusion. For example, CIS uncertainties are often factual rather than questions of legal interpretation and inheritance tax planning may take place many years before any charge arises. By the time an IHT return is submitted, will executors be able to identify whether the original advice involved more than one credible interpretation of the law?

Next steps

The consultation is presented as a transparency measure designed to reduce the tax gap. However, many stakeholders argue that the proposals place greater responsibility on taxpayers without imposing any corresponding obligation on HMRC to reduce uncertainty through clearer legislation, better guidance or more accessible clearances.

There is a clear irony. The UTT regime was originally narrowed because subjective tests were viewed as unworkable. Four years later, HMRC are proposing to reintroduce a different version of the same idea. Whether this represents sensible evolution or a genuine trip back to the future remains to be seen.

In light of this, large businesses may wish to stress-test how a “credible interpretation” trigger might apply to any current matters, and wealthy individuals, trustees and their advisers should consider the need to start keeping a clearer paper trail of how significant tax positions are reached.

If you would like to discuss what the proposals could mean for you or your business, please contact a member of the Shoosmiths tax team.

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The rising cost & risk of employment: Why LLPs are not a simple answer for executive engagement

Tue, 7 Jul 2026 00:00:00 +0100

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The rising cost & risk of employment

Why LLPs are not a simple answer for executive engagement

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Rising employment costs and widening employment law risk may make LLP structuring look attractive. But the Supreme Court’s recent decisions in the cases of BlueCrest and HFFX underline that LLP status is not a simple workaround: the structure, economics and governance must support genuine partner treatment.

Published: 7 July 2026
Authors: Laura Gould

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Being an employer is becoming more expensive - and riskier. From April 2025, employer NICs increased from 13.8% to 15%, and the secondary threshold fell from £9,100 to £5,000, increasing the payroll cost of employing staff. At the same time, employment law reform is significantly increasing the potential cost and legal risk of terminating senior employees (in particular): from 1 January 2027, ordinary unfair dismissal protection is due to apply after six months’ service, rather than two years, and the statutory cap on unfair dismissal compensatory awards will be removed, potentially bringing high-value equity incentives and pension entitlements into the value of unfair dismissal claims.

Against that background, some businesses may ask whether senior individuals could be engaged as members of an LLP rather than as employees. LLP members are generally taxed as self-employed partners, not employees. The LLP does not pay employer NICs on profit allocations to genuine self-employed members, and those members do not automatically benefit from ordinary unfair dismissal protection.

But recent case law highlights that LLP status is not a simple solution to minimise costs and risk. The recent Supreme Court decisions in BlueCrest Capital Management (UK) LLP v HMRC [2026] (“BlueCrest”) and HMRC v HFFX LLP; Atkins & Ors v HMRC [2026] UKSC 17 (“HFFX”) are timely reminders that LLP profit-sharing and member remuneration arrangements are under close scrutiny. LLP “member” status is not simply a label that can be applied to mitigate the costs and obligations of employment. The legal and commercial substance matters.

BlueCrest: significant influence must be legally grounded

BlueCrest is a UK LLP providing investment management and support services. The focus of the long-running case concerned whether certain senior members should be treated as employees under the salaried members rules.

The Supreme Court dismissed BlueCrest’s appeal and, broadly, upheld the Court of Appeal’s approach, confirming a narrow interpretation of the “significant influence” condition (one of the three conditions that must be met for the member to be treated as an employee for tax purposes). The case will return to the First-tier Tribunal for the rules to be reapplied in light of the Supreme Court’s guidance.

The Court confirmed that “significant influence” must derive from the individual’s legally enforceable rights and duties as a member of the LLP and contained in the LLP agreement (or statutory framework). The requisite qualifying influence is likely to be managerial or strategic influence in relation to the affairs of the LLP itself. Crucially, the court held that managing a core part of the business does not constitute influence over the “affairs of the LLP taken as a whole”.

For firms that rely on members having “significant influence” in order to achieve or maintain self-employed tax status, BlueCrest requires a governance review. It is no longer enough to point to an individual’s commercial importance or day-to-day autonomy. The question is what enforceable rights they actually hold, whether those rights give influence over the LLP as a whole, and whether that influence has practical and commercial substance.

HFFX: another warning on LLP profit allocation

The Supreme Court’s decision in HFFX adds a further cautionary note. HFFX concerned structured profit-sharing arrangements within an LLP, under which amounts that would otherwise have been allocated to individual members were instead allocated to a corporate member, with awards later made to individuals through a “special capital” mechanism. The Supreme Court rejected HMRC’s profit allocation argument but held that the receipts were, nevertheless, taxable as miscellaneous income.

The Court’s approach, in HFFX and BlueCrest, reflects an increasing tendency by HMRC and the courts to scrutinise amounts received by self-employed LLP members or partners where those amounts arise outside straightforward allocations of trading profits.

Why this matters now

These decisions land at a time when the economics of employment are changing. Higher employer NICs, a lower NIC threshold and forthcoming employment law reforms are increasing the cost and legal risk of employing senior personnel.

These changes may encourage some businesses to ask whether they can and should be moving senior executives or investment professionals into an LLP structure. But these cases demonstrate that simply making someone an LLP member is not enough.

Businesses operating through or considering LLP arrangements for senior executives should treat BlueCrest and HFFX as governance and documentation warnings and use them as an opportunity to review their LLP arrangements.

If you would like to discuss this further, please contact Laura Gould at Laura.Gould@shoosmiths.com or Adam Lambert at Adam.Lambert@shoosmiths.com or your usual Shoosmiths contact.

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Covid-19 business interruption: Supreme Court ruling on furlough issue

Thu, 2 Jul 2026 00:00:00 +0100

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Covid-19 business interruption: Supreme Court ruling on furlough issue

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The Supreme Court has confirmed that furlough payments received by holders of business interruption insurance policies reduce the losses otherwise claimable under those policies.

Published: 2 July 2026
Authors: Susie Wakefield

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Just over 6 years on from the UK’s first Covid-19 lockdown, the Supreme Court has recently handed down judgment in Bath Racecourse Company Ltd and others v Liberty Mutual Insurance Europe SE and others^[1]on the question of whether furlough payments made to businesses under the Coronavirus Jobs Retention Scheme (the Scheme) fall to be deducted from the amounts otherwise payable to them by their business interruption (BI) insurers.

Upholding the High Court and Court of Appeal decisions on the issue, the Supreme Court held that the payments did reduce the losses claimable under the policies, marking the end of the road for this particular line of argument in the wider BI litigation spawned by the pandemic.

In this article we briefly consider the Supreme Court’s judgment and where matters now stand in relation to post-Covid BI litigation generally.

The Supreme Court’s decision on furlough payments

Each of the relevant BI policies contained a ‘savings’ clause in either of the following terms:

the amount payable shall be “less any sum saved during the Indemnity Period in respect of such of the charges of the Business payable out of Gross Revenue as may cease or be reduced in consequence of the incident”
“if any of the charges or expenses of The Business payable cease or reduce in consequence of the Damage such savings during the Indemnity Period shall be deducted from the amount payable”.

The courts below held (following a separate High Court decision in 2022 in Stonegate^[2]) that the furlough payments paid to the policyholders under the Scheme “reduced” the charges or expenses of the business and did so “in consequence” of the “incident” or “damage” (which in turn refer to the occurrence of the “insured peril”). Accordingly the amounts received in furlough payments should be deducted from the amounts the policyholders could otherwise claim under their BI insurance policies.

The policyholders appealed to the Supreme Court on the basis that:

there was no “reduction” of charges or expenses, as the wages and other employment costs had to be paid out by the policyholder before being reimbursed under the Scheme (the Construction Issue)
as a matter of law, the furlough payments were not caused by the insured peril and were therefore not “in consequence” of it (the Causation Issue).
the Supreme Court unanimously dismissed the policyholders’ appeal.
in relation to the Construction Issue, the Supreme Court found that:
the insurers’ construction of the savings clauses (whether the payments reduced the businesses’ charges and expenses as a matter of fact) was to be preferred over the policyholders’ construction (whether the liability for a charge or expense was reduced as a matter of law).
the insurers’ construction better reflected reality of the Scheme and the purpose of the policies and savings clauses (their being concerned with overall economic outcomes/effects rather than the legal mechanics). It was also more commercial, and not dependent on artificial distinctions around the timing of payments.

In relation to the Causation Issue:

there was a straightforward causal connection between the BI losses and the savings from the furlough payments. Given the existence of the Scheme, it was a predictable and direct consequence of the insured peril that the policyholders ‘furloughed’ employees while claiming (at least most of) the costs of doing so. The Supreme Court noted that “[had] it not been for the skill of the appellants' counsel in arguing otherwise, we would have thought this conclusion indisputable”.
the Court rejected the policyholders’ argument that the insured peril was “irrelevant” to their receipt of furlough payments and the savings made as inconsistent with the approach to establishing causation for the BI losses themselves as set down in the FCA test case^[3]and the policyholders’ own position in that respect.
the Court also rejected the argument that the payments were “collateral” to the insured peril, rather than caused by it, on the basis they were voluntary, gratuitous or benevolent. The Scheme involved legally enforceable rights and obligations, and was implemented to benefit both the UK Government and the public in the circumstances at the time.

The end of an era?

It is coincidentally poignant that the Bath Racecourse proceedings reached their conclusion just over 6 years after Covid-19 was declared a notifiable disease in the UK and the nation subsequently went into lockdown – a point in time at which any BI claims which were yet to be issued (or preserved through a standstill agreement) likely became time-barred. While the outcome was perhaps relatively predictable, the Supreme Court’s decision puts to bed a long-fought issue and parties with similar disputes on hold can now finally resolve them accordingly. Recent data from Solomonic suggested that more than 54% of Covid-related BI claims were still in active dispute as at 11 March 2026^[4] and it will be interesting to see how that percentage shifts in light of the Bath Racecourse judgment. It is not impossible that further case law in the BI space may yet be generated by the cases which remain live (whether issued or in standstill), although this now seems increasingly unlikely. There has certainly been no shortage of other global events since Covid to present yet more stark challenges to insurers, policyholders and brokers alike.

[1] Gatwick Investment Limited & Ors v Liberty Mutual Insurance Europe SE [2026] UKSC 14 (22 April 2026)
[2] Stonegate Pub Company Ltd v Ms Amlin Corporate Member Ltd & Ors [2022] EWHC 2548 (Comm) (17 October 2022)
[3] The Financial Conduct Authority & Ors v Arch Insurance (UK) Ltd & Ors [2021] UKSC 1 (15 January 2021)
[4] Covid-19 Business Interruption Claims: Six Years of Litigation Trends — Solomonic

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Preventing financial crime in the insurance sector – FCA recommendations

Tue, 30 Jun 2026 00:00:00 +0100

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Preventing financial crime in the insurance sector

FCA recommendations

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Financial crime remains one of the Financial Conduct Authority’s cross-sector priorities. Insurance firms should take note of the regulator’s findings from its recent review of financial crime frameworks in the sector.

Published: 30 June 2026
Authors: Daren Allen & Claire Kershaw

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Key facts

The FCA undertook a multi-firm review of financial crime systems and controls in the insurance sector and has recently published its findings here.

Several large insurance firms were reviewed across the retail, wholesale and life insurance markets. These firms were asked to provide the FCA with documents in response to 38 questions across ten key groups of financial crime controls.

The FCA evaluated the design of firms’ controls against the Money Laundering Regulations 2017, the FCA’s Financial Crime Guide, the SYSC rules, and guidance issued by the Joint Money Laundering Steering Group and the Financial Action Task Force.

Overall, the FCA found life insurance firms generally had stronger controls than retail and wholesale firms, with six cross-sector themes emerging (see our key takeaways).

The FCA highlighted the following ‘headline’ areas for improvement:

retail – risk assessment and policies and procedures
wholesale – fraud risk management
life – transaction monitoring.

Firms should note the full findings and take appropriate action

Key takeaways

AML transaction monitoring – firms should ensure they consider the risks and benefits of their approach to this and clearly document their rationale. Any reduction or simplification in controls should be risk-based, proportionate and clearly evidenced.

Controls monitoring and testing – this must be clearly co-ordinated to avoid gaps in coverage (or duplication). Firms without internal assurance expertise should be able to evidence how they have considered financial crime risks and assessed need for specialist or outsourced reviews.

Policies and procedures – firms should consider supplementing group-level frameworks with more specific policies and procedures tailored to individual business units and jurisdictions. How these interact and are implemented in practice should be clearly documented.

Roles and responsibilities – firms should also consider using a RACI (Responsible, Accountable, Consulted, Informed) matrix to define roles and responsibilities clearly across their financial crime framework.

Obligations management – to support clear accountability and oversight firms should consider an obligations register or similar method of articulating its legal and regulatory obligations, and mapping them to specific controls, processes and responsible roles.

Third-party outsourcing – where firms outsource financial crime activities, they should categorise third-party relationships by risk and apply proportionate oversight, documenting oversight activities and decisions clearly.

For more information or advice, please contact our Financial Services Disputes and Investigations team.

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Shorts International v Google: A short lesson in distinctiveness

Tue, 30 Jun 2026 00:00:00 +0100

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Shorts International v Google

A short lesson in distinctiveness

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Decision: Shorts International v Google [2026] EWCA Civ 668
Court: Court of Appeal (Civil Division)
Judges: Chancellor of the High Court, Stephen Phillips LJ; Falk LJ
Decision: Here
Key issues: Trade Marks; Distinctiveness

Published: 30 June 2026
Authors: Irem Alici

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Background

The Court of Appeal’s decision in Shorts International Ltd v Google LLC highlights the limits of trade mark protection for descriptive terms, particularly in the context of digital media services.

Shorts International Ltd (“SIL”) operates the “ShortsTV” channel and produces and distributes short-form audiovisual content. It owns a portfolio of UK trade mark registrations incorporating the word “SHORTS”, including both figurative marks and a word mark, covering audiovisual content, broadcasting and related services.

2021 was the year Google launched its “YouTube Shorts” feature in the UK, offering user-generated, short-form video content designed primarily for mobile viewing. Google used the term “shorts” in a number of ways in connection with this service, including as part of the name “YouTube Shorts” and in various on-platform displays.

SIL alleged that Google’s use of “shorts” infringed its registered trade marks and amounted to passing off. Google denied the claims, arguing in particular that “shorts” is descriptive of short-form video content, and counterclaimed that SIL’s marks were invalid for lack of distinctive character.

At first instance, the High Court rejected SIL’s claims. While certain stylised marks were held to be valid, the word mark “ShortsTV” was largely found invalid. The court also held that Google’s use of “shorts” was primarily descriptive and did not give rise to a likelihood of confusion. SIL appealed those findings.

Issues

The appeal raised a number of interrelated issues concerning both infringement and validity, centred primarily on how the word “shorts” would be understood by the average consumer.

SIL argued that “shorts” would be taken to refer to traditional short films, whereas Google contended that it had a broader, descriptive meaning encompassing short-form video content more generally. This distinction was critical, as it informed whether Google’s use of the term was descriptive and, in turn, whether there was any likelihood of confusion.

The Court also considered whether Google’s use of “shorts” functioned as trade mark use in all contexts, or whether, in some instances, it was merely descriptive. In parallel, the Court had to assess the distinctiveness of SIL’s marks, both inherent and acquired, and the extent to which any distinctiveness affected the scope of protection.

Finally, SIL sought to rely on the enhanced protection available under section 10(3) of the Trade Marks Act 1994, which required it to establish that its marks enjoyed a sufficient reputation in the UK.

Decision

The Court of Appeal dismissed the appeal in full.

A central finding was that the term “shorts” is not limited to traditional short films, but extends more broadly to short-form audiovisual content. As a result, the element common to SIL’s marks and Google’s signs was descriptive in the relevant context.

This significantly narrowed the scope of protection available to SIL. Although there were similarities between the parties’ signs, those similarities related to a descriptive term with low distinctive character. The Court agreed with the trial judge that this pointed away from any likelihood of confusion.

The Court also confirmed that, in certain contexts, Google’s use of “shorts” would be understood as purely descriptive rather than as indicating origin — for example, where it appeared as a label within the platform interface. Even where the term formed part of branding, the overall differences in presentation and context were sufficient to avoid confusion.

SIL’s claim under section 10(3) failed at the outset. The Court held that SIL had not established that its marks enjoyed a reputation among a significant part of the UK public, and therefore did not benefit from enhanced protection.

On validity, the Court upheld the finding that the word mark “SHORTSTV” is descriptive. It was considered to convey no more than short-form content delivered via television or similar media, and therefore lacked distinctive character. SIL’s reliance on acquired distinctiveness was not supported by the evidence, and its proposed limitation excluding “short films” was also rejected.

Commentary

This decision is a clear commercial warning for brand owners operating in crowded, fast‑moving sectors.

In practical terms, it reinforces that descriptive branding offers limited enforceability, even where it has been registered. If the core of a mark describes what the product or service is -rather than who it comes from - it will be difficult to prevent competitors from using similar language, particularly where that language is industry‑standard.

For businesses launching new platforms or features, the case also highlights the importance of naming strategy at the outset. Terms that feel intuitive and consumer‑friendly (such as “shorts”) may be attractive from a marketing perspective, but they are inherently difficult to protect. The result is that competitors can often adopt similar terminology without infringing.

The decision will be particularly relevant to companies in the content, media and tech sectors, where products are frequently categorised by format (e.g. reels, stories, clips, shorts). In these environments, courts are likely to treat such terms as descriptive, leaving limited scope to claim exclusivity.

From an enforcement perspective, the case also underlines the need for strong evidence of market recognition. Reliance on niche audiences, limited distribution, or relatively small viewing figures will not be sufficient to establish reputation or acquired distinctiveness. Businesses seeking broader protection need to be able to demonstrate real penetration into the relevant market.

Overall, the take‑away is straightforward: businesses should not assume that registration alone will secure meaningful protection. Investing in genuinely distinctive branding, or in building clear, widespread recognition, is critical if trade mark rights are to provide real commercial value.

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Buying leasehold land: How to avoid an unreasonable landlord killing your deal

Thu, 25 Jun 2026 00:00:00 +0100

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Buying leasehold land

How to avoid an unreasonable landlord killing your deal

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In a case of interest to purchasers acquiring leasehold titles, the court considered the position where the seller’s landlord unreasonably withholds or delays consent to the assignment.

Published: 25 June 2026
Authors: Tom Freeman

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The case of Mulberry Homes (Hazel Grove) Limited v Scoto Limited (1) and Stockport Metropolitan Borough Council (2) [2026] EWHC 1339 (Ch) confirms that a buyer has standing to challenge such conduct, enabling developers to take control of both the timetable and the parties’ rights to either enforce or end the sale contract.

Background

The case concerned a right of pre-emption over a mixed freehold and leasehold site in Stockport, with Stockport Metropolitan Borough Council as landlord of the leased part. The lease included a standard restriction against assignment without landlord’s consent, such consent not to be unreasonably withheld.

The buyer exercised its right of pre-emption to acquire the land, and the parties duly entered into a sale and purchase agreement, incorporating the Standard Commercial Property Conditions (SCPC).

As required by the lease and SCPC 11, the seller applied for consent to assign – which was refused (twice) by the Council.

SCPC 11.6 makes provision for what happens if consent to assign cannot be obtained. First, the deadline for completion is pushed back and then, if after six months consent has not been granted and there has been no court declaration that the landlord’s refusal was unreasonable, either party has the power to rescind the contract.

With consent refused and no application made for a declaration, the seller in this case purported to exercise its right to rescind and pulled out of the deal.

Legal argument

The buyer argued that the Council’s refusal of consent was clearly unreasonable, and so (under s.1(3) of the Landlord and Tenant Act 1988) the seller became entitled to assign without consent so that SCPC 11 no longer applied – and crucially, the seller lost its right to walk away.

The buyer therefore applied for specific performance requiring the seller to complete the sale agreement, plus a declaration that the Council’s refusal of consent to the proposed assignment was unreasonably withheld and/or delayed.

The questions for the court were therefore:

If consent to assign has been wrongfully refused or delayed, such that it is “no longer required”, does SCPC 11.3 fall away?
Can the buyer apply for a declaration that the consent to assign has been wrongfully refused or delayed by the landlord for the seller?

Decision

The court considered the first question at a single moment in time – the original completion date, at which point landlord’s consent to assign was required under the lease. Where the SCPC specifically made provision for next steps, and notwithstanding the statutory framework, the obligation on the seller under the SCPC couldn’t simply fall away.

The court was however willing to find that a contracting purchaser has sufficient interest and standing to apply for declaratory relief against the landlord, even in advance of completion of the sale of the leasehold interest – although it would also need to join the seller as a party to the litigation.

Crucially however, that step had to be taken in accordance with the deadline in the SCPC.

This had not happened in this case, and so the seller was entitled to rescind the contract.

So what?

It is not uncommon for a landlord’s delay in providing consent, or refusing consent, to scupper a transaction. The seller will argue that it is doing all that it can to secure consent, and that a “reasonable endeavours” obligation does not require it to issue proceedings against a landlord which is holding out.

This decision is of real benefit to buyers, as it confirms for the first time that buyers can unilaterally make an application for a declaration that consent has been unreasonably withheld or delayed. This gives the buyer much more control over the transaction and means that they are no longer beholden to a seller. If that declaration is made, the sale agreement will stand – without the obligation for the seller to obtain consent. Any such application must, however, be made within the timescales laid down in the sale contract.

Remember too that the sale and purchase agreement can amend the SCPC. In certain circumstances, it might be worth considering whether deadlines (such as the six-month longstop date) should be extended to allow both parties more time to consider their options (and to litigate, if required), particularly where strategic acquisitions are key to wider deals.

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From icons to identity – the changing face of the UK Trade Mark Register

Wed, 24 Jun 2026 00:00:00 +0100

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Brand interchange | 2 min read

From icons to identity

The changing face of the UK Trade Mark Register

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In April 2026, the UK Intellectual Property Office (IPO) revealed the public’s top 10 iconic British trade marks, following a poll marking 150 years of trade mark registration in the UK.

Published: 24 June 2026
Authors: Andrew Brennan

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Trade mark specialists will know that the first ever UK registration – UK00000000001 – was the Bass & Co red triangle label, filed on 1 January 1876, the opening day of the register. It placed fifth on the list.

At the top sat Rolls-Royce, described as “a worldwide metaphor for the best of the best”, with Radio Caroline and Twinings completing the top three. Cadbury ranked fourth, while Burberry, the Transport for London (TfL) roundel, Calpol, Mini and the BBC made up the remainder.

According to the IPO, these are the marks Britons feel have shaped their lives and are woven into the fabric of national identity – so familiar they feel like old friends.

The IPO also explored what makes a trade mark iconic. What emerged was a picture of trade marks not merely as commercial tools, but as markers of quality, memory and meaning. A mark’s iconic status can stem from many sources – whether a memorable advertising jingle, longstanding household trust, or even debate over how it is pronounced.

Today, 150 years on, the UK register contains more than 2.5 million marks. While around 400 live registrations still date back to the Victorian era, the system has proved highly adaptable. It now accommodates marks that would have been unimaginable in 1876 – including sound, motion, multimedia and hologram marks – covering goods and services unknown at the register’s inception.

That adaptability is increasingly being tested at the margins. One growing group of applicants is sports personalities seeking to protect their personal brands against third-party use. This sits against the backdrop of the UK’s lack of a comprehensive statutory image rights regime – an issue we have explored previously in the context of influencers.

Late last year, Chelsea footballer Cole Palmer secured registrations for a portrait mark (a photographic image of his face) and a motion mark (a video of his “shivering” goal celebration), alongside his “Cold Palmer” nickname and signature. This is understood to be the first time a footballer has secured a motion mark for a celebration, following changes introduced in 2018 allowing registration via multimedia files.

Similarly, last week, teenage darts sensation Luke Littler secured registration for an image of his face, aiming to control commercial use of his likeness and guard against AI-generated content and unauthorised merchandising.

This trend is not confined to the UK. In the United States, celebrities including Taylor Swift and Matthew McConaughey have also sought protection for elements of their personal brand. Most recently, Taylor Swift filed applications covering audio clips of her voice and a specific on-stage image from her Eras Tour.

At the EUIPO, the first sound mark application aimed at preventing deepfakes was filed by Italian singer Giusy Ferreri for the phrase “Sono Giusy Ferreri” (“I am Giusy Ferreri”) in May.

Using trade marks to protect personal attributes is not new. However, the combination of rapid advances in AI and this latest wave of celebrity filings suggests the trend is likely to accelerate. These marks may be challenging to secure and enforce in practice, but they represent a clear evolution in how trade mark protection is being used.

Whether Cole Palmer’s shiver or Luke Littler’s likeness will ever feature among the UK’s most iconic marks, however, remains to be seen.

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Small changes, big questions? The Law Commission takes a cautious approach to 1954 Act reform

Thu, 18 Jun 2026 00:00:00 +0100

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Small changes, big questions?

The Law Commission takes a cautious approach to 1954 Act reform

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Following the announcement that the Law Commission proposed retaining the security of tenure regime under the Landlord and Tenant Act 1954 in substantially the same form, a second consultation paper has now been released inviting views on how the Act might be modernised.

Published: 18 June 2026
Authors: Kate McCall

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In this series of articles, we review the key areas of change under consideration in the Consultation.

Proposals for reform

The consultation (which closes on 16 September 2026) poses 67 questions considering:

the tenancies to which the Act applies; excluding more short-term tenancies by increasing the duration threshold from six months to as much as two years and excluding the majority of periodic tenancies
simplification of the contracting out procedure; by including the declaration in the lease rather than via service of warning and declaration notices
the terms of a renewal tenancy; in particular, whether changes should be made to address environmental matters
how rent should be calculated; allowing the court to grant leases including a turnover rent and improving the calculation and enforcement of interim rent payments
modernising the grounds of opposition; redefining the categories ofworks that can be relied on under Ground F (redevelopment), including a consideration of how to permit access for works relating to the landlords’ obligations under the MEES regime
dispute resolution process – exploring whether lease renewal disputes should remain in the county courts or whether some or all cases should be decided in the tribunal and/or High Court, and considering whether Alternative Dispute Resolution could have a greater role in resolving disputes.

Continuity over change

When it comes to consideration of the grounds of opposition under s.30(1) of the Act, the headline is one of continuity rather than wholesale change. No new grounds are proposed, and most of the existing framework is left intact.

From a commercial perspective, that balance remains important. Retaining meaningful (albeit limited) rights to recover possession may reduce the incentive for landlords to contract out of the Act entirely.

That said, the consultation does reveal where pressure points lie in modern practice. Ground F (redevelopment) and Ground G (own occupation) are highlighted as areas where targeted clarification or reform may be warranted.

Ground F in the spotlight: Refinement, not reinvention

Ground F continues to attract the greatest scrutiny, which is unsurprising given it is the ground most commonly encountered in practice. The consultation acknowledges “significant dissatisfaction” with its operation, but stops short of proposing fundamental change.

Two key aspects are expressly preserved:

the intention test, including consideration of the landlord’s motive following S Franses v Cavendish, is retained.
the “crunch” point for assessing intention remains the date of the hearing.

Instead, the focus is on the scope of qualifying works. Three options are proposed:

expanded categories for works that can satisfy Ground F, with a purpose/motive filter
expanded categories without a filter
a single “substantial works” test

These options respond to recognised issues in practice:

uncertainty around what constitutes “refurbishment”
difficulty in accommodating modern works such as retrofitting
the risk that rigid categories become outdated

Option 3, focusing on “substantial works”, represents the most radical reframing, allowing the court to assess the scheme holistically while retaining safeguards such as the requirement that possession is reasonably necessary.

The MEES driver

A key policy driver is the interaction with the Minimum Energy Efficiency Standards (MEES) regime. In some cases, landlords cannot lawfully let sub‑standard properties, yet the works required to remedy those properties may not currently satisfy Ground F.

The consultation stops short of proposing a new MEES-specific ground, instead exploring whether reform of Ground F itself is sufficient – including the possibility of specifically referencing the MEES regime in Ground F.

Takeaways

For landlords and tenants alike, the consultation signals no imminent shift in the fundamental architecture of security of tenure.

The direction of travel is towards the simplification of short-term leasing processes and increasing flexibility in accommodating modernisation and sustainability works, but with continued scrutiny of intention. Depending on what reform is proposed, we can anticipate more litigation, not less, particularly on the boundaries of what works qualify for Ground F.

Alongside this, another consultation will consider the Landlord and Tenant (Covenants) Act 1995, and the sections of the Landlord and Tenant Act 1987 relating to rights of first refusal over commercial/mixed-use premises.

As ever, it is important to remember that these are for now, only consultations. Any views provided in response will form the basis of recommendations by the Law Commission. It will then be for Government to choose how to implement (or not) those recommendations in order to reform the landscape for commercial landlord and tenant relationships.

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Is your competition compliance program fit for the AI world?

Thu, 11 Jun 2026 00:00:00 +0100

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Is your competition compliance program fit for the AI world?

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AI pricing and benchmarking tools are reshaping competition risk. Compliance programmes should now be tested against this new reality.

Published: 11 June 2026
Authors: Kiran Desai

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Corporations have competition compliance programs because they have in the past been found to have breached competition law, or because they responded to the incentivisation factors to have a programme, namely: detection and response, compliance and risk management in general, an investment in compliance, the reputational benefits of compliance, and a commitment to the law.

The emergence of AI and in particular algorithmic revenue management software and benchmarking software should lead corporations to check whether their compliance programme is sufficiently addressing these new technologies, or whether these technologies are the catalyst for the adoption of a compliance programme.

In considering this topic, questions GCs should consider include:

have you reviewed the business’ use of these new technologies, the risks attached to their use, and what mitigation steps are appropriate?
how do the resources devoted to the use of these new technologies compare with the resources used to detect and mitigate risks arising from their use?
when was the last time a gap analysis was undertaken as regards risks arising from the use of such new technologies, and the programme’s policies, controls and training elements?

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Retail leases on trial: Value beyond the store

Tue, 9 Jun 2026 00:00:00 +0100

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Retail leases on trial: Value beyond the store

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Two investor landlords have commenced High Court proceedings against John Lewis Properties plc seeking declaratory relief on the scope of turnover rent.

Published: 09 June 2026
Authors: Gemma Siviter

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Retail has moved on, but leases have not. The dispute between Hammerson and John Lewis puts a spotlight on a growing tension: how do you value a store when sales are no longer made solely within its walls? The outcome will shape how landlords and retailers share risk, define value and futureproof leases in an omnichannel world where boundaries between online and physical retail no longer hold.

What the dispute is really about

Two investor landlords have commenced High Court proceedings against John Lewis Properties plc seeking declaratory relief on the scope of turnover rent.

The claim concerns the proper interpretation of “Gross Receipts” payable under a long lease at Brent Cross Shopping Centre, for the purposes of calculating additional rent under a 1979 underlease.

In this case, the turnover provisions refer to receipts relating to business “conducted at or from” the premises, expressly including orders “originated and/or accepted at or from the demised premises” and mail, telephone or similar orders “received or filled at or from” the premises.

Where landlords see untapped turnover

The landlord claims that Gross Receipts (and therefore turnover rent) should include:

“click and collect” sales, attributable to online retail but collected in store
online orders dispatched from stock held at the store
as in‑store purchases delivered from elsewhere
sales made by licensees or concessionaires operating within the store

Alongside declaratory relief, the claim seeks provision of detailed auditors’ certificates going back to the 2013 accounting year – which, depending on the findings of the court as to what constitutes Gross Profits, may result in John Lewis owing backdated and underpaid rent.

As always, the matter is fact-specific. However, the proceedings will be closely watched by landlords and retailers alike, given their potential implications for turnover rent clauses drafted long before omnichannel retailing became the norm.

When one sale becomes two

In particular, with a clause as widely drafted as this one, the result could be that in scenarios where orders are placed in one store and fulfilled from stock held in a different store, or ordered from one store for collection in another, there would be the potential for that item to be counted as “turnover” in both stores– which would result in the profits being double counted.

In a world where the high street is already struggling, these additional costs may make bricks and mortar presence even less attractive to retailers.

With already tight margins across the retail sector, the prospect of additional rental exposure linked to online activity, risks making a physical presence harder to justify for many retailers. Where stores are no longer purely sales-generating locations but also act as fulfilment hubs, showrooms or customer service centres, attributing online revenue to the premises can disproportionately increase occupancy costs relative to in-store profitability.

From an occupier’s perspective, only sales that are both generated at and paid for at the premises should be included in the turnover attributable to that store.

From a landlord perspective however, the case goes to the commercial rationale underpinning turnover rent – namely that rent should reflect the economic value generated by a store’s operation, which, from this perspective, a landlord could argue to include its role as a hub for online sales.

Why legacy leases are under strain

More generally and whilst the case is unlikely to establish a new point of law with general application, the proceedings underline the limits of trying to map 20th‑century drafting onto 21st‑century retail practices. Legacy turnover definitions were never designed to accommodate the complexities of omnichannel trading, where the distinction between in-store and online sales is increasingly blurred. Whatever the outcome, the dispute is likely to have a material influence on how turnover rent provisions are negotiated going forward. In particular, we are likely to see a greater focus on clearly delineating how different categories of online and delivery sales are treated, with more sophisticated and expressly drafted mechanisms to reflect the realities of modern retail trading models.

In short, even if the law does not move, the market almost certainly will.

Gemma Siviter, Principal Associate in Shoosmiths’ Real Estate team notes: “At its core, this is as much an operational issue as a legal one. Retailers need a clear understanding of what their systems can actually capture as turnover and ensure that property and finance teams are aligned before agreeing lease terms. Open dialogue with landlords is key because if the parties are not working from the same assumptions, disputes are almost inevitable. The benefit of shorter lease cycles is that they allow for more precise, up-to-date drafting without needing to speculate as heavily on future retail models, which can go some way to reducing this risk of dispute in the future.”

Tom Freeman, Legal Director in the Real Estate Litigation team comments: “While this dispute turns on the specific wording of one lease, it is fundamentally about the issues in applying legacy analogue drafting to modern digital retail. We will be keeping a close eye on this case but in the meantime, landlords may consider reviewingthe drafting of turnover rent clauses within their precedent leases and challenge whether their drafting truly captures the economic value generated by the premises”.

Find out more in our Shared & Halved podcast series considering this issue, as well as other trends and updates within the occupier sphere. Please use the link below to sign up.

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Offshore energy: The MingYang decision: Is there a compromise?

Tue, 26 May 2026 00:00:00 +0100

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Offshore energy: The MingYang decision: Is there a compromise?

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The UK government's announcement excluding offshore wind turbine produce MingYang from the UK market cited national security concerns. Would a nuanced approach be optimal?

Published: 26 April 2026
Authors: Kiran Desai

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The evolution of Europe’s response to concerns raised about the use of Huawei chips in European telecommunications infrastructures, from initial compromise to a shift to exclusion based on national security grounds, may offer lessons. In March this year the UK government, by fiat and on no formal legal basis, effectively excluded Chinese producer MingYang Smart Energy from supplying offshore wind turbines, resulting in the cancellation of what would have been the creation at Ardersier Port in Scotland of the world’s largest wind turbine manufacturing facility. Noting concerns expressed by European wind turbine suppliers that the Chinese suppliers were offering lower-cost products and faster delivery, the first obvious consequence of a broader scoped exclusion of Chinese suppliers would be a rise in the cost of offshore wind turbine projects in Europe. Perhaps as regards the UK, the government has calculated that this is a cost it is prepared to fund. However, governments typically would want there to be a competitive market. There are three European offshore wind turbine suppliers who in aggregate are reported to hold about 90% of the European market. That suggests governments should seek to encourage smaller players to ensure the market is competitive.

In the absence of a harmonised approach, there is space for a government to learn lessons from the Huawei experience, with a government perhaps adopting a ‘critical’ (e.g., grid interface, control systems and remote access) metric where national security concerns arise, and a ‘non-critical’ metric (e.g., physical turbines and mechanical components) where Chinese suppliers would be able to compete. Such a risk-mitigation compromise would still allow subsequent exclusion if security concerns escalated. It would also provide a more managed and foreseeable investment climate.

The UK’s MingYang decision aligns positively with emerging COP priorities around energy security, supply chain resilience and domestic industrial strategy, but sits uneasily with core climate objectives of rapid renewable deployment, cost reduction and open global markets. In practice, it reflects a broader shift in climate policy from “fastest and cheapest decarbonisation” toward “secure and geopolitically resilient decarbonisation”—a trade-off that is likely to be central to the COP31 meeting in November this year and discussed at London Climate Week in June.

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Shifting landscape: Employment insights from the 2026 Litigation Risk Report

Wed, 20 May 2026 00:00:00 +0100

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Shifting landscape

Employment insights from the 2026 Litigation Risk Report

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This article explores the employment related findings of the 2026 Litigation Risk Report and considers what they mean in practice for employers and HR professionals as we enter a period of significant change.

Published: 20 May 2026
Author: Phil Crowe & Rachel Taylor

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Shoosmiths’ 2026 Litigation Risk Report provides valuable insight into how disputes are evolving, where organisations are most exposed, and which emerging themes HR teams should have on their radar. Drawing on the perspectives of more than 360 general counsel and senior in-house lawyers across the UK, the report highlights a rapidly shifting landscape shaped by legislative reform, data-driven disputes and the growing influence of artificial intelligence (AI).

This article explores the employment related findings of the 2026 report and considers what they mean in practice for employers and HR professionals as we enter a period of significant change.

Employment disputes: Trends and what lies ahead

The report notes a slight reduction in employment disputes compared with the previous year. However, this position is not expected to continue. With the implementation of the Employment Rights Act 2025 (the ERA), disputes are anticipated to increase significantly over the coming years. Historically, an expansion of workers’ rights has been accompanied by a corresponding rise in Employment Tribunal claims, and the ERA introduces a number of changes that are likely to materially increase employers’ litigation risk exposure.

One of the most significant changes will be the extension of the limitation period for most Employment Tribunal claims, from three months to six months, giving employees more time to reflect, seek advice and decide whether to pursue a claim. This change is expected to take effect on 1 October 2026.

Further significant changes which have been confirmed will take effect from 1 January 2027, include:

a reduction in the qualifying period to bring an unfair dismissal claim
the removal of the compensation cap for unfair dismissal.

Although unfair dismissal will not become a day-one right, these reforms represent a marked shift. Around 6.3 million employees currently fall within the six-month to two-year service bracket and currently have limited protection against unfair dismissal. From 2027, employees with just six months’ service will be able to bring unfair dismissal claims.

As a result, robust recruitment processes, effective probation management and early-stage performance management will become even more critical.

Data subject access requests as a litigation tool

The report highlights the growing use of data subject access requests (DSARs) in employment disputes. Employees are increasingly using DSARs to obtain material to support claims or to increase the cost and complexity of defending proceedings.

AI is also making it easier for individuals to generate lengthy and complex DSARs, significantly increasing the time and cost burden on organisations. As a result, disputes are becoming more resource-intensive, underlining the importance of having robust processes in place to meet statutory timescales and to make sure responses are compliant.

AI‑related employment disputes: the top litigation risk

AI-related litigation risk has emerged as the most significant concern for respondents to the report, overtaking both intellectual property and breach of contract claims. More than half of respondents to the report expect AI-related disputes to increase.

AI‑generated employment claims: Claimants are already using AI tools to draft Employment Tribunal claims, correspondence and even witness statements. While these documents are often lengthy and follow similar structures, they do not always clearly articulate the legal basis of the claim, making them time-consuming and costly for employers to assess and respond to
restrictions on workplace AI use: The report reveals that 43% of respondents have introduced restrictions on AI use in the workplace, highlighting how prominent these risks have become. Clear policies, supported by targeted training, are essential to ensure employees understand not only what AI can be used for, but also its limitations and prohibited use
discrimination risks from automated decision‑making: AI systems can unintentionally replicate or amplify bias, particularly where they are trained on biased datasets. Where automated tools disadvantage certain groups or produce inconsistent outcomes, employers may face claims under equality legislation. These risks are expected to increase over the next three years.

While AI can offer significant opportunities for efficiency and innovation, these benefits must be carefully balanced against the growing employment and litigation risks associated with its use.

Managing AI-related employment risk

Effective AI risk management starts with understanding how AI is being used across the organisation. Clear training, supported by practical AI policies is essential to ensure employees understand acceptable use and associated risks.

Regular auditing of AI outputs is also a critical risk‑mitigation tool, helping organisations identify emerging issues and unintended consequences at an early stage. Ongoing testing to detect and address potential bias remains an essential part of responsible AI use in the employment context.

From a data protection perspective, employers must ensure they have a lawful basis for processing personal data, understand how AI tools operate and are transparent about the use of AI in relevant workplace processes.

Managing litigation risk: practical steps from the report

The report identifies several ways organisations are seeking to reduce exposure.

One notable development is the restriction on WhatsApp for work-related communications. One in four organisations has taken this step, rising to 42% in the financial services sector. WhatsApp messages frequently feature in Employment Tribunal proceedings, and the lack of oversight can present a real risk. Whether this approach is workable will depend on sector and workforce structure. While alternatives like Microsoft Teams may suit employers in the financial services sector, WhatsApp messaging can be harder to replace in sectors such as retail or automotive.

Another key strategy is targeted training for managers. Line managers are often making day-to-day decisions that later come under legal scrutiny. Providing early and practical guidance can materially reduce the risk of disputes.

Organisations are also encouraged to:

regularly review policies and procedures
conduct litigation preparedness reviews to identify areas of exposure
review AI governance and internal controls to ensure AI is used appropriately.

Conclusion

Our 2026 Litigation Risk Report makes clear that employment litigation risk is evolving rapidly. Employers that take early action by strengthening policies, upskilling managers, improving documentation and implementing clear AI governance will be better placed to navigate an increasingly complex litigation landscape.

You can download a copy of the report here: Litigation Risk Report 2026.

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Valuing reality: What Dyer means for business rates & fit-out

Tue, 19 May 2026 00:00:00 +0100

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Valuing reality: What Dyer means for business rates & fit-out

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In a recent Upper Tribunal decision, commercial occupiers have been reminded that business rates do not exist in a vacuum.

Published: 19 May 2026
Author: Sophie Tracey

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Where offices have moved beyond a basic Cat A fit‑out to a more bespoke Cat B configuration, rateable value should reflect the physical reality of that enhanced hereditament.

Fit‑out decisions, dilapidation strategies and occupation profiles can therefore all have unintended rating consequences – meaning that occupiers need to take early advice on the knock-on effects of customisation of their premises.

How is rateable value calculated?

Rateable value (RV) is an estimate of the annual rent a ‘hereditament’ (essentially, a unit of property) could achieve on the open market.

It is a hypothetical rental value, assessed by reference to the antecedent valuation date (AVD), but reflecting the physical state of the property and any relevant circumstances on the ‘material day’. For properties entered onto the ratings list after the AVD, the material day is typically the date they were entered – meaning that strong comparative evidence is crucial to the exercise.

In the Upper Tribunal’s recent decision on appeals by two valuation officers (considered together and known as Re Dyer and Re Johnson), the relevant premises were occupied on the material day and were therefore valued including the sitting tenant’s fit out, known as ‘Cat B’ condition.

How does tenant’s fit out affect the RV of its premises?

As highlighted in Re Dyer, most lettings in the office market are actually of properties in Cat A condition (i.e. a standard developer or landlord’s shell or standard fit-out). These lettings are therefore of limited use to valuers, but direct Cat B comparables are themselves limited.

The starting point is therefore often Cat A rental evidence, ‘toned’ by adding an uplift to reflect the value of the element of the Cat B fit out that would have general market appeal. In Bunyan v Acenden [2023], for example, this was assessed at 4.4% of the capital amount of expenditure. However, where the tenant’s fit out is overly bespoke, this can instead depress values.

In Re Johnson, the primary evidence came from sub-lettings between law firms, where the expected fit out was relatively consistent across occupiers.

Key considerations for occupiers

1. Plan early

The 1 April 2026 revaluation has reset RVs across England and Wales, based on a new AVD of 1 April 2021. The result is sector- and location-specific shifts, with some occupiers seeing significant movement. The introduction of more permanent reliefs/multipliers (particularly in retail, hospitality and leisure) has also altered the landscape, making forward planning essential.

2. Do your due diligence

There is evidence both in the property and national press that the new list has not been implemented consistently, with errors in RVs, multipliers and reliefs. It is well worth your time checking rateable value, factual accuracy for the property e.g. floor area, use and layout, and whether correct multiplier and reliefs have been applied.

3. Check, challenge, appeal

The system for challenging rates valuations first requires you to raise a ‘check case’ and then ‘challenge’ via the Valuation Office’s electronic portal. This can then be appealed if you still disagree with the challenge decision (within four months of the date of the decision), or if you have not had a reply within 18 months.

In another Upper Tribunal appeal, Caffe Concerto v Johnson [2026], the VTE confirmed its discretion to extend appeal deadlines, applying the Denton principles – but this should not be relied on, and deadlines remain critical.

4. Factor rating into fit-out and works

Physical changes to property such as tenant fit-out can increase RV where it adds value, but landlord works or contributions may also have unintended rating consequences. Occupiers should therefore price rating risk into fit-out decisions and negotiations.

In the Hitchings appeals [2025], the Tribunal was reluctant to determine whether a landlord’s contribution to a Cat B fit out should be preferred over the actual cost of the fit out.

Instead, whilst there is no automatic ‘strip back to Cat A’ rule, the Tribunal must look at the actual physical state of the property and its utility in the market.

5. Evidence is king

As highlighted in Re Dyer, the Tribunal is often dealing with “less than helpful” evidence, particularly given the scarcity of Cat B comparables (described in one case as “virtually impossible to come by”).

The Tribunal will engage closely with hard factual evidence of the condition of the hereditament, not general market narratives. Floorplans, photos, specifications and evidence of actual works carried out can all be decisive.

Where necessary, an application to the Tribunal for an order for disclosure or a witness summons could encourage production of better evidence.

6. Remember it’s not all about works

Changes in mode or category of use of the property can also trigger revaluation.

Remember too that certain tenancy arrangements will be subject to more scrutiny than others – there are known issues with valuing flex or serviced office space either per individual tenant or as a single office space, for example – so be alive to potential issues. Once a valuation ‘tone’ is established, the Tribunal may seek to prioritise consistency across the list rather than seeking to arrive at the ‘perfect’ number.

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Renters’ Rights Act reset: What landlords can no longer ignore

Fri, 15 May 2026 00:00:00 +0100

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Renters’ Rights Act reset: What landlords can no longer ignore

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Following the abolition of “no fault” evictions on 1 May 2026, the Court of Appeal’s decision in Muca v El Amrani has thrown doubt on the validity of existing section 21 notices.

Published: 15 May 2026
Author: Simon Foster

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Following the rush to serve section 21 notices ahead of the abolition of “no‑fault” evictions on 1 May 2026, many landlords will have been breathing a sigh of relief and hoping they had successfully navigated the transition to the new Renters’ Rights Act regime of open‑ended periodic tenancies and reformed rent review procedures.

However, the Court of Appeal’s decision in Muca v El Amrani – handed down on the eve of section 21’s abolition – has thrown a significant complication into that assessment.

The legal background

To serve a valid notice under section 21 of the Housing Act 1988, a landlord needed to have complied with certain prescribed requirements. One of these is the gas safety obligation: the landlord must provide the tenant with a valid gas safety certificate (GSC) before the tenant first goes into occupation, and again after each subsequent inspection.

Until recently, uncertainty remained over whether a failure to provide the initial GSC could be remedied later.

The Court of Appeal’s decision

The Court of Appeal has now confirmed that failure to provide a GSC before the start of the tenancy is an irremediable breach. Where that requirement has not been met, the landlord can never serve a valid section 21 notice in respect of the tenancy.

The court made it clear that late service of the GSC does not cure the breach. Even where all subsequent certificates are provided, section 21 cannot be relied upon to recover possession.

This settles a long‑standing divergence of approach in the lower courts and brings much‑needed clarity – albeit with significant consequences for affected landlords.

Why this still matters

Although section 21 notices can no longer be served, existing notices served before 1 May 2026 may still be relied upon, provided proceedings are issued by 31 July 2026 under the transitional arrangements – and provided that the notice is valid.

Muca v El Amrani is therefore critical when assessing the viability of any ongoing or contemplated claims based on historic section 21 notices. Where the initial gas safety certificate was not provided before occupation, those claims are vulnerable to being struck out.

In such cases and following the changes brought in by the Act, landlords will be required to start again by serving a section 8 notice, specifying statutory grounds for possession. This inevitably carries greater evidential burden, cost and delay.

Ongoing compliance under the new regime

While serving new s.21 notices will no longer be possible, gas safety obligations remain firmly in place.

Under the new regime, landlords must ensure all new tenants are informed of their gas safety obligations through the Written Statement of Terms (whether incorporated into the tenancy agreement or provided as a standalone document), including the requirement to provide copies of gas safety records. These obligations are also expected to feed into the forthcoming landlord database requirements.

In the meantime, it is crucial that all landlords remember their first obligation under the new regime – to serve Information Sheets on their existing tenants by no later than 31 May 2026. Landlords of student accommodation should double-diarise this date if they intend to rely on the transitional provisions of the Act and regain possession this summer, as the deadline to serve a warning notice of their intention to rely on Ground 4A is also 31 May 2026.

Next steps

Landlords (and their advisers) should carefully review any live section 21 notices and related proceedings to ensure they remain legally sound in light of Muca v El Amrani.

If you would like assistance reviewing existing notices or understanding the possession options now available under the Renters’ Rights Act regime, please contact Simon Foster, who leads Shoosmiths’ specialist residential possession team.

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When contempt goes too far: Strike-out in Bargain Busting v Shenzhen SKE

Wed, 13 May 2026 00:00:00 +0100

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Brand interchange | 7 min read

When contempt goes too far

Strike-out in Bargain Busting v Shenzhen SKE

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Decision: Bargain Busting v Shenzhen SKE Technology Company & Others [2026] EWHC 933 (Ch)
Court: High Court of England and Wales
Judge: HHJ Matthews
Decision: Here
Key issues: Contempt of court

Published: 13 May 2026
Authors: Shojibur Rahman

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Introduction

In Bargain Busting v Shenzhen SKE Technology, HHJ Matthews struck out an application for criminal contempt, an emphatic reminder that contempt is an exceptional jurisdiction, not a routine litigation tactic. The judgment is a helpful read for anyone contemplating criminal contempt proceedings: the court will look for a genuine, realistic risk to the administration of justice, not sharp correspondence or robust submissions.

Background

On 10 May 2022, Bargain Busting applied to register the trade mark CRYSTAL BAR for class 34 goods (including electronic cigarettes and vape bars). Shenzhen SKE Technology opposed the application at the UK Intellectual Property Office under section 5(4)(a) of the Trade Marks Act 1994, but the Hearing Officer rejected the opposition and the application was allowed to proceed.

Shenzhen SKE Technology then appealed to the High Court, but the appeal was dismissed. The parties subsequently agreed a form of order on 7 July 2025 requiring the mark to proceed to registration, while preserving Shenzhen SKE Technology’s right to seek permission to appeal to the Court of Appeal by 25 July 2025.

The next step sparked the dispute. On 14 July 2025, the UK Intellectual Property Office asked the parties for an update on the High Court appeal. Bargain Busting supplied the order (copying Shenzhen SKE Technology), and a short exchange followed with the UKIPO. A précis is set out below:

14 July (from Shenzhen SKE Technology’s lawyers): “… Please kindly note that the judge’s order … includes a deadline of 25 July 2025 to apply to the Court of Appeal for permission to appeal … We therefore respectfully request that no registry updates are effected at present …”
14 July (from Bargain Busting’s lawyers): “The order has immediate effect and applying for permission to appeal does not stay the order.”
17 July 2025 (from Shenzhen SKE Technology’s lawyers): “… we respectfully disagree. Our client presently intends to appeal the Order to which Brandsmiths refer … Consequently, … CRYSTAL BAR should not be registered until after either permission to appeal is refused, or, if it is granted, the final determination of any appeal … Allowing … CRYSTAL BAR to be registered effectively deprives the parties’ legal rights to appeal under paragraph 4 of the court order … The UKIPO is under a public duty to maintain the register of trade marks ensuring they are as accurate as possible. Should the UKIPO proceed to register this mark but later the court decides that the mark should not be registered and the UKIPO has to cancel the registration, it will be wasting the UKIPO’s time. Innocent third parties who rely on the UKIPO’ register during that period may also be misled by the status of … CRYSTAL BAR …”
24 July (from Bargain Busting’s lawyers): “The wording of the Order was agreed by the parties in advance of it being finalised and handed down by the High Court. If SKE … wanted the registration of the mark to be dependent or contingent ‘until after eitherpermission to appeal is refused, or, if it is granted, the final determination of any appeal’, they should have made this clear at the appropriate time and suggested amendments to the wording of the Order to be agreed and finalised in advance of it being handed down, but this did not happen. Paragraph 2 of the Order states that ‘[CRYSTAL BAR] shall proceed to registration’ … an appeal does not operate as a stay … we are extremely concerned that [Shenzhen SKE Technology’s lawyers are] attempting to mislead the Tribunal and interfere with the due administration of justice by seeking to call into question a mandatory Order from a High Court judge …”

Bargain Busting subsequently issued an application for criminal contempt (alleging intentional interference with the administration of justice) against Shenzhen SKE Technology and its lawyers. It also warned the UK Intellectual Property Office that High Court proceedings would follow if the mark was not registered by 16:00 on 27 August 2025. The UK Intellectual Property Office did not register the mark, but instead listed a hearing before Dr James Porter (Chief Hearing Officer) on 12 September 2025. Given the contempt allegations, Shenzhen SKE Technology and its lawyers attended that hearing but made no representations. In parallel, Shenzhen SKE Technology sought permission to appeal and applied to vary the High Court order to secure a stay pending any appeal.

In his decision, the Hearing Officer noted that Shenzhen SKE Technology’s request (to leave the register unchanged until all routes of appeal were exhausted) was common before the UK Intellectual Property Office (it arising from the long standing practice in Planet Epos v. Nettec Solutions BL O/373/02). He also noted that the Trade Marks Manual, while not binding, indicated that the Planet Epos applies to all levels of appeal, including to the Court of Appeal. However, he noted that, in practice, the specific issue had not been addressed (either because the High Court order expressly provides for a stay or because the parties adopt a pragmatic approach, waiting until all routes of appeal are exhausted). He then concluded:

“It is clearly unsatisfactory for rights to come on and off the register, leaving third parties and the wider public in a position of considerable uncertainty. Having rights appear and disappear (or vice versa) may raise significant questions over the status of infringing acts, and third party terms may be needed to regularise the position of parties. It may also lead to considerable uncertainty in proceedings where the existence of earlier registered rights is relied upon.

However, despite the practical concerns, I conclude that POINT FOUR does not establish that the Registrar can leave the register unchanged in light of a court order.”

Shenzhen SKE Technology then applied to strike out the contempt allegations. That application came before HHJ Matthews.

Decision

HHJ Matthews drew on (among other authorities) BHP Group (UK) Limited v Municipio de Mariana [2026] EWCA Civ 294, which distilled eight principles governing criminal contempt. Against that framework, he made the following findings:

requests are not “misstatements”: Much of the relied-upon conduct was framed as requests or submissions, not statements of fact. A request that a public body take (or refrain from taking) a step cannot, in itself, be false or misleading in the way required for contempt.
no realistic risk of interference: The UKIPO alone controlled whether the mark would be registered. It was aware of the legal position and could not be compelled by the parties, so the respondents’ conduct could not affect (or realistically risk affecting) the outcome.
aligned with longstanding UKIPO practice: The representations sat comfortably with the UKIPO’s established approach of pausing implementation pending appeals, making it harder to characterise the conduct as improper.
robust arguments are not contempt: Parties are entitled to advance submissions about how the law applies. The fact an argument is rejected does not make it improper, still less contemptuous.
public interest threshold not met: Criminal contempt protects the public interest in the administration of justice, not private litigation advantage. The court saw no evidence of an intention to interfere with justice, and the threshold was not approached.

On that basis, he struck out the contempt application: the pleaded conduct did not meet the legal threshold for criminal contempt, there was no real risk to the administration of justice, and the claim disclosed no reasonable grounds.

Comment

In striking out the application, HHJ Matthews also stepped back to make broader, timely observations about how contempt is being used in modern litigation:

“What has happened in this case is nowadays an increasing problem for the courts. The courts now see even small (alleged) breaches of any orders, not necessarily injunctions, and indeed the conduct of litigation more generally, being threatened with contempt proceedings. In the old days, there would simply have been an application to enforce the original order. As one might expect, and as has happened here, such proceedings being launched are then often followed by applications from the respondents to strike out those proceedings. This slows down the litigation and consumes a lot of time and money. It is trite to say that the contempt jurisdiction is being ‘weaponised’ in a way that it has not been before. Certainly, I do not recall anything of this kind when I first started to practise law in the 1980s. Contempt applications were rare beasts, reserved for serious cases of non-compliance with injunctions or orders for specific performance, or for serious disruption of court hearings and interference with juries.

I appreciate that the contempt jurisdiction may be viewed by some litigators today as just another stick to beat your opponent with: the old adage is transmuted for modern times to All’s fair in love and litigation. In some cases, too, it may also be seen as a marketing tool for professionals, whether lawyers or others, to show how strong and fearless they are, and how committed they are to their clients’ cases. But in my judgment these are notfunctions of the contempt jurisdiction at all. Worse, and as I have said, its misuse consumes valuable judicial and legal resources, and costs a great deal of money. And this cannot help but prejudice other litigants seeking to have their disputes settled sooner rather than later. This is an unnecessary burden on society. In my judgment, the contempt jurisdiction should be exercised only where it is properly justified, and the courts should be vigilant to see that its exercise is so confined.”

The takeaway is simple but important: contempt is for serious misconduct that poses a real risk to the administration of justice. If the complaint is really about how an order should be implemented (or whether a step should be paused pending appeal) the court will expect parties to use the ordinary procedural tools, not the criminal contempt jurisdiction.

Addendum

Subsequent to the successful application for strike out, HHJ Matthews considered Shenzhen SKE’s costs (which were £296,099.61 plus applicable taxes) and permission to appeal.

He concluded that Bargain Busting should pay the costs on an indemnity basis, with an interim payment to be made of £215,000. The costs are to be the subject of a detailed costs assessment. He noted:

“In my judgment, whether or not these various factors would each individually justify an award of costs on the indemnity basis, I am quite satisfied that, taken together, they do so overwhelmingly. The claimant made very serious allegations against the defendants, and lost. It was wrong and out of the norm for the claimant’s solicitors opportunistically to seek to use criminal contempt proceedings, in which the touchstone is the public interest in the administration of justice, in order to pursue their client’s private interests. It was wrong and out of the norm for the claimant’s solicitors to threaten the defendants with being reported to the SRA in order to persuade them to agree to their client’s terms. The claimant must pay the defendants’ costs on the indemnity basis.”

Permission to appeal was refused.

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When freedom of expression bites back: Injunctions & actionable threats in Bargain Busting v Shenzhen SKE Technology Company

Wed, 13 May 2026 00:00:00 +0100

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When freedom of expression bites back

Injunctions & actionable threats in Bargain Busting v Shenzhen SKE Technology Company

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Decision: Bargain Busting v Shenzhen SKE Technology Company [2026] EWCA Civ 532
Court: Court of Appeal (Civil Division)
Judges: Arnold LJ; Laing LJ; Warby LJ
Decision: Here
Key issues:

actionable threats
interim injunctions
Human Rights Act 1998

Published: 20 May 2026
Authors: Ellen Hughes-Jones

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Introduction

How hard is it to stop a trade mark owner from writing to the market? In Bargain Busting v Shenzhen SKE Technology, the Court of Appeal set aside an interim injunction that had restrained Bargain Busting from making alleged actionable threats to Shenzhen SKE Technology Company’s (SKE) supply chain. The key reason: where an injunction would restrain speech before trial, section 12(3) of the Human Rights Act 1998 applies a heightened merits threshold and the first‑instance judge had not applied it.

Background

Bargain Busting owns UK trade marks including CRYSTAL BAR, CRYSTAL CLEAR VAPOURS ELECTRONICS CIGARETTES, and CRYSTAL ADDICT (figurative) in class 34, covering (among other things) electronic cigarettes. SKE has challenged the validity of some of these marks via opposition and/or revocation proceedings.

On 18 September 2024, Bargain Busting issued infringement proceedings against SKE, alleging that SKE’s use of signs containing the word CRYSTAL (the CRYSTAL Signs) on vape products infringed its trade marks. Then, on 23 and 24 December 2024, Bargain Busting’s solicitors wrote to eleven of SKE’s distributors, wholesalers and/or retailers. The letters said Bargain Busting considered the use of the CRYSTAL Signs to be infringing and explained that Bargain Busting intended to apply to add those recipients as defendants in the main claim.

That kind of correspondence matters because sections 21A–21F of the Trade Marks Act 1994 create a cause of action for actionable (or unjustified) threats. A person aggrieved by threats of trade mark infringement can seek a declaration that the threats are unjustified, an injunction to stop them, and damages for any loss. The policy aim is to prevent rights holders from pressuring a competitor’s customers (sometimes with immediate commercial impact) without having to put their infringement case before the court. It was common ground between the parties that whether the letters were “justified” would depend (at least in part) on the validity of the marks relied on.

SKE applied on 21 January 2025 for an interim injunction to restrain further alleged actionable threats, which came before the court on 30 April. In response to the application, Bargain Busting invoked section 12 of the Human Rights Act 1998, which restricts the grant of pre‑trial relief that would restrain publication (and so engages freedom of expression):

“(1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression.

…

(3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed.

…”

At first instance, the judge held that the correct approach applying section 12(3) was as follows:

“… it appears to me that applications for injunctions in respect of allegedly unjustified threats will often fall within the exceptional category of cases identified by Lord Nicholls in Cream Holdings. The key question as far as the merits threshold is concerned is whether the court is satisfied the applicant’s prospects of success at the trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case. To require the higher threshold to be met in all such cases would to my mind undermine the protection intended by Parliament in enacting the unjustified threats provisions. A party may need to move quickly to seek such an injunction as losses can be rapid as the market is cleared. It would to my mind generally place too high a barrier in the way of applicants in such cases to require them to show that they will probably win at trial.”

On the (necessarily limited) evidence available at the interim stage, the judge assessed SKE’s prospects on the relevant marks as follows:

CRYSTAL BAR: “While SKE was able to show a serious issue to be tried, I cannot conclude on the limited materials before me on this application that SKE has “a better than evens chance of success” on its section 5(4)(b) case” and “SKE has established no more than a standard serious issue to be tried” on its section 3(6) case;
CRYSTAL CLEAR VAPOURS ELECTRONICS CIGARETTES: The judge was “satisfied that SKE has a realistically arguable case [of non‑use], which may well succeed at trial”; and
CRYSTAL ADDICT (figurative): The judge could “conclude no more than that there is at least a serious issue to be tried in relation to it”.

Pulling those strands together, the judge held that, so far as section 12(3) was concerned, SKE’s prospects were “sufficiently favourable to justify” making the order in the circumstances. He therefore granted an interim injunction restraining Bargain Busting from making further threats.

Appeal

Bargain Busting appealed, arguing that the judge had applied the wrong legal test. Relying on Cream Holdings Ltd v Banerjee [2004] UKHL 44, it said that section 12(3) ordinarily requires the claimant to show it is more likely than not to succeed at trial before the court restrains publication.

Arnold LJ (with whom Laing LJ and Warby LJ agreed) accepted that submission. The Court of Appeal held that the first‑instance judge had not applied the general rule in Cream Holdings. In particular, because the judge had not found that SKE’s threats claim was more likely than not to succeed (and there was no respondent’s notice inviting the Court to uphold the injunction on that basis) the injunction could not stand. The interim restraint was therefore overturned.

Comment

The judgment makes clear that section 12(3) is not a mere ‘gloss’ and, if the relief sought would restrain publication (including letters to the trade), the court must grapple with the section and the merits threshold.

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Avoiding the ‘black hole’: Court of Appeal considers registration of trade mark licences

Wed, 13 May 2026 00:00:00 +0100

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Avoiding the ‘black hole’

Court of Appeal considers registration of trade mark licences

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Decision: Lifestyle Equities CV v Frasers Group Trading Ltd (formerly Sportsdirect.com Retail Ltd) [2026] EWCA Civ 583
Court: Court of Appeal
Judges: Zacaroli, Arnold and Peter Jackson LJJ
Decision: Here
Key issues: Trade mark licences

Published: 5 June 2026
Authors: Leigh Smith

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Introduction

In the United Kingdom, as in most jurisdictions, it is possible to register a licence of a registered trade mark, but it is not mandatory. Licensees are incentivised to do so, most notably by rendering the licence ineffective against a person acquiring a conflicting interest in the licensed trade mark in ignorance of the licence. Section 30 and section 31 of the Trade Marks Act 1994 as amended ("TMA") also grant certain further protections to licensees of registered trade marks in the case of third party infringements. Section 25(3)(b) TMA 1994 however provides that a licensee cannot benefit from these protections until an application to register the licence with the United Kingdom Intellectual Property Office (“UKIPO”) has been made.

It is not unusual for a trade mark licence not to be registered, and there are many good reasons why a licensor and/or licensee would prefer not to do so. A well-drafted licence will typically deal with the allocation of responsibility and costs of third party infringement claims in any event, putting in place a contractual arrangement between the parties which either replicates or modifies the majority of the effects of registering the licence as between the parties.

The recent case of Lifestyle Equities C.V. and Lifestyle Licensing B.V. v. Frasers Group Trading Limited and others [2026] EWCA Civ 583shines a light however on the potential impact a failure to register a licence can have vis-à-vis the recovery of losses from the infringing third party. If only the licensee has suffered loss by the infringement, a failure to register could create what the judge at first instance called a "black hole", where the licensor has a right to bring proceedings but has no loss to recover, and the licensee has no right to bring proceedings but suffered the loss.

Background

Lifestyle Equities is the registered proprietor of certain United Kingdom trade marks (the "Marks"), and Lifestyle Licensing its exclusive licensee of the Marks. Lifestyle Equities and Lifestyle Licensing alleged that the defendants had infringed the Marks in 2014 and 2015. Proceedings were issued in September 2015, and on 20 April 2018 the claimants received judgment largely in their favour. Lifestyle Equities and Lifestyle Licensing elected for an inquiry as to damages.

The Marks are also subject to a number of intra-group sub-licences, the details of which (including in most cases the identity of sub-licensee) Lifestyle Equities and Lifestyle Licensing sought to avoid disclosing. In fact, only one sub-licence had been registered against the sub-licensed Marks with the UKIPO. By the time Lifestyle Equities and Lifestyle Licensing served their points of claim in the inquiry in June 2023 (and then as amended in September 2024), they sought to recover the losses of these sub-licensees on the basis of section 30(6) TMA. That sub-section provides that:

"In infringement proceedings brought by the proprietor of a registered trade mark any loss suffered or likely to be suffered by licensees shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of licensees."

The defendants applied to strike out this head of loss on the basis that the recovery was not permitted if the sub-licences had not been registered with the UKIPO, or alternatively had not been registered at the time of the infringing acts. They relied upon section 25(3)(b) TMA 1994 which provides that:

"Until an application has been made for registration of the prescribed particulars of a registrable transaction… a person claiming to be a licensee by virtue of the transaction does not have the protection of section 30 or 31".

The strike out application was dismissed on 9 June 2025. Marcus Smith J found that the sub-licences did not need to be registered to take into account the losses under section 30(6) TMA. He also held that if there was a requirement to register the sub-licences to benefit from section 30(6) TMA, there was no time limit for doing so. Those findings were appealed by the defendants to the Court of Appeal.

Protections of a (sub-) licensee

At first instance, Marcus Smith J found that section 25(3)(b) TMA did not prevent the application of the entirety of section 30(6) TMA since the first part of it was in fact a protection for the proprietor rather than the licensee. He reasoned that only the second part of section 30(6) TMA granted a protection to a licensee, in that the recovered losses could then flow back to the licensee through the court's discretion. This interpretation was not accepted by the Court of Appeal, as it was not willing to accept that section 30(6) TMA could be partitioned in such a way. If it were, it could well result in unjustified windfall for proprietors. Read as a whole, the purpose of section 30(6) TMA was to ensure that losses of the licensee, which otherwise could not be taken into account, were recoverable. This, along with the rest of section 30 TMA, was seen as a protection for a licensee and therefore only available if the licence was registered.

The Court of Appeal then turned to the second ground of appeal, which in essence asked if there was a time limit by which the registration of the licence must occur to benefit from section 30(6) TMA. It was common ground that the registration could have retrospective effect. However, the Court of Appeal would not accept that there was no time limit at all for making the application. Applying to register the licence should still be subject to the limitation period for bringing proceedings. The Court of Appeal considered that a claim by a proprietor to recover its own losses is different from a claim to recover the losses of its licensee. The registration of the licence must therefore occur within the limitation period for the latter claim. Since the only registration of a licence in the present case occurred well after the limitation period for that claim expired, the defendants were not entitled to seek recovery of damages suffered by any of its licensees.

Practical application for trade mark litigation

As was the case here, there are often compelling reasons why a proprietor and licensee may not wish to register a trade mark licence. This is particularly the case in the context of intra-group licensing arrangements. Confidentiality may be a concern, or it may simply be impractical or carry a disproportionate expense. Whilst a failure to register the licence within six months of its grant could limit recovery of a licensee's costs in infringement proceedings under section 25(4) TMA, this may not be a major consideration in intra-group arrangements. What this case demonstrates is the impact this can have on the recovery of losses. Depending on the royalty payable, and the basis of its calculation, there is likely to be significant gap between the losses of the sub-licensees in this case and the losses of the licensor.

This decision highlights the importance of taking into consideration licence registration in the broader context of trade mark litigation strategy. The key takeaways for litigators are that:

the losses of a licensee are to be treated as a separate head of claim
the licence will need to be registered for a proprietor to recover those losses; but
the registration of the licence only needs to occur within the limitation period for the licensee's claim, and not before the infringement occurs or even the claim is issued

This gives the parties to a licence a degree of flexibility to decide how best to plead and run a case, and to ultimately recover losses suffered by the licensee.

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New limits on non-disclosure obligations: A barrier to resolution?

Tue, 12 May 2026 00:00:00 +0100

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New limits on non-disclosure obligations: A barrier to resolution?

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