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La Perla: When there is no rulebook

Fri, 6 Nov 2026 00:00:00 GMT

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La Perla: When there is no rulebook

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How Shoosmiths helped navigate a complex post-Brexit insolvency involving multiple jurisdictions, competing proceedings and one of the world's best-known luxury brands.

Published: 6 November 2026
Authors: Lee Sennett & Lisa Bricknell

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Imagine being appointed over the owner of a globally recognised luxury brand, only to discover that insolvency practitioners in another country have also been appointed over the same company.

Who has authority? Which court takes precedence? How do you sell assets when different insolvency regimes have different objectives? And, in a post-Brexit world, what do you do when the rules that once governed those questions no longer apply?

Those were just some of the challenges facing the team advising the liquidators of La Perla Global Management UK Limited, part of the internationally renowned La Perla luxury lingerie group. Corporate restructuring & advisory partner, Lee Sennett, who led the matter, spoke about one of the most unusual cross-border insolvencies the team has encountered.

"What started as a relatively straightforward liquidation became anything but"

At first glance, the position appeared relatively simple. The UK company held the group's intellectual property, and the expectation was that the liquidators would realise that asset for creditors.

But La Perla's structure was far from straightforward.

"The intellectual property sat in the UK, but manufacturing was carried out in Italy, most employees were based there, and the brand itself was inextricably linked to Italy," says Lee.

The complexity increased when Italian proceedings were opened over the same company, while a key manufacturing business entered an Italian extraordinary administration process. Suddenly, multiple officeholders across different jurisdictions were involved in different parts of the same group.

"What we thought would be a relatively straightforward asset realisation became significantly more complicated," Lee recalls.

The post-Brexit challenge

Before Brexit, practitioners would have looked to the European Insolvency Regulation framework to help resolve many of these issues.

This time, there was no playbook.

"The old framework wasn't there anymore," says Lee. "You couldn't simply point to a set of rules that told everybody how these competing proceedings should interact."

A lengthy jurisdictional battle was possible, but it wasn't attractive.

"There was a real risk that we'd spend years arguing about jurisdiction while value continued to disappear. The business needed a practical solution, not a perfect legal answer."

That thinking shaped the team's approach from the outset.

Building cooperation instead of conflict

Rather than focusing on who should prevail, the team worked with officeholders in Italy to develop a bespoke cross-border protocol. The aim was simple: create a framework that allowed everyone to fulfil their duties while preserving value.

The protocol dealt with how the parties would communicate, realise assets, allocate costs and ultimately distribute proceeds. It drew on concepts familiar to insolvency practitioners from the old European regime but adapted them for a post-Brexit world.

"Everybody had different obligations and different stakeholders," says Lee. "The challenge wasn't deciding who was right. It was finding a structure that allowed everybody to move forward."

More than an intellectual property sale

One of the key lessons from the matter was that value sat in far more than the intellectual property alone.

The brand, manufacturing capability, workforce and heritage were all closely connected. At the same time, the various insolvency processes were driven by different statutory objectives, including preserving employment and protecting an iconic Italian brand.

"The value wasn't simply in an isolated asset," says Lee. "The wider business and brand story mattered."

That meant a conventional disposal process was unlikely to produce the best outcome.

Thinking creatively

The solution required a degree of innovation.

Different jurisdictions imposed different restrictions on how assets could be realised, making a straightforward sale problematic. To overcome those obstacles, the intellectual property was transferred into a dedicated vehicle and made available through a long-term licence with future acquisition rights.

"We had to think differently," says Lee. "The challenge wasn't just identifying the legal position. It was finding something that would actually work in practice."

The structure enabled the transaction to progress while balancing the commercial and legal concerns of stakeholders across multiple jurisdictions.

The people side of cross-border restructurings

One of Lee's strongest reflections is that some of the biggest challenges weren't legal at all.

Cross-border matters inevitably involve different cultures, working practices and expectations.

"You learn very quickly that not every jurisdiction approaches these issues in the same way," he says. "Part of the challenge is understanding those differences and finding a way to work through them constructively."

For Lee, that ability to balance technical expertise with commercial pragmatism was ultimately what made the project successful.

Looking ahead

While La Perla involved a famous luxury brand, the lessons are increasingly relevant across all sectors. Businesses are more international than ever assets are held across multiple jurisdictions and insolvencies rarely fit neatly within national boundaries.

"Cases like this remind you that there isn't always an answer sitting in a textbook," says Lee. "Sometimes the real value comes from bringing people together and creating a solution that otherwise wouldn't exist."

For Shoosmiths, La Perla showcased the team's ability to navigate novel cross-border challenges, coordinate stakeholders across competing insolvency processes and develop practical solutions in situations where there is no obvious roadmap.

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Shoosmiths helps launch UK’s first search acquisition legal documents

Fri, 6 Nov 2026 00:00:00 GMT

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Shoosmiths helps launch UK’s first search acquisition legal documents

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New UK SET initiative aims to bring greater consistency and transparency to entrepreneurship through acquisition transactions.

Published: 6 November 2026

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The initiative was developed in response to the rapid growth of the UK search fund market. While venture capital transactions have long benefited from recognised standard documentation, the self-funded search sector has lacked a common legal framework. UK SET provides searchers and investors with a practical starting point for negotiations, helping to streamline transactions and reduce complexity.

The UK SET suite comprises a subscription agreement, shareholders' agreement and articles of association, setting out key arrangements between searchers and investors before and after an acquisition. Rather than prescribing commercial terms, the documents are designed to provide a clear framework for discussion and agreement.

Shoosmiths worked alongside Fox Williams LLP and Marriott Harrison LLP to draft the documentation, with input from industry experts including Archimax Global Solutions Ltd, Gerald Edelman, Orca Equity Partners and Thalor Capital.

Alistair Hammerton, Partner at Shoosmiths, said: "Over the last few years, we've seen significant growth in the number and sophistication of search fund transactions in the UK. As the market continues to evolve, initiatives such as UK SET can help create a common foundation for discussions between searchers and investors, allowing parties to focus their time and energy on the commercial aspects of a transaction."

Alexander Kalis, Founder and CEO of Archimax Global Solutions Ltd, said: "Having reviewed a number of these transactions, we could see the market needed documents that searchers and investors could both start from. We brought the working group together with that aim, and I'm grateful to every firm involved for giving their time and expertise without charge. We hope UK SET becomes the reference point that helps deals close more smoothly."

Shoosmiths ranked first by deal volume among UK-based legal advisers in London in 2025. The firm has invested significantly in its search fund practice in recent years, drawing on its deal expertise across M&A, private equity, venture capital and leveraged finance to get deals done for UK searchers.

The documents are available free of charge at ukset.org and the working group intends to publish revisions as the market evolves.

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Shoosmiths advises AI software business PEAK:AIO on sale

Fri, 6 Nov 2026 00:00:00 GMT

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Shoosmiths advises AI software business PEAK:AIO on sale

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Shoosmiths has advised the major shareholders of PEAK:AIO, including the company’s founders and institutional investors Pembroke VCT plc and PXN Asset Management, on its sale to NASDAQ listed intelligent data infrastructure company NetApp.

Published: 6 November 2026

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PEAK:AIO is a UK-based developer of AI storage software which has developed a high-performance data platform designed specifically for AI and accelerated computing workloads, helping organisations manage and access the large volumes of data required to train, deploy and operate AI models.

The deal highlights continuing strategic investment in AI infrastructure and demonstrates the increasing convergence between data storage, cloud technologies and artificial intelligence as organisations seek to unlock value from next-generation computing platforms. Having also advised the company on its initial institutional funding round led by Pembroke VCT plc, the transaction reflects Shoosmiths' continued focus on supporting innovative technology businesses, founders and investors in the Tech & AI sector at all stages of their lifecycle, including through to fast-moving cross-border M&A.

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To go from initial funding round to an exit in little over 12 months is an incredible achievement and is a testament to the expertise and vision of the company and its founding team. We are delighted to have supported PEAK:AIO and its shareholders on these strategic transactions."

Steve Barnett

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Shoosmiths' team was led by Corporate partner Steve Barnett, supported by a cross-departmental team including Corporate partner Alistair Hammerton, Legal Directors Natalia Tombs and Katie Yorke, associates Saba Mahmood and Georgia Edmondson, Tax partner Laura Board and principal associate Georgina Jones, Commercial Legal Director Nicky Jenkins, Privacy and Data partner Sherif Malak, Employment partner Harry Abrams, and Employment associates Niamh Millais and Eliza Moore.

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Building safety in focus: Why is Government ignoring internal fire safety defects?

Thu, 5 Nov 2026 00:00:00 GMT

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article | 2 min read

Building safety in focus

Why is Government ignoring internal fire safety defects?

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The introduction of the Building Safety (Remediation of Unsafe Cladding etc) Bill (Remediation Bill) marks the latest stage in the Government's efforts to accelerate remediation across England. The Bill imposes duties to assess and remediate external wall fire safety risks, introduces remediation compliance plans, expands enforcement powers and creates mechanisms for regulators to step in where responsible entities fail to act. The policy objective is clear: unsafe cladding must be identified and fixed.

Published: 5 November 2026
Authors: Sam Mullender

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Yet the Bill also exposes an increasingly difficult question: what about internal fire safety defects?

Almost every recent Government initiative has focused overwhelmingly on external walls. The Building Safety Fund, Cladding Safety Scheme and now the Remediation Bill are all directed primarily towards the assessment and remediation of external wall systems.

That focus is understandable, but it risks creating a misleading impression that external wall defects are synonymous with building safety. They are not.

A building does not become safe simply because its cladding has been replaced. Internal fire safety defects can be equally serious. Missing compartmentation, defective fire-stopping, inadequately protected structural elements, defective fire doors, poorly designed means of escape and failures within smoke control systems may all materially increase the risk to life. In many cases, those defects are capable of allowing fire and smoke to spread throughout a building even where the external wall system is fully compliant.

Indeed, many of the failings exposed by the Grenfell Tower Inquiry were internal rather than external. Any suggestion that external walls alone define building safety risks therefore oversimplifies the lessons of Grenfell.

The difficulty is that Government policy now appears inconsistent.

On the one hand, and as noted above, public funding schemes generally exclude internal fire safety defects from recovery. The new Remediation Bill likewise concentrates almost entirely on external wall remediation.

On the other hand, the remediation of internal defects falls within the scope of other Government measures. The Developer Remediation Contract requires developers to address both internal and external fire safety defects. Likewise, the Building Safety Act 2022 permits remediation orders, remediation contribution orders and building liability orders in respect of both categories of defect.

The result is an uncomfortable question: are internal fire safety defects important enough to remediate, or not?

The Remediation Bill creates further uncertainty in respect of this question by only focussing on the remediation of external defects rather than approach each individual building’s defects holistically.

This is not merely an academic question. Internal defects have, in numerous cases, led to waking watches, enforcement action, major remediation projects and even the temporary decant of residents. Responsible entities are routinely told that such defects present life-safety risks requiring urgent attention. Yet the Government's latest flagship legislation largely proceeds as though they are peripheral.

Nine years after Grenfell, few would argue that unsafe cladding should not be fixed. The more pressing question is why the same clarity has not been provided for internal fire safety defects. If those defects are sufficiently serious to justify developer liability, Building Safety Act recovery claims and regulatory intervention, the Government should explain why they are largely absent from its remediation legislation. Responsible entities, housebuilders and residents alike deserve a coherent answer.

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Shoosmiths advises on Safety UK Group sale to Inspiro

Thu, 5 Nov 2026 00:00:00 GMT

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Shoosmiths advises on Safety UK Group sale to Inspiro

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Health, safety and compliance training provider Safety UK Group (SUKG) has joined workforce development company Inspiro.

Published: 5 November 2026

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The deal reflects continued investment in skills and workforce development businesses as employers face increasing regulatory, safety and compliance requirements. By bringing together SUKG's expertise in accredited training and compliance services with Inspiro's strengths in apprenticeships, vocational learning and workforce development, the combined business is well positioned to support employers operating in highly regulated sectors.

Founded by Michael Havercroft and Damian Dunne, Safety UK Group has built a strong reputation for delivering accredited health, safety, environmental and compliance training across the UK through The Safety Maintenance Company, The Safety Consultants Company and SOTA Training.

Shoosmiths advised the SUKG shareholders on the corporate aspects of the transaction, including the private equity elements, with support from specialist employment and tax lawyers.

James Foster, Corporate Partner at Shoosmiths, said: "Safety UK Group has built an outstanding reputation in the health, safety and compliance training market, making it an attractive partner for a business with Inspiro's growth ambitions. This transaction positions the business for its next phase of growth while allowing the founders to build on the strong platform they have created. Congratulations to the shareholders and all those involved on this significant milestone."

The Shoosmiths team was led by James Foster and included Partner Simon Procter, Legal Director Natalie Redfern, Senior Associate Jordan Collinson, Associate Arvind Paramiswaran and Trainee Solicitor Rebecca Tullet. Specialist employment support was provided by Principal Associate Alex Bevan and Senior Associate Rachel Taylor, while Partner Laura Board and Principal Associate Caroline Airey advised on tax matters.

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Shoosmiths strengthens its position in the autonomous mobility sector

Thu, 5 Nov 2026 00:00:00 GMT

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Shoosmiths strengthens its position in the autonomous mobility sector

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Shoosmiths has joined Partners for Automated Vehicle Education UK (PAVE UK), reinforcing its commitment to supporting the responsible deployment of self-driving vehicle technology and the future of the UK's connected and automated mobility sector.

Published: 5 November 2026

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PAVE UK brings together organisations from across the mobility ecosystem to build public trust and understanding of self-driving technology through research, education and engagement. As a member, Shoosmiths joins organisations including Wayve, Uber, Nissan, Acorn Group and the Motability Foundation, contributing its legal and sector expertise to discussions around regulation, liability, accessibility and consumer confidence.

Professor Siddartha Khastgir, Director of PAVE UK and Head of Safe Autonomy at WMG, University of Warwick, said: "At a pivotal moment for the UK self-driving vehicle ecosystem as the technology graduates to commercial deployment, we are delighted to welcome Acorn Group, the Motability Foundation and Shoosmiths. Together with our existing members, this new insurance, accessibility, and legal expertise focus, gives us a holistic view towards a responsible deployment of self-driving vehicle technology.”

Industry recognition for legal expertise

The appointment follows further recognition for the firm's work in the sector. Shoosmiths was recently named winner of the Legal Award at the 2026 Cars of the Future Self-Driving Industry Awards, recognising its role in advising connected and automated mobility businesses and helping shape the UK's evolving regulatory framework for autonomous vehicles.

The award reflects Shoosmiths' contribution to industry bodies including techUK, the Society of Motor Manufacturers and Traders (SMMT) and the UK Automotive Council, alongside its support for clients across the mobility ecosystem.

Cars of the Future editor Neil Kennett said: "As the legal and regulatory landscape for self-driving vehicles continues to evolve with the emergence of new technologies, Shoosmiths has demonstrated a strong understanding of the issues facing the industry, supporting organisations as they navigate an increasingly complex legal landscape. The judging panel was pleased to recognise that contribution with this year's Legal Award."

Supporting the future of mobility

Ben Gardner, Partner in Shoosmiths' Commercial Group, said: "Joining PAVE UK and receiving this industry recognition are important milestones for our mobility sector team. Together, they reflect our continued commitment to helping clients navigate the legal and regulatory challenges associated with self-driving technology and supporting the responsible growth of the sector.

"With the industry moving closer to commercial deployment, we look forward to working alongside fellow PAVE UK members and continuing to support innovative mobility projects in the UK and internationally."

Together, these milestones reinforce Shoosmiths' continued growth across its Mobility, Logistics and Manufacturing sector.

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Who controls flexibility? Competition and the UK’s electricity market

Wed, 4 Nov 2026 00:00:00 GMT

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Who controls flexibility? Competition and the UK’s electricity market

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Who controls access to the markets, data and technology through which flexibility is bought and sold is becoming increasingly important to the electricity system.

Published: 4 November 2026
Authors: Kiran Desai

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Electricity competition is changing

Historically, competition and competition law analysis naturally concentrated heavily on generation and supply. The energy transition in the UK creates another competitive layer: the ability to shift, store, aggregate and optimise electricity consumption and production. That puts battery energy storage system (BESS) operators, aggregators, industrial demand-response providers and optimisation businesses into markets whose competitive conditions can depend heavily on access arrangements and market design. The National Energy System Operator (NESO) says demand-side flexibility is currently underrepresented in its services because of market rules, policy and regulatory barriers¹.

Key questions

The transition raises questions that business should anticipate regulators will consider and need to address.

access: Could rules for participating in balancing or flexibility services disadvantage particular technologies, smaller assets or aggregators?
data: If access to consumption, asset or operational data becomes important to competing effectively, who possesses it and on what terms can competitors obtain it?
platforms and optimisation: What happens when multiple competing assets use the same optimiser, aggregator or bidding technology? At what point could information flows or algorithmic decision-making facilitate coordination?
vertical integration: What competition questions arise if a participant operates at several levels, for example owning assets while also providing optimisation, aggregation or market-access services to third parties?
aggregation and scale: Aggregation enables small assets to compete, but under what circumstances could concentration among aggregators or optimisation providers itself become an issue as these markets mature?

Competition and market architecture

Consideration of the above questions by business is not so much about compliance but about the market architecture, namely, however designed, what potential competition outcomes may need addressing? However, there is something of a symbiotic point as well-designed competition rules can help create the conditions in which flexibility, storage and new business models can scale.

That matters because the electricity system is changing. Competition is increasingly taking place not simply between generators of electricity, but between different sources of flexibility: battery storage, flexible generation, interconnectors, demand-side response and, increasingly, aggregated consumer assets such as electric vehicles and smart heating.

For these businesses, the ability to compete may depend upon much more than the price they offer. It may depend upon access to the grid, balancing and flexibility markets, operational and consumption data, optimisation technology and other routes to market.

This is where competition law and policy can play a constructive role.

First, open and non-discriminatory access can promote entry. If access to infrastructure, data or a route to market is necessary to compete effectively, the terms on which access is provided can have an important bearing on competition. The question is not simply whether access exists, but whether market arrangements allow different technologies and business models a realistic opportunity to compete.

Second, competition rules need not prevent collaboration and aggregation. The transition requires significant coordination, and smaller assets may need to be aggregated to compete effectively. NESO's current work expressly seeks to remove barriers for smaller and aggregated assets and to increase competition. The challenge is therefore to distinguish legitimate cooperation that brings new capacity into a market from arrangements that unnecessarily restrict independent competitive decision-making.

Third, competition can encourage innovation in the routes through which flexibility is traded. Aggregators, optimisation providers and digital platforms can reduce barriers to participation by connecting assets with different electricity markets. But successful intermediation can also create new dependencies. As these models develop, questions concerning access to data, interoperability, exclusivity and conflicts between operating a platform and competing through it may become increasingly significant, in a similar way to how product platforms, such as Amazon, are facing regulatory challenges for being both a major platform on which sellers and resellers transact, and on which Amazon sells its own products.

Finally, effective competition should matter to investment. The government's 2026 Clean Flexibility Roadmap envisages a major expansion of clean flexibility as the electricity system decarbonises². Investors therefore need confidence not merely that markets exist, but that there are viable and durable routes through which their assets can compete.

The energy transition consequently presents competition law with a wider task. It must continue to prevent collusion and exclusionary conduct. But it can also contribute to something more fundamental: ensuring that the emerging commercial architecture of the electricity system remains sufficiently open for new technologies, new entrants and new business models to prosper.

That makes competition law not simply a constraint on the energy transition, but potentially one of its market-building tools.

The transactional implications

For energy-transition transactions, competition law should not begin and end with the question: does the deal require merger clearance? The more commercially interesting question may be what the transaction does to the parties’ position within an evolving energy ecosystem. Acquiring a battery, aggregator or optimisation business can bring control over capacity, data, customer relationships or routes to market. Understanding those relationships can expose strategic advantages, but also dependencies, conflicts and potential competition concerns. Competition analysis should therefore form part of the commercial understanding of the deal, not simply the regulatory process that follows it.

The energy transition is not simply changing how electricity is generated and consumed; it is creating new markets, new intermediaries and new commercial dependencies. Competition law has an important role to play in ensuring that this emerging architecture remains open, contestable and capable of supporting the investment and innovation the transition requires.

¹ NESO website, Flexibility | National Energy System Operator

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Shoosmiths strengthens Financial Services disputes offering with partner hire

Mon, 2 Nov 2026 00:00:00 GMT

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New partner hire strengthens Financial Services disputes offering

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Philip Williams joins the Litigation, Regulatory & Compliance team as the firm continues to invest in Financial Services as a priority sector.

Published: 2 November 2026

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Williams joins Shoosmiths from DLA Piper, bringing specialist expertise in payments, fintech and insurance, alongside extensive experience handling complex financial services and commercial disputes.

For the last decade, Williams’ international practice has focussed on advising leading financial services and technology businesses at the cutting-edge of the fast-growing payments sector, and advising on specialist insurance business transfers; expertise that saw him recognised in the 2024 Chambers FinTech Guide.

Alex Bishop, lead Partner of Shoosmiths’ Litigation, Regulatory & Compliance practice, said: “Philip is an accomplished financial services litigator with extensive experience spanning payments, fintech and insurance, major banking disputes (including acting on a matter valued at approximately £900 million) and complex international work.

“Financial Services continues to be a key growth area for Shoosmiths, and Philip’s appointment strengthens our ability to support clients as they navigate regulatory change, technological innovation and increasingly complex disputes. We’re delighted to welcome him to the team.”

Commenting on his appointment, Williams said: “It’s an exciting time to be joining Shoosmiths as it continues to develop its financial services practice. The pace of change across payments, fintech and the wider financial services market is creating increasingly complex challenges and opportunities for clients, particularly as regulation and technology rapidly evolves.

“Shoosmiths’ ambition in the sector, combined with its collaborative approach and breadth of expertise, provides a strong platform to grow the practice. I’m looking forward to working with colleagues across the firm, developing existing and new client relationships and contributing to the continued growth of the team.”

Williams’ arrival follows the recent appointment of Caroline Tuck to Shoosmiths’ Litigation team, further strengthening the firm’s Litigation, Regulatory & Compliance offering. The hires demonstrate Shoosmiths’ continued investment in strategic growth areas and support the delivery of its 2030 Vision.

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Regulating for growth: Can the UK keep pace with innovation?

Thu, 29 Oct 2026 00:00:00 GMT

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Regulating for growth: Can the UK keep pace with innovation?

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The Regulating for Growth Bill could reshape UK innovation. What will it take to turn successful pilots into investment, adoption and lasting change?

Published: 29 October 2026
Authors: Michelle Craven-Faulkner

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Innovation rarely waits for regulation.

Technology develops, new business models emerge and organisations find different ways of delivering products and services. The opportunities can be significant, but the legal and regulatory framework within which those innovations need to operate may have been designed for a very different market.

That raises an increasingly important question for government, regulators and business: how do we retain the protections that good regulation provides while creating a system agile enough to accommodate innovation, investment and growth?

The government’s proposed answer includes the Regulating for Growth Bill, which, as well as strengthening the existing Growth Duty, is expected to introduce wider regulatory sandboxing powers.

Both aspects could be significant. But their real value will depend not simply on what the legislation says, but on whether they change what happens in practice.

From regulating risk to enabling responsible growth

The Growth Duty itself is not new. The existing statutory framework has been in effect since 2017 and requires regulators within its scope to have regard to the desirability of promoting economic growth alongside the protections they are required to deliver. The statutory guidance was substantially refreshed in 2024 and the duty extended to Ofcom, Ofgem and Ofwat.

The current government's direction of travel is, however, increasingly clear. Its wider Regulation for Growth programme, reinforced by the Budget published on 28 October, includes ambitions to reduce administrative costs for business, reduce regulatory uncertainty and challenge excessive risk aversion within the regulatory system.

A strengthened Growth Duty raises an important question.

What would we expect a regulator to do differently?

There is a significant difference between requiring economic growth to be considered as part of a regulatory decision and creating a regulatory culture in which growth, innovation and investment genuinely influence how decisions are approached.

Accountability will matter.

Businesses will want to understand not simply whether a regulator considered growth, but what effect that consideration had. Did it result in a more proportionate approach? Did it enable a decision to be reached more quickly? Did it reduce unnecessary uncertainty? Did it facilitate investment or adoption of a new technology?

The economic effect of regulation is not limited to the regulatory requirement itself. Time, uncertainty and complexity all have a commercial cost.

For investors deciding where to deploy capital and businesses deciding whether to pursue an innovation, knowing when a regulatory decision will be made and understanding the likely parameters can sometimes be almost as important as the ultimate answer.

Sandboxes could be the more radical development

The second element of the proposals is as interesting.

Regulatory sandboxes already exist in some areas, most notably financial services. The broader proposition being considered by the Bill is a cross-economy mechanism capable of responding to regulatory barriers affecting innovation.

First, identify a regulatory barrier and establish what flexibility is needed to enable an innovation to be tested.

Second, undertake a controlled pilot with appropriate safeguards.

Third, where that pilot demonstrates that an alternative approach works, create a route through which the regulatory change can potentially become permanent.

That third stage is critical.

A sandbox should not simply make it easier to run more pilots. It should make it possible for successful innovation to become normal.

Otherwise, there is a danger that we create excellent environments for experimentation without addressing the more difficult question of adoption.

The real challenge is pilot to scale

That distinction between experimentation and implementation is something I see repeatedly through my work with businesses and across sectors.

Organisations can often demonstrate that an innovation works. The challenge comes afterwards, with common questions including:

how does a successful pilot become commercially viable?
how does it move into procurement and contracting?
how does temporary regulatory flexibility become a sustainable regulatory position?
how does a business obtain sufficient certainty to invest?
how does something demonstrated on a relatively small scale become capable of widespread deployment?

There is a tendency when discussing innovation policy to concentrate heavily on creating the conditions for ideas to be developed and tested. That is important, but innovation does not generate economic growth merely because it has been successfully demonstrated. Growth occurs when good ideas are adopted, invested in, procured and scaled.

That is why the relationship between the proposed sandbox powers and the strengthened Growth Duty could prove particularly important.

The sandbox may provide the environment in which evidence can be gathered. The Growth Duty should help ensure that the regulatory system is receptive to what that evidence demonstrates.

Regulation increasingly needs to work across boundaries

There is another practical challenge: innovation does not respect organisational charts.

A new product, technology or service can potentially engage multiple regulatory regimes, government departments and areas of policy simultaneously.

A cross-economy approach therefore creates some important questions:

who should be able to initiate a sandbox: businesses, regulators, government departments or each of them?
where more than one regulator is involved, who takes the lead?
what happens if regulators reach different conclusions about the same innovation?
how are competing proposals prioritised?
where a proposal has implications across several sectors, who takes responsibility for looking at the opportunity as a whole?

The answers will matter enormously to businesses. A sandbox that removes one regulatory obstacle while leaving two others untouched may ultimately have achieved very little.

For businesses, the regulatory experience needs to feel joined-up even where the regulatory landscape is not.

Who carries the risk of saying “yes”?

Perhaps the most interesting question is one of risk.

Regulators exist to protect important interests. Safety, consumers, markets, the environment and other public interests cannot simply be subordinated to growth.

Nor should they be.

But innovation inevitably involves some uncertainty. If the safest institutional position is always to preserve the status quo, a system can become unintentionally resistant to change.

That leads to what I think is one of the central questions for the proposed regime:

Who carries the risk of saying “yes”?

If government wants regulators to take a more proportionate approach to risk in pursuit of growth, regulators need a sufficiently clear framework within which to do that.

Simply telling regulators to become less risk-averse is unlikely, on its own, to alter behaviour.

Clear parameters, safeguards and accountability should protect the public interest. But accountability also needs to work in the other direction. The consequences of unnecessary delay, excessive caution or failing to facilitate responsible innovation deserve consideration too.

Good regulation should protect us from harm.

It should not inadvertently protect us from change.

Access cannot be limited to those with the greatest resources

There is also an important question around accessibility.

Large businesses often have sophisticated legal, regulatory and government affairs capabilities. An SME or scale-up developing a genuinely disruptive technology may have considerably fewer resources with which to navigate government and the regulatory landscape.

If sandboxing is to encourage innovation across the economy, the process needs to be accessible to those businesses too.

That becomes particularly relevant if demand exceeds the capacity to establish sandboxes. Transparent criteria for selecting proposals, clarity over the evidence required and a process which does not itself impose disproportionate costs will all be important.

Otherwise, there is a risk of creating an innovation mechanism which is theoretically available to everyone but practically accessible mainly to organisations already well equipped to navigate regulation.

Successful sandboxes will need an exit strategy

A great deal of attention will understandably be paid to how a business enters a sandbox, but I would pay equal attention to how it gets out.

At the outset, participants should understand the possible consequences of a successful pilot:

what evidence is being gathered?
against which criteria will success be assessed?
who ultimately determines whether the experiment has succeeded?
what happens if there is disagreement?
most importantly, what is the mechanism for converting the evidence generated by a successful experiment into permanent change?

This is where the proposed legislative architecture has the potential to become particularly interesting. A model capable of facilitating appropriate regulatory change following a successful controlled experiment could offer a much more agile response than waiting for opportunities for primary legislative change.

But greater agility inevitably makes questions around scope, scrutiny, safeguards and challenge more important, not less.

The objective should not simply be faster deregulation. Instead, it should be better, evidence-led regulation capable of adapting more quickly where the evidence justifies it.

What should businesses do now?

The legislation is still developing, so it would be premature for businesses to assume what the final regime will look like. The government is actively seeking industry perspectives as the proposals develop and businesses should not wait for the final legislation before considering the opportunity. Across sectors, organisations should be asking:

where does the current regulatory framework prevent or delay something we could otherwise safely do?
is the barrier genuinely regulatory, or does the problem actually lie in procurement, investment, contracting or market adoption?
what evidence could demonstrate that a different approach delivers the necessary protection?
does the issue affect one business or an emerging market more broadly?
which regulator or government department owns the relevant policy?
could a controlled trial provide the evidence required to support change?
if the trial succeeded, what would be required to turn that success into a scalable commercial proposition?

This analysis is valuable regardless of the eventual shape of the legislation.

It moves the conversation from an abstract proposition that “regulation is a barrier” to a much more constructive proposition:

“This requirement is preventing this innovation. Here is the evidence. Here is how an alternative could be tested safely. And here is the economic opportunity if it works.”

Government and regulators need clear evidence of how policy affects businesses in practice. We can help our clients make that case, connecting them with the relevant departments or regulators and facilitating constructive conversations that bring their experience directly into the debate.

A significant opportunity, if we get the implementation right

The Regulating for Growth Bill arrives at an important moment.

AI and other technologies are accelerating change. Established industries are transforming. Increasingly, innovations cross traditional distinctions between sectors, regulators and government departments.

Against that background, a regulatory framework designed around lengthy cycles of legislative change risks finding itself perpetually behind the markets it regulates.

The answer cannot be regulation without constraint. But nor should the answer be regulation which preserves the present simply because changing it is difficult.

The opportunity is something more sophisticated: a regulatory system that protects important interests while being capable of learning, testing and adapting as the world around it changes.

The ultimate test of these reforms should therefore not be how many regulators refer to growth in their decisions, nor how many sandboxes government establishes.

It should be what happens next, answering questions including:

do good ideas get tested?
does evidence lead to regulatory change?
does regulatory change unlock investment and commercialisation?
do responsible innovations move from idea, to test, to evidence, to adoption and ultimately to scale?

If the new framework can achieve that while maintaining appropriate safeguards and public confidence, the Regulating for Growth Bill could prove to be far more than a regulatory reform programme.

It could become an important part of the UK's economic infrastructure for innovation.

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Commercial Court clarifies the procedure on letters of request

Thu, 29 Oct 2026 00:00:00 GMT

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Commercial Court clarifies the procedure on letters of request

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A recent Commercial Court decision provides significant guidance on the procedural requirements for letters of request where a witness is out of the jurisdiction.

Published: 29 October 2026
Authors: Aimee Cook

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The Commercial Court's decision in IPJSC United Company Rusal v Whiteleave Holdings Ltd & Ors¹ provides significant guidance on the operation of CPR 34.13 and the 1970 Hague Evidence Convention (1970 HEC). Whilst the judgment does not change the substantive test for obtaining a letter of request, it serves as a reminder that letters of request are a mechanism by which, assuming the relevant procedural requirements are satisfied the English court may ask a court in another jurisdiction to obtain evidence using the foreign court's own procedures, rather than a means of exporting English litigation practices abroad.

For commercial litigators, the decision highlights the practical and procedural realities of obtaining evidence from overseas witnesses: there are no shortcuts, and parties must be prepared to place themselves in the hands of the foreign court and its procedures when seeking overseas evidence.

What are the rules?

CPR 34.13 allows a party to apply to the High Court for a letter of request seeking evidence from a witness located abroad for use in English proceedings. The procedure operates alongside the 1970 HEC.

The starting point is that a letter of request is a request from the English court to a court, or “judicial authority”, in another jurisdiction asking the receiving court to obtain evidence and transmit it back for use in the English proceedings. The foreign court is ordinarily responsible for executing the request in accordance with its own procedural rules.

As held by the Court of Appeal in Honda², in considering whether to order that a letter of request be issued, the Court should ask two preliminary questions:

whether the intended witness can reasonably be expected to have relevant evidence to give on the topics set out in the relevant letter of request
whether the intention underlying the formulation of those topics is an intention to obtain evidence for use at the trial or is some other impermissible intention – e.g. mere general investigation.

If both those preliminary questions are answered in the affirmative, then in principle the application should be granted, subject to four further points also set out in Honda:

whether the request is oppressive
whether the request is too wide
other case management considerations, including proportionality and whether the evidence is necessary for the fair determination of the issues
whether there has been delay in making the application.

What happened in Whiteleave?

The Claimant sought two letters of request:

a request to Cyprus seeking evidence from four witnesses
a request to Germany seeking evidence from one witness.

The Commercial Court accepted that the witnesses could reasonably be expected to have relevant evidence. Indeed, the Defendants did not resist the application on relevance grounds. Instead, their challenge focused on the potential case management burden and timing of the application, which (if granted) they contended would cause “such extreme disadvantage ... as to be oppressive”.

The dispute therefore centred on how the proposed evidence-gathering exercise would be conducted. As drafted, both requests envisaged a significant degree of involvement by English lawyers in the overseas examination process. That approach led Bright J to consider the purpose and operation of CPR 34.13 and the 1970 HEC.

What did the court decide?

The Cyprus request

The Cyprus request was extensive.

It comprised 3,605 pages of materials, included very substantial lists of questions, sought documentary evidence and envisaged a lengthy examination process involving English legal representatives.

The Court refused the request in its existing form, emphasising that, under CPR 34.13 and the 1970 HEC, the normal position is that the foreign court obtains the evidence according to its own procedures and in its own language.

The most significant issue was that the letter did not ask the Cypriot court to examine the witnesses itself or even ask local counsel to; instead it proposed English counsel questioning witnesses and the exercise being carried out largely in English.

The request also had not been translated into Greek. The Court considered that it was inappropriate to expect the Cypriot court to operate using vast quantities of English-language material solely for the convenience of the English litigants.

The scale and timing of the proposed exercise was also relevant. The Court accepted that requiring parties and lawyers to participate in what could amount to several days of overseas examinations shortly before trial risked creating a disproportionate burden.

The Germany request

The Germany request differed in several important respects.

It concerned only one witness, had been translated into German, did not propose that the examination be led by English counsel, and did not contain a request for documents. Nevertheless, it still contemplated participation by English counsel in the examination process, including by way of asking supplementary questions of the witness.

The claimant relied on information published under the 1970 HEC suggesting that parties' representatives may, in some circumstances, ask limited follow-up questions following examination by the German judge. Bright J accepted that such limited participation might be permissible, however he concluded that this did not justify the extensive involvement of English advocates proposed by the Claimant and emphasised that any questioning should proceed through the German process and in German.

While substantially more compliant than the Cyprus request, the Germany request was also refused in its existing form and required amendment.

A refusal of form, not substance

Importantly, the Court did not conclude (and the Defendants did not argue) that the evidence was irrelevant or that letters of request were inappropriate in principle.

While the Defendants expressed concerns around timing/delay, and the Court accepted it was possible the letters (once amended and issued) may not be executed in time for trial, it considered that, on the evidence, there was a realistic chance or probability that the evidence would be available in time. (The 1970 HEC practical information indicated a 3-5 month execution period for the Cyprus request, and a 6 month period for the Germany request. At the time judgment was handed down, trial was 8 months away, in April 2027).

Instead, the applications failed because the Claimant sought to use the letters of request procedure in a manner inconsistent with the role of the receiving court. Bright J requested both letters be revised in accordance with his judgment.

Key takeaways

1. There are no shortcuts

The principal lesson from the decision is that parties cannot use the 1970 HEC to recreate an English cross-examination abroad. Parties seeking to maintain control over the process by avoiding instructing foreign counsel will receive pushback.

A letter of request is not simply a mechanism for relocating an English evidential hearing to another country. It is a request for the foreign court to obtain evidence using the procedural framework available in that jurisdiction.

Practitioners should therefore begin by asking: "How would this evidence be obtained under local law?" necessarily requiring the instruction of foreign counsel.

2. Foreign courts are not administrative assistants to English proceedings

The judgment reflects a strong emphasis on judicial harmony.

The receiving court is not expected to facilitate an English procedure; the foreign court's processes, language requirements and procedural rules must be respected.

In practical terms, that is likely to require:

translated requests
translated supporting documents
local lawyer
local procedural advice
acceptance that the process may unfold differently from an English witness examination.

It follows that the procedure is reciprocal. Where foreign litigants seek evidence from witnesses in England, the English court similarly expects the evidence-gathering exercise to be conducted in English, in accordance with English procedural requirements and by English-qualified lawyers.

3. Proportionality matters

The judgment also demonstrates that the court will scrutinise the practical burden of a proposed request.

Large document sets, lengthy question schedules and extensive overseas examination processes may all influence the court's exercise of discretion, even where the evidence sought is relevant.

Applicants should therefore consider carefully whether the scope of a request can be narrowed and simplified.

4. Witness burden is becoming increasingly important

A notable feature of the judgment is the Court's concern about the burden imposed on witnesses themselves.

Applicants need to address not only why the evidence is relevant and to comply with local law, but also how the process will operate in practice for the individuals being examined.

Conclusion

While Rusal v Whiteleave does not alter the established principles governing letters of request, it provides an important reminder about their fundamental nature. A letter of request is not a tool for extending English litigation procedures across borders. It is a request for assistance from a foreign court, and that assistance must be sought on the foreign court's terms.

For litigants, the message is straightforward: if evidence is required from an overseas witness, there is no procedural shortcut. Parties must be prepared to engage with the legal system of the requested state, comply with its procedural requirements and trust the foreign court to carry out the evidence-gathering exercise. Attempts to retain control of the process through English lawyers, English-language materials or English procedures will likely lead to the court requiring revision of the letters. The practical information published under the 1970 HEC must be consulted.

Parties must also ensure they do not delay in their applications to the English court; while the Court in this case acknowledged that letters of request are often regarded as a “last resort”, and may not always know until a relatively late stage in proceedings (as was the case here) whether another party is intending to call the relevant witnesses, the prospect of a proposed letter of request causing prejudice to any trial date will be a key consideration for the court generally and in relation to the third and fourth Honda points in particular.

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Supreme Court clarifies the scope of directors’ duty of good faith

Thu, 29 Oct 2026 00:00:00 GMT

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Supreme Court clarifies the scope of directors’ duty of good faith

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The Supreme Court's judgment in Saxon Woods v Costa provides important guidance on the scope of a director's statutory duty to promote the success of a company.

Published: 29 October 2026
Authors: Lauren Moroney

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The Supreme Court’s decision in Saxon Woods Investments Ltd & others v Costa provides important guidance on the scope of a director’s duty to promote the success of the company under section 172 of the Companies Act 2006 (the 2006 Act). The judgment addresses the relationship between a director’s business judgment, collective board decision-making, and the fundamental fiduciary duty of good faith owed to the company.

The decision confirms that a director cannot avoid liability under section 172 simply because they honestly believed that their actions were in the company’s best interests. Where a director secretly acts to undermine or circumvent decisions that properly fall within the authority of the board, they may be acting in breach of their duty of good faith, even if they subjectively considered that their actions were beneficial to the company.

The judgment will also be of interest to insolvency practitioners considering breach of duty claims against directors on behalf of the companies to which they are appointed.

Facts

The dispute arose from the management of a company (Spring Media Investments Limited) (the Company) in which Saxon Woods Investments Ltd (Saxon Woods) was a shareholder and Mr Costa was a director.

In 2016, a shareholders’ agreement was entered into under which the parties (including Saxon Woods and various other investors) agreed to work towards a sale of the Company (or its shares) by the end of 2019. Mr Costa, however, believed that postponing a sale beyond that date would ultimately produce a better financial outcome. Acting on that belief, he covertly pursued a strategy designed to delay the sale process.

That strategy did not produce the intended result. Following the significant impact of the Covid-19 pandemic on the Company’s business, the anticipated increase in value failed to materialise. Saxon Woods subsequently presented an unfair prejudice petition under section 994 of the 2006 Act.

Earlier judgments

The first instance Judge held that Mr Costa’s conduct amounted to unfair prejudice. However, the court was not satisfied that his actions constituted a breach of section 172 or involved dishonesty.

Both parties appealed. Saxon Woods challenged the finding on section 172, whilst Mr Costa cross-appealed against the unfair prejudice findings. The Court of Appeal allowed Saxon Woods’ appeal and dismissed Mr Costa’s cross-appeal.

A significant aspect of the Court of Appeal’s reasoning concerned the nature of “prejudice” for the purposes of section 994.

The Court held that prejudice need not be financial in character. Although it could not be established that a sale would necessarily have been achieved by the end of 2019, Mr Costa’s actions had deprived the company of the opportunity to pursue the agreed strategy and attempt to achieve such a sale.

That lost opportunity was itself capable of constituting prejudice. By deliberately causing the company to depart from its agreed obligations, Mr Costa had engaged in conduct that was unfairly prejudicial to Saxon Woods as a shareholder.

The Court of Appeal also concluded that section 172 encompasses a core fiduciary requirement of honesty and loyalty towards the company.

The Court found that Mr Costa had acted contrary to that duty by secretly pursuing a course of conduct designed to frustrate the agreed corporate strategy. His conduct therefore breached the statutory duty to promote the success of the company.

Supreme Court decision

Mr Costa appealed to the Supreme Court, where his appeal was dismissed unanimously. The Supreme Court upheld the Court of Appeal’s reasoning and ordered an unconditional buy-out of Saxon Woods’ shares by Mr Costa.

In doing so, the Court provided substantial clarification on the proper interpretation of section 172(1). Section 172(1) provides that:

“A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole.”

The central issue was whether the requirement of good faith governed only the director’s state of mind and decision-making process, or whether it also extended to the director’s conduct.

Mr Costa argued that section 172 focused solely on the director’s subjective belief as to what would promote the company’s success. On that analysis, a director who genuinely believed their actions would benefit the company could not be in breach even if they acted covertly.

Saxon Woods contended that the statutory obligation was broader, requiring not only honest thought processes but also conduct consistent with a director’s fiduciary obligations.

Although the Supreme Court accepted that a strictly grammatical analysis might lend some support to Mr Costa’s interpretation, it concluded that Saxon Woods’ construction was clearly preferable for three principal reasons:

consistency with the previous common law around directors’ fiduciary duties which the 2006 Act sought to codify, under which conduct of the nature of Mr Costa’s was “so obviously disloyal” that there was no previously reported case on the point
consistency with the broader statutory context and purpose of Chapter 2 of the 2006 Act as a whole, which aims to codify directors’ duties in a way that promotes harmony with the governance of a company in accordance with its constitution
it strained credulity to think that the drafters of the 2006 Act intended section 172 only to require a director to think, but not act, in good faith, since this “would be a recipe for chaos and paralysis in corporate governance”.

Key takeaways

Corporate disputes

The Supreme Court’s decision serves as a significant restatement of the importance of collective board governance and fiduciary loyalty.

Whilst directors retain broad discretion to exercise their own commercial judgment, that discretion must be exercised within the framework established by the company’s constitution and through proper board processes. Directors are not entitled to circumvent those processes by secretly implementing their own preferred strategies.

The judgment makes clear that section 172 is not solely concerned with what a director thinks; it is equally concerned with how a director behaves. Even where a director genuinely believes that they are acting in the company’s best interests, they may still breach their statutory duties if they act covertly, undermine board authority, or pursue objectives that conflict with decisions that should be made collectively.

For directors and shareholders alike, the decision provides welcome clarity that the duty of good faith remains rooted in the traditional fiduciary concepts of honesty, loyalty and adherence to proper corporate governance.

Insolvency claims

The Supreme Court’s decision will also assist Insolvency Practitioners who bring breach of duty claims either on behalf of the companies to which they are appointed, or pursuant to section 212 of the Insolvency Act 1986. Broadly, these claims are made further to a breach of duty by the directors of a company, including section 172 of the 2006 Act, and seek repayment of any loss flowing from that breach from the misfeasant director(s).

It is important to note that the underlying action to claims arising out of insolvency will often take place when the company was already insolvent. If a company is solvent, what constitutes ‘the success of the company’ is by reference to its members and their interests. If a company is insolvent, the directors must instead consider the interests of the company’s creditors.

Therefore, when considering whether a breach of duty has occurred in an insolvent scenario, the Court will consider whether the directors’ actions were, in good faith, in the interests of creditors. The Supreme Court’s decision may widen, or at least simplify, insolvency practitioner claims where directors have tried to hide over optimistic decisions or gambles in the hopes of saving the company and paying off creditors.

It is invariably sensible for directors to seek both legal and insolvency advice when their company begins to struggle financially. The Supreme Court’s decision has only amplified the importance of advice to ensure that directors do not inadvertently breach their duties, despite their best intentions.

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Raeshaw Farms: EIA considerations for renewable energy projects and grid connections

Wed, 28 Oct 2026 00:00:00 GMT

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Raeshaw Farms

EIA considerations for renewable energy projects and grid connections

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The Raeshaw Farms decision highlights key EIA considerations for renewable energy developments and grid connections, and what they mean for developers in practice.

Published: 28 October 2026
Authors: Jemma Hughes

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Earlier this year the Court of Session issued a decision that has highlighted the importance of determining whether a renewable energy development and its grid connection should be treated as separate or connected projects for environmental impact assessment purposes. In this article we look at the key considerations for developers and what the decision could mean in practice.

In Raeshaw Farms Limited v Scottish Ministers and Energiekontor UK Ltd [2026] CSIH 10, the Inner House of the Court of Session highlighted the importance of identifying the project for the purposes of environmental impact assessment (EIA). The case was concerned with a challenge to an appeal decision to grant planning permission for the proposed Wull Muir Wind Farm. A key question was whether the wind farm and its grid connection were separate projects, or a single project requiring an EIA of the wider scheme. Whilst the Court stressed that the decision on what constituted the project was one for the decision maker and not the courts, it decided that the Reporter had not undertaken an adequate, fact-specific evaluation of whether Wull Muir Wind Farm and its associated grid connection formed one project or two separate projects for EIA purposes.

The Wingfield factors

The Court highlighted the non-exhaustive list of factors for identifying the project identified by the High Court in R (Wingfield) v Canterbury City Council [2020] JPL 154 (the Wingfield Decision). These include:

Common Ownership: Where two sites are owned or promoted by the same person, this may indicate that they constitute a single project.
Simultaneous Determinations: Where two applications are considered and determined by the same committee on the same day and subject to reports which cross refer to one another, this may indicate that they constitute a single project.
Functional Interdependence: Where one part of a development could not function without another, this may indicate that they constitute a single project.
Stand-alone Projects: Where a development is justified on its own merits and would be pursued independently of another development, this may indicate that it constitutes a single individual project that is not an integral part of a more substantial scheme.

Separate projects

Where in terms of the Wingfield factors it could be concluded that the projects are separate then no cumulative environmental assessment of the grid connection is required at the renewables project stage.

Connected projects

If the projects are considered connected and the grid connection route is known then the EIA should assess the cumulative impacts of both projects. In circumstances where the projects are connected but a connection route may not be fully known then the ‘realistic, worst case’ grid connection corridor is assessed applying the so-called ‘Rochdale Envelope’. Further guidance is available from the Scottish Government, Nationally Significant Infrastructure Projects guidance and the UK Government EIA guidance.

This allows a decision maker to determine that a renewables project and the grid connection project are connected projects and at least a partial assessment, based on the information available at the time, of the cumulative impacts of the grid connection will be required.

To assist the decision maker being comfortable with taking a Rochdale approach we could propose a Grampian Condition:

no development above [specified stage] shall commence until details of the proposed electricity grid connection serving the development have been submitted to and approved in writing by the local planning authority
the submitted details shall:
- demonstrate that the proposed grid connection falls within the design parameters and environmental envelope assessed in the Environmental Statement and supporting environmental informationaccompanying the application
- demonstrate that no materially new or materially different likely significant environmental effects would arise, either alone or cumulatively with the development hereby permitted, beyond those previously assessed by the local planning authority in determining this application
- identify any mitigation measures necessary to ensure that the environmental effects of the development and grid connection remain within the scope of those previously assessed

the development shall thereafter be carried out in accordance with the approved details

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Break conditions and last minute demands decided in the High Court

Mon, 26 Oct 2026 00:00:00 GMT

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Break conditions and last minute demands decided in the High Court

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In Sterling House Ltd v International Baccalaureate Organisation (UK) Ltd [2026] EWHC 2680 (BP), the High Court considered whether a tenant had successfully exercised a break clause where sums remained outstanding at the break date.

Published: 26 October 2026
Authors: Nick Wilcock

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The lease required annual rent and insurance rent to be paid as conditions of the break. Although the tenant asked the landlord’s agents for the sums required before handing back the premises, the rent invoice issued by the agents only covered the period up to the break date. The tenant paid that amount, leaving approximately £45,000 outstanding in respect of the balance of the quarter which fell after the break date.

The Court held that the landlord was prevented from relying on that shortfall. It was accepted that clear wording was required to allow the parties to depart from the position under the lease. However, the Court found that the landlord’s invoice amounted to a clear representation of what the landlord wanted paid before handover. The tenant had reasonably relied on it, having specifically sought the invoice well before the break date because it wanted to ensure that all necessary sums were paid.

The landlord had also demanded approximately £2,300 of insurance rent at 3pm on the Friday before the Monday break date. The Court found that this did not give the tenant a reasonable opportunity to complete the mechanics of payment. The payment was subsequently made within a reasonable period.

The landlord’s claim was therefore dismissed. Both landlords and tenants will retain a keen interest in whether permission to appeal is granted.

Practical significance

The decision is an important warning for landlords administering conditional break options. Although tenants must comply strictly with break conditions, a landlord's communications may prevent it from relying on non-compliance. Rent demands and correspondence issued shortly before a break date should therefore accurately reflect the sums contractually due, while demands for additional sums should allow a reasonable opportunity for payment.

For tenants, this decision provides a possible shield in circumstances where a conditional break option is challenged. However, it is anticipated that tenant’s focus will remain on avoiding these circumstances arising in the first place. It seems more likely that tenants will continue to ensure any break conditions are strictly complied with, rather than rely on landlord’s conduct to (as in this case) mitigate a missed payment.

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AI vs the world: Don't leave it to the governments

Mon, 26 Oct 2026 00:00:00 GMT

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AI vs the world: Don't leave it to the governments

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There is a great deal of discussion at the moment about whether AI development should be slowed, paced, governed or subjected to some form of international control.

Published: 26 October 2026
Authors: Oscar Tang, Sarah Reynolds & Alex Kirkhope

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In September, the debate arrived once again at the UN. Frontier AI companies called for global standards. Political leaders discussed cooperation. Commentators discussed existential risk. Everyone discussed everyone else. It is difficult not to enjoy the theatre.

The cast is unusually strong. Sam Altman and Dario Amodei warn about the dangers of increasingly capable AI systems. Xi Jinping speaks of keeping AI under human control whilst pursuing technology leadership. In the US, there has been a tendency to frame AI as a geopolitical race and embrace the term "super intelligence". The world's most valuable technology companies insist that the technology is too important to regulate heavily, while simultaneously insisting that only they can be trusted to regulate it responsibly.

The underlying problem is straightforward. Global AI regulation requires global agreement. Those leading AI development, be it companies or countries, do not entirely agree on what they are trying to achieve.

The United States tends to see AI through the lens of competition. China views it as a question of national capability . Europe prefers its precautionary principle, safety and accountability, albeit with greater concern about competitiveness in the past year. In the UK meanwhile, considerable faith has been placed in the evaluation capabilities of the AI Security Institute (AISI), yet even its influence has been constrained by the reluctance of model developers and increasingly protectionist state players to grant access to the latest frontier models.

Everyone would like international standards, but only standards that reflect their own interests. Sure, common standards will emerge, reporting frameworks will be developed, and there will be a convergence around these standards and frameworks.

But businesses cannot wait for a grand bargain. The market almost certainly will not. For most organisations, their first AI regulator is not a government agency or quango, but a customer procurement team, an investor or an acquirer, asking uncomfortable questions about engineering and evidence.

Markets regulate faster than governments

The assumption sitting behind much of the public debate is that governance begins when legislators intervene. In practice, governance begins when counterparties start asking awkward questions.

Cybersecurity followed this trajectory.

Long before legislators arrived with EU NIS2 or DORA and a list of legal obligations, customers were sending security questionnaires, demanding independent assurance and refusing to contract with suppliers who could not satisfy expectations. ISO, BSI, ISC2, ISACA did the job. In other words, the market arrived first.

AI is already following the same path. Enterprise customers are rewriting procurement requirements. Investors are adding AI governance questions to commercial and legal diligence exercises, while boards expect management to explain where AI is deployed, and how associated risks are controlled. Businesses are being asked not merely whether they use AI, but whether they can evidence responsible use through inventories, impact assessments, testing records, incident procedures, contractual safeguards and governance artefacts. No treaty is required for any of this.

AI is both normal and novel

AI model developers and AI sceptics argue that our AI today is unlike anything humanity has ever seen. Those taking the opposite viewargue that AI is simply software. We think that this is beside the point.

AI is novel in the sense that capable AI systems exhibit behaviours that are difficult to predict, difficult to explain and difficult to control. These systems pose questions that previous generations of software did not. Many discussions focus exclusively on models. In practice, businesses deploy systems, and risks emerge not from a model in isolation, but from systems – from the interaction of models, users, business processes, automation, data flows and operational controls. Governance, therefore, is a whole-system exercise rather than a model exercise, and the frontier risk literature recognises this distinction. The relevant question is not whether AI will eventually become superintelligent, but whether current and emerging systems create observable risks that can be engineered against, today.

While these risks are often presented as entirely novel, many risks collapse into categories we already study, test and govern. An AI system that generates hallucinated outputs creates a quality problem, a compromised AI system creates a security problem, poor governance creates a management or reputational problem, and misuse of autonomous systems creates an oversight and control problem. An AI-enabled product that causes loss creates a liability problem.

There is a tendency in policy debates to speak as though every challenge requires an entirely new vocabulary, a new taxonomy, and a new branch of law or concept of liability. However, not every new technology creates a new problem – the reality is much less dramatic, and most organisations can already manage the AI risks that are most critical to them. The practical challenge is adapting those capabilities rather than reinventing them, and deciding what evidence should be required before increasingly capable systems are trusted in real environments.

Accountability is the real standard

The most interesting development is not the emergence of new legal duties, but of a common expectation around accountability.

The first generation of AI governance was focused on principles: fairness, transparency, explainability, safety, like the summit of a cascading policy hierarchy. We are in a time today where the real governance comes in the lower layer of procedures and guidelines. One lesson emerging from the frontier AI debate is that confidence in a model provider's safety claims is no longer sufficient. In private settings like commercial contracts, businesses increasingly want assurance. Who approved deployment? What testing occurred? What safeguards were implemented? What data was used? What happened during an incident? How is performance monitored after deployment and what happens if behaviour changes over time? These are not just compliance questions, but procurement, investment and transaction questions.

In other words, we’re moving from ideals to operations; from representations and warranties to assurance and verification; from what organisations say about AI to what they can prove. The vocabulary becomes dull, but the consequences become real, and the organisations that can demonstrate how systems were tested, controlled and monitored will be trusted more than those relying on policy statements alone.

Governments still matter

Private enforcement is powerful but incomplete. Contracts only bind the parties who sign them. Powerful customers can demand protections that smaller organisations cannot. Large market participants often succeed in defining standards for everyone else. Private arrangements do little for those outside those arrangements.

If an AI system causes loss to a third party, a procurement schedule is unlikely to provide comfort, and we move into tort law and insurance. Here, it is our governments and legislators who address systemic risks, establish minimum standards and protect those who lack leverage.

Where this goes next

Three things seem likely.

First, AI governance becomes a standard feature of commercial relationships. The question is not whether organisations use AI, but whether they can demonstrate responsible use when asked.

Second, accountability will become a transaction issue rather than compliance. Investors and buyers will care about dependencies on third-party models, training data provenance and quality, contractual allocation of risk and operational resilience. Good governance is a better valuation, and bad governance invites diligence and indemnity discussions.

Third, regulation will codify practices that emerged first in the market. This is how technology regulation frequently develops – new technologies generate uncertainty, customers create expectations, markets coalesce around standards, and the law, eventually, formalises them. We do not see the order reversing today.

Action, today

The public debate about AI governance focuses heavily on governments. That is understandable – governments write laws and journalists like theatre.

But organisations should pay at least as much attention to the commercial levers of the business – customers, investors, insurers, other counterparties – and how the market manages AI risk through engineering accountability. The dry, hard work of internal governance determines who wins contracts, secures investment and accesses markets.

The race to govern AI is often presented as a contest between nations but it’s increasingly a question of trust and negotiation between counterparties. Governments will continue to shape the legal baseline, but markets are already determining what good governance looks like. For boards, that means AI governance is a commercial driver rather than mere compliance. For procurement and legal, it is about supplier management. For investors and acquirers, it is core diligence. The legal risks are already here and the organisations that can evidence control, accountability and resilience will secure contracts, attract investment and earn trust. Those that cannot may find that the first meaningful AI regulator they encounter is not a government at all, but a customer.

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Product liability in the digital age: Law Commission proposes sweeping reforms

Fri, 23 Oct 2026 00:00:00 +0100

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Product liability in the digital age: Law Commission proposes sweeping

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Published: 23 October 2026
Authors: Claire Kershaw, Paul Eccles, Luke Coleborn, Nick Sheerin

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The Law Commission has published a consultation on significant proposed reforms to the UK’s product liability regime under the Consumer Protection Act 1987 (the CPA) .

Introduction

Acknowledging that the law has “not kept pace” with how modern technologies have “transformed everyday life”, the Commission’s central proposal is to expand the definition of “product” to bring software, AI systems and aspects of social media/other online platforms within scope. Amongst other things, the definition of “supply” and categories of potentially liable persons will also be expanded to reflect digital delivery methods and the increasing complexity of modern supply chains.

The consultation follows in the footsteps of the EU’s new Product Liability Directive and wider consideration of liability for AI-related harm by the UK Jurisdiction Taskforce, both of which were previous explored in Product liability redefined: EU Directive reshapes digital risk and New tech, old law: UKJT confirms its position on liability for AI harm. This sits alongside rising public sentiment around the risks of certain technologies, partly reflected in the enactment of the Online Security Act 2023 and the subject of developing case law particularly in the US.

The Commission describes the proposals as seeking to strike an appropriate balance between the interests of consumers and businesses, by providing consumers with a straightforward route to compensation while giving businesses legal certainty to manage the risk of liability for harm.

Interested stakeholders should consider responding to the consultation, which closes on 14 January 2027, as soon as possible.

Summary of key proposals

Definition of “product” to include software, AI and social media/online platforms

the Commission proposes to expand the definition of “product” to include software and AI systems, identifying some core features of each to help clarify boundaries (for example, in relation to AI, the possibility of self-learning after deployment). The case for this is described as particularly strong given the evidential difficulties claimants face in establishing how and why these technologies may have caused harm – the type of complexity the CPA’s strict liability regime is intended to address
design components and features of social media and other online platforms would also be brought within scope, giving individuals the right to seek compensation for harm suffered (which the Online Safety Act 2023 does not provide). Features identified by the Commission include recommender algorithms, ‘infinite scroll’, personal notifications, age verification processes and illegal/harmful content reporting mechanisms
in order to “future-proof” the definition of “product”, the Commission proposes that it should extend to any other thing (digital or otherwise) that is designed or developed to perform a specific function for users, irrespective of how it is supplied or made available.

Meaning of “supply” to capture digital delivery

the Commission proposes this also be expanded to include (i) any means of delivery (such as digital download) and (ii) circumstances where products are made available for no consideration at the point of use, but in the course of business and/or with a view to profit - for example a freely available social media platform which generates revenue from advertising and/or users’ personal data.

Potentially liable persons to include tech developers, online marketplaces and fulfilment service providers

the definition of “producer” would be expanded to include developers of software, AI systems and design components/features of online platforms (which themselves would fall within the expanded definition of “product” as noted above)
greater clarity would be provided around the allocation of liability (i) as between producers of component parts and producers of finished products, to reflect the range of circumstances in which a component may be integrated, and (ii) as between original producers and persons carrying out “substantial modifications”
the categories of other person who may be liable would also be expanded to include fulfilment service providers (such as warehousing, packaging and dispatching), “core participants” including online marketplaces, and UK authorised representatives. The existing approach to supplier liability would be retained, with suppliers able to avoid liability by reference to the expanded list of ‘primarily’ liable persons.

Greater clarity on what constitutes a “defect”

the Commission aims to retain the breadth and flexibility of the current approach (based on an ‘entitled level of safety’), while providing greater clarity on its application through:
- a new non-exhaustive list of principles for assessing the entitled level of safety, such as presentation of risk, and the relationship between risks and benefits
- supplementing the existing list of relevant circumstances to which a court must have regard, for example to include the product’s ability to learn/acquire new features after supply, and the reasonably foreseeable effects of interaction with other products
- clarifying and elaborating the stated purpose of the CPA (currently only expressed in terms of compliance with the EU’s original product liability directive of 1985)

Easing evidential challenges for claimants in proving defect and causation

noting difficulties around the evidential burden on claimants – likely to be compounded by the increasingly digital/AI-driven range of in-scope products – the Commission is considering introducing:
- certain rebuttable presumptions of fact relevant to defect and/or causation, where there is an asymmetry of information and it would be fair for the defendant to bear the burden of rebutting
- a rebuttable presumption of defect, subject to strict thresholds: namely that it is arguable the product is defective, the facts relied on are not fanciful, the claimants faces exceptional evidential difficulties, and the risk of harm is not so widely known as to be socially accepted. The defendant could then either accept the alleged defect or try to rebut the presumption, with consequential guidance for the court on assessing any damages as may be awarded thereafter.

Wide-ranging framework for assessing compensable psychiatric harm

the Commission proposes a new framework to clarify the (highly topical and emotive) issue of the circumstances in which psychiatric harm may be compensable as a form of personal injury, distinguishing between direct and indirect victims of such harm
for direct victims:
- where the psychiatric harm results from physical injury/impairment, it would be compensable where it amounts to a medically ”recognisable” psychiatric illness
- where psychiatric harm is the sole injury, as well as being medically recognisable, the harm must also “fall within the natural range of reactions of a person of ordinary fortitude”.
for indirect victims:
- the psychiatric harm must be medically recognisable and result from the physical and/or psychiatric injury, physical imperilment or death of a direct victim
- the harm suffered must fall within the natural range of reactions of a person of ordinary fortitude, having regard to all the relevant circumstances
- the indirect victim must have a “close tie of love and affection” with the direct victim.
in principle therefore this new framework would extend, for example, not only to a child who (as a direct victim) develops a psychiatric condition as a result of a defective social media platform, but also to a parent who (as an indirect victim) also suffers psychiatric harm as a result of the psychiatric injury to their child

Compensable property damage extended to mixed private/professional use property

the circumstances in which damage to property may be compensable would be expanded to include damage to property used for both private and professional purposes (reflecting flexible/home-working arrangements), and destruction or corruption of data (including data used for mixed private and professional purposes)

Extended 25-year ‘long-stop’ for latent harm claims and modifications to other defences

currently a claimant must bring a claim within three years of either (i) the date on which the damage arose or (ii) the date on which the claimant acquired the relevant knowledge of the damage – whichever is the later. This is subject to a “long-stop” of 10 years from the “relevant time”, usually the time of supply
the Commission makes two proposals in relation to the long-stop period:
- substantial modifications: Where a product has been substantially modified after supply (for example through software upgrades), the 10-year long-stop would reset. If the modification occurs within the original producer’s control, time would restart from when the modified product is made available. If it is modified outside the original producer’s control, time for the original producer would not restart, but time for the modifier would (re)start from the point of supply
- latent injuries: The long-stop period would be extended to 25 years for latent personal injury claims, where it was not possible for the claimant to initiate proceedings within the 10-year period due to the latent nature of the injury – to be assessed by reference to criteria “inspired” by s.14A of the Limitation Act 1980, which provides a special time limit for negligence claims where facts relevant to the cause of action were not known when the cause of action accrued.
the Commission also proposes modifications to other existing defences, in particular:
- the ‘no supply to another’ defence would not be available where a defective product is used in the provision of commercial or publicly funded services
- the ‘defect arose after supply’ defence would not be available to a defendant who caused the defect post-supply, for example by introducing a faulty software update
- the ‘development risks’ defence should involve an objective assessment of the state of the art and, where applicable, should operate to reflect a producer’s ongoing role in a product’s safety after supply, again for example through software updates.

Shoosmiths comment

If enacted, the Law Commission’s proposed reforms would represent a ‘once-in-a-generation’ shift in the UK’s product liability landscape.

The core proposals around the definitions of product, supply, and potentially liable persons, would vastly expand the scope of the regime to a huge range of products and businesses, across multiple sectors, which were previously unaffected. The potential consequences of being in scope have an equally ‘long tail’, not least given the concept of indirect victims of psychiatric harm, and the extended 25-year long-stop for latent harm.

While they are of course subject to consultation, given the EU’s recent action in this area, other relevant domestic legislative developments (such as the Online Safety Act 2023), and the acknowledgement by the Commission that the law has been out of date for some time, it seems relatively likely that substantial reforms will indeed be pursued, albeit there will doubtless be a process of evolution before any resulting legislation is brought in.

It is worth noting in particular that some aspects of the Law Commission’s proposals arguably go further than the new EU Directive. For example, the Directive makes no express reference to social media platforms or indirect victims of psychiatric harm, although its application in those respects may be a matter of interpretation and/or implementation by Member States. The treatment of fulfilment service provider and online marketplaces also differs as between the Directive and the Commission’s proposals. While the Commission seeks to explain its reasons for these areas of divergence, they could prove obvious ‘sticking points’ in consultation responses.

Stakeholders may also be aware that earlier this year the Law Commission issued an initial scoping questionnaire as part of its new consumer class actions project, looking at whether the way consumer laws are enforced could be strengthened through the introduction of a ‘purpose-built’ consumer class actions regime. It would be advisable for businesses to monitor developments on this front and consider how they may interact with the present proposals for product liability.

The consultation closes on 14 January 2027. If you would like to discuss how the proposals could impact you or your business, don’t hesitate to reach out to your usual Shoosmiths contact(s).

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Five trends shaping professional services M&A

Thu, 22 Oct 2026 00:00:00 +0100

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Five trends shaping professional services M&A

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Professional services businesses continue to attract significant interest from private equity investors, consolidators and strategic buyers. We explore five trends shaping the next chapter of professional services M&A.

Published: 22 October 2026
Authors: James Foster

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The sector offers many of the characteristics investors value, including strong client relationships, specialist expertise and the potential for recurring revenues. However, the rationale behind transactions is evolving. Drawing on the trends we are seeing through our recent deal activity, five themes are becoming increasingly prominent.

1. Scale remains important, but specialism is increasingly driving value

Investors and acquisitive businesses are showing particular interest in firms with specialist capabilities, defensible market positions and expertise that can be difficult to replicate. This can include tax and intellectual property advisory businesses, specialist consultancies and firms focused on highly technical or regulated areas.

Technology is also increasingly influencing the investment case, particularly in accountancy. The potential for AI and automation to reshape labour-intensive processes, increase capacity and change the economics of service delivery is attracting attention from investors considering where future value may lie. In turn, this is raising questions around workforce models and valuations, while bringing professional services businesses to the attention of US investors and funds that have historically focused on technology and software opportunities.

For buyers, acquiring specialist expertise can provide access to new clients, create additional revenue streams and differentiate an existing platform. It can also offer a more effective route into an attractive market than attempting to develop the same capabilities organically.

2. Buy-and-build strategies are becoming more sophisticated

The first generation of buy-and-build strategies in professional services ofteny focused on aggregating revenue, expanding geographically and creating scale in fragmented markets.

Those objectives remain relevant, but the more developed strategies we are now seeing are increasingly focused on capability as well as size.

Platforms therefore need to think carefully about the strategic fit of each acquisition, rather than simply pursuing volume. This places greater emphasis on the integration plan. Buyers need to understand not only whether the target is financially attractive, but also how its people, systems, client base and culture will fit into the wider group.

3. Private equity is looking at the full value-creation story

Private equity investment in professional services continues to broaden, but different professions have travelled at different speeds. Accountancy has already seen significant sponsor-backed consolidation, while the legal sector has historically presented greater structural and regulatory barriers to outside investment.

That distinction is becoming increasingly relevant for investors. In the UK, alternative ownership structures have opened legal services to external capital, while in the US restrictions on non-lawyer ownership have made conventional investment considerably more difficult. Nevertheless, private capital is increasingly exploring structures that provide exposure to legal businesses and their associated operations. Recent US commentary notes increased PE activity through management services organisation structures, while almost all US jurisdictions continue to prohibit direct non-lawyer ownership of law firms.

This raises an important question for investors: whether some of the characteristics that have made accountancy attractive to consolidators, including fragmented markets, strong client relationships, specialist expertise and opportunities for technology-led efficiency, can increasingly support investment in other professional services sectors.

4. People remain the critical asset

In professional services businesses, much of the value resides in people, their specialist knowledge and the client relationships they have developed.

This makes people considerations fundamental to any transaction. Buyers and investors need to understand how key individuals will be retained, how leadership succession will be managed and whether the proposed structure provides the right incentives for future growth.

Where a business has traditionally operated as a partnership or is heavily dependent on a small number of senior individuals, these points may require particularly careful consideration.

Incentive arrangements and equity participation can be used to align management teams with the business’s longer-term objectives. However, financial arrangements are only part of the picture. Career progression, decision-making, leadership responsibilities and culture can all affect whether people remain engaged following a transaction.

5. Deal structures are evolving

The valuation of professional services businesses can be complicated by their reliance on people, client relationships and future performance. As a result, we are seeing greater use of structures intended to share risk and align the interests of buyers, sellers and management teams.

Earn-outs and deferred consideration can help bridge differing expectations around valuation, particularly where future growth forms an important part of the investment case. Rollover equity can allow vendors and management teams to retain an interest in the combined business and participate in its future development.

Recent professional services transactions in Shoosmiths’ proprietary deal data have included combinations of cash consideration, earn-outs, loan notes and rollover arrangements.

These mechanisms can support a transaction, but they also add complexity. Earn-out provisions need to define clearly how performance will be measured and how the business will be operated during the relevant period. Rollover arrangements require careful consideration of governance, minority protections and the circumstances in which management can realise its investment.

Looking ahead

Professional services M&A is likely to remain an attractive area for private equity investors and strategic buyers, but the characteristics of the strongest opportunities are becoming clearer.

Specialist expertise, scalable capabilities, high-quality management and a credible approach to technology and integration are all increasing in importance.

At the same time, AI has the potential to reshape how professional services businesses operate and grow. This creates opportunities around efficiency and scalability, but also new questions around workforce models, differentiation and how businesses should ultimately be valued.

For investors, consolidators and management teams, the key question is no longer simply whether a business can grow. It is whether the transaction provides the right foundations for sustainable value creation while protecting the expertise, relationships and culture on which the business depends.

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Horizon scanning for Real Estate Scotland: Autumn 2026

Tue, 20 Oct 2026 00:00:00 +0100

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Horizon scanning for Real Estate Scotland: Autumn 2026

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This update highlights areas of legislative change on the horizon for Scottish Real Estate including proposals outlined by the Scottish Government in its Programme for Government for 2026-2031.

Published: 20 October 2026
Authors: Sheelagh Cooley & Mandy Soppitt

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Planning

In our Autumn Planning update, Steven Stewart and Jemma Hughes focus on:

a new planning path for data centres in Scotland
a step forward for compulsory purchase reform
the responses to the Scottish Government’s consultation on increasing the threshold for applications under the Electricity Act 1989

The update is available here: Scottish planning update: Autumn 2026

New timeline for EPC reforms

Significant changes to the current EPC framework were originally scheduled for 31 October 2026. However, the commencement date has been pushed out to 30 April 2028 in line with the implementation plan agreed by the Scottish Government with the UK Government and the EPC assessor industry.

The new regime, which will apply to both domestic and non-domestic EPCs, will introduce a new EPC register and accreditation scheme for assessors and a new rating system and it will reduce the period for which an EPC remains valid from ten to five years. What doesn’t change is the requirement for a valid EPC to be provided 1. when a building is advertised for sale or let and when it is subsequently sold/let; and 2. when a new building is constructed.

Transitional arrangements are anticipated: between 30 April 2028 and 30 April 2029, properties being sold or let may use an existing, valid EPC issued under the old 2008 regulations or an EPC issued under the new 2025 regulations. Generally, subsequent sales/lettings of the same property within the grace period will require a new regime EPC. However, the regulations provide some relief for short term lets of residential properties for which an existing old-style EPC can be used more than once until 30 April 2029.

More detail is available here: Energy Performance Certificate Reform: updates - gov.scot

We will be tracking the progress of the regulations required to implement these changes and also looking out for the introduction of the Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill in 2026/27 as indicated in the PFG.

Scottish Building Safety Levy (SBSL)

From 1 April 2028, the SBSL will be charged on completion of new residential units in Scotland. There will be no transition period meaning that residential units in progress – but not complete – before the implementation date will be in scope. We discuss the recent consultation on the indicative rates and technical aspects of the levy here: Scottish Building Safety Levy update: indicative rates and technical consultation published.

The equivalent tax for residential developments in England took effect on 1 October 2026. More detail on that levy is available here: Countdown to the new building safety levy

PBSA: Consultation on grounds for students ending their tenancies

The Scottish Government’s long-awaited consultation on the circumstances in which students can exit their PBSA tenancies early, and the process for doing so, runs until 22 October 2026.

Recognising the need to balance the ability for some students to end their tenancies against the consequential impact on providers, the six circumstances proposed are:

close family bereavement
health issues requiring a return to the family home/hospitalisation/rehabilitation
National emergency or incident leading to teaching being stopped
student is no longer matriculated, e.g. has withdrawn from university/changed to a university in another area/ has been expelled
serious risk to the health or safety of the student – e.g. they have been subject to gender - based violence, domestic abuse
revocation of visa.

In terms of process:

evidence to support the student’s application will usually be required
the proposed notice period is 28 days (with possible extension up to 20 days to request further evidence/information)
the consultation asks what a fair process would be for challenging a refusal.

The consultation is available here: Consultation Questions - Purpose-Built Student Accommodation - ending student tenancies: consultation - gov.scot

Steps to speed up housing delivery

Consistent with its aim to deliver 110,000 affordable homes by 2032, the PFG sets out the Scottish Government’s plans to:

work with local and regional partners to ensure the right mix of housing in the right places
reform the planning system: to speed up developments and make it easier to get projects to completion
phase in the new Scottish housing agency, More Homes Scotland, from 1 April 2027. The concepts behind the agency - to bring expertise together centrally and remove barriers to development - are welcome but, we should not expect a fully functional operation on day 1.
develop a strategic partnership between More Homes Scotland and the Scottish National Investment Bank.

In the meantime, Homes For Scotland have published an interactive map showing, by local authority area, the numbers of new homes started and completed for the latest calendar year: New home delivery across Scotland - Homes for Scotland

For more detail on the above please contact: Sheelagh Cooley or your usual member of Shoosmiths’ Scottish Real Estate team.

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Shoosmiths advises on one of the UK's first PISCES transactions

Mon, 19 Oct 2026 00:00:00 +0100

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Shoosmiths advises on one of the UK's first PISCES transactions

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Published: 19 October 2026

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The deal, which traded on 7 October 2026, is the third employee share sale on the Private Securities Market, representing an important milestone in the development of private capital markets.

Alastair Peet, Corporate Partner at Shoosmiths, said: "PISCES has the potential to transform liquidity in private markets, so it was exciting to be involved in one of the framework's earliest transactions. As the market takes shape, deals like this present novel legal and commercial challenges, and helping Gresham House to find solutions to these issues made this a particularly rewarding deal to work on."

Shoosmiths advised Gresham House Ventures on the investment structure, governance arrangements and implementation of a bespoke framework designed to meet the requirements of the PISCES platform while preserving the rights attached to its existing shareholding. This included navigating the shareholder, regulatory and operational considerations arising from one of the first transactions completed under the new framework.

Ed Wass, Portfolio Director at Gresham House Ventures, said: "As one of the earliest transactions undertaken through the PISCES framework, this investment presented a unique set of opportunities and challenges. Shoosmiths combined deep technical expertise with commercial pragmatism, helping us navigate an evolving market environment and successfully deliver a transaction that broke new ground."

The Shoosmiths Corporate team advising on the transaction was led by Partners Alastair Peet and Geoff Dragon, supported by Principal Associate Gregg Harris and Associates Jess Lockett and Louise O'Connor.

This transaction highlights Shoosmiths' experience advising investors and growth businesses on innovative transaction structures and emerging private market initiatives.

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Register your rental property: What Build to Rent (BTR) operators need to know

Mon, 19 Oct 2026 00:00:00 +0100

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What Build to Rent (BTR) operators need to know

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The Renters’ Rights Act 2025 establishes a Private Rented Sector Database, now presented by government as the “Register your rental property” service.

Published: 19 October 2026
Authors: Simon Foster

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The Renters’ Rights Act 2025 establishes a Private Rented Sector Database, now presented by government as the “Register your rental property” service. Draft Regulations 2026 have been published setting out the requirements for registration, and although there is a chance that the detail of the proposals will change before they are made law, landlords should take note of the relevant deadlines for registration and start preparing now.

What are the changes?

The service first opens for business on 15 December 2026 for properties let on assured or regulated tenancies in the West Midlands, and will roll out region by region across England, with the final deadline falling on 14 November 2027.

Region

Registration opens

Deadline

West Midlands

15 December 2026

14 March 2027

East of England

15 January 2027

14 April 2027

East Midlands

15 February 2027

14 May 2027

South East

15 March 2027

14 June 2027

Yorkshire and Humber

15 April 2027

14 July 2027

North West

15 May 2027

14 August 2027

North East

15 June 2027

14 September 2027

London

15 July 2027

14 October 2027

South West

15 August 2027

14 November 2027

Landlords will have three months from the date registration opens for the relevant region to complete their entry. The relevant deadline is linked to the location of the property, so operators with geographically diverse portfolios may need to manage several registration windows in parallel (although in practice details for any property can be submitted from 15 December 2026).

For now, only properties which are let (or which become let during the rollout period) must be registered. Future legislation is anticipated to also require all landlords to register unoccupied properties before marketing them for rent, and to require the landlord and property identifiers to be included in advertisements.

What are the consequences of breach?

Failure to register the landlord or the dwelling, and to keep the entry updated, will mean that:

the landlord cannot market the dwelling to let – if it does so in breach, it may be liable for a fine of up to £7,000 for a first offence, with additional penalties for continuing breaches
the court cannot make an order for possession, unless the landlord is relying on Ground 7A or 14 (where the tenant has committed an offence or engaged in anti-social behaviour)

Landlords will also be liable for a fine if they knowingly or recklessly provide information which is false or misleading in a material respect. If the landlord is a company, an officer of the company can also be liable as an individual.

What are the issues?

Each landlord and each dwelling requires registration separately, including copies of in-date EPC, electrical and gas safety certificates. We set out in full the information required, below.

Registration is not a one-off exercise, however. Entries must be renewed annually, with a fee payable on each occasion.

In addition, where information or documents relating to a landlord or dwelling become inaccurate, expired or otherwise out of date, the entry must be updated within 28 days. This includes renewal of EPCs, gas safety certificates and electrical safety reports. There does not appear to be a fee for updating information.

This is a reasonably simple task for landlords with one or two properties. However, the practical significance of this new unit-by-unit compliance obligation lies in scale.

For professional BTR operators who may have thousands of units in scope, this presents a significant administrative burden:

volume: every dwelling requires its own entry, so a single scheme may generate hundreds of registrations.
delegation: while managing agents and property managers can add and update limited tenancy details and relevant compliance documents, responsibility for registration remains with the landlord. The landlord must create a landlord entry, create the entries for each dwelling, verify the information submitted by its agents and pay the relevant fee.
consistency: whether registration is managed by the operator or its agents, data concerning the landlord, property, occupancy, tenancy and rent will need to be accurate and readily retrievable.
cost: the annual fee is £65 per property, which will not fall within the Tenant Fees Act 2019 and so is not recoverable from tenants. A 1,000-unit portfolio would therefore face £65,000 each year if every unit is in scope. There is no suggestion yet that any bulk discount will be available, although we are aware that industry bodies such as RE:UK are lobbying for this to be considered before the final form of the regulations is brought into force.

How could the system be improved for BTR operators?

The point of the database, and the RRA in general, is protection of residential tenants. It will allow local authorities and tenants to easily see which landlords are complying with their legal obligations. However, for those landlords with huge numbers of tenancies, is there a better way to structure this protection?

Those familiar with the RRA will be aware that there is an exemption from many of its provisions for some providers of purpose-built student accommodation (PBSA) where the provider or its agent managing the property is an active member of a registered code of practice. The Codes are national accreditation schemes which set and check compliance with professional standards of management for PBSA buildings.

The BTR Alliance, formed in 2025 between the Association for Rental Living and Real Estate: UK (then the British Property Foundation), is in the process of developing a similar code for the BTR sector. Compliance with such a Code could provide the basis for an exemption for operators who are members of a BTR-focussed professional framework, which would remove red tape without compromising standards.

What to do now

We do not anticipate any major changes to the draft regulations, so operators should start mapping their units and testing their data now. Accurate and consistent record-keeping (and confirming the responsibility and accountability) will speed up the process of registration, and certificates must be current, readily retrievable and correctly matched to the relevant dwelling.

It will be well worth planning now for the operational changes required for new lettings, renewals and future pre-marketing requirements, to embed these into business-as-usual processes.

Information required

Who can enter information

Landlord details (where landlord is an individual):

Name
Date of birth
Residential address
Telephone number
Email address.

Landlord only

Landlord details (where landlord is a company):

Name of organisation, or description by which it is known.
Type of legal entity.
Address (which may not be a PO Box number).
Telephone number.
Email address.
Name, date of birth, email address and telephone number of the individual making the entry on behalf of the organisation.
Name of nominated contact within the organisation for the purposes of the database, and their email address and telephone number.
Companies House Registration number, if applicable.
Charity number, if applicable.
Where a Companies House registration number is not provided, the names, dates of birth and addresses of all directors, trustees, partners or members of the governing body of the organisation.
Where the organisation is constituted as a trust, the name, date of birth, address, email address and telephone number of the lead trustee.

Additional landlord details (for all landlords):

Whether the person making the entry is doing so in their capacity as any of the following in relation to the person who is, or intends to become, a residential landlord: (a) a donee of a power of attorney; (b) a personal representative of a deceased person’s estate; (c) a court appointed deputy; (d) a guardian; (e) a receiver; (f) a trustee in bankruptcy; (g) a liquidator or provisional liquidator; (h) an administrator; (i) an administrative receiver; (j) a person acting in a similar or corresponding capacity to those in sub-paragraphs (a) to (i) under the law of a country or territory outside England and Wales; (k) a mortgagee or a person appointed by the mortgagee to act on their behalf.
The name, address, telephone number and email address of any person specified in accordance with paragraph 17 that is making the entry.
A copy of a certified or sealed copy (as appropriate) of the relevant evidence of the authority of the person specified in accordance with paragraph 17 to act in relation to a dwelling which is, or is intended to be, let under a residential tenancy, as follows: (a) the document granting the power of attorney; (b) the grant of probate or grant of letters of administration; (c) the deed, certificate, notice or instrument of appointment; (d) the mortgage deed; (e) a court order; (f) a bankruptcy order; (g) a document issued under the law of a country or territory outside England and Wales which is similar to, or corresponds to, a document listed in sub-paragraphs (a) to (f).

Landlord only

Dwelling information:

Address of dwelling.
Name of the person who is the residential landlord, or who intends to become the residential landlord, of the dwelling and a correspondence address (which may not be a PO Box number) in England and Wales and an email address for that person in relation to the dwelling.
Ownership type.
Dwelling type.
Number of bedrooms in the dwelling.
Whether the dwelling is currently under let.
Name and email address of any of the following: (a) the owner of the freehold property which includes the dwelling; (b) any other superior landlord; (c) the property manager for the dwelling.

Landlord only

Tenancy and health and safety information and documents:

Number of occupants of the dwelling.
Number of households occupying the dwelling.
Information as to whether the dwelling requires an HMO licence, an additional licence or a selective licence, and if so, the numbers of those licences, if available.
If the dwelling has a gas supply— (a) a copy of the gas safety record, if one exists, and (b) the gas safety record issue date.
Electrical safety information as follows— (a) a copy of the EICR, if one exists, or appropriate EIC, and (b) the EICR expiry date, or the EIC issue date.
Information as to whether the landlord was required to give a valid EPC to the person who is the tenant currently occupying the dwelling, and if so, a copy of the most recent EPC, if one exists.
If the most recent EPC for the dwelling is no longer valid, the date the current tenancy started.
If the most recent EPC for the dwelling gives an energy performance rating of below the minimum level of energy efficiency, information as to whether the dwelling has a registered MEES exemption, and if so, what types of exemption apply.
Rent information, as follows: (a) rent charged and frequency of payment, and (b) whether the rent is inclusive of utilities and if so, what utilities are included.
Whether the dwelling is let furnished, partly furnished or unfurnished.

Can be delegated to management / letting agent

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Scottish planning update: Autumn 2026

Fri, 16 Oct 2026 00:00:00 +0100

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article | 3 min read

Scottish planning update: Autumn 2026

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Scotland is redrawing the rules for development, with tighter data centre scrutiny, CPO reform and potential changes to nationally determined energy project thresholds.

Published: 16 October 2026
Authors: Jemma Hughes

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A new planning path for data centres in Scotland

In August, the Scottish Government directed planning authorities to notify Scottish Ministers within seven days of validating any new data centre planning application with a proposed power capacity above 50MW. As Steven Stewart pointed out in his article for techUK, the direction did not amount to a moratorium and neither does it automatically transfer decision-making from planning authorities to Ministers.

A second direction followed last month, setting out that data centres exceeding a capacity of 50MW are EIA development, meaning an Environmental Impact Assessment is required. The accompanying Chief Planner letter notes that data centres below this threshold will remain subject to case-by-case consideration of whether the project is classified as EIA.

At the same time, the Scottish Parliament passed a motion requiring the Scottish Government to:

bring forward a clear definition of what constitutes a hyperscale data centre
issue national planning guidance, alongside robust environmental standards and assessments, to inform national and local decision-making on current and potential hyperscale data centre planning applications.

The motion set out that consideration must be given to implementing community benefit schemes and adjusting the non-domestic rates regime, or other tax measures, to ensure communities see the economic benefits of where the data centres are sited.

The Scottish Government is to report back to Parliament on the development of the guidance by the end of this year and publish it in full within 12 months. In the meantime, no decisions on planning or consenting in relation to hyperscale data centres can be made until this has been completed. The Scottish Parliament has not gone as far as to create a moratorium, but there is now a holding pattern as the industry waits for next steps.

Compulsory purchase reform is shifting forward

Last year, the Scottish Government consulted on compulsory purchase reform. A progress report was recently published noting responses to that consultation and setting out the proposed changes which include:

replacing the old legislation with a single Compulsory Purchase Act covering both Compulsory Purchase Order (CPO) procedures and compensation
measures to accelerate and simplify the CPO approval process, including clearer statutory timescales, flexibility in the handling of objections, quicker procedures in unopposed CPOs and reduced duplication within the decision-making process
digitisation of procedures, including electronic service of notices and documents supported by consistent data standards
new powers allowing the creation of rights, such as servitudes, and temporary possession arrangements where permanent acquisition is unnecessary
introduction of a single, standardised mechanism for taking possession of land following confirmation of a CPO – with clear and fair timescales for each part of the process
codifying the case law on compensation rules
measures designed to encourage earlier settlement of compensation claims and quicker advance payments to affected parties.

Important questions remain around statutory loss payments and how hope value should be treated when compensation is assessed. The Scottish Government plans further engagement with stakeholders, supported by research to build a stronger evidence base.

The consultation also considered Compulsory Lease Orders (CLOs) and Compulsory Sale Orders (CSOs) neither of which exist in the current legislation. Interestingly, most responses showed support for the principle of CSOs, particularly among local authorities who noted their potential use in tackling long-term vacant, derelict land or buildings. However, a significant minority questioned whether this mechanism would provide meaningful practical advantages once the CPO system has been reformed. Support for CLOs was less well-defined, but the Scottish Government will continue to look at both.

You can find the full report here: Compulsory Purchase Reform in Scotland: The Way Forward - gov.scot

Onshore electricity generation: Consultation on increasing the threshold for applications under the Electricity Act

The Scottish Government ran a consultation earlier this year seeking views on increasing the 50MW threshold which determines whether applications for onshore electricity generating stations are decided by Scottish Ministers or by the relevant planning authority.

The consultation asked various questions, such as should we be adopting a single threshold for all technologies (for example wind, solar and battery storage) or setting individual thresholds for each one. The responses, published on 8 October, show that:

71% favour a single threshold across all technologies
22% favour keeping the threshold at 50MW
64% would like to see a higher threshold of 150MW.

The full consultation response is available here Onshore electricity generation: Consultation on increasing the threshold for applications under the Electricity Act.

We will continue to track these developments and in the meantime for further information please contact Steven Stewart and Jemma Hughes.

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Shoosmiths advises Livingbridge on launch of Elevare Software Group

Wed, 14 Oct 2026 00:00:00 +0100

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Shoosmiths advises Livingbridge on launch of Elevare Software Group

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Shoosmiths has advised longstanding client Livingbridge on its backing of Elevare Software Group ("Elevare"), a new software platform.

Published: 14 October 2026

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Founded by David Lockie and Elona Mortimer-Zhika, the transaction included acquisitions of Rubixx and Voicescape, two leading technology providers to UK landlords.

Elevare has been set up to assist ambitious software and tech-enabled services businesses to scale, drawing on Lockie and Mortimer-Zhika’s track record of growing software businesses. Rubixx and Voicescape will anchor a new housing technology ecosystem.

Rubixx provides a cloud-native housing management platform that helps social landlords manage compliance, safety and operational performance. Voicescape uses behavioural science, data analytics and automation to help housing providers improve resident engagement, rent collection and regulatory compliance. Together, the businesses support housing providers responsible for millions of homes across the UK.

The wider transaction was led by Corporate Partner Daniel Shilvock – with the equity investment being run by Corporate Partner Holly Hirst, Principal Associate Jordan Telford, Senior Associate Alice Richmond and Associate Jasmine Dhillon; the acquisition of Voicescape was led by Corporate Partner Andrew Jennings, Legal Director Charlotte Cannell and Senior Associate Hugh White, alongside Associates Sarah Palmer and Hannah Jones; and the acquisition of Rubixx was led by Principal Associate Sarah Mitchell and Senior Associate Melissa Gray, supported by Associate Uzoma Udoyeh.

Daniel Shilvock, Partner at Shoosmiths, commented:

“David, Elona and the wider team bring an exceptional track record of building and scaling software businesses, and both Rubixx and Voicescape provide strong foundations for future growth. It is fantastic to have advised Livingbridge and the Elevare team on the launch of this exciting new platform and these first acquisitions. As ever, a pleasure to work with Simon, Vernan, Rob and Alex from the Livingbridge team.”

Simon Peet, Partner at Livingbridge, said:

“We’re delighted to be backing Elevare. Our conviction starts with the team: top-tier software talent and deep operational experience coming together from day one. Across many markets we see a significant opportunity as vertical software stacks are refreshed, with AI as a genuine accelerator. Social Housing is a great example of this, and Rubixx and Voicescape provide strong foundations in a sector where technology has an increasingly important role to play. It was great to work with the extended Shoosmiths team who provided expertise and support throughout.”

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Shoosmiths advises Dragonpass on acquisition of iCoupon

Tue, 13 Oct 2026 00:00:00 +0100

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Shoosmiths advises Dragonpass on acquisition of iCoupon

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Shoosmiths has advised existing client Dragonpass on its acquisition of iCoupon, bringing together two travel technology businesses with a shared focus on enhancing the passenger journey.

Published: 13 October 2026

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Completed on 30 September 2026, Shoosmiths advised Dragonpass on all aspects of the transaction, including transaction structuring, legal due diligence, negotiation of the transaction documents, warranty and indemnity insurance arrangements, completion mechanics and post-completion integration matters. The firm also provided specialist advice on commercial contracts, regulatory and payments matters, intellectual property, cyber security, data protection and employment issues.

Founded in Manchester, iCoupon has grown into a market leader in aviation-focused digital voucher issuance. The acquisition combines Dragonpass' global travel and lifestyle platform, which serves more than 40 million cardholders worldwide, with iCoupon's digital vouchering network spanning more than 200 airlines, 4,000 retail locations and 400 airports across 56 countries.

Having worked together for almost a decade, Dragonpass and iCoupon already share a strong commercial relationship and integrated technologies. The transaction expands Dragonpass' offering beyond airport lounges and travel ancillaries, creating a broader platform for airlines, airports, retailers and travellers.

Wei Wu, Partner at Shoosmiths, said: "Dragonpass and iCoupon are a natural fit, combining complementary strengths, a longstanding relationship and a shared commitment to innovation. As traveller expectations continue to evolve, the combined business is well placed to deliver a broader range of connected travel experiences and create value for customers, partners and travellers worldwide."

The transaction builds on Shoosmiths' longstanding relationship with Dragonpass, having previously advised the business on intellectual property matters and commercial contracts with key customers.

The Shoosmiths team was led by Corporate Partners Wei Wu and Kurt Ma, supported by the cross-disciplinary team across the firm and the Corporate team members of Legal Director Charlotte Cannell, Principal Associate Arjun Mehta, Senior Associate Sadia Hussain, Associates Nurul Amin, Maddie Fretwell and Kyle Tong, and Legal Administrator Shay Wu.

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Partner hire strengthens our Technology & AI and litigation offering

Mon, 12 Oct 2026 00:00:00 +0100

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Partner hire strengthens our Technology & AI and litigation offering

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Caroline Tuck joins our Litigation, Risk & Compliance team as the firm continues to invest in its Technology & AI sector offering and commercial litigation capability in London.

Published: 12 October 2026

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Joining from RPC, Tuck is a recognised technology disputes specialist, advising major international businesses on high-value commercial disputes, cross-border litigation and arbitration. Her experience includes disputes arising from distressed technology projects, digital transformation programmes and complex commercial contracts.

Alongside her disputes practice, Tuck plays a leading role in AI governance and legal innovation, having played key roles on RPC's AI Board and Steering Committee and contributed to the development of its AI strategy, client offering and legal technology products.

Named a Law.com Rising Star in 2025 and recognised by Legal 500 for her technology disputes expertise, she advises clients ranging from global IT services providers and technology manufacturers to digital platforms and fintech businesses.

Hannah Field, Partner and head of the Dispute Resolution & Litigation team in London, said: "Technology sits at the heart of many of our clients' most significant opportunities and risks, and disputes involving complex technology projects, digital transformation programmes and AI-related issues are becoming increasingly sophisticated.

“Caroline has built an outstanding reputation in this space, combining market-leading disputes expertise with deep experience in AI governance and legal innovation. Her appointment strengthens our commercial litigation capability in London and further enhances the specialist Technology & AI support we provide to clients."

Commenting on her appointment, Tuck said: “Technology has become integral to businesses across every sector, and the challenges and disputes they face are becoming more complex and technically demanding.

“Shoosmiths’ ambition in this space, combined with its strong technology, regulatory and commercial capabilities, provides a fantastic platform to grow the practice. I’m looking forward to working across the firm to build client relationships and further build its technology disputes practice.”

Based in London, Tuck's appointment supports our 2030 vision, bringing together specialist expertise in technology disputes, AI governance and legal innovation.

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Payments at a crossroads

Thu, 8 Oct 2026 00:00:00 +0100

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Payments at a crossroads

How regulation, AI & digital money are reshaping the future of payments

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For more than a decade, payments innovation has largely been driven by technology. Fintechs, banks and infrastructure providers have focused on faster execution, improved customer experience, embedded finance and increasingly seamless digital journeys.

Published: 16 October 2026
Authors: Thomas Brown

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Regulation, while important, has often been viewed as the framework within which innovation operates.

That dynamic is changing.

Across the UK and internationally, policymakers are reconsidering foundational aspects of the payments ecosystem in response to three converging forces: artificial intelligence, digital money and increasingly complex payment value chains. The result is a fundamental rethink of the legal architecture that underpins modern payments.

The UK's existing framework, centred on the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs), was designed for a world of identifiable payment service providers, conventional payment accounts and relatively straightforward customer instructions. It was not built for autonomous AI agents capable of making transactional decisions, nor for tokenised forms of money operating on distributed ledger infrastructure.

HM Treasury's Modernising Payment Services Regulation Consultation, published on 14 July 2026, reflects that reality directly. The consultation expressly considers how the regulatory framework should evolve to accommodate developments such as tokenised payments, open banking and "agentic payments" while maintaining consumer protection, operational resilience and confidence in the payments system.

The implications for the industry are significant. This is no longer a discussion about incremental regulatory refinement. It is about how responsibility, accountability, authorisation and consumer protection should operate in a financial system where payments may be initiated by software, settled using digital assets and delivered through interconnected technology platforms.

From Rules Written for Payment Accounts to Rules Written for Payment Ecosystems

The current regulatory framework has served the market well. The PSRs establish detailed requirements governing authorisation, safeguarding, outsourcing, transparency and liability. For example, payment institutions are subject to safeguarding requirements under Regulation 23 PSRs and outsourcing obligations under Regulation 25 PSRs, creating an important foundation of consumer protection and market confidence.

However, many of the framework's defining concepts originate from an earlier generation of financial services. The legislation assumes that payments are initiated by identifiable users through identifiable intermediaries using recognised payment instruments and payment accounts. Increasingly, those assumptions no longer hold.

As innovation accelerates, regulators are being forced to revisit fundamental questions. Which participants in a payment chain should be regulated? How should liability be allocated between banks, fintechs, merchants, infrastructure providers and technology firms? What protections should apply when value is represented digitally rather than held in traditional accounts? And where should the regulatory perimeter sit when products blur the lines between payment services, electronic money and newly regulated cryptoasset activities under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026?

For firms operating at the leading edge of innovation, these questions can no longer be treated as future policy issues. They are becoming material product, legal and commercial considerations today. The most successful businesses will be those that assess emerging products not only against the current rules but also against the direction of travel of future regulation.

Agentic Payments Challenge Traditional Concepts of Authority and Liability

Perhaps no development better illustrates this shift than the emergence of agentic payments.

The prospect of AI systems identifying products, selecting suppliers, negotiating terms and initiating payments on behalf of consumers or businesses is no longer theoretical. HM Treasury highlighted agentic payments as a specific area of regulatory focus in its July 2026 consultation, recognising the extent to which these models challenge existing assumptions about payment authorisation and customer consent.

At the heart of the issue is a deceptively simple question: what does customer consent look like when a machine makes the decision?

Traditional payment regulation assumes a clear and identifiable payment instruction given by a customer. Agentic commerce introduces greater complexity. Consumers may establish parameters and objectives rather than approve individual transactions. Businesses may authorise AI systems to optimise procurement decisions without direct human involvement in every payment.

That creates difficult legal and operational questions. Firms must consider how authority is granted, evidenced and withdrawn. They must determine where responsibility sits when an AI system acts outside its intended mandate. Existing strong customer authentication requirements may need to evolve for increasingly automated payment journeys, while reimbursement and liability regimes may require reconsideration when an unauthorised transaction results from machine-led decision-making rather than conventional fraud.

The legal challenge extends beyond payments regulation. Depending on the use case, agentic payment models may also engage consumer protection requirements, UK GDPR obligations, outsourcing rules, operational resilience expectations and, in some circumstances, financial promotion regulation.

The central question is not whether AI can make payments. It is whether firms can demonstrate that those payments remain authorised, explainable and accountable within the existing regulatory framework.

Stablecoins Are Moving From Innovation Narrative to Regulatory Reality

At the same time, digital money is moving decisively from policy discussion into regulatory implementation.

The UK's framework for cryptoassets and stablecoins has developed rapidly, with legislators and regulators increasingly focused on integrating digital forms of value into the broader financial services regime. What was once viewed primarily as a cryptoasset issue is now becoming a mainstream payments issue.

A major milestone was the FCA's publication of Policy Statement PS26/10: Stablecoin Issuance in June 2026. The final framework establishes requirements for non-systemic UK-issued qualifying stablecoins covering backing assets, segregation, statutory trust arrangements, reconciliation, record keeping, governance, disclosures and redemption rights.

The significance of these reforms should not be underestimated. Stablecoin issuance is increasingly being regulated as a financial activity rather than a technology activity.

In practice, the success of a stablecoin as a payment instrument will depend at least as much on the strength of its legal framework as on the sophistication of its underlying technology. Investors, consumers, counterparties and regulators alike will focus on ownership of backing assets, operation of statutory trusts, redemption mechanics, insolvency treatment and safeguarding arrangements. These legal foundations ultimately determine whether a stablecoin can function as trusted digital money.

The position becomes even more significant as stablecoins grow in scale. Under powers introduced by the Financial Services and Markets Act 2023 and related amendments to the Banking Act 2009, HM Treasury may designate certain stablecoins as systemic payment systems. Oversight of those arrangements would be shared between the FCA and the Bank of England, creating a dual-regulator framework for stablecoins that become critical to the UK payments ecosystem.

The Convergence of Payments, AI and Digital Assets

The most important development, however, is not AI in isolation or stablecoins in isolation. It is the convergence of technologies that have historically been analysed separately.

A single proposition may now involve a regulated payment service under the PSRs, a qualifying stablecoin within the UK's cryptoasset framework, AI-driven decision making, cloud-based outsourcing arrangements and extensive processing of personal and transactional data. Regulatory frameworks originally designed around discrete activities must increasingly oversee interconnected ecosystems.

This convergence is reshaping legal risk analysis. Firms can no longer examine payments regulation, crypto regulation, data protection and operational resilience in separate silos. Product governance, regulatory strategy and legal design are becoming inseparable.

A similar trend can be seen in Europe through PSD3 and the proposed Payment Services Regulation (PSR), which seek to strengthen fraud prevention, modernise open banking and create a more integrated supervisory framework for payment and electronic money institutions. While the UK and EU remain broadly aligned in policy objectives, divergence in regulatory implementation is likely to create additional complexity for firms operating across borders.

As a result, regulatory strategy is becoming an increasingly important source of commercial advantage. Businesses that understand how these frameworks interact will be better positioned to launch products quickly, scale efficiently and manage regulatory risk. Those that treat compliance as a post-development exercise may find themselves facing redesign costs, delayed launches and difficult supervisory discussions.

The next phase of payments innovation will be defined as much by legal architecture as by technology.

The industry's most pressing challenge is no longer whether AI can initiate transactions, whether stablecoins can settle value or whether digital infrastructure can support new forms of commerce. Increasingly, those capabilities are a given.

The real differentiator will be trust.

Boards should be asking fundamental questions about every new proposition. Who creates the value? Who controls it? Who safeguards it? Who authorises the transaction? Who oversees the AI making decisions? And, ultimately, who is accountable when something goes wrong?

The firms that embed authorisation, safeguarding, operational resilience, consumer protection and governance into product design from the outset will be best positioned to thrive in an increasingly complex regulatory environment. Those that leave them as afterthoughts risk finding that innovation moves faster than governance.

The debate is therefore no longer whether regulation can keep pace with technological change. The more important question is whether the industry can design the next generation of payments services in a way that remains compatible with the next generation of regulation.

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Employment Rights Act 2025: Tougher duties on employers to prevent harassment

Wed, 7 Oct 2026 00:00:00 +0100

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article | 5 min read

Employment Rights Act 2025: Tougher employer harassment duties

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The Employment Rights Act 2025 (ERA 2025) significantly strengthens employers’ obligations to prevent harassment in the workplace.

Published: 7 October 2026
Authors: Stuart Lawrenson

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Whilst employers have been under a duty since October 2024 to take reasonable steps to prevent sexual harassment, the new legislation raises the bar considerably by requiring employers to take ‘all reasonable steps’ and by reintroducing liability for harassment carried out by third parties such as customers, clients and suppliers. Employers need to review whether their current approach is sufficient to meet this higher standard.

From reasonable steps to all reasonable steps

Currently, employers are required to take reasonable steps to prevent sexual harassment of employees in the workplace. A failure to comply can lead to a tribunal awarding an uplift of up to 25% on discrimination compensation.

From 30 October 2026, the ERA 2025 will strengthen this duty by requiring employers to take all reasonable steps to prevent sexual harassment. This change is designed to place greater emphasis on proactive prevention rather than responding once problems arise.

The detail of what constitutes all reasonable steps will depend on the circumstances of each employer, including factors such as its size, sector, resources and working environment. However, the government has indicated that the expectation is likely to be more demanding than the current duty. The government has committed, through regulations, to set out the steps employers will be expected to take to stratify the new duty. However, the regulations themselves are not expected until 2027/28, following consultation.

New liability for third-party harassment

The ERA 2025 also introduces employer liability for third-party harassment. From 30 October 2026, employers can be liable where an employee is harassed by a customer, client, contractor or another third party in the course of their employment and the employer failed to take all reasonable steps to prevent that harassment. In this context, the harassment could relate to any protected characteristic, not just in relation to sexual harassment.

This represents a significant expansion of employer responsibility. Employees will not need to show repeated incidents or that the employer had prior knowledge of the offending behaviour. Instead, the focus will be on whether the employer took all reasonable preventative measures.

The new provisions are likely to be particularly challenging for sectors such as hospitality, retail and healthcare, where employees regularly interact with members of the public and employers have less direct control over third-party conduct.

Protection for whistleblowers

The ERA 2025 also strengthens protections for individuals who report sexual harassment.

Since 6 April 2026, disclosures that sexual harassment has occurred, is occurring or is likely to occur have been expressly recognised as capable of qualifying for whistleblowing protection. Workers who make protected disclosures may therefore benefit from protection against detriment and dismissal, provided the usual whistleblowing requirements are met.

This change is intended to encourage reporting and remove uncertainty around whether concerns about sexual harassment fall within whistleblowing legislation.

What can employers do now?

Although the regulations setting out the detail of this new duty are not yet published, indications are that prescribed steps may include:

carrying out risk assessments
publishing anti-harassment policies and action plans
implementing reporting mechanisms
establishing procedures for handling complaints
taking account of specified matters when assessing workplace risks

Employers should also make sure they are following existing Equality and Human Rights Commission (EHRC) guidance (including any updates to that guidance) and its eight-step guide to preventing sexual harassment at work.

In particular, employers should consider:

updating anti-harassment and dignity at work policies
conducting harassment risk assessments to identify specific harassment risks that might arise
ensuring behavioural expectations or codes of conduct clearly set out what behaviour is and is not acceptable
delivering regular and targeted training to managers and staff
reviewing complaint and reporting procedures
assessing risks posed by customers, clients and other third parties
ensuring appropriate records are kept of preventative measures and investigations

Looking ahead

The harassment reforms under the ERA 2025 represent a clear shift towards prevention and accountability. Employers who fail to prepare may face increased tribunal exposure, regulatory scrutiny and reputational risk when the new regime comes into force on 30 October 2026.

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Back on track: Great British Railways’ new direction for trains

Fri, 2 Oct 2026 00:00:00 +0100

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article | 5 min read

Back on track: Great British Railways’ new direction for trains

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Published relatively quietly during party conference season, Great British Railways’ (GBR) new Rolling Stock & Infrastructure Strategy could easily have passed under the radar. It should not.

Published: 2 October 2026
Authors: Tom Guile

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The strategy sets out how GBR intends to approach the design, procurement, financing and maintenance of passenger trains over the coming decades. Its message is straightforward: trains, track, power, signalling, depots and maintenance should no longer be planned through separate processes and timescales. They should be treated as parts of a single, integrated railway.

That may sound like an organisational change, but its commercial implications are far-reaching. GBR intends to act as a stronger national customer, move away from highly bespoke train procurements, take a more active role in whole-life asset management and preserve greater choice over who maintains trains later in their lives. Traditional financing models will no longer be assumed to be the default, with direct state ownership, leasing and other arrangements instead considered for each new fleet.

Why is the strategy significant?

GBR is being created through the government’s rail reform programme to provide a unified directing mind for passenger train operations and rail infrastructure.

The strategy starts from the view that, since 1993, responsibility for different parts of the railway has been divided between separate organisations, contributing to disconnected decisions, poorer outcomes and reduced value for taxpayers. GBR considers that this has resulted in unnecessary fleet diversity, limited commonality and constrained depot and maintenance arrangements, while creating an unpredictable pipeline of work for rolling stock manufacturers and rail supply chains.

GBR’s answer is not simply to purchase new trains. It intends to manage the national fleet as a long-term portfolio, considering replacement, refurbishment, life extension and redeployment alongside power, signalling, depot capacity and maintenance readiness.

This matters because new trains, and much of the infrastructure supporting them, may remain in service for 35 or more years. Decisions taken during the next procurement cycle will therefore shape the railway, and the market supporting it, for decades.

Fewer bespoke trains and more “fleet families”

One of the most significant proposals is the introduction of “fleet families”. GBR’s future orders will be structured around a smaller number of families aligned broadly to intercity, regional express, commuter and metro services. Trains within each family may vary in layout, capacity, performance and onboard facilities, but will share common design principles, capabilities and interfaces. Greater commonality should make trains easier and less expensive to procure, operate and maintain.

Rather than specifying highly prescriptive technical requirements, GBR intends to focus on the outcomes and capabilities it requires. This should give manufacturers greater flexibility to develop solutions, while allowing greater use of existing platforms instead of developing new bespoke products.

For manufacturers and their supply chains, the fleet-family model should provide greater certainty around future requirements and a more predictable market for trains, refurbishment and long-term support. GBR's proposed Fleet & Infrastructure Plan should reinforce that visibility. Businesses are therefore likely to place increasing emphasis on proven platforms, modular products, interoperability and whole-life value.

The move towards standardisation will also affect how businesses compete. Proven platforms, modular products and the ability to demonstrate interoperability, adaptability and whole-life value are likely to become increasingly important.

Passenger requirements will, however, continue to shape individual specifications. Future trains and major refurbishments are expected to place greater emphasis on accessibility, level boarding, reliable connectivity, cyber resilience, flexible internal spaces and ease of maintenance. Those requirements will need to be designed in from the outset, with implications for vehicle architecture, software, data interfaces, power consumption and long-term support.

A battery-led transition away from diesel

GBR identifies the replacement of ageing diesel fleets as one of the railway’s major long-term challenges. That should come as no surprise: around 4,000 diesel and diesel-hybrid passenger vehicles are expected to reach the end of their operational lives over the coming decades.

The proposed solution is progressively to replace those trains with battery-electric units, supported by full or “discontinuous” electrification. Delivery will, however, depend on the necessary power and infrastructure being available, including grid capacity, power connections and charging facilities.

The commercial opportunity, therefore, extends well beyond the manufacture of new trains. Battery systems, charging infrastructure, power electronics, energy storage, monitoring technologies and depot adaptations will all be required to support the transition.

This transition will not happen overnight. Existing diesel fleets may need to be retained, refurbished or redeployed where funding for replacement stock or required infrastructure is not yet available, creating meaningful opportunities for businesses supporting legacy fleets in the meantime.

A new model for maintenance and whole-life support

Whilst GBR recognises the value of manufacturer-led maintenance, it will no longer assume that this is the preferred long-term solution where more efficient or cost-effective alternatives exist. Instead, maintenance may remain with the manufacturer, move in-house, transfer to a third party or be delivered through a hybrid model. To make that choice credible, future procurements are expected to address:

knowledge transfer and training
access to technical documentation, drawings and manuals
access to software diagnostics and historic data
the treatment of tooling and software interface
parts availability and obsolescence
intellectual property and technical rights.

This may significantly affect long-term revenue models. Manufacturers may continue to benefit from early-life maintenance work but face greater pressure to facilitate an eventual transition to alternative providers. Conversely, independent maintainers and specialist suppliers may gain access to opportunities that have historically been difficult to compete for, introducing a greater degree of competition than the market has typically seen to date.

Data will be central to this model. GBR intends to make greater use of remote condition monitoring, predictive maintenance and train-generated data, both to manage fleets and to monitor infrastructure condition. Suppliers will increasingly need to address who can access that data, the format in which it is made available and whether diagnostic tools and interfaces can be used by an alternative maintainer.

GBR also proposes a more coordinated approach to parts, inventory, logistics and obsolescence. It does not plan to centralise every purchase but intends to combine demand where this would improve resilience, reduce duplication or create a more stable market. This may offer suppliers larger and more predictable opportunities, although it is also likely to increase commercial scrutiny as GBR uses its purchasing power across a national portfolio.

The strongest rolling stock propositions are, therefore, likely to combine early-life reliability with transparent, transferable and sustainable support arrangements throughout the asset lifecycle.

A different approach to procurement and financing

GBR intends to act as the single coordinated buyer for new fleets, replacing the existing model of operator-led purchasing, overseen and controlled by the Department for Transport, with a single national market interface. Procurement will focus on whole-life value rather than lowest initial price, with more standardised fleet families expected to be procured on a repeatable basis.

Future procurements will also place greater emphasis on social value, including investment in UK jobs, skills, innovation and resilient supply chains.

More significantly, the strategy opens the door to a move away from the post-privatisation model, under which trains are typically owned by rolling stock companies and leased to operators. GBR will consider direct ownership, leasing and other arrangements for each new fleet, with state ownership pursued where it offers the strongest outcome. Existing fleets are, however, expected largely to remain leased.

What should businesses do now?

Nothing will change immediately, and implementation will depend on funding, business cases and future procurements. Nonetheless, businesses should assess the implications now rather than wait for individual opportunities to emerge.

Those operating in the sector should consider whether their business models are suited to a market characterised by more standardised fleets, greater focus on whole-life value, increased maintenance competition, wider access to technical information and data, battery-electric traction and greater scrutiny of social value and supply-chain resilience.

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Shoosmiths advises Blitz Hire shareholders on BGF investment

Fri, 2 Oct 2026 00:00:00 +0100

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Press release | 1 MIN READ

Shoosmiths advises Blitz Hire shareholders on BGF investment

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Shoosmiths has advised the shareholders and management of Blitz Hire (Blitz) on BGF’s investment into Blitz, in a deal that further strengthens the firm’s track record advising businesses and investors across the UK’s film, television and entertainment sector.

Published: 2 October 2026

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Completed on 30 September 2026, the firm advised the shareholders and management on all aspects of the transaction, including corporate, banking, tax, employment and real estate.

Founded in 2001, Blitz is a leading provider of specialist rigging and structural equipment for the film, television and live events industries. The business has more than doubled in size since partnering with Production Park in 2022, with BGF’s investment set to support its continued growth, expansion into adjacent markets and further strategic M&A.

James Foster, Partner in Shoosmiths’ Corporate team, said: “Film, television and entertainment is an established area of expertise for Shoosmiths, and this transaction builds on our strong track record in the sector. Having advised clients including Blitz Hire, Production Park [and Hive Media Control], we understand the opportunities and challenges businesses in this market face. Blitz has achieved impressive growth in recent years, and BGF’s investment marks an exciting next step for the business. It was great to bring our sector knowledge and expertise from across the firm together to support the investors through to a successful completion.”

Sam Skipper, CEO at Blitz Hire, said: “I’m incredibly proud of what our team has built and the growth we’ve achieved while maintaining the personal service our customers value. BGF shares our ambition and long-term outlook, making them a strong partner for Blitz’s next chapter. I’d also like to thank the Shoosmiths team for their advice and support throughout the transaction and for helping us successfully reach this important milestone.”

The Shoosmiths team comprised Corporate Partner James Foster, Legal Directors Natalie Redfern and Marcus-Adam Tuck, and Associates Amy Walton, Emily Egan and Arvind Paramiswaran; Banking Partner Charlotte Thomas, Senior Associate Jonny Adamson and Associate Georgia Barrick; Real Estate Partner James Speed; Employment Principal Associate Alex Bevan; and Tax Senior Associate Carly Cutler and Principal Associate Caroline Airey.

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Wrong advice, right penalty? The Upper Tribunal on reasonable excuse

Wed, 30 Sep 2026 00:00:00 +0100

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article | 3 min read

Wrong advice, right penalty? The Upper Tribunal on reasonable excuse

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Hill and another v HMRC [2026]: a cautionary reminder that instructing advisers does not, of itself, absolve a taxpayer from potential liability for penalties.

Published: 30 September 2026
Authors: Kate Garcia

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In Hill and another v HMRC [2026] UKUT 306 (TCC), the Upper Tribunal held that two taxpayers did not have a reasonable excuse for failing to comply with HMRC information notices, even though a professional adviser had concluded that no action was required.

Background

The taxpayers were the scheme administrators of separate pension schemes. In January 2018, HMRC issued information notices requiring them to provide certain information. After receiving the notices, an intermediary (the scheme operator) instructed tax advisers to advise on the appropriate response.

The advisers concluded that, because the relevant pension schemes had been wound up, the taxpayers were not obliged to provide the information or documents requested. That view was relayed to HMRC on the taxpayers’ behalf. HMRC responded that the notices had been issued to the taxpayers, rather than to the pension schemes, and that the taxpayers therefore remained responsible for complying with them.

HMRC ultimately imposed penalties on the taxpayers for failing to comply with the information notices. The taxpayers appealed against the penalties, arguing that they had a reasonable excuse: they had relied on the consistent advice given to them that they did not need to comply with the notices.

The First-tier Tribunal (FTT) rejected that argument and upheld the penalties. It found that the taxpayers’ reliance on the advice was not objectively reasonable because they had failed to take reasonable care to check or question it.

Upper Tribunal decision

The Upper Tribunal (UT) upheld the FTT’s approach to the question of reasonable reliance on an adviser and dismissed that ground of the taxpayers’ appeal.

The UT held that the FTT was entitled to conclude that the taxpayers’ behaviour fell short of a reasonable excuse. They had failed to check or ask questions of the advice and relied on it without a reasonable basis for believing that the advice was correct.

Essentially, it was too narrow simply to ask whether a taxpayer knew, or ought to have known, that the advice was wrong. That question alone did not determine whether the taxpayer’s reliance on the advice was reasonable.

Instead, a wider assessment was required, including the degree of independent judgement exercised by the taxpayer. In this case, the taxpayers’ lack of engagement meant that they had not taken reasonable care. For example, they had failed to ask obvious questions of their adviser or to request copies of key correspondence. Their reliance on the adviser’s advice therefore did not amount to a reasonable excuse for failing to comply with the information notices.

Practical implications for taxpayers

The outcome may appear harsh. The taxpayers received incorrect advice and were then penalised for acting on it. Taxpayers who seek professional advice, rather than dealing with a matter themselves, may instinctively consider that following that advice provides a reasonable excuse for any liability arising from that advice.

The position is, however, more nuanced. The ultimate question is whether a taxpayer’s reliance on professional advice is objectively reasonable.

To reduce the risk that reliance on an adviser will be regarded as unreasonable, a taxpayer should engage actively with both its advisers and the matter itself. In practice, this should include:

reading key correspondence relating to the matter
asking for clarification if anything appears unusual or is unclear
checking that the factual assumptions underpinning technical advice are accurate. A taxpayer is not expected to understand or verify every aspect of complex technical advice, but should be able to identify and question any factual assumption that appears incorrect or inaccurate
asking for an explanation if legal arguments or strategy change
questioning advice that is expressed only in brief terms.

In short, taxpayers are not expected to second-guess their advisers. Blind reliance on them, however, is likely to be viewed unfavourably by HMRC and the tribunals.

A taxpayer who has paid for professional advice may be less inclined to engage closely with the issues or monitor the progress of the matter, on the basis that the advisers are dealing with it. The UT’s decision is therefore a cautionary reminder that instructing advisers does not, of itself, absolve a taxpayer from potential liability for penalties. A taxpayer should remain appropriately engaged with the matter and exercise reasonable care when acting on the advice it receives.

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Under pressure: Is your AIM board ready for shareholder activism?

Tue, 29 Sep 2026 00:00:00 +0100

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Under pressure: Is your AIM board ready for shareholder activism?

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How should boards respond to shareholder activism? Shoosmiths' Corporate and Dispute Resolution experts unpack the key strategic points below.

Published: 29 September 2026
Authors: Emma Carr

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Shareholder activism is no longer confined to the largest listed companies.

For AIM companies, the combination of concentrated shareholdings, lower liquidity, valuation pressure and a relatively lean investor relations function can mean that an activist shareholder acquires influence quickly. What begins as a private challenge to strategy, management or capital allocation can rapidly become a public campaign for board change.

For directors, the difficult question is rarely whether a shareholder is entitled to disagree with the board. It is how the board should respond when that disagreement starts to gather momentum.

The first 90 days can be critical.

So, what should boards be thinking about when an activist appears on the register? Emma Carr, Commercial Litigation Partner, and Ed Nisbet, Corporate Partner, consider the key issues during the first 90 days: from initial engagement and governance through to preparing for the possibility of a shareholder dispute.

Days 1-30: Understand the challenge before responding to it

An activist approach can create an understandable instinct to defend the company’s existing position outright. That can be a mistake.

The first task is to understand what is really driving the challenge. The stated demand may be for a strategic review, disposal, return of capital or change of directors. The underlying concern may be simpler: disappointing performance, a valuation discount, executive remuneration or a loss of confidence in management.

Boards should establish a small response team (including independent directors), consult with their nominated adviser, take legal and, where appropriate, financial PR/IR advice and map the shareholder register. Who is likely to support the activist? Which shareholders remain undecided? Is the activist raising a concern that other investors have expressed privately?

The nominated adviser should be involved early where the campaign touches on strategy, board composition, financial performance, expectations or market messaging. The company should also consider whether specialist shareholder identification work, including the use of section 793 Companies Act 2006 notices, is needed to understand beneficial ownership behind nominee positions.

Early engagement can be valuable. Meeting an activist does not mean accepting its case. It gives the board an opportunity to test the argument, understand the level of support behind it and avoid being forced into a reactive position later.

Practical steps for the board

identify the activist, its holding, its historic voting behaviour and any known support from other shareholders
agree who will speak for the company and how internal and external communications will be controlled
consider carefully how communications with advisers will be managed to preserve privilege in any legal advice obtained at this stage
stress-test the activist’s stated concerns against the company’s own performance, strategy and market messaging
keep a clear record of board discussions and the reasons for decisions taken
consider how likely it is that the challenge will evolve into a dispute and the company’s preparedness for that. As soon as litigation is contemplated, relevant documents must be preserved.

Days 31-60: Pressure test the board’s own case

The uncomfortable part of an activist campaign is that the activist may have a point.

Once the immediate position has been stabilised, the board should test its own strategy with the same rigour it applies to the activist’s proposals. Is capital being allocated effectively? Does the board have the right composition? Is there a credible explanation for persistent underperformance or a valuation discount?

Directors must continue to exercise their own judgment. Their duties are owed to the company, and the interests of shareholders cannot simply be equated with the demands of the loudest or largest investor.

Communication becomes particularly important at this stage. For an AIM company, statements made during an activist campaign sit within an existing framework of AIM Rule 11 disclosure obligations and market abuse restrictions, including the need to manage inside information and avoid selective disclosure. Assertions about performance, strategy or future prospects therefore need to withstand market, regulatory and shareholder scrutiny. The defensibility of such assertions, if they are challenged in due course, will largely rise or fall on the company being able to ‘show its working’ in the paper trail.

When activism becomes contentious

Boards should also prepare for the possibility that what starts as shareholder engagement becomes a dispute.

Documents created in the early stages may assume considerable importance later. Board minutes should properly record the decisions taken and the reasons for them, while directors and executives should exercise appropriate discipline over emails, messages and other communications. Legal advice should also be taken on preserving privilege where potentially contentious issues are being considered, particularly where a blend of legal and other more commercial (e.g. brand/reputation management) advice is being sought.

Emma Carr comments: “An activist campaign can become contentious very quickly. The emails, board papers and messages created in the first few days may later be scrutinised in a shareholder dispute or contested meeting. Good decision-making and good record-keeping need to start before positions become entrenched.”

Days 61-90: Prepare for the campaign to become a contest

If private engagement fails, the focus can shift rapidly from persuasion to votes.

Shareholders holding at least 5% of the company’s paid-up voting share capital can require directors to call a general meeting and may ultimately seek the removal and replacement of directors. By the time a requisition arrives, a board which has not already considered voting scenarios, communications and procedural requirements may be operating at a significant disadvantage.

Preparation does not mean assuming that confrontation is inevitable. Settlement may produce a better commercial outcome than a public contest. A board appointment, governance change or strategic review may address legitimate shareholder concerns while ensuring that the board remains able to discharge its duties without surrendering complete control of the company’s strategy – or becoming tied up in a complex and management time-intensive dispute.

What matters is that any compromise can be justified as advancing the interests of the company, rather than protecting individual directors from challenge.

Practical steps for the board

review the company’s articles and the procedural requirements for requisitioned meetings
model likely voting outcomes and identify the shareholders whose position may decide the result
prepare consistent, stress-tested messaging for shareholders, employees and the market
consider whether a negotiated outcome could address legitimate concerns while preserving the board’s strategic control
consider seeking legal and any other relevant advice on negotiation strategy, wider consequences of potential outcomes, and documenting any terms agreed.

The 90-day question

Shareholder activism ultimately tests more than a company’s legal defences. It tests the board’s understanding of its shareholders, its confidence in its strategy and its ability to make decisions under scrutiny.

A well-prepared AIM board should therefore ask one question before an activist ever appears:

If a shareholder publicly challenged our strategy tomorrow, could we explain, not simply assert, why our present course remains the right one?

If the answer is uncertain, the best time to address that vulnerability is before the 90-day clock starts.

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Manual handling at work: Understanding employers’ legal duties

Wed, 23 Sep 2026 00:00:00 +0100

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Manual handling at work: Understanding employers’ legal duties

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This article considers employers' duties to avoid, assess and reduce risks arising from manual handling and what practical steps organisations can take to protect employees.

Published: 23 September 2026
Authors: Rubina Zaidi

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What is manual handling?

Manual handling operations arise in many sectors, including logistics, warehousing, retail, manufacturing, construction, healthcare and office environments. The activity need not involve lifting a load in a box; it can include moving a patient, pushing a trolley or roll cage or supporting an awkward item.

The Manual Handling Operations Regulations 1992 (the Regulations) define “manual handling operations” as transporting or supporting a load by hand or bodily force, including lifting, putting down, pushing, pulling, carrying or moving it (regulation 2). A “load” includes any person, animal or object.

The Regulations concern operations which involve a risk of injury. Although manual handling is commonly associated with back injuries, “injury” is not confined to back injury. However, the definition excludes injury from a toxic or corrosive substance which has leaked or spilled from a load, is on its surface but has not leaked or spilled from it or is a constituent part of the load.

To whom do the Regulations apply?

The principal duties apply to employers in respect of their employees and to a “relevant self-employed person” in respect of themselves, as defined by regulation 2.

The Regulations sit within a wider health and safety framework. Depending on the circumstances, duties relating to manual handling may also arise under the Health and Safety at Work etc. Act 1974 and the Management of Health and Safety at Work Regulations 1999 (the Management Regulations), including the duty to conduct a suitable and sufficient assessment of risks to health and safety.

Employers’ duties: avoid, assess, reduce

Regulation 4 establishes a three-stage hierarchy for controlling manual handling risks:

employers must first avoid the need for employees to undertake manual handling operations which involve a risk of injury, so far as is reasonably practicable. Avoidance may involve eliminating the operation or changing or mechanising the process. Mechanisation can help, but introducing equipment such as forklift trucks may create different hazards which must also be assessed and controlled (see our article Operating forklift trucks: LOLER and the wider legal framework )
where it is not reasonably practicable to avoid manual handling operations involving a risk of injury, employers must make a suitable and sufficient assessment. It should address the actual operation rather than rely solely on generic assumptions. It must be reviewed if there is reason to suspect it is no longer valid or there has been a significant change in the operations, and amended where necessary
employers must then take appropriate steps to reduce the risk of injury to the lowest level reasonably practicable.

Regulation 4 also requires employers to take appropriate steps to provide affected employees with general indications and, where reasonably practicable, precise information about each load’s weight and the heaviest side of a load whose centre of gravity is not positioned centrally.

The assessment

Schedule 1 organises the assessment around five factors to which the employer must have regard: the task, the load, the working environment, individual capability and other factors. Questions which must be considered when making the assessment include:

the task: whether it involves holding or manipulating a load away from the trunk; twisting, stooping, reaching upwards or another unsatisfactory posture or movement; excessive lifting, lowering or carrying distances; excessive pushing or pulling; risk of sudden movement; frequent or prolonged physical effort; insufficient rest; or a rate of work imposed by a process
the load: whether it is heavy, bulky or unwieldy, difficult to grasp, unstable or has contents likely to shift, or is sharp, hot or otherwise potentially damaging
the working environment: whether space constraints prevent good posture; floors are uneven, slippery or unstable; floor or work-surface levels vary; there are extremes of temperature or humidity; conditions cause ventilation problems or gusts of wind; or lighting is poor
individual capability: whether the job requires unusual strength, height or other physical characteristics, creates a hazard for someone who might reasonably be considered pregnant or have a health problem, or requires special information or training for safe performance
other factors: whether movement or posture is hindered by personal protective equipment or clothing.

Regulation 4(3) additionally requires particular regard to the employee’s physical suitability; clothing, footwear or other personal effects; knowledge and training; relevant findings under regulation 3 of the Management Regulations; whether the employee is in a group identified by the findings as being especially at risk; and relevant health-surveillance results.

The role of training

Information and training are important, but do not replace the regulation 4 hierarchy. Regulation 4(3) requires employers to have particular regard to employees’ knowledge and training. Schedule 1 also requires consideration of whether special information or training is needed for the job to be performed safely.

Training should be relevant to the work undertaken and cover the risks identified, the measures in place to control them and the use of aids. Employers should review whether further information or training is needed when operations change.

Employees’ duty

Regulation 5 requires each employee to make full and proper use of any system of work provided by their employer in compliance with regulation 4(1). In practice, employees should follow the system, use aids as instructed and report defects, changes or difficulties. This does not displace the employer’s duties.

Practical steps for organisations

review operations to identify routine and non-routine manual handling operations, including deliveries, maintenance, cleaning, emergencies and tasks undertaken by temporary workers or contractors
consult employees who perform the work and observe its conduct, including foreseeable variations and peak workloads
apply the hierarchy by eliminating unnecessary handling, redesigning operations, using aids, and reducing remaining risks through workplace, organisational and procedural controls
ensure assessments are task-specific and proportionate, appropriately documented and take account of workers who may be especially at risk
ensure aids are suitable, available, maintained and properly used, that employees are trained in their use and that their introduction does not create additional risks
provide information, instruction, training, supervision, and load information required by regulation 4
review arrangements after incidents, reports of difficulties, changes to the task, workplace or workforce, or evidence that controls are ineffective.

Organisations may also use the Health and Safety Executive’s (HSE) risk filters to help identify low-risk operations and decide if a more detailed assessment is required. The HSE provides task-specific tools, including the MAC tool for lifting, carrying and team handling, the RAPP tool for pushing and pulling, and the ART tool for repetitive upper-limb tasks. It also provides checklists to help identify and assess high-risk operations.

The HSE confirms its tools are divided by task type and that some tasks may require more than one tool.

Key takeaway

The law does not prescribe specific weight limits for manual handling, and HSE’s filter values are guidelines rather than safe limits. Compliance requires employers to apply the regulation 4 hierarchy to the actual operations undertaken. Effective arrangements combine appropriate work design, suitable handling aids, task-specific assessments, employee involvement, relevant information and training, monitoring and timely review.

Useful links

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