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From pilot to production: Making smart factories work in the real world

Fri, 12 Jun 2026 00:00:00 +0100

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From pilot to production: Making smart factories work

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Why smart factory pilots fail in practice. Key takeaways from Subcon 2026 on closing the gap between ambition and execution.

Published: 12 June 2026
Authors: Wei Wu

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Summary

Smart factory programmes rarely fail because of weak ambition. They fail when execution drifts away from reality with too many organisations prioritising technology over operational need. That was the message from the Subcon 2026 panel “From pilot to production: Making smart factories work in the real world”, chaired by Shoosmiths’ Wei Wu in Birmingham earlier this month. In this article, we outline some of the key takeaways from the discussion.

Panellists

Wei Wu, Partner & Manufacturing Sector Lead, Shoosmiths (Chair)
Claire Robinson, Divisional Director & UK Industry Cluster Lead, Drees & Sommer
Dr Marco Chacin, Head of Actuators and End Effectors, Airbus
Russell Watkins, Lean Transformation Expert & Co-founder, Sempai
Shazan Siddiqi, Automotive Trends Strategist, Advanced Propulsion Centre UK

Where smart factories go wrong

The most consistent issue is also the simplest: projects are built around technology rather than need.

Too many initiatives begin with ambition – full automation, digital twins, end-to-end visibility – without first understanding what is broken. That creates solutions that look impressive but struggle to justify their place on the factory floor.

This misalignment is reinforced during delivery. Transformation programmes are often driven from the centre, by teams tasked with hitting efficiency targets. Yet the detail that determines success sits elsewhere: on the shop floor, within existing processes, and with the people who run them. When those perspectives are missing, pilots translate poorly into live environments.

The result is predictable. Systems that worked in isolation fail to integrate. Business cases begin to stretch. What once looked like a five-year return becomes a 10-year question.

Scaling exposes the truth

The move from pilot to production is where assumptions are tested and usually exposed.

Legacy infrastructure is the first pressure point. Most factories are not built from scratch. They rely on systems that were never designed to connect, let alone share data in real time. Retrofitting becomes necessary, and quickly expensive.

At the same time, the economics shift. Integration costs, operational disruption and ongoing complexity reduce the viability of large-scale rollouts. What seemed viable at pilot stage becomes difficult to justify when applied across an entire site.

There is also a tendency to over-engineer. In trying to future-proof systems, organisations introduce layers of complexity and control that slow delivery. The result is not resilience, but inertia.

Against this backdrop, a more pragmatic view is emerging. The goal is no longer a fully rebuilt, fully connected factory. It is a hybrid environment where new technology sits alongside existing systems, focused on the points that deliver the most value.

What practical transformation looks like

Moving from pilot to production requires a shift in mindset as much as capability.

The strongest programmes begin not with investment decisions, but with operational clarity. They ask direct questions about performance today: where losses occur, how they can be measured, and what the cost of inaction really is. Only then do they consider how technology fits.

This approach changes the nature of the business case. Instead of projecting theoretical returns, it builds from what already exists. Improvements are targeted. Investment is phased. Value becomes visible earlier.

It also forces organisations to confront a less obvious risk: knowledge. In many cases, critical understanding of systems is held by a small number of experienced individuals. As those individuals move on, so does the organisation’s ability to operate, adapt and scale. Without capturing that knowledge, transformation becomes fragile from the outset.

In practice, delivery is rarely linear. It involves coordinating multiple teams, working around systems that cannot be stopped, and improving performance while production continues at pace. That reality cannot be modelled in a spreadsheet. It has to be managed on the ground.

The role of funding and sector pressure

External funding is increasing the level of discipline.

Programmes tied to public investment require organisations to articulate their starting point in detail. It is not enough to present a compelling idea – there must be a clear baseline, a quantified problem and a credible path to value.

This is particularly evident in sectors such as automotive, where innovation is closely linked to broader industry shifts. Manufacturing decisions are no longer driven purely by efficiency. They are shaped by regulation, supply chain resilience and long-term capability.

Battery production is one example. Emerging requirements around material sourcing and traceability are pushing manufacturers to think beyond individual processes. The ability to track inputs, understand origins and demonstrate compliance is becoming as important as production efficiency itself.

That changes the nature of transformation. It is no longer just about making factories smarter. It is about making them fit for a more complex, more scrutinised environment.

Closing the gap

The difference between a successful pilot and a successful rollout comes down to discipline.

Organisations that scale effectively are not the ones that invest the most in new technology. They are the ones that start with a clear understanding of their operations, focus on real problems, and build change around what already works.

They are also prepared to move at the pace reality demands: incremental where needed, decisive where it matters. Smart factories do not fail at scale because the concept is flawed. They fail because execution drifts away from the conditions they were designed for.

Bring it back to those conditions – operational, commercial and human – and production follows.

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DB pensions: Draft surplus flexibility regulations published

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

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DB pensions: Draft surplus flexibility regulations published

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On 10 June 2026, the Department for Work & Pensions (DWP) published a public consultation on the draft Occupational Pension Schemes (Payments to Employer) Regulations 2027 (the Regulations).

Published: 11 June 2026
Authors: Rhiannon Barnsley-Bloomfield

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What is the background?

The Pension Schemes Act 2026 permits the trustees of a pension scheme, by resolution, to amend the scheme rules to:

introduce a power for the trustees to make payments to the employer of the scheme out of scheme funds where no power currently exists
remove or relax any restrictions imposed by the scheme rules on any existing power to make payments to the employer of the scheme out of scheme funds.

The draft Regulations set out the conditions which must be met to release surplus from DB schemes. The DWP’s stated aim is to “strike the right balance” with the Regulations between “strong protection for members” while “unlocking value” for employers and scheme members.

What do the draft Regulations say?

The draft Regulations set out what the DWP describe as “clear safeguards” that must be met before surplus can be released. Interesting takeaways include:

a requirement for trustees to obtain an actuarial assessment to confirm the scheme meets the funding threshold for surplus release; namely that the scheme is funded on at least a low dependency funding basis. The low dependency funding threshold differs from existing regulations which use the buy-out basis as the threshold
an actuarial certificate must confirm that the scheme is expected to remain funded at or above the low dependency funding threshold, not just at the point of surplus release, but also over the following three years
any surplus payment must be made within five working days of actuarial certification to ensure that surplus release reflects the scheme’s most up-to-date funding position
a written statement must be sent to members at least three months before the trustees plan to release surplus, which under the existing regulations require the exact amount to be specified
TPR must be notified within one week of the payment being made of: (i) the amount of the scheme’s assets and liabilities, (ii) the amount that the assets exceed the liabilities on a low dependency basis, (iii) the effective date of the actuarial assessment and (iv) the amount of the payment to the employer. Details must also be provided of any member benefit enhancements and any authorised surplus payments being made to members; and
sectionalised schemes with more than one employer can use the powers in the Pension Schemes Act 2026 to modify the scheme rules to enable the payment of surplus as if each section were a separate scheme.

What is next?

The consultation closes at 11:59pm on 2 September 2026. Initial feedback when discussing the draft with our clients and industry contacts is that some of the timings look tight, for example, the time between the actuarial certificate and payment of the surplus.

TPR published a statement on 10 June 2026 to support discussions between trustees and employers on surplus release options. The statement provides TPR’s early views on some of the principles that trustees should consider when releasing surplus. It also provides some high-level illustrative examples for how trustees could go about releasing surplus now (if permitted under scheme rules), and how this might change when the Regulations are in force.

TPR’s statement clearly recognises that “Trustees’ independence on the decision to release surplus is unaffected by these new flexibilities” as well as recognising that “Trustees must be satisfied, in the proper exercise of their fiduciary duties, that a surplus release is appropriate.”

The new regime is expected to come into force in April 2027. There will be no transitional measures associated with the Regulations, so any release of surplus before the Regulations come into force will be subject to the current regime. TPR intends to consult later this year on guidance outlining factors for trustees to consider on surplus release.

DWP intends to make a separate provision for surplus release from DB superfunds.

Key takeaways

Trustees and employers of well-funded schemes should keep a watching eye on developments in surplus release. Although the Regulations have not yet been finalised, trustee and employers that are considering utilising the new powers can start discussions now based on the key principles, recognising that each is likely to have different considerations in such discussions.

The changes introduced by the Pension Schemes Act 2026 and draft Regulations provide a framework under which a scheme surplus may be paid to scheme employers. What is paramount for Trustees is to ensure that any action under that framework is underpinned by their general fiduciary obligations to act in members’ and beneficiaries’ interests. Trustees, employers and their advisers should consider whether the timetable suggested by the Regulations is likely to be workable in practice.

We will continue to monitor developments and will be commenting further as the Regulations and TPR guidance unfolds. Noting that TPR’s statement is mostly aimed at trustees, we are looking to consider the position from an employer’s point of view and will provide some commentary in due course.

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The hidden risks of letting employees work overseas

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

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The hidden risks of letting employees work overseas

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Overseas remote working can support mobility and flexibility, but it is never risk‑free. Employers should assume that employment, tax, immigration and regulatory issues can all arise at once, and that clear governance is essential.

Published: 11 June 2026
Authors: Amy Frost

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Critically, the duration of any overseas remote working is not the defining issue; role, authority, location and what the employee does on the ground matter far more. As a result, approval of overseas working must be done on a case‑by‑case basis, consistently handled, and underpinned by clear governance.

The reality employers are facing

Post‑pandemic working patterns continue to evolve. Many UK employers are seeing growing requests to work from another country, from extended “workcations” to employees moving home overseas and never returning, to ongoing remote‑from‑abroad roles in sectors where work is readily portable (notably financial services and technology).

Risks relating to these arrangements are routinely underestimated across the board. That does not mean overseas arrangements can’t work; it just means they need clear governance and boundaries, and employers should not simply green‑light requests without careful consideration and coordinated legal input.

Which law applies?

A UK contract with a governing law and jurisdiction clause does not necessarily disapply mandatory host‑country employment protections. Over time, overseas working can pull in local dismissal protections, notice/severance rights, working time/holiday rights, and collective rights.

The problem often surfaces at the worst moment for an employer, for example when performance management or termination is on the table and the employer then discovers they may need both UK and local legal advice, with cost, delay and litigation risk that weren’t priced in at the outset.

As a general observation, many EU jurisdictions tend to be employee‑protective, while the US is often less so (subject to significant state‑by‑state variations).

Immigration considerations

Ideally, the immigration position should be checked by a specialist because local rules vary widely (including for a country’s own nationals engaging in certain categories of work). Copies of passports or evidence of nationality help but are not a guarantee that the employee will have the right to work. UK employers will recognise how serious this can be where civil penalties for illegal working in the UK can be up to £60,000 per illegal worker for repeat breaches - a reminder that other countries can be just as strict and just as costly to get wrong.

Corporate tax, payroll & social security considerations

Remote working overseas can raise corporate tax risks for UK employers, particularly where senior employees are involved. If a director attends board meetings from abroad, there is a risk that the company’s place of central management and control could be seen as outside the UK, potentially resulting in dual residence, additional filing obligations and tax leakage.

Separately, an overseas permanent establishment (PE) may arise if the employee’s activities create a taxable presence—particularly where they work from an employer-provided office, perform key strategic or revenue-generating functions, or have authority to conclude contracts. The more senior the employee, the greater this risk. If a PE is established, profits attributable to it may be taxed overseas (subject to any applicable double tax treaty). Employers should therefore assess roles, activities and working arrangements carefully and implement appropriate governance to mitigate these risks, as issues can be difficult and costly to unwind once they arise.

Payroll and social security obligations must also be considered. An employee working overseas may trigger local payroll withholding requirements and/or employer social security liabilities in the host jurisdiction, depending on factors such as the duration of the arrangement and the applicable domestic law. Where a bilateral social security agreement applies, it may be possible to maintain UK National Insurance contributions for a limited period; otherwise, dual contributions or host-country obligations may arise. Employers should therefore review reporting obligations and ensure appropriate payroll arrangements are in place before overseas working begins.

Operational and regulatory considerations

Alongside employment, immigration and tax risks, employers should also be mindful of several operational and regulatory considerations that can arise when employees work from overseas.

UK employers retain the same health and safety duties for employees working remotely including overseas as they do for those on‑site. The HSE confirms that employers must assess risks associated with home or remote work, including workstation setup, equipment safety, and stress or wellbeing concerns, and take appropriate steps to protect employees’ health wherever they work. Acas guidance reinforces that employers remain responsible for supporting the mental and physical wellbeing of remote workers and should maintain regular communication, ensure suitable arrangements are in place, and address any concerns regarding the home‑working environment or the employee’s circumstances.

Practicalities like time‑zone differences and communication rhythms also matter since they affect both the employee’s performance and their wellbeing.

UK employers should also consider data protection issues when employees work from overseas. The ICO’s updated guidance sets out a straightforward three‑step test to help organisations understand when sending or accessing personal data from another country counts as a “restricted transfer” under the UK GDPR. In practice, this can be triggered where data is sent to or accessed by a separate legal entity outside the UK. The guidance also makes clear that employers must still think about data security, access controls and how information is stored or transferred when staff work abroad.

These issues may not always be the primary drivers of risk, but they form part of a broader governance picture. Employers should factor them into their overseas‑working assessments to ensure remote arrangements remain lawful, safe and operationally viable.

Role and location factors

Certain roles, such as directors and regulated financial services roles, might also trigger the need for additional regulatory permissions, supervision and location‑based requirements.

In addition, the location the employee is planning to work from can also give rise to further considerations that will need to be assessed. For example, is there political instability or conflict there? Do local laws materially conflict with your organisation’s values (for example, LGBTQ+ protections)? These can potentially be legitimate grounds to refuse or apply tighter controls to an overseas working request.

Where this leaves HR leaders

Global mobility enables growth and done well, can be a competitive advantage. But it is not a “flexible benefit” that can be waved through on trust every time. Every cross‑border working request is a mini governance exercise that spans employment, immigration, tax, data and regulatory questions and the hardest issues appear late if they’re not addressed early.

Some practical tips for employers to consider:

there is no days‑based “safe harbour”. Duration is relevant, but not determinative. The risk picture depends on role, authority, activities, and location
implement mandatory pre‑approval for any overseas working. Employees should always seek permission from their employer before working abroad. The employer can then coordinate legal, tax and compliance input as needed
consistency matters. Handle like‑for‑like requests consistently to reduce discrimination risk and maintain a clear audit trail of decisions and rationales
if, following assessment, overseas working is permitted, the decision should be recorded in writing detailing scope, location, responsibilities, time‑zone expectations, authority limits, data/security controls, IP ownership, review periods and end points. Employers need to remember that governing law and jurisdiction clauses won’t always disapply mandatory local rules and they should plan on taking host‑country legal advice in additional to UK advice
plan for drift. Employers should decide in advance how they will handle extensions, what happens if the arrangement becomes long‑term, or if the employee refuses to return

What to do next

Employers should audit what’s already happening in their organisations and consider requiring pre‑approval for anything new.

Employers should also build a case‑by‑case decision process that is clear and consistent and seek targeted advice early on when considering any requests to work abroad so that risks are managed before they crystalise. The goal isn’t to shut down flexibility via global mobility, it’s to protect the business while enabling it.

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Is your competition compliance program fit for the AI world?

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

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Is your competition compliance program fit for the AI world?

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

Published: 11 June 2026
Authors: Kiran Desai

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

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

In considering this topic, questions GCs should consider include:

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

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Tarbuc v Martello Piling Ltd: Limits of ‘protected conversations’

Wed, 10 Jun 2026 00:00:00 +0100

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Tarbuc v Martello Piling Ltd: Limits of ‘protected conversations’

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Tarbuc v Martello Piling Ltd clarifies the narrow scope of section 111A: protected conversations do not shield all claims and may fall away where conduct is assessed holistically.

Published: 10 June 2026
Authors: Jessica Pearson

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Employers frequently rely on ‘protected conversations’ under section 111A of the Employment Rights Act 1996 (ERA 1996) as a tool to explore exit arrangements without the risk that what is said will later be used against them in litigation. However, the recent decision in Tarbuc v Martello Piling Ltd [2026] EAT 58 serves as a timely reminder that the protection afforded by section 111A is narrower than is often assumed.

In particular, the case highlights two key points. First, that section 111A protection is restricted to ordinary unfair dismissal claims and does not extend to other statutory or contractual claims. Secondly, that tribunals must take a holistic approach when assessing whether ‘improper conduct’ displaces that protection. Together, these principles significantly limit the extent to which employers can rely on protected conversations as a litigation shield.

A brief refresher: Section 111A ERA 1996

Section 111A was introduced to encourage pre-termination discussions by providing that evidence of such negotiations is generally inadmissible in proceedings for ordinary unfair dismissal.

However, the scope of that protection is limited. It does not extend to other types of claim, such as discrimination, whistleblowing, unlawful deductions from wages, or claims under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations.

In addition, section 111A protection can be lost where there has been ‘improper conduct’. While the statute does not define this exhaustively, case law and ACAS guidance make clear that it requires a fact-sensitive assessment of the employer’s behaviour.

Against that background, Tarbuc is a useful illustration of how these principles operate in practice.

The facts in Tarbuc

Mr Tarbuc was employed by Martello Piling Ltd. In April 2024, he was invited to a meeting that was described as a ‘protected conversation’. At that meeting, the employer presented a settlement offer and indicated that redundancy would follow if the offer was rejected. Following his dismissal, Mr Tarbuc brought a number of claims, including unfair dismissal, unlawful deductions from wages, and less favourable treatment as a part-time worker.

The employment tribunal initially held that section 111A applied and that there had been no improper conduct. On that basis, it directed that all references to the protected conversation should be removed from the evidence and pleadings across all claims. Mr Tarbuc appealed and the Employment Appeal Tribunal (EAT) allowed the appeal in part, identifying two key errors in the tribunal’s reasoning.

Section 111A does not apply to all claims

The EAT held that the tribunal had misapplied section 111A by excluding evidence of the protected conversation in relation to all claims, since it only renders pre-termination negotiations inadmissible in proceedings for ordinary unfair dismissal. It does not extend to other causes of action.

This means that, where multiple claims are brought, tribunals may be required to admit the same evidence for some claims but not others. The EAT referred to this as a form of ‘analytical compartmentalisation’, noting that courts and tribunals are well accustomed to taking such an approach.

In practical terms, this significantly undermines any assumption that a ‘protected conversation’ will be excluded wholesale from proceedings.

Improper conduct must be assessed holistically

The EAT also found that the tribunal’s approach to the question of improper conduct was too narrow. In assessing whether the employer’s behaviour was improper, the tribunal had focused only on what was said during the meeting. However, it failed to consider the surrounding circumstances, including how the meeting was arranged and the fact the employee was not permitted to be accompanied.

The EAT made clear that these factors were relevant and should have been taken into account. Although previous authority had held that an ‘ambush’ meeting or a refusal to allow a companion will not automatically amount to improper conduct, it does not mean such factors are irrelevant.

The EAT also addressed the issue of time pressure. It confirmed that the adequacy of any deadline for accepting a settlement offer must be assessed in context. On the facts, the provision of a five-day period did not amount to improper conduct, particularly as the offer had already been rejected at the meeting.

The case was ultimately remitted to a freshly constituted tribunal.

Practical implications for employers

Tarbuc is a clear reminder of the practical risks that arise when employers treat protected conversations as a complete form of litigation privilege. The most immediate takeaway is that section 111A does not provide a global exclusion of evidence. Where an employee brings multiple claims, particularly alongside ordinary unfair dismissal, there is a real risk that the contents of a protected conversation will be admissible in respect of at least some of those claims. Employers should therefore proceed on the basis that anything said in a protected conversation may ultimately be scrutinised in tribunal proceedings.

Tarbuc also underlines the procedural complexity that can arise in litigation. Tribunals may be required to consider the same evidence for certain claims while disregarding it for others. This can create evidential and strategic challenges, particularly where the facts are closely linked.

Process matters as much as substance

Perhaps the most significant practical point concerns the assessment of improper conduct. The EAT’s judgment confirms that the tribunal’s focus should not be limited to the content of the discussion. Instead, it must consider the wider context, including:

how and when the meeting was arranged
whether the employee had an opportunity to prepare
whether procedural fairness was observed (for example, in relation to accompaniment)

This reflects a broader theme in employment law: that the manner in which decisions are implemented is often as important as the decision itself.

Settlement strategy considerations

For employers, the key implication is that reliance on section 111A should never be absolute. In particular:

where there is a realistic prospect of claims beyond ordinary unfair dismissal, the protection afforded by section 111A may be of limited use
care should be taken to ensure that discussions are conducted in a manner that cannot be criticised as improper
communications should be drafted on the basis that they may ultimately be disclosable

In some cases, employers may wish to consider whether the without prejudice rule provides a more appropriate or complementary form of protection. However, there are limitations with this rule as well, in particular the need for there to be an existing dispute before it can apply, and therefore it will not be an available avenue in every case.

Key takeaways

The Tarbuc case serves as a useful corrective to any over-expansive view of section 111A. For both practitioners and employers, the message is clear: while protected conversations remain a valuable tool, they are not a risk-free environment. Careful handling, both in substance and process, remains essential.

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Holiday pay: Lessons from a tribunal award

Wed, 10 Jun 2026 00:00:00 +0100

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Holiday pay: Lessons from a tribunal award

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Holiday pay is back in focus. We consider Littlewood v Nuffield Health, new duties for employers under the Employment Rights Act 2025 and the steps employers should take now.

Published: 10 June 2026
Authors: Darlia Williams

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The recent Employment Tribunal decision in Littlewood v Nuffield Health, which resulted in an award of approximately £149,000, has brought holiday pay back into focus.

Although the decision turned on its own facts, it is a useful reminder of the risks employers face where holiday pay is calculated incorrectly, payroll records do not stand up to scrutiny, or annual leave decisions are not communicated effectively.

The Employment Rights Act 2025 also brought into force a new statutory duty on employers to keep detailed records of holiday entitlement and holiday pay. This means employers now face a dual risk: not only getting calculations wrong but also being unable to evidence compliance.

This article highlights the key legal issues and the practical steps employers should now take.

The legal position

Workers are entitled to 5.6 weeks of paid annual leave. The key principle is that holiday pay should reflect ‘normal remuneration’. In other words, a worker should get the same pay when they are on holiday as when they are at work.

For workers with fixed hours and pay, this is relatively straightforward. However, where normal pay varies because workers receive additional earnings such as commission or overtime, holiday pay calculations must reflect those elements. This issue often arises in sectors with variable hours or performance-based earnings, and Littlewood demonstrates that tribunals will scrutinise both the calculation itself and the employer’s ability to explain it.

Calculating holiday pay

For workers with variable earnings, employers should generally apply a 52-week reference period, averaging pay over the last 52 paid weeks. Government guidance makes clear that holiday pay should not be limited to basic salary and should include elements of normal remuneration such as:

commission
payments that are intrinsically linked to the performance of tasks under the contract
regular payments linked to professional or personal status
contractual overtime
voluntary overtime worked on a regular basis

The aim is to reflect what the worker would ordinarily receive if they were working, by taking a genuine average of gross pay rather than applying a simplified or ‘top-up’ method that risks underpayment.

For contractual overtime, the position is relatively clear. However, voluntary overtime is more difficult. The guidance and case law suggest it should be included where it is sufficiently regular to form part of normal remuneration, but there is no definitive legal threshold for what counts as ‘regular’. That remains a question of fact in each case, which is why a clear and consistent methodology matters.

Although the tribunal in Littlewood did not provide further guidance on this point, it did underline the evidential risk for employers: if an employer cannot clearly demonstrate how holiday pay has been calculated, a tribunal may be prepared to accept a claimant’s own figures, as happened there. The case is also a reminder that unclear payslips, unexplained credits and debits, and inconsistent descriptions of payments can significantly weaken an employer’s position.

Recording holiday pay

From 6 April 2026, the Employment Rights Act 2025 requires employers to keep records of annual leave and holiday pay. Enforcement is expected to be overseen by the Fair Work Agency (FWA) and an employer that cannot prove compliance may commit a criminal offence. The maximum penalty is likely to be an unlimited fine.

Employers must now record:

the amount of statutory annual leave taken by each worker
clear evidence of how holiday pay is calculated, including exactly which pay elements (such as commission or overtime) are included or excluded
details of any holiday carried over from previous years
any payments made in lieu of holiday, such as pay for accrued but untaken holiday on termination

These records must be accurate, accessible and retained for at least 6 years from the date they were made. Although there is no prescribed format and employers can use digital systems or paper, the records must be detailed enough to justify 52-week average calculations for workers whose pay varies.

Without clear and accurate records of holiday entitlement, leave taken and holiday pay calculations, employers may struggle to defend claims and could also face penalties from the FWA.

What employers should do now

The practical lessons from Littlewood are clear. Employers should:

review holiday pay policies and procedures to ensure compliance
review holiday pay calculations to ensure all elements of normal remuneration are included; in some cases, the simplest and lowest-risk approach may be to include all voluntary overtime earned over the previous 52 weeks
check that holiday pay is clearly identified on payslips and that payroll codes are intelligible
audit existing systems against the new record-keeping requirements
ensure holiday request decisions are consistent and communicated to workers in good time

A proactive review now will put employers in a stronger position to comply with the new record-keeping regime, reduce the risk of holiday pay claims and avoid the evidential problems highlighted in Littlewood.

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Employment Related Securities returns: 6 July deadline

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

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Employment Related Securities returns: 6 July deadline

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ERS annual returns are due by 6 July 2026. Employers must report share schemes and employee share activity – even where no events occurred.

Published: 09 June 2026
Authors: Marie Mann

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We are fast approaching the 6 July 2026 filing deadline, which is relevant for clients who may need to file an end of year Employment Related Securities (ERS) annual return with HMRC in respect of reportable events occurring in the 6 April 2025 – 5 April 2026 tax year.

This return is effectively HMRC’s way of knowing what employment related securities UK employees hold, and covers:

activity relating to tax-advantaged types of incentive arrangements (EMI, CSOP, SAYE and SIP); and
any situation where employees or directors acquire or hold shares or share options (or other types of security) in their employing company (or a company in which they are a director)

It does not need to be part of a traditional “incentive” scheme. Any one-off share acquisitions by employees or directors are caught, even if market value is paid.

Reportable events

The most common reportable events for the ERS return are:

UK employees or directors acquiring shares or share options; and
the exercise or surrender/cancellation of options

The disposal of shares is generally not reportable, provided no income tax arises from the sale. Examples of where an income tax charge may arise on a disposal include where a section 431 election was not entered into, or where the shares were sold for more than their market value.

Filing requirements

ERS annual returns must be filed via HMRC’s online service by 6 July 2026.

There are separate returns for:

tax-advantaged employee share schemes (EMI, CSOP, SAYE and SIP); and
all other arrangements (e.g. non-tax advantaged options or the direct issue of shares to employees or directors)

Even if there have been no reportable events, a filing must still be made to HMRC (known as a “nil return”).

You also need to register the relevant scheme or arrangement before you are able to file an annual return. If you are not already registered (either with HMRC’s online service, or because the scheme or arrangement is not registered), you should do so as soon as possible to ensure everything is in place ahead of the deadline. HMRC do not send reminders or notices to file in respect of these ERS annual returns.

You can register for HMRC’s online service by navigating to:
https://www.gov.uk/register-for-hmrc-online-services

The returns can be found at the following link, including HMRC guidance on what needs to be reported:
https://www.gov.uk/guidance/employee-share-schemes-reporting-requirements

We recommend that you retain records of your submission, including screenshots or copies of the information submitted, together with the acknowledgement number received once the return is filed.

Penalties

Failure to file accurate returns by 6 July may result in HMRC imposing penalties. There is an automatic penalty of £100 for a late return, with additional increasing penalties if the return remains outstanding for more than three months.

In addition, if the return contains inaccuracies, HMRC can impose penalties of up to £5,000 per return.

EMI notifications

Please also note that 6 July 2026 is the deadline for notifying any EMI options granted in the 2025/26 tax year.

It is important that notifications are made by the deadline to ensure that the EMI options remain EMI qualifying.

How we can help

We cannot make the ERS annual return or EMI notifications for you, but we can assist by guiding you through the process via a screen share call.

If you would like support, please get in touch with your usual Shoosmiths contact or a member of our Tax & Incentives team.

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Retail leases on trial: Value beyond the store

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

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Retail leases on trial: Value beyond the store

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

Published: 09 June 2026
Authors: Gemma Siviter

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

What the dispute is really about

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

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

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

Where landlords see untapped turnover

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

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

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

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

When one sale becomes two

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

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

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

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

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

Why legacy leases are under strain

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

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

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

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

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

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Foreign PE exemption set to become mandatory for UK companies

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

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Foreign PE exemption set to become mandatory for UK companies

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The UK is set to mandate the foreign PE exemption. Whilst overseas profits will not be subject to UK tax, foreign losses will no longer be available to reduce UK tax liabilities.

Published: 09 June 2026
Authors: Laura Board & Laura Gould

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The UK Government has announced changes to the tax treatment of UK companies with foreign permanent establishments (PE).

For accounting periods beginning on or after 1 January 2027 (with the changes commencing from 1 September 2026 for oil and gas companies), the choice of whether a UK company can include the foreign PE’s profits and losses into its UK tax calculations will be removed. A mandatory exemption regime will apply resulting in: (i) the foreign PE’s profits no longer being subject to UK corporation tax; and (ii) the foreign PE’s losses no longer being available to reduce the company’s UK corporation tax liabilities.

The need for change

Under the current rules, without making an exemption election, UK companies are subject to UK corporation tax on the profits of its foreign PEs. The foreign PE’s losses are also available to be used to offset against UK profits.

In its Policy Paper, HM Revenue & Customs confirms the ability to offset foreign losses against UK tax is not balanced by equivalent foreign profits being taxed in the UK. This may arise because UK tax is reduced by double taxation relief or because profitable foreign PEs are subsequently incorporated and therefore removing profits from the charge to UK corporation tax (without generally triggering a taxable gain).

As a result, it is considered that the UK is effectively subsidising overseas losses without taxing the related foreign profits. The UK Government has confirmed that this change in approach is standard international practice to seek to protect against this outcome.

Next steps

Businesses should begin assessing the expected performance of their foreign PEs and reviewing their current structures now, ahead of 2027. Draft legislation is due to be published this Summer, which is expected to include both transitional rules and anti-avoidance rules aimed at artificially accelerating the utilisation of foreign PEs losses to minimise the impact of this change.

Please get in touch with our Tax & Incentives team to discuss how these changes may impact your business. They would be very happy to discuss your multinational tax arrangements with you.

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From satisfaction to scepticism: Motor finance faces a reset

Mon, 8 Jun 2026 00:00:00 +0100

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Report

From satisfaction to scepticism: Motor finance faces a reset

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Based on a survey of 2,000 UK motorists, this article reveals why trust in motor finance is slipping and why transparency now matters more than ever.

Published: 08 June 2026
Authors: Wayne Gibbard & Mitch Barltrop

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UK motor finance: Assessing consumer sentiment and public perception

Explore the experiences and attitudes of 2,000 UK vehicle owners towards motor finance.

https://sites-shoosmiths.vuture.net/6/3326/landing-pages/uk-motor-finance---download-form.asp

Download the report

Motor finance still works for most customers, but trust is declining. Based on a survey of 2,000 UK vehicle owners our latest report, produced in partnership with FTI Consulting, highlights a growing disconnect between strong customer experience and weakening perceptions of fairness. For firms operating in this space, this marks a clear inflection point: transparency is no longer optional.

Motor finance is at a tipping point.

For years, it has been a cornerstone of vehicle ownership in the UK: widely used, broadly understood and, on the surface, effective. But today, scrutiny is intensifying. Regulatory pressure is growing. Media coverage is shaping public opinion in real time. And most importantly, consumer expectations are shifting.

Strong experiences vs. fragile trust

The report reveals a market defined by a clear and uncomfortable tension. On one hand, customer experience remains strong: nine in 10 users say their motor finance agreement met their needs and financial circumstances. On the other, trust is falling, with 40% of customers reporting that their trust in providers has declined over the past three years.

This gap between experience and perception is where the real challenge lies.

Dig deeper, and the tension sharpens. 41% of customers now believe their agreement was unfair in hindsight, despite many reporting initial satisfaction. A significant proportion have already, or plan to, pursue compensation. This is not simply a question of historic conduct: it is a live and evolving risk, shaped by what customers are learning after the fact.

The drivers are clear. Customers point to a lack of transparency around commissions, fees and key terms as the root of their concerns. And those concerns are not forming in isolation. Media and political debate is playing a powerful role too, with over a third of consumers saying recent coverage has reduced their trust in providers.

The new battleground: Transparency

Despite that, consumers do not expect to step away from motor finance altogether. Instead, they are becoming more active, more informed and more demanding. Nearly three quarters (73%) say they will review terms more closely, and more than half (60%) expect to shop around more before making their decision.

For firms operating in this space, the message is clear: transparency is now a decisive differentiator. That means clearer pricing, full disclosure of commissions and simpler, more understandable products.

Those who respond decisively to that challenge have an opportunity – not just to manage risk, but to rebuild trust and strengthen long-term relationships with their customers.

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Shoosmiths advises Azets on acquisition of Muldoon & NI expansion

Wed, 3 Jun 2026 00:00:00 +0100

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Press release | 1 MIN READ

Shoosmiths advises Azets on acquisition of Muldoon & NI expansion

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Shoosmiths has advised international accountancy and business advisory group Azets on its acquisition of Belfast-based accountancy and advisory firm Muldoon, marking Azets' entry into the Northern Ireland market and further strengthening its presence across the UK and Ireland.

Published: 3 June 2026

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Established more than 40 years ago, Muldoon provides accounting, tax, audit and advisory services to more than 1000 clients across a wide range of sectors. The firm has built a strong reputation in the Northern Ireland market for its high-quality advice and people-first approach. It employs over 40 people.

The transaction broadens Azets' regional footprint and enhances its ability to support clients across the UK and Ireland, while creating a new platform for growth in Northern Ireland. Following completion of the transaction, Muldoon will immediately rebrand as Azets.

Shoosmiths advised Azets on all legal aspects of the transaction.

The Shoosmiths team was led by Partner Simon Procter, Associate Emily Egan and Trainee Solicitor Bonnie Hasselman, who advised on corporate matters. Senior Associate Carly Cutler provided tax advice, Partner Sarah Ewing provided real estate advice and Principal Associate Alex Bevan provided HR advice.

Simon Procter, Partner in Shoosmiths’ Corporate team, said: “It has been a pleasure to support Azets on another key acquisition. Muldoon has gained a reputation as an outstanding regional firm with strong client relationships across multiple industries and a culture that aligns closely with Azets. The transaction represents a significant milestone in Azets’ growth strategy as it expands into Northern Ireland and reflects the continued investment and consolidation we are seeing across the accountancy and advisory sector."

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Inheritance Tax changes: New information-sharing regulations

Tue, 2 Jun 2026 00:00:00 +0100

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Article | 2 min read

Inheritance tax changes: new information-sharing regulations

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On 18 May 2026, HMRC published draft regulations relating to the changes to Inheritance Tax (IHT) treatment for pensions.

Published: 02 June 2026
Authors: Rhiannon Barnsley-Bloomfield

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What is changing?

Under the Finance Act 2026, most unused pension funds and death benefits will, from 6 April 2027, be included in the value of a person’s estate when determining IHT liability and thresholds.

An “unused” pension is one which has not been used to claim an income. For money purchase arrangements, this will include all money held in a pension savings pot. For defined benefit arrangements, this will include lump sum death benefits that do not fall within any of the exclusions.

Personal representatives, who already report and pay IHT on a deceased person’s estate, will be responsible for reporting and paying any IHT due on unused pension funds and death benefits.

What are the new draft regulations?

The draft regulations have been published by HMRC for technical consultation. The regulations make changes to the Registered Pension Schemes (Provision of Information) Regulations 2006 to incorporate the changes made by the Finance Act 2026. The consultation closes at 11:59pm on 11 June 2026.

The draft regulations focus on the information-sharing that will be required between pension providers and personal representatives, and with pension beneficiaries and HMRC, in order to facilitate the payment of IHT on unused pension funds.

This follows the publication on 11 May 2026 of a technical note by HMRC.

What are the key provisions?

Pension scheme administrators and personal representatives are already required to share information about the deceased and beneficiaries after a member has died. The new regulations build upon this. The key provisions under the draft regulations are:

the scheme administrator (or the insurance company, if relevant) will be required to provide initial information to the personal representatives of a deceased member of the scheme within 28 days of receiving the request. Initial information will include the value of the notional pension property other than excluded benefits, at the date of the member's death,
if the value of the notional pension property is an estimate, the actual value must be provided within 14 days beginning with the day on which the actual value is obtained by the scheme administrator
further information must be provided to a personal representative where they are required to file an IHT account and request further information from the scheme administrator
if a personal representative, or prospective personal representative, gives a withholding notice to a scheme administrator the administrator must: (i) confirm receipt of the notice and (ii) confirm whether it accepts the notice is a valid withholding notice or why it is considered to be invalid within 14 days beginning with the date the notice is received, and
if a scheme administrator accepts a notice as a valid withholding notice, the scheme administrator must inform the beneficiaries of (i) the date of the notice and (ii) the details of the person who gave the notice.

What is next?

HMRC intends to make and lay the regulations in spring/summer 2026.

HMRC has confirmed that it is planning to publish guidance and other supporting materials before 6 April 2027, including templates to use for withholding and paying IHT and interactive tools for personal representatives. It has also confirmed it is planning to update its tax manuals with detailed guidance on IHT and pensions.

Key takeaways

The regulations are still in draft and subject to consultation, so they could change. Scheme administrators in particular should keep an eye on developments and ensure the necessary systems are in place to comply with the information-sharing requirements from 6 April 2027.

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Price gouging under scrutiny: What UK businesses should prepare for

Mon, 1 Jun 2026 00:00:00 +0100

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Price gouging under scrutiny: What UK businesses should prepare for

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The UK government has signalled by statements to parliament a crackdown on “price gouging” – the practice of hiking prices to unjustified highs during crises. What should a business do?

Published: 01 June 2026
Authors: Kiran Desai

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Ignoring the policy merits of what is proposed, the practical implication for businesses is that pricing decisions may face greater scrutiny, both regulatory and public. Rather than focusing on prescriptive steps, corporations may wish to test themselves against a series of internal questions. These include:

how robust is our pricing governance and oversight?
can we evidence and explain our price changes?
how exposed are we to regulatory scrutiny?
how vulnerable are we to reputational damage?
are we balancing commercial reality with perceptions of fairness?

A New Focus on Price-Gouging in the UK

As first addressed in parliament on 24 March 2026 and reiterated on 21 May 2026, the UK government plans to empower regulators to act swiftly against excessive pricing. Price gouging typically means exploiting a crisis by raising prices to an unfair or unjustifiable level. Measures under discussion include rapid investigations and public “name and shame” campaigns to spotlight firms whose margins surge unfairly. In extreme cases, officials even suggest targeted orders or fines to stop “exploitative pricing”. This is a proactive shift – historically UK competition law has not punished high prices alone (unless a dominant firm abused its power), focusing more on collusion or monopolistic conduct. Now, however, the UK government aims to address unfair prices, reflecting public expectations and political pressure.

Key Questions for End-Consumer Facing Corporations

1. Do we have the right pricing governance and oversight?

Corporations should ask whether pricing is treated as a strategic governance issue, with clear internal controls and approval routes for significant price changes. The relevant internal question is whether the business has guardrails capable of testing not only commercial necessity, but also how a pricing decision may appear if reviewed by a regulator, customer base, or the media. The strength of that governance framework may be as important as the price decision itself.

2. Could we clearly justify and evidence each material price increase?

Corporations should ask themselves whether they could demonstrate, with contemporaneous records, why a price increase occurred and whether it was linked to genuine cost, supply, or market factors. The issue is not merely whether an increase can be defended in principle, but whether the business has documentary support showing purchase costs, margins, inventory constraints, or other drivers. A key internal question is whether the company could explain its pricing decisions in a way that appears disciplined rather than opportunistic.

3. How would our pricing look under regulatory scrutiny?

With stronger oversight powers under discussion, corporations should ask how their pricing patterns would appear if compared against pre-crisis levels, sector norms, or peer conduct. The question is whether the business has identified who would respond to an inquiry, how data would be assembled, and whether any pricing outliers would be difficult to explain. Even before any formal rules are settled, a prudent self-assessment is whether the company would be comfortable seeing its pricing decisions examined in real time by a regulator.

4. What would be the reputational impact if our pricing were publicly challenged?

Corporations should ask not only whether a price increase is legally defensible, but also how it would be perceived externally. A price decision that can be explained internally may still be portrayed publicly as exploitative, particularly in a period of economic pressure. The relevant question is whether the business has considered the effect on customer trust, brand value, and public narrative if it were singled out in a “name and shame” environment. In many cases, reputational exposure may matter as much as formal legal risk.

5. Are we striking a credible balance between fairness and commercial reality?

The final question is whether the business can articulate a coherent position on where legitimate cost recovery ends and perceived exploitation begins. Regulators have indicated that not every price increase is problematic, particularly where costs have genuinely risen, but the dividing line remains unclear. Corporations should therefore ask whether their internal policies, margin expectations, and crisis-response planning reflect a defensible balance between commercial viability and wider perceptions of fairness. What is already clear is that even an investigation can consume management time, create advisory cost, and inflict reputational harm before any formal determination is reached.

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Automotive Conference 2026: From disruption to delivery

Fri, 29 May 2026 00:00:00 +0100

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Automotive Conference 2026: From disruption to delivery

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Shoosmiths’ annual Automotive Conference brought leaders together to tackle disruption—from automated vehicles to finance trust. Here are the key themes shaping what’s next.

Published: 29 May 2026
Author: Jonathan Smart

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The annual Shoosmiths Automotive Conference brought together leaders from across manufacturing, technology, finance and legal to tackle the forces reshaping the sector – from automated vehicles and supply chain resilience to motor finance trust and the future of dealerships. This article brings together the day’s key themes and debates, setting out what’s changing now and where the industry is heading.

This time, automated vehicles are moving from concept into real-world deployment

Panel: Automated vehicles: An exciting road ahead for the UK & beyond

Speakers: Ben Gardner, Partner, Shoosmiths; Robert Bateman, Manager – Vehicle Research & Advanced Engineering, Nissan Group of Amieo; Mihail Krepchev, Head Of Legal, Wayve Technologies Ltd

The opening panel was clear: AVs are moving out of theory and onto UK roads. With robotaxis expected in London, a maturing regulatory framework and live commercial trials, the shift is underway. To illustrate the point Nissan has moved beyond research into real-world deployment and mobility services. Wayve, meanwhile, pointed to growing investment and heavyweight partners. The message was simple: this is no longer a distant future.

No single player will deliver AVs alone; collaboration across OEMs, software firms, regulators and infrastructure partners is essential. . On that front the UK has an edge with regulatory readiness, deep engineering talent and an influence on global standards. But technology alone won’t unlock scale. Public confidence remains critical and adoption will only follow once people trust how AVs behave on real roads.

AVs are not just about self-driving cars — they’re about access, safety and new services with Robert Bateman framing AVs as a shift from carmaker to service provider. They can also be of benefit for nervous drivers, people with limited mobility and those who currently depend on others to travel. As a result, more consistent driving, safer streets and smarter cities could deliver lasting economic and social value for the UK.

Supply chains are being rebuilt for resilience

Panel: Build or integrate? Re‑wiring supply chains, logistics & manufacturing

Speakers: Caroline Chester, Legal Director, Shoosmiths; Wei Wu, Corporate Partner & Manufacturing Lead, Shoosmiths; Rupal Harrison, Head of Legal & Compliance, Company Secretary, Daimler Truck & Daimler Buses UK; Edwin Morgan, Policy & Public Affairs Director, UKWA

Geopolitics, tariffs, fuel volatility, labour shortages and energy disruption have exposed how fragile global models can be. This isn’t the end of globalisation: it’s a reset. Businesses are rethinking where they need control, where single‑source risk runs too deep, and where localisation or vertical integration can protect continuity.

The build‑versus‑integrate debate has become a strategic choice about ownership. Speakers argued that companies should retain control of what matters most — data, forecasting, analytics and customer insight — while partnering on platforms, logistics and specialist tech. Examples like build your dreams (BYD) show the upside of owning more of the value chain. But the warning was clear: trying to build everything slows execution and raises risk.

Despite rising customer expectations, many B2B supply chains still lack real‑time visibility. That gap raises hard questions around data ownership, cybersecurity and cross‑border compliance. At the same time, challenges like battery logistics, charging infrastructure and freight electrification are simply too big for any one business to solve alone. The takeaway? Future resilience will be built on shared data, stronger ecosystems and more joined‑up policy and infrastructure planning.

Motor finance is a trust issue, not just a regulatory one

Panel: Reset to restart: Being the trusted brand again

Speakers: Wayne Gibbard, Commercial Partner, Mobility, Logistics & Manufacturing Sector Co-Lead, Shoosmiths; Mitch Barltrop, Senior Managing Director, FTI Consulting

Motor finance is experiencing a trust reset, driven by regulatory scrutiny and shifting customer expectations.. FCA commission redress has created uncertainty, but compensation mechanics aren’t the real story. The bigger challenge is what this moment means for long‑term customer trust — and how the sector rebuilds it.

As part of the session Shoosmiths and FTI Consulting presented the results of its motor finance study which surveyed 2,000 vehicle owners across the UK on their experiences and attitudes – click here for the full survey findings. Customers still value motor finance, but too often they don’t trust what they’re being shown. Confusing pricing, complex incentives and dense documentation remain the pressure points — even where practices have improved. The message was simple: strip it back. Explain pricing clearly. Speak like a business that’s on the customer’s side. Transparency is no longer just about compliance — it’s how brands win.

Public perception is being driven by media, social channels and claims firms — often ahead of legal outcomes. The panel noted that firms have gained little credit for changes already made, partly because direct customer communication is still too weak. The takeaway: take control. Lead with clear, authoritative, customer‑first messaging — or risk trust being defined by others.

Physical dealerships remain central, evolving into multi-functional hubs combining sales, servicing and brand experience.

Panel: Showrooms, not showpieces: The investable reality of auto retail

Speakers: James Needham, Real Estate Partner, Mobility, Logistics & Manufacturing Sector Co-Lead, Shoosmiths; Catherine Hood, Real Estate Partner, Shoosmiths; David Hammersley, Business And F&I Manager, NFDA; Richard Stephens, Director, Robert Stephens & Co; Nigel Wells, Head of Network Development, Stellantis &You

Despite the growth of online sales, car buying remains a major financial and emotional decision. Customers want to see, test and experience vehicles in person. Physical sites also play a critical role in explaining increasingly complex products — particularly EVs and finance — where confidence is built face to face.

As a result, dealerships are becoming more flexible, multi‑functional spaces. Sales, servicing, aftersales — and in some cases multiple brands — are coming together under one roof. Brand experience still counts, but sites now need to work harder commercially and deliver value across the full customer journey.

Affordability, flexibility and infrastructure are the real constraints. Dealers face high fit‑out and operating costs, shorter lease horizons and the need to retrofit sites for EV charging. At the same time, competition for land is intensifying as automotive uses compete with industrial and logistics demand. As a result, real estate strategy is becoming a core commercial decision, not a background issue.

Back to basics: Clarity, judgement and focus

Panel: Running legal like a business: Practical steps for lawyers in a changing industry

Speakers: Jonathan Smart, Litigation Partner, Mobility, Logistics & Manufacturing Sector Co-Lead, Shoosmiths; Jonathan Lipman, Group General Counsel, Mercedes-Benz UK; Paul Gilbert, Director, LBC Wise Counsel

Lawyers need to translate complexity into plain English, be open with their teams, and stop living in permanent reaction mode according to the final panel session. Stronger boundaries matter. Not to block the business, but to support it properly, without burning out or losing focus.

The panel identified a growing confidence in AI tools like Copilot, particularly for practical gains such as summarising emails or sharing knowledge across teams. But the discussion drew a firm line: AI supports better prioritisation and efficiency; it does not, and should not, replace legal thinking.

As a result, the core job remains the same: run the day job well, spot what’s missing, understand the wider business context, and build a stronger function for the future. In summary, legal teams need to spend less time on low‑value tasks, be sharper about what genuinely needs legal input, and make deliberate, risk‑based choices about where to focus their energy.

More information

To stay up to date for the conference next year, register via the link below:

https://www.shoosmiths.com/sign-up

https://youtu.be/JeFLKFVXRo4

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UK steel tariffs: A critical inflection point for manufacturing

Fri, 29 May 2026 00:00:00 +0100

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UK steel tariffs: A critical inflection point for manufacturing

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UK steel tariffs tighten from July 2026, cutting quotas and adding 50% duties—driving up costs and risk; review your exposure now to protect contracts and supply chains.

Published: 29 May 2026
Author: Michelle Craven-Faulkner

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From 1 July 2026, the UK’s revised steel trade measures will introduce a markedly more restrictive regime for steel imports, with tariff-free quotas reduced by 60% and a 50% tariff applied to imports above those thresholds.

Set out in recent government guidance, the measures are designed to protect UK steelmaking capability in response to global overcapacity and declining domestic production. However, for many manufacturers – particularly in aerospace, rail and automotive – the impact is likely to be immediate and significant.

A blunt instrument in a precision-driven sector

Steel is not a commodity input in advanced manufacturing. Many businesses rely on highly specialised grades and alloys, often with exacting performance and certification requirements.

While the new regime applies to steel “that can be made in the UK”, this principle does not always hold in practice. A number of affected commodity codes relate to products not manufactured domestically at scale, or at all.

The consequence is straightforward manufacturers may face punitive tariffs on imports they have no alternative but to procure overseas.

This transforms the measure from one of industrial protection into a direct cost burden on downstream industry.

Impact on cost, contracts and competitiveness

The commercial implications are material:

significant cost increases where imports fall outside reduced quotas
contractual exposure under fixed-price or long-term supply arrangements
reduced competitiveness in global markets
heightened supply chain risk, particularly where substitution is not feasible

Industry bodies have already warned that businesses reliant on imported steel not available domestically could face substantial cost increases or even production disruption.

Misalignment across the value chain

The policy forms part of a broader UK Steel Strategy aimed at strengthening domestic capacity. However, it risks creating misalignment between upstream protection and downstream impact.

Steel production is strategically important, but so too are the manufacturing sectors it supports. Where policy does not distinguish between available and unavailable domestic supply, there is a real risk of weakening the wider industrial base.

Legal and operational implications

Manufacturers should focus on three immediate areas:

contract review – pricing mechanisms, change-in-law clauses and tariff allocation
supply chain resilience – alternative sourcing, stock strategies and logistics planning
customs strategy – proactive management of tariff-rate quotas, which operate on a first‑come, first‑served basis

Industry response is building

Concerns are already translating into action. A parliamentary petition is calling for urgent reconsideration of the measures, including the scale of quota reductions, the 50% tariff rate and the scope of affected commodity codes.

The central concern is clear: UK manufacturing cannot adapt at the pace currently envisaged, particularly where domestic supply does not exist.

Key takeaways for manufacturers

map your exposure: Identify whether your inputs fall within affected commodity codes
stress-test cost impact: Model quota exhaustion scenarios and tariff exposure
review contracts now: Ensure adequate protection for tariff and regulatory change
plan supply chains proactively: Consider sourcing, stockpiling and timing strategies
engage and influence: Industry feedback is likely to shape how the regime evolves

Conclusion

There is a clear policy objective behind the new measures. However, without greater nuance, particularly around non-UK-producible steel grades, there is a risk of protecting domestic supply at the expense of manufacturing competitiveness.

For many businesses, this is not a future risk. It is a live commercial issue requiring immediate action.

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Shoosmiths advises HIVE shareholders on its sale to Panasonic

Thu, 28 May 2026 00:00:00 +0100

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Press release | 1 MIN READ

Shoosmiths advises HIVE shareholders on its sale to Panasonic

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Shoosmiths has advised the shareholders of HIVE Media Control Ltd (“HIVE”), a UK-based media technology company, on the sale of 100% of its issued shares to Panasonic Projector & Display Corporation (“Panasonic”), a Japan-based manufacturer specialising in professional projection, display and visual solutions technology.

Published: 28 May 2026

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HIVE develops media server and control solutions for immersive audio-visual experiences and large-scale digital installations worldwide, with its BeeBlade platform deployed across major projects, including the BBC Earth Experience, the National Museum of Qatar and the Michelangelo Sistine Chapel exhibition. The transaction marks Panasonic’s continued evolution into a broader visual solutions provider, expanding beyond hardware into software and integrated media delivery solutions. HIVE will continue to operate as a standalone business, preserving the independence, agility and openness that underpin its market position.

The Shoosmiths team was led by James Foster, Partner in the firm’s Corporate team, with support from Legal Director Natalie Redfern, Senior Associate Jordan Collinson and Associate Arvind Paramiswaran. From the firm’s tax team, Partner Laura Board and Senior Associate Carly Cutler also advised on the transaction.

James Foster, Partner at Shoosmiths, commented: “We’re delighted to have supported HIVE on this important transaction. The deal highlights continued international interest in innovative immersive and audio-visual technology businesses, particularly those with strong proprietary platforms and global applications. Delivering the transaction required close collaboration across jurisdictions and stakeholders, reflecting the increasingly cross-border nature of strategic investment activity in the technology sector – an area which Shoosmiths has significant experience.”

Mark Calvert, CEO of Hive Media Control Ltd, commented: “This was the third time we’ve worked with James and his team at Shoosmiths, and I cannot recommend them highly enough.

“They patiently and clearly guided us through a complex acquisition process with our new Japanese owners Panasonic. The team at Shoosmiths was exceptional throughout, and their expertise proved invaluable at every stage.”

Shoosmiths’ corporate team of over 150 lawyers specialises in the premium and upper mid-market and is one of the UK’s leading advisers on domestic and cross-border M&A transactions across a range of sectors, including technology, media and entertainment.

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Raising the bar on probation periods

Wed, 27 May 2026 00:00:00 +0100

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Raising the bar on probation periods

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From 1 January 2027, the qualifying service required to bring an ordinary unfair dismissal claim will be reduced to just six months. This change will increase the importance of having a well-managed probation period.

Published: 27 May 2026
Author: Harry Abrams

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Why does the change in qualifying service matter?

The change in qualifying service will apply to any employee who has acquired six months service on or after 1 January 2027, meaning that staff hired from 1 July 2026 onwards will gain protection as soon as the six-month mark is passed. This is a significant reduction from the current two-year qualifying period.

Many employers have historically used the current qualifying period as a buffer to assess suitability and manage underperformance. Dismissals during this period did not require a fair reason or a fair process, provided contractual notice was given and there was no automatically unfair or discriminatory element to the decision to dismiss.

Once the change comes into force, employers will have a much shorter period in which to assess new recruits and potentially dismiss for underperformance before having to go through a full performance management process if a successful unfair dismissal claim is to be avoided. This is particularly significant given the removal of the cap on compensation for unfair dismissals that will also come in from 1 January 2027.

So what tools are available to employers to help them to assess if a recruit is capable, reliable and suitable well before the qualifying period expires? A well-structured probation process is one answer.

What is a probation period?

A probation period occurs at the start of an employment relationship and provides an opportunity for the employer to assess the employee. If performance is deemed acceptable, then the employee’s appointment will be made permanent usually at the end of the probation period.

Employees on probation may not be entitled to all contractual benefits during a probation period. In addition, the employee’s employment can usually be terminated on shorter notice than the notice which would apply once they become a permanent member of staff.

How long should a probation period last?

The length and terms of a probation period are governed by an individual’s contract of employment and will depend largely on the role in question and how much opportunity there is for the employee to carry out core elements of the role in the time to allow a proper assessment of performance to take place.

Typically, probation periods last between three and nine months. It is likely that the change to the unfair dismissal qualifying period will see probation periods being shortened to between three and five months so that key decisions are made well within the six‑month service window.

Whatever the initial length of the probation period, employers should decide whether they want to retain the ability to extend the period to give further opportunity to assess an employee’s performance in the role. If so, any probation period clause should clearly set out the right to extend probation and for how long any extension will last. Once the change to the unfair dismissal qualifying service takes effect, it is important that both the initial probation period and any extension can be completed well within the first six months.

What steps should an employer take during a probation period?

To make the most of a probation period, the employee needs to be aware from the outset of the approach to be taken and any specific goals or outcomes that they are expected to achieve within set timescales. Employees should also be informed of when any progress meetings will take place and whether a decision on their continued employment can be made during the probation period or only once the whole period is completed.

Employers need to actively monitor new employees from day one. Early notes and evidence gathering, objective feedback, and formal check‑ins to explain whether expectations are being met will all help to identify or address issues during the probation period.

A well‑structured probation policy will help to manage expectations and guide both employees and managers through the process.

What happens at the end of probation?

Once the change in qualifying period comes in, an employee who passes a six-month probation should be treated the same as all long service employees. Currently, employees who pass their probation but who do not yet have two years’ service are in a precarious position because they can still be easily dismissed.

As a result of the change, it is likely we will see a reduction in the length of probation periods coupled with an increase in failed probations and dismissal of employees where expectations are not being met - if there is any risk of dismissal soon after the initial six month period, employers will be unlikely to take that risk and instead dismiss just prior to six months. Employers may also want to rely more heavily on the ability to pay in lieu of notice where a probation is failed close to the employee reaching six months’ service, so that termination can take place immediately on making the payment rather than the employee working their notice and going over six months service.

What steps should employers be taking now?

review current probation period clauses and consider if the period needs to be shortened to between three and five months
ensure there is a contractual right to pay in lieu of notice
review current probation process and develop where needed to include clear review points, expectations and procedures for extension or termination
train managers on probation processes so they are equipped to identify concerns early, hold constructive conversations, and make timely decisions

consider what support is available to new employees and if additional resources are needed or improvements made to the onboarding process

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Pension Schemes Act 2026: A reset moment for UK pensions

Wed, 27 May 2026 00:00:00 +0100

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Pension Schemes Act 2026: A reset moment for UK pensions

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A report setting out the key changes in the Pension Schemes Act 2026 and the impact on DB and DC pensions.

Published: 27 May 2026
Author: Rhiannon Barnsley-Bloomfield

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The Pension Schemes Act 2026, which received Royal Assent on 29 April this year, marks a decisive shift in how UK pensions are governed, funded and expected to perform.

What is the background to the reforms?

The Act was originally introduced as the Pension Schemes Bill on 5 June 2025. It is intended to bring about “major reform to the UK pensions system”. The Act “paves the way” for the upcoming Pensions Commission which will explore adequacy and retirement outcomes.

There are multiple provisions aimed to reform defined contribution (DC) pensions, make it easier to extract surplus from well-funded schemes and address the issues arising from the judgement in Virgin Media Ltd v NTL Pension Trustees II Ltd.

Changes to extracting surplus

Subject to certain restrictions, the trustees of a pension scheme will be able to amend the scheme rules to:

introduce a power for the trustees to make payments to the employer of the scheme out of scheme funds where no power currently exists, and
remove or relax any restrictions imposed by the scheme rules on any existing power to make payments to the employer of the scheme out of scheme funds.

According to the government’s roadmap, it anticipates the surplus regulations and guidance will come into force by the end of 2027.

Please see our article for further details on the background to the reforms and the restrictions on the use of the new power.

Virgin Media Remedy

The Virgin Media remedy, aimed at addressing uncertainty following the judgement, came into force on 29 April 2026.

Scheme actuaries are permitted, subject to certain conditions and exemptions, to give retrospective written actuarial confirmation in relation to historic amending deeds which will treat amendments as having been validly made insofar as the contracting-out requirements are concerned.

Please see our article for information on the issues caused by the judgement, and how the remedy will work in practice. We have also published an article on The Pension Regulator’s (TPR) guidance for trustees considering making use of the remedy.

DC Provisions

The are several changes affecting DC schemes:

new requirements for DC multi-employer schemes, such as master trusts and group personal pensions (GPP), to operate a main scale default arrangement (MSDA) which has at least £25 billion in assets under management from 2030 otherwise the schemes will no longer be qualifying schemes for auto enrolment purposes
a new contractual override for schemes regulated by the Financial Conduct Authority (FCA). Providers will be able to make “unilateral changes” to schemes, including amending terms or transferring members to a different scheme operated by the same provider or a scheme operated by a different provider without consent from members
legislative powers to mandate the VFM framework for trust-based schemes with DC benefits which intends to shift the focus from cost to value
requirements for automatic enrolment schemes to transfer small pension pots to authorised consolidators if they are £1,000 or less in value (but not nil), and have had no contributions paid into them or any active investment decisions made in respect of them in the last 12 months, and
a requirement for trustees of DC schemes to develop ways for members to receive their pension without the member having to make complex choices about how they want to receive those benefits.

Please see our article for further details about each of these measures, included expected implementation timescales.

Asset allocation

The Pension Schemes Bill underwent several rounds of ‘ping pong’ between the House of Lords and the House of Commons in recent weeks over the scope of the proposed mandation power.

The Act gives the government the power to mandate that master trusts and GPPs must allocate the assets in their default funds in a certain manner otherwise those schemes will no longer be qualifying schemes for the purposes of automatic enrolment. The asset classes and percentages are not set out in the Act and will be provided in regulations.

Following criticism from the House of Lords, which originally voted to remove the clause in its entirety, the House of Commons agreed to amend the clause, limiting its scope:

regulations cannot require more than 10% (by value) of all scheme assets held in the default fund to be invested in “qualifying assets” or more than 5% (by value) to be invested in assets of a UK-specific description which match the targets set by the Mansion House Accord
the power can only be used if the Secretary of State takes certain steps including preparing a report assessing whether they are any barriers to schemes investing in qualifying assets and the steps taken by the Secretary of State to address any such barriers
TPR can suspend the applicability of the power to a scheme if it determines that, following an application by the trustees, that the trustees are reasonable to conclude that meeting the asset allocation requirement is not likely to be in the best interests of the members of the scheme, and
the power cannot be used before 1 January 2028. The power can only be used once and will be repealed if it has not been used by the end of 2032 (this was previously 2035).

The government has previously stated that it does not intend to use its mandation powers unless the targets of the Manion House Accord are not satisfactorily implemented.

Key takeaways

The Pension Schemes Act 2026 is a key piece of legislation that will have significant impact for the pensions industry. Most of the measures will take some time to implement and the government has published a roadmap with details of expected timeframes, although it has confirmed that it plans to update this. Trustees and employers should keep a watching brief on changes that may impact their schemes and make any necessary preparations.

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

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

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

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

Published: 26 April 2026
Authors: Kiran Desai

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

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

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

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How will the trade union right of access impact employers?

Fri, 22 May 2026 00:00:00 +0100

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How will the trade union right of access impact employers?

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The government has published its response to the consultation on the right of trade unions to access workplaces, a measure under the Employment Rights Act 2025 which is due to be brought into force in October 2026.

Published: 22 May 2026
Author: Jonathan Naylor

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Much of the detail will be set out in implementing regulations although the government has also published a Draft Code of Practice: Right of Trade Unions to Access Workplaces, to provide practical guidance on how the right of access will operate, which includes a template request form and response form.

What does the right of access entail?

The measure will enable independent trade unions and employers to enter into access agreements which allow union officials to access the employer’s workers, both digitally or physically in the workplace, for the purposes of meeting, representing, recruiting or organising workers, or facilitating collective bargaining. Importantly, the right does not cover access with the purpose of organising industrial action.

How will this work in practice?

Where a union is seeking access to workers, and access cannot be agreed on a voluntary basis, the union will present an access request to the employer. The employer may issue a response notice within the response period, which is proposed to be 15 working days unless an extension is agreed, either accepting or rejecting the request.

If the employer accepts the request, there is then a negotiation period of 25 working days in which the union and employer can seek to agree written terms governing the access.

If the employer fails to respond, or if negotiations are unsuccessful, the union can apply to the Central Arbitration Committee (CAC) within a 55 working day period, commencing from the date of the original request. The CAC can then determine whether to grant access and on what terms.

Once any access agreement is in place, the trade union would need to give a minimum of five working days’ notice before the first site visit. Thereafter only two working days’ notice would be required before each access visit. Access on an up to weekly basis will be provided for in the template agreement but, whilst this is considered best practice, unions are free to apply for the frequency of access best suited to their needs.

Regulations will set out the right of access in more detail, such as providing that access requests and responses must be made in writing, with supporting guidance stating that these steps are preferably done by email. The Code, meanwhile, gives guidance on where and when access can take place, what workplace facilities should be available and what consent is required for digital access.

The government has accepted that access agreements should not be granted by the CAC without an expiry date, which will be a maximum of two years from the point they come into force, unless the parties agree and apply for an extension.

What if an employer does not recognise a union?

The right of access is not limited to recognised trade unions, and therefore any employer could be faced with an access request once the measure becomes law.

Interestingly, where two or more trade unions make a joint application for access to a workplace, the draft Code says they should act together in preparing and implementing the access agreements. It is therefore anticipated that more than one union might have access where they access different groups of workers.

Are there any circumstances in which access will not be granted?

The government has confirmed that it will exempt employers with fewer than 21 workers from the right of access.

There will also be a small number of situations in which access must be refused, for example where granting access would be contrary to the interests of national security or where access would prejudice the detection or investigation of offences.

The presence of a recognised union representing one or more of the workers the union is seeking access to may also constitute a reasonable basis for an employer and the CAC to refuse access, although this is not an absolute rule. It may also be reasonable to refuse access where there is an ongoing statutory recognition process concerning one or more of the workers the union is seeking access to or where a statutory access agreement with an independent union is already in place.

What does an employer have to do once access is granted?

The employer is expected to take reasonable steps to facilitate access, but does not have to make significant, structural, technological or operational changes just for that purpose. Access should be supported using existing facilities and systems. If an access application would require excessive resource allocation, this could be another basis on which the CAC refuse the request.

What if the access agreement is not followed?

The government expects parties to try and resolve differences between themselves, although there is scope to raise a complaint to the CAC. Where a complaint is upheld, the CAC will be able to issue penalties with maximum limits of:

up to £75,000 for a first penalty
up to £150,000 for a second penalty
up to £500,000 fine for the third breach and subsequent non-compliance under the same access agreement

Regulations will set out the factors that the CAC should consider when setting the level of fine.

What can employers do now to prepare for this change?

consider existing arrangements with any recognised trade union and how these might need to be updated to include a right of access
if there is no union currently recognised, consider recognition on a voluntary basis with a preferred union

assess what facilities are available to support union access and what restrictions might be required, for instance, to comply with safeguarding or health and safety requirements.

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Shifting landscape: Employment insights from the 2026 Litigation Risk Report

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

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Shifting landscape

Employment insights from the 2026 Litigation Risk Report

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

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

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

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

Employment disputes: Trends and what lies ahead

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

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

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

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

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

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

Data subject access requests as a litigation tool

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

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

AI‑related employment disputes: the top litigation risk

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

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

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

Managing AI-related employment risk

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

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

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

Managing litigation risk: practical steps from the report

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

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

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

Organisations are also encouraged to:

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

Conclusion

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

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

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

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

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

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

Published: 19 May 2026
Author: Sophie Tracey

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

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

How is rateable value calculated?

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

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

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

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

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

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

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

Key considerations for occupiers

1. Plan early

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

2. Do your due diligence

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

3. Check, challenge, appeal

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

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

4. Factor rating into fit-out and works

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

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

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

5. Evidence is king

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

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

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

6. Remember it’s not all about works

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

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

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

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

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

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

Published: 15 May 2026
Author: Simon Foster

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

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

The legal background

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

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

The Court of Appeal’s decision

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

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

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

Why this still matters

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

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

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

Ongoing compliance under the new regime

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

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

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

Next steps

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

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

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

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

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Brand interchange | 4 min read

When freedom of expression bites back

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

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

actionable threats
interim injunctions
Human Rights Act 1998

Published: 20 May 2026
Authors: Ellen Hughes-Jones

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Introduction

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

Background

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

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

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

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

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

…

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

…”

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

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

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

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

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

Appeal

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

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

Comment

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

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

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

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When contempt goes too far

Strike-out in Bargain Busting v Shenzhen SKE

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

Published: 13 May 2026
Authors: Shojibur Rahman

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Introduction

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

Background

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

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

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

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

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

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

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

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

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

Decision

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

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

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

Comment

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

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

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

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

Addendum

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

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

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

Permission to appeal was refused.

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Late Payments Bill: A reset for small business payment culture

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

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Late Payments Bill: A reset for small business payment culture

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New legislation will cap payment terms, mandate interest and strengthen enforcement—reshaping UK payment practices and rebalancing power in supply chains.

Published: 13 May 2026
Author: Michelle Craven-Faulkner

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Following on from our recent commentary on this topic the inclusion of the Small Business Protections (Late Payments) Bill in the King’s Speech signals a decisive shift in how payment practices will be regulated in the UK. Moving beyond incremental reform, the proposed regime introduces enforceable constraints on payment terms, backed by financial penalties and regulatory oversight.

For many businesses, the significance of the Bill lies not in the headline measures themselves, but in the operational and legal implications that follow: a fundamental recalibration of contracting models, cashflow management and dispute processes across supply chains.

From contractual freedom to statutory constraint

The proposed 60‑day cap on payment terms and mandatory statutory interest are well understood headline measures. Their real significance lies in the removal of commercial flexibility: payment terms will no longer operate as a negotiable lever, but as a regulated constraint with direct financial consequences.

Coupled with this is the move to make statutory interest on late payments mandatory and non-waivable, set at 8% above the Bank of England base rate. This is a subtle but important shift. The existing statutory framework has long permitted interest claims, but the ability to contract out of those rights has meant they are rarely exercised. By removing that discretion, the Government is effectively hard-wiring financial consequences into late payment itself.

In practice, this represents the emergence of a new form of economic regulation within B2B contracting. Payment behaviour—historically treated as a matter of commercial discretion—will instead be subject to oversight, enforcement and sanction.

Enforcement: From reputation to regulation

Historically, enforcement in this space has relied heavily on transparency and reputational pressure. The strengthened role of the Small Business Commissioner (SBC) marks a departure from that model. Under the proposed regime, the SBC will be equipped with powers to investigate, adjudicate disputes and, critically, impose substantial financial penalties on persistent offenders.

This is not merely an enhancement of an existing office; it represents the emergence of a new economic regulator in all but name. The implication for large corporates is clear: payment practices will no longer be an internal operational matter but a potential source of regulatory risk, with board-level visibility and consequence.

The proposed 30‑day deadline for raising invoice disputes reinforces this shift further. It targets a familiar tactical delay mechanism—late-stage disputes raised to defer payment—and replaces it with a more disciplined framework. In doing so, it pushes organisations toward tighter internal controls and faster decision-making around invoice validation.

Sectoral impact and supply chain dynamics

The impact will be particularly acute in those contractual environments where layered supply chains and milestone-based payments are common. In these sectors, the interaction between statutory payment obligations and existing contractual mechanisms (including retention and certification processes) is likely to generate both legal uncertainty and increased dispute risk.

More broadly, the reforms are likely to have a profound impact on supply chain dynamics. For SMEs, improved payment certainty should enhance liquidity, reduce reliance on external financing and support growth. For larger organisations, however, the cumulative effect—shorter payment cycles, mandatory interest exposure, and regulatory oversight—will require a fundamental recalibration of working capital management.

A cultural inflection point?

The central question is whether legislation can achieve what decades of voluntary codes and incremental reform have not: a genuine shift in payment culture. There are reasons to think this time may be different. The combination of hard legal obligations, financial penalties, and active enforcement creates a framework that is far more difficult to ignore.

That said, the success of the regime will depend on how it is implemented and enforced in practice. There will inevitably be areas of tension—particularly in complex supply chains where payment is linked to performance milestones or dispute resolution mechanisms. Careful drafting of secondary legislation and guidance will be critical to ensure that the regime is both robust and workable.

Looking ahead

For many organisations, the more immediate challenge will be operational:

standard terms will require revision, particularly where extended payment periods are embedded across group contracts
invoice validation processes must accelerate to meet compressed dispute windows
working capital assumptions will need reassessment, particularly in sectors reliant on extended payment cycles
governance and reporting structures may require uplift, given the increased visibility of payment practices.

The significance of the Small Business Protections Bill lies not simply in its individual measures, but in what it represents: a shift from a culture of negotiated payment practices to one of enforceable standards. For businesses, the key question is no longer whether payment terms are commercially acceptable, but whether they are legally sustainable in a more regulated environment.

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Shoospeak HR: The diversity conversation progress, challenges and the future of data centres

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

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Podcast | 40 min listen

Shoospeak HR

The diversity conversation progress, challenges and the future of data centres

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The employment team are back with another episode of Shoospeak HR.

Published: 13 May 2026

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In this episode of the Shoospeak HR podcast series on diversity, equity and inclusion, Legal Director, Charlotte Staples speaks with Charlotte Berry-Sellwood, Chief Delivery Officer at AVK-SEG and a leading voice in the data centre sector. Charlotte shares her career journey from engineer to senior executive, offering candid insights into the fast-paced evolution of the industry and the scale of its growth.

The conversation explores the realities of building a career in a traditionally male-dominated sector, the importance of making your voice heard, and the role of diverse perspectives in driving better business outcomes. Charlotte also reflects on the current state of DEI in data centres, highlighting both the progress made and the challenges that remain, including talent shortages, the need for better industry visibility, and the importance of sustained leadership commitment.

With a strong focus on mentorship and advocacy, Charlotte discusses initiatives such as the Forum for Women in Data Centres and the importance of creating inclusive environments where individuals can thrive. The episode closes with practical advice for those considering a career in the sector and a powerful call to action for businesses to embrace diversity as a driver of long-term success.

https://www.podbean.com/ep/pb-fbetb-1ac516f

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

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

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Brand interchange | 5 min read

Avoiding the ‘black hole’

Court of Appeal considers registration of trade mark licences

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

Published: 5 June 2026
Authors: Leigh Smith

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Introduction

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

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

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

Background

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

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

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

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

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

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

Protections of a (sub-) licensee

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

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

Practical application for trade mark litigation

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

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

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

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

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Royal Assent signals a reset for salary sacrifice pensions

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

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Royal Assent signals a reset for salary sacrifice pensions

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On 29 April 2026, The National Insurance Contributions (Employer Pensions Contributions) Act 2026 (the Act) received Royal Assent. The Act places a cap on the amount of pension contributions made via salary sacrifice that will be exempt from national insurance contributions.

Published: 13 May 2026
Author: Rhiannon Barnsley-Bloomfield

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What is salary sacrifice?

Salary sacrifice is a formal arrangement where an employee agrees to give up (i.e. sacrifice) a portion of their gross salary in exchange for a non-cash benefit from their employer (such as increased pension contributions). This is achieved by changing the employee’s contractual terms and conditions.

In addition to their standard employer pension contribution (which is not subject to National Insurance contributions (NICs), an employer pays the salary that has been sacrificed by an employee directly into the pension scheme. It is considered a tax-efficient way of contributing to a pension scheme as the employers pay less NICs because the employee’s gross salary is lowered. It also reduces income tax and employee NICs for the employee. Some employers pass on the NICs saved by paying some or all of the savings as increased pension contributions.

What is the background to the changes?

On 26 November 2025, the government announced at the Autumn Budget 2025 that from 6 April 2029, employee pension contributions exceeding £2,000 per annum made using salary sacrifice arrangements will be subject to NICs. The change aims “to increase fairness, while protecting ordinary workers” as the cap “makes the system fairer and more sustainable”.

Pension contributions will remain exempt from income tax, subject to the usual limits. Pension contributions made via other methods will also be unaffected.

The government has published guidance on the changes and is expected to publish further guidance before April 2029.

What is changing?

Salary sacrifice arrangements are commonly utilised for pensions and employers and employees will still be able to make use of them after April 2029, although the tax advantage of doing so will not be as significant. Employees will still be able to choose to sacrifice salary to contribute to their pension, however, any amount sacrificed in excess of £2,000 per year, will be subject to NICs (both employer and employee NICs).

Where an employer currently pays some or all of the NICs saving back into the employee’s pension, the fact that the NICs saving will be reduced could result in a reduced payment into the pension scheme for the employee or an additional cost to the employer if the payments are maintained. All employer pension contributions will continue to be free of NICs.

Employees will not need to contact HMRC themselves if the amount of salary sacrificed for pension contributions is in excess of £2,000 as it is expected that employers will make the necessary changes to ensure NICs are paid.

Key takeaways

The changes don’t come into force until 6 April 2029, and so there is no immediate action needed as much of the detail of how the cap will work is not available. The timing of the regulations is not yet known and further guidance from the government is also expected.

Employers operating salary sacrifice arrangements for pension contributions should continue to monitor developments and think about what preparations can be made to ensure HR systems are updated for the changes. Employers should also consider what changes need to be made to employee’s employment contracts and if they wish to reconsider their benefit package offering.

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

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

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

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New limitations on an employer’s ability to prevent allegations of discrimination and harassment becoming public are expected in 2027. The changes aim to foster a culture of openness and accountability, but will they in fact create a barrier to resolution?

Published: 12 May 2026
Author: Lauren Wilson

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What’s proposed?

Section 24 of the Employment Rights Act 2025 (ERA 2025), once implemented, will render a contractual non-disclosure obligation void if it would prevent a worker from making an allegation of workplace harassment or discrimination or an allegation around the employer’s response to any such allegation. That is unless the non-disclosure obligation is contained within an ‘excepted agreement’.

Even with an ‘excepted agreement’ in place, workers will still be able to disclose allegations to certain prescribed persons, such as to the police or victim support services (known as ‘permitted disclosures’).

On 15 April 2026, the government launched a consultation seeking views on what conditions should be required for an agreement to be an ‘excepted agreement’; the categories of person to which permitted disclosures may be made; and whether the protection should, in the future, be extended to non-workers.

The government accepts that non-disclosure obligations (NDOs) can be appropriate in some cases, particularly where a worker wants to enter into a settlement agreement with their employer with the assurance that the matter will stay confidential. However, the consultation paper states that, currently, “Some employers have exploited the inherent power imbalance in the workplace to get NDOs signed by workers, creating a culture of secrecy and sometimes leaving perpetrators in place to offend again.” The government’s hope is that, by introducing the proposed changes, workers will be protected from coercion and will only enter into NDOs if fully informed, being empowered to make the decision which is right for them.

It is proposed that, for an agreement to be an ‘excepted agreement’, the worker must:

receive independent advice on the effect of the NDO contained within the agreement from a prescribed person who has indemnity insurance in place and whose name is included in the agreement
express their preference to enter into the agreement containing the NDOs in writing, having had independent advice – employers may even be prevented from proposing an agreement with NDOs as an option
have a right to withdraw from the agreement during a cooling off period (suggested as 14 days following the date of the agreement) or during a mandatory review period prior to entering into the agreement – the right to withdraw may apply to the agreement as a whole, rather than the NDO only. This could cause difficulties in the context of settlement agreements as an employer would not want to pay settlement money during any cooling off period.
be given a physical copy of the agreement containing the NDOs after it is signed, with it also being available in an accessible format – there may also be a requirement for the agreement to be written in ‘plain English’
only be prevented from making allegations of harassment or discrimination which has already taken place – meaning a provision seeking to prevent a worker from reporting a new instance would be unenforceable.

The government is also consulting on whether excepted agreements should be time-limited. This is not being actively proposed but it could be implemented if deemed appropriate following the responses to the consultation.

The legislation will apply to any contractual non-disclosure obligation, whether in a contract of employment, a standalone confidentiality agreement, a settlement agreement or otherwise. However, it will not apply retrospectively – only agreements entered into once the legislation is in force will be affected.

Potential impact

Currently, where allegations of discrimination and/or harassment have been made, settlement is often a common goal for the complainant and the employer. Both can be concerned about the prospect of being involved in a public hearing, particularly given the often-sensitive subject matter.

It is generally the norm that a settlement agreement will contain NDOs and will prevent the worker from speaking negatively about the employer going forward. This is often the main draw for the employer, in order to minimise reputational damage. Accordingly, if the proposed conditions on ‘excepted agreements’ are introduced, this may amount to an absolute barrier to settlement for some employers.

The conditions would apply not only to private settlement agreements, but those facilitated by ACAS (known as COT3 Agreements). COT3s currently benefit from being more straightforward than private settlement agreements and do not require the worker to take legal advice. Again, the changes may disincentivise employers, leaving an individual with a choice between a public hearing or no recourse at all.

Whilst the Government’s aims are commendable in theory, it will remain to be seen whether actual cultural change will be achieved by these changes or whether the legislation will simply push individuals towards otherwise unwanted litigation.

What can you do now?

We recommend reviewing your contracts of employment and staff policies to ensure that workers with concerns about harassment or discrimination are encouraged to report this internally, in a private forum. Similarly, you should ensure you have appropriate processes in place to investigate concerns and take effective action.

You may also wish to submit a response to the consultation, which is open until 8 July.

Various other consultations will be taking place as the Employment Rights Act 2025 phases in over 2026 and 2027. We are encouraging clients to participate as the responses will influence what changes are implemented. You can access those which are currently open here.

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