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

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

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article | 4 min read

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

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

Published: 29 September 2026
Authors: Emma Carr

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

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

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

The first 90 days can be critical.

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

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

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

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

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

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

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

Practical steps for the board

identify the activist, its holding, its historic voting behaviour and any known support from other shareholders
agree who will speak for the company and how internal and external communications will be controlled
consider carefully how communications with advisers will be managed to preserve privilege in any legal advice obtained at this stage
stress-test the activist’s stated concerns against the company’s own performance, strategy and market messaging
keep a clear record of board discussions and the reasons for decisions taken.

Consider how likely it is that the challenge will evolve into a dispute and the company’s preparedness for that. As soon as litigation is contemplated, relevant documents must be preserved. Days 31-60: Pressure test the board’s own case

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

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

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

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

When activism becomes contentious

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

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

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

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

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

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

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

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

Practical steps for the board

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

The 90-day question

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

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

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

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

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Manual handling at work: Understanding employers’ legal duties

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

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Manual handling at work: Understanding employers’ legal duties

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

Published: 23 September 2026
Authors: Rubina Zaidi

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What is manual handling?

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

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

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

To whom do the Regulations apply?

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

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

Employers’ duties: avoid, assess, reduce

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

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

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

The assessment

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

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

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

The role of training

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

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

Employees’ duty

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

Practical steps for organisations

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

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

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

Key takeaway

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

Useful links

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Shoosmiths advises AURELIUS on acquisition of Hain International

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

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Press release | 1 MIN READ

Shoosmiths advises AURELIUS on acquisition of Hain International

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Shoosmiths has advised international private equity investor AURELIUS on its agreement to acquire Hain International from The Hain Celestial Group, Inc.

Published: 23 September 2026

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AURELIUS is a global alternative investment firm with a long-established track record of acquiring and developing businesses across a range of sectors and geographies. Hain International is a food and drink business operating across the UK and Europe, with a portfolio of well-known brands spanning categories including ambient grocery, beverages and healthy snacking.

Shoosmiths acted as legal adviser to AURELIUS co-counselling alongside Freshfields, supporting the transaction as part of a wider international adviser team. The Shoosmiths team was led by Alison Chivers as lead deal partner, working closely with Elizabeth Ward, private equity relationship partner for AURELIUS, with further support from Melissa Gray, Senior Associate and Heather Stewart, Associate. The team also benefited from the support of Nathan Turley, Senior Associate, who recently worked alongside AURELIUS as co-counsel on another significant transaction for the investor.

Elizabeth Ward, partner at Shoosmiths and private equity relationship partner for AURELIUS, said: "We were delighted to support AURELIUS on this acquisition and to work alongside Freshfields and the wider adviser team, following our recent co-counselling role on another successful AURELIUS transaction. We are proud to continue supporting the team on its complex, cross-border transactions.”

In addition to Freshfields and Shoosmiths as legal advisers, AURELIUS was advised by Houlihan Lokey (M&A), Alvarez & Marsal (Financial), BDO (Tax), Food Strategy Associates (Commercial) and Haver & Mailänder (Antitrust).

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The Hillsborough Law Bill: Key duties and implications

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

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The Hillsborough Law Bill: Key duties and implications

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A new duty of candour could change how organisations engage with inquests, inquiries and public investigations. Here’s what to watch now.

Published: 23 September 2026
Authors: Nancy Wesby

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Background

The Public Office (Accountability) Bill, commonly known as the Hillsborough Bill, has progressed through Parliament and is currently at Second Reading in the House of Lords, following Commons amendments relating to the security and intelligence services. Subject to completing the remaining parliamentary stages, it is expected to receive Royal Assent before the end of the current Parliamentary session.

The Bill responds to longstanding concerns about the conduct of public authorities and officials following major incidents, investigations and public inquiries. Although rooted in the experiences of the Hillsborough families after the 1989 disaster, it has also been shaped by wider concerns about institutional defensiveness and lack of transparency in major public scandals and inquiries, including Grenfell, the Infected Blood Inquiry, Windrush and the Post Office Horizon affair.

The Bill is also heavily influenced by Bishop James Jones' 2017 report to Parliament, The Patronising Disposition of Unaccountable Power, commissioned after the fresh Hillsborough inquests. The report identified 25 "points of learning", including a statutory duty of candour for public authorities, greater support and participation rights for bereaved families, and a cultural shift towards openness, transparency and accountability. Many of those recommendations underpin what is now known as the Hillsborough Law.

In summary, the Bill aims to ensure that public authorities and officials perform their functions with candour, frankness and in the public interest by:

imposing a duty on public authorities and public officials to act with candour, transparency and frankness in inquiries and investigations, backed by criminal liability
requiring public authorities to promote and maintain ethical conduct
creating new offences of failing to uphold the duty of candour and assistance, and misleading the public
replacing the common law offence of misconduct in public office with two statutory offences
expanding non-means-tested legal aid for bereaved families at inquests in England and Wales where a public authority is an interested person

Who does it apply to?

The Bill applies to a wide range of public authorities and public officials, including central government departments, NHS bodies, local authorities, Integrated Care Boards and the intelligence and security services.

Importantly, however, the obligations are not limited to the public sector. They would also extend to those with a "relevant public responsibility" in connection with an incident under investigation or inquiry, so that organisations closely connected to public functions cannot avoid transparency obligations simply because they sit outside government.

This includes organisations providing services under a direct contract with a public authority, as well as individuals and organisations with health and safety responsibilities connected to the incident. The Bill could therefore capture private sector organisations whose activities are closely linked to public services or public safety.

The explanatory notes give the following example: “…in an event similar to the Post Office Horizon scandal, a public authority contracted with a private company to supply computer software, and defects in that software resulted in significant impacts on members of the public, that company could be subject to the duty of candour and assistance.”.

For private sector organisations, this may be one of the Bill's most significant features. Businesses delivering outsourced public services, supplying critical systems to the public sector, or exercising health and safety responsibilities in connection with an incident could find themselves within scope.

What does it do?

A statutory duty of candour and assistance

Public authorities and public officials must act with candour, transparency and frankness in their dealings with statutory and non-statutory inquiries and inquests. The Bill also allows the duty to be extended to other investigations, including criminal, regulatory, supervisory and public service investigations.

The duty is proactive. Those subject to it must notify the relevant chair, coroner or investigator where their actions or decisions may be relevant, provide reasonable assistance, disclose relevant information, respond openly and accurately, and correct information later found to be incomplete, inaccurate or misleading.

The duty goes beyond responding to information requests. Public authorities and officials are expected to help establish the full facts, placing transparency and accountability above institutional or reputational concerns. Inquiry chairs and coroners may issue directions to secure compliance.

A criminal offence is committed where a person deliberately fails to comply with the duty in order to hinder an inquiry or investigation from finding out what happened or achieving its purpose. An offence may also arise where, after being required to provide information or assistance, they act recklessly as to whether their failure will obstruct the process.

The duty does not override legal professional privilege, the privilege against self-incrimination or public interest immunity. However, questions are likely to arise as to how these protections interact with the new obligations in practice, including when organisations will be regarded as falling within scope. Early case law is therefore likely to be closely watched.

Mandatory ethical conduct framework

The Bill requires public authorities to promote and maintain high standards of ethical conduct, transparency and frankness, and to have regard to guidance expected to align with the Nolan Principles.

Public bodies must adopt a code of conduct explaining how staff should act with candour, transparency and openness, how those standards apply in practice, and the consequences of failing to meet them, including where failures may amount to gross misconduct.

The code must also explain:

how concerns can be raised where someone may not have complied with the code
the process for protected disclosures, including relevant internal policies
how members of the public can complain about the authority or its staff, including any external complaint bodies

New criminal offence - Misleading the public

The Bill creates a new offence where a public authority intentionally or recklessly misleads the public and its conduct is "seriously improper".

Conduct will be "seriously improper" only where a reasonable person would regard it as such in all the circumstances. This includes significant or repeated dishonesty on matters of substantial public concern, such as inaccurate evidence to an inquiry, withholding key documents, failing to disclose public safety information, or misleading bereaved families. The conduct must have caused, contributed to, or risked harm, and significantly depart from expected standards.

Seriously improper acts to prevent death or serious injury

The Bill introduces a new offence of breach of duty to prevent death or serious injury. It applies where a public office holder has a role-based duty to protect another person from death or serious injury, knows or ought to know of that duty, and intentionally or recklessly breaches it, causing or creating a significant risk of such harm. The breach must fall far below the expected standard.

"Critical harm" means death or grievous bodily harm under the Offences against the Person Act 1861. CPS guidance indicates that grievous bodily harm may include life-changing injuries and injuries requiring significant or sustained medical treatment, even where the person later makes a full or near-full recovery.

The offence is intended to apply only to public office holders whose roles inherently involve protecting others from critical harm, such as members of the armed forces, firefighters and police officers.

The proposed offence would replace misconduct in public office and provide a clearer statutory basis for accountability where intentional or reckless breaches of duty expose others to critical harm.

Parity of arms for bereaved families

The Bill will introduce non-means-tested legal aid for families at inquests whenever a public authority is an interested person and is legally represented. Public authorities must ensure their own representation is necessary and proportionate, and chairs and coroners must have regard to an overriding objective of enabling full and effective participation by affected persons.

In practice, these provisions may increase the number of legally represented participants and the scrutiny applied to the evidence and decision-making of public bodies. Public authorities will also need to consider carefully whether legal representation is necessary and proportionate in each case.

The Lord Chancellor must also issue conduct guidance for public authorities and their lawyers, which may influence approaches to disclosure, engagement with interested persons and participation in inquests.

Operational questions remain, including when funding will be available and whether the regime will achieve parity where legal aid rates differ from rates available to lawyers acting for public authorities.

Practical readiness: steps organisations can take now

Although the Bill remains subject to the parliamentary process, organisations that may fall within scope should consider whether their governance and investigation procedures would support compliance with the proposed duty of candour and assistance.

Practical steps include reviewing policies and training to promote transparent engagement with inquiries, investigations and inquests; identifying internal ownership and escalation routes for significant incidents; assessing document retention, preservation and disclosure processes; and, for suppliers to public authorities, reviewing contracts to ensure cooperation, information sharing and investigation obligations are clearly allocated.

Organisations likely to be involved in inquiries or inquests should also consider how legal professional privilege, public interest immunity and information governance would be managed in practice, and whether protocols are in place to respond quickly to information and assistance requests.

Key issues to watch include:

A number of aspects of the Bill are likely to attract particular attention as it progresses through Parliament and, if enacted, through the courts:

when non-means-tested legal aid will be available for families at inquests
the practical impact of proportionality requirements on public authorities and their lawyers
the extent to which private sector organisations providing public services or functions will fall within scope
how the courts interpret key concepts, including "functions of a public nature" and the thresholds for the proposed offences

Conclusion

The Hillsborough Law represents a significant development in the legal framework governing inquiries, investigations and inquests. By imposing a proactive duty of candour and assistance, creating new enforcement mechanisms and extending obligations beyond traditional public bodies, the Bill may affect a broader range of organisations than its title initially suggests.

Whether all aspects of the proposals become law remains to be seen. However, organisations operating in regulated environments, delivering public services, or undertaking activities with significant public safety implications should monitor the Bill closely and consider whether their governance, investigation and disclosure processes would withstand the enhanced scrutiny envisaged by the legislation.

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COSHH: Not just hazardous chemicals

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

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COSHH: Not just hazardous chemicals

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This article considers what substances beyond industrial chemicals must be controlled in workplaces and the practical steps that can be taken to protect employees' health.

Published: 23 September 2026
Authors: Rubina Zaidi

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What are substances hazardous to health?

Although The Control of Substances Hazardous to Health Regulations 2002 (the Regulations) are often associated with industrial chemicals, their scope is considerably wider. The Regulations also apply to substances encountered in many non-industrial workplaces, including cleaning products, dusts, fumes, vapours and biological agents.

The definition of a substance hazardous to health in Regulation 2(1) is intentionally broad. In addition to substances carrying hazard classifications, substances assigned workplace exposure limits and biological agents, COSHH applies where a substance creates a health risk because of its chemical or toxicological properties and the way it is used or present at work.

The Regulations are not limited to substances that are inhaled. Employees may be exposed through skin contact, eye contact, skin absorption or accidental ingestion. Employers should therefore consider all potential exposure routes when assessing risk.

COSHH applies to exposure arising out of, or in connection with, work. This distinction means the Regulations would not ordinarily apply simply because an employee contracts an illness from a colleague at work. The focus is on work-related exposure to hazardous substances, although biological agents at workplaces may be caught by the Regulations.

Who has duties under the Regulations?

The Regulations impose duties on employers and the self-employed.

Where an employer has duties under the Regulations to their employees, he has the same duty, so far as is reasonably practicable, in respect of others, whether at work or not, who may be affected by the employer’s work (save for duties relating to health surveillance, monitoring, information and training, and dealing with accidents). ‘Others’ might include contractors, agency workers or members of the public.

Organisations should therefore consider who beyond their direct workforce may be affected by hazardous substances.

Assessing the risk

The starting point for compliance is a suitable and sufficient assessment of the risks from substances hazardous to health (regulation 6).

COSHH assessments should include identification of:

the hazardous substances present
who may be exposed
potential exposure routes
the type and extent of exposure
potential health effects
any exposure limits
the measures required to eliminate, prevent or control exposure.

COSHH assessments should not be treated as paper exercises. They should reflect how work is conducted in practice, including maintenance, cleaning operations, emergencies and foreseeable deviations from normal procedures. Assessments must be reviewed if there is reason to suspect they are no longer valid, where the work has significantly changed, or where monitoring or health surveillance indicates existing controls may be inadequate.

Employers should consider whether exposure can be eliminated before considering controls. Any assessment required should consider the effectiveness of existing controls and employers should take account of all exposure routes, including inhalation, ingestion and skin or eye contact. Failure to recognise non-inhalation exposure can result in overlooking significant risks.

While safety data sheets provide useful information about hazardous properties and recommended precautions, they should not be viewed as a substitute for workplace-specific assessments. Risks arising from substances often depends on their use, handling, storage or generation in the workplace.

New or expectant mothers and other vulnerable employees require specific consideration. COSHH assessments should, for example, identify substances that present additional risks during pregnancy or breastfeeding and controls adjusted appropriately.

Preventing or controlling exposure

A key principle of COSHH is that exposure, wherever reasonably practicable, must be prevented, otherwise it must be adequately controlled (regulation 7).

Employers may be able to prevent exposure by:

eliminating the hazardous substance
substituting it with a safer alternative
changing the process to avoid its use or generation, or
using equipment or methods that reduce exposure.

Where exposure cannot be prevented, employers should implement appropriate controls which may include local exhaust ventilation, enclosure of processes, engineering controls, safe systems of work and hygiene measures.

Personal protective equipment (PPE) should generally be used only where adequate controls cannot be otherwise achieved, or as a supplement to other controls.

Other key duties

As well as conducting an assessment and implementing controls, employers should:

ensure control measures are properly used
maintain, examine and test control measures
monitor workplace exposure where necessary
provide health surveillance where appropriate
provide employees with information, instruction and training
establish arrangements for dealing with accidents, incidents and emergencies involving hazardous substances.

The extent of these requirements (regulations 8-13) will depend on the nature of the substances used and the risks identified.

Principles of good practice

Schedule 2A to the Regulations describes eight principles of good practice for controlling exposure to substances hazardous to health which underpin the concept of "adequate control" and provide a practical framework for employers when devising, implementing and reviewing controls.

Employers should design and operate work activities and controls to minimise emission, release and spread of substances hazardous to health. Exposure should be reduced to the lowest level reasonably practicable, with controls applied at source wherever reasonably practicable and a hierarchy of control measures used, prioritising elimination, substitution and engineering controls before relying on PPE.

Measures adopted should be proportionate to the health risks involved, suitable for the nature and severity of the risk and capable of achieving and maintaining adequate control of exposure.

The principles also emphasise that controls should be regularly reviewed to ensure continuing effectiveness, and that employers should consider all potential exposure routes. Employees should be provided with suitable information and training so that controls are used effectively.

Compliance is therefore not achieved through a COSHH assessment alone or by demonstrating that exposure is below a workplace exposure limit. Rather, employers should adopt a preventative and systematic approach that seeks to eliminate or minimise exposure so far as is reasonably practicable and ensure that controls remain effective.

Employees' duties

Employees must use the controls provided for their protection fully and properly and report defects in those controls where appropriate (regulation 8).

Effective compliance depends on both suitable controls and employee engagement.

Training and monitoring effectiveness remain essential to ensure controls are used properly.

Practical steps for employers

identify all substances that could create a risk to health, not just industrial chemicals
complete and regularly review COSHH assessments
eliminate use of hazardous substances where reasonably practicable
substitute safer products or processes where possible
implement appropriate engineering and organisational controls
ensure control measures are maintained and tested
provide suitable information, instruction and training
consider whether health surveillance is required
monitor compliance in practice rather than relying solely on documentation
review arrangements following incidents, near misses, process changes or the introduction of new substances.

Comment

COSHH extends across a wide range of workplaces and to seemingly routine work.

Enforcement action frequently highlights failures to identify or adequately control less obvious hazards arising from dusts, fumes, vapours, biological agents and substances generated by the work itself. Proportionate and well-considered COSHH assessments, coupled with effective control measures and ongoing review, can significantly reduce the risk of occupational ill health and therefore of enforcement action.

As regulators continue to focus on the prevention of work-related ill health, employers should ensure that COSHH compliance forms part of their wider health and safety management arrangements rather than being treated as a standalone exercise. By adopting a proactive approach to identifying and controlling exposure, organisations can better protect employees, reduce business risk and demonstrate compliance with their legal duties.

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New right to work rules widen business risk

Tue, 22 Sep 2026 00:00:00 +0100

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New right to work rules widen business risk

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From 1 October 2026, immigration compliance obligations will extend beyond traditional employment relationships to cover a wider range of working arrangements.

Published: 22 September 2026
Authors: Hannah O'Brien & Rory Stone

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Background: What is changing?

The UK’s right to work regime is set for a significant expansion. From 1 October 2026, immigration compliance obligations will extend beyond traditional employment relationships to cover a wider range of working arrangements, including certain personal service arrangements, subcontracting models and online matching services.

The changes are introduced by section 48 of the Border Security, Asylum and Immigration Act 2025, which amends the Immigration, Asylum and Nationality Act 2006 and expands the circumstances in which civil penalty liability may arise.

Arrangements in scope

Historically, right to work obligations have focused on employees working under traditional contracts of employment. The new regime broadens that approach by treating certain non-employment working arrangements as employment for illegal working purposes.

In practice, the following arrangements are likely to be most relevant.

Direct employees are already within scope under the existing regime. Organisations must continue to complete compliant right to work checks before employing an individual under a contract of employment.

Personal service arrangements may also be caught where an individual undertakes to perform work or services personally, unless they are genuinely operating an independent business and providing services to a client or customer.

Subcontracting chains will require closer scrutiny. Where labour is supplied through a contractual chain, liability may extend beyond the organisation that directly engages the individual carrying out the work.

Online matching services may be brought within scope where they introduce or match service providers with potential clients or customers. This is likely to be particularly relevant to businesses operating platform-based labour models.

The practical effect is that immigration compliance will no longer be solely an HR issue. Procurement, legal, operations and commercial teams may all need to understand where right to work obligations can arise.

Practical examples

Subcontracting

Company A contracts with a local authority to provide highway maintenance services and subcontracts part of the work to Company B. Company B supplies workers to perform the maintenance work, one of whom is later found not to have the right to work in the UK.

Company B may be liable as the party directly engaging or supplying the worker. Company A may also face extended liability, although it may be able to rely on a statutory excuse if it had appropriate contractual controls and compliance measures in place before the work began.

Online matching

Company A operates an online matching service that connects businesses needing plumbing services with service providers. Through the service, Company B agrees to provide plumbing services and sends Plumber C to carry out the work. Plumber C is later found not to have permission to work in the UK.

Company B may be liable as the service provider. Depending on how the platform operates, Company A may also be exposed if it is treated as an online matching service involved in supplying the details of the individual service provider to potential clients or customers.

Substitution

Company A contracts with Worker A, an IT consultant, to provide software development services. The contract allows Worker A to appoint a substitute. Worker A sends Worker B to perform the work, and Worker B is later found not to have permission to work in the UK.

Company A may be exposed to liability even though it did not contract directly with Worker B. To mitigate that risk, Company A would need robust substitution controls requiring right to work checks before any substitute starts work.

Internal business services

The extended liability provisions are not designed to capture every commercial relationship. The focus is on arrangements where an individual is personally providing work or services through labour-supply, subcontracting, online matching services or substitution arrangements.

By contrast, where a business purchases services for its own internal operations and there is no labour-supply chain involved, the new regime is unlikely to apply. Examples may include engaging external accountants, instructing solicitors, purchasing software services, or contracting with a cleaning company to clean the business’s own offices. In these cases, the business is receiving a service for its own internal purposes rather than supplying labour onwards to a third party.

Businesses should nevertheless assess arrangements carefully. The distinction will depend on the contractual structure and, in particular, whether individuals are being supplied to perform work or services within the scope of the legislation.

Statutory excuse: What businesses need to show

A compliant right to work check can establish a “statutory excuse”, protecting a business from a civil penalty where an individual is later found not to have permission to work.

The draft guidance also introduces additional prescribed requirements aimed at protecting businesses from extended liability in contractual chains, substitution arrangements and online matching services. These requirements are likely to require both appropriate contractual wording and practical compliance controls.

Contractual controls. Contracts should require relevant parties to carry out compliant right to work checks, prevent unauthorised subcontracting and flow down equivalent obligations through any permitted subcontracting chain.

Substitution controls. Where substitution is permitted, businesses should ensure that substitutes are checked before work starts and that responsibility for those checks is not left to the original worker.

Identity assurance. Businesses should have processes to confirm that the person performing the work is the same individual whose right to work has been verified.

In short, contractual wording alone is unlikely to be sufficient. Businesses will need to show that the relevant controls are implemented and followed in practice.

Non-compliance risks

The consequences of non-compliance remain significant.

Where an individual is found to be working unlawfully under an arrangement covered by the expanded regime, a business may face a civil penalty of up to £60,000 per worker. Other enforcement action may also follow, including:

criminal prosecution
closure of business premises
revocation of a sponsor licence.

The key change is that liability may arise even without a direct contractual relationship with the individual. Organisations should therefore consider not only who they employ, but also how labour is supplied across their wider business and supply chain.

Preparing for the new regime

Businesses should use the lead-in period before 1 October 2026 to assess where the expanded regime may affect their workforce, supplier and online matching arrangements.

Key preparatory steps include:

Map labour engagement models. Identify how labour is sourced across the organisation, including contractors, consultants, subcontractors, casual workers and online matching arrangements.

Update policies and procedures. Existing right to work policies may not address the new categories of working arrangement or the extended liability provisions.

Train relevant teams. HR, recruitment, procurement, legal, compliance and commercial teams should understand when checks are required and how liability may arise.

Review contracts. Supplier, subcontractor and consultancy agreements should be checked to ensure they contain appropriate right to work obligations, subcontracting controls and audit rights.

Check digital verification arrangements. Businesses using digital identity verification should confirm that their provider is registered on the relevant register and authorised to conduct right to work checks when the new regime takes effect.

Key takeaway

The reforms mark a clear shift in the UK’s approach to illegal working compliance. Businesses should not wait until October 2026 to assess their exposure. Mapping labour supply routes, updating contracts, strengthening verification processes and training relevant teams now will put organisations in the best position to reduce risk and establish a statutory excuse where needed.

Publication note: This article reflects the draft guidance currently available and should be checked against the final Home Office guidance once published.

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UK cartel investigation decision stretches two important concepts

Tue, 22 Sep 2026 00:00:00 +0100

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article | 2 min read

UK cartel investigation decision stretches two important concepts

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A UK cartel law decision identifies challenges for independent UK businesses whose activities are largely outside the UK.

Published: 22 September 2026
Authors: Kiran Desai

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The UK’s Financial Conduct Authority (FCA) has competition powers. The FCA issued a commitment decision on 18 September 2026 relating to 11 traders in relation to conduct in commodity futures trading (Decision to Accept Commitments: CA98.2023.01).

The FCA can accept the offer of commitments if, pursuant to its investigation, it holds ‘competition concerns’ and has determined that commitments offered by the direct object of the investigation addresses the competition concerns. As such, in a commitment decision the FCA does not make a finding of infringement.

Two elements of the current matter raise risks for businesses who think their activities are not subject to UK competition law.

First, the decision relates to traders who, for a cartel to exist, need to be separate undertakings. The FCA’s decision identifies that each trader (a) traded for his own profit using his own funds, (b) was responsible for his trading decisions, (c) operated as an independent contractor, rather than an employee, and thus the FCA characterised the traders as competitors. However, the evidence presented also identifies (i) the traders were members of the same trading group, (ii) the trading group was run and owned by one of the traders and another individual, (iii) a single group trading agreement governed the relationship between the traders, the trading group and others, (iv) each trader’s funds were pooled with the other traders funds for risk purposes, (iv) the traders had a common trading infrastructure, and (v) two of the traders operated under regulatory permissions of another trader.

Arguably, there is at least as much to point to the traders being not separate undertakings as there is to them being sufficiently connected for competition law purposes.

Second, infringement of UK competition law requires that the object or effect of a cartel is the prevention, restriction or distortion of competition within the UK. The FCA’s expressed view is that the traders (all of whom were based and active in the UK) compete, and so the traders ‘trade within the UK’. However, the decision is notably absent as regards any evidence connecting the traders’ activity as regards energy futures contracts traded on exchanges, most of which are outside the UK, and the extent that they traded on futures contracts on a UK exchange. As such, factually, the link to any possible effect of that activity to the UK is speculative at best.

The FCA’s decision raises two important lessons. First, activity undertaken in the UK that relates largely to non-UK markets cannot automatically be regarded as a safe harbour. Second, activities undertaken by entities that seem independent but do not fully regard themselves as separate entities, are more susceptible to competition law than they consider.

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Commercial Payments Bill: Reforming UK late payment legislation

Wed, 16 Sep 2026 00:00:00 +0100

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Commercial Payments Bill: Reforming UK late payment legislation

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Late last year, the UK Government opened a consultation announcing significant proposals to tackle late payment practices as part of a broader plan to stimulate growth within the SME sector (see our earlier article here). The proposed reforms were formalised earlier this year by way of announcement of the Commercial Payments Bill (the “Bill”) in the King’s Speech. The proposed legislation is aimed at strengthening and modernising the rules which currently exist to protect small businesses against the detrimental impact of late payments.

Published: 16 September 2026
Authors: Michelle Craven-Faulkner & Stefanie Hughes

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The Bill has undergone committee stage and entered report stage earlier this month, providing a further opportunity for parliamentary scrutiny and amendment. Whilst various details of the new regime will require secondary legislation, we have set out some of the key elements of the Bill below.

Payment terms capped at 60-days to protect small businesses

Subject to certain exemptions, a 60-day deadline to pay invoices will apply when large businesses enter into contracts to pay smaller businesses. This position will apply by default, and parties will not be able to vary this under contract. Certain limited exemptions to the 60-day payment deadline are proposed within the Bill, for example where the smaller party is the purchaser, or where the contract is between two large undertakings. Secondary legislation will be required to define business sizes for the purposes of any exempted transactions. Subject to further consultation, there is also an intention to introduce an exemption from maximum payment terms for contracts for imports and exports. In the event that the purchaser is a public authority, payment terms will be capped at 30 days. The most recent amendments to the Bill (see here) introduce consequential amendments to the Procurement Act 2023 to simplify the calculation of certain payment dates.

Some concerns have been raised that there is a lack of clarity on the point at which the purchaser is deemed to have discharged its obligation to pay within the deadline. For example, is the purchaser deemed to have paid when they have instructed payment, or is the obligation only discharged at the point that the supplier receives the funds? In the latter scenario, purchasers may risk incurring mandatory interest (see further below) if there are banking delays which are outside of their control.

Mandatory and non-negotiable statutory interest on late payments

Interest on late payments will accrue at 8% above the Bank of England base rate, with the Bill providing that contractual terms which seek to exclude or restrict the right to the statutory rate of interest will have no effect. The Bill also renames the existing Late Payment of Commercial Debts (Interest) Act 1998 as the Commercial Payments and Interest on Late Payment Act 1998, reflecting the broader reform of the regime.

Further detail is required on whether purchasers will be obliged to automatically apply interest on overdue invoices, or whether the onus will be on suppliers to take a proactive approach in claiming any interest.

Time limits for disputing invoices and fixed sum penalties for raising disputes in certain circumstances

The Bill introduces a time limit within which a business must raise an invoice dispute. This is aimed at preventing a business from raising a dispute in bad faith immediately before the invoice is due under the contract.

The Bill also introduces an implied term into contracts which allows for a supplier to recover a fixed sum from a purchaser where a dispute is raised late or without sufficient information.

Clarity is required as to whether there is a set length of time within which a dispute must be resolved once it has been raised. If there is no deadline for resolving disputes, businesses could rely on an ongoing, meritless dispute as a basis on which to delay or withhold payment.

Enhanced reporting requirements, and increased board-level accountability for “large” UK companies and LLPs

The new measures mandate greater transparency from such large organisations around their payment performance and practices, and interest owed on late payments.

Strengthened enforcement powers for the Small Business Commissioner (SBC)

The SBC will be equipped with new powers such as the ability to investigate practices, and impose financial penalties for non-compliance with the new rules.

The trigger mechanism which will enable the SBC to initiate an investigation will centre on whether a business has “persistently engaged in poor payment practices”. Whilst the draft Bill provides some indication of what may constitute poor practice, it remains to be seen what will constitute “persistent” in practice.

Sector-specific reforms

The use of retention clauses within construction contracts will be banned. For additional detail on these provisions, see our earlier article Retention ban moves a step closer – but what will replace it?

Practical next steps for commercial teams:

review standard payment terms and identify any arrangements exceeding the anticipated statutory cap
map and test invoice-to-payment processes to identify bottlenecks and delays and implement systems to mitigate such risks
implement systems to track payment dates and calculate any interest which may fall due in the event of non-compliance
strengthen invoice validation and dispute escalation processes to meet any statutory deadlines
ensure payment data is accurate and capable of supporting enhanced reporting requirements
consider governance structures, including board-level oversight and audit scrutiny of payment practices.

REFORMS REPRESENT FUNDAMENTAL REGULATORY INTERVENTION

“These reforms represent a fundamental regulatory intervention in commercial payment practices, not a marginal adjustment. The introduction of hard payment caps, coupled with mandatory interest and enhanced enforcement powers, will force large organisations to confront long-entrenched behaviours in their supply chains. Whilst the policy intent is clear, the operational challenge for businesses should not be underestimated. Payment compliance will become a systems and process issue as much as a legal one. Boards will need to take ownership of payment performance as a matter of financial discipline, reputational risk, and regulatory exposure. Businesses that fail to adapt quickly will face not only increased cost but meaningful scrutiny from regulators and the market.”

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Shoosmiths advises on sale of Skyrise Intelligence to TapTap Digital

Wed, 16 Sep 2026 00:00:00 +0100

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Press release | 2 MIN READ

Shoosmiths advises on sale of Skyrise Intelligence to TapTap Digital

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Shoosmiths has advised the selling shareholders and management of Skyrise Intelligence (“Skyrise”), a leading UK ad-tech business, on the sale of the group to TapTap Digital, the global location intelligence and audience activation platform.

Published: 16 September 2026

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Founded in the UK, Skyrise has built a strong reputation for helping advertisers and agencies plan, buy and measure media more effectively through anonymised network intelligence, location data, transactional insights and real-world behavioural patterns. The business enables brands to reach audiences more accurately while improving campaign performance across multiple channels.

The deal, which also includes a reinvestment by certain sellers into TapTap Digital, marks a significant milestone for both businesses, supporting TapTap Digital's European growth ambitions and bringing together audience design, location intelligence, omnichannel activation and AI-powered advertising capabilities. The transaction also reflects growing investor appetite for technology businesses that combine data, analytics and artificial intelligence to deliver measurable outcomes for customers.

Shoosmiths advised Skyrise on all aspects of transaction. The team was led by Partners Dan Shilvock and Claire Checketts, and Legal Directors Katie Yorke and Rosie Hendon, with support from Sam Naunton, Adam Smith, Paige Richardson and Oliver Reed-Daunter (Corporate); Sherif Malak and Christian Cockcroft (Data Protection); Laura Board and Caroline Airey (Tax); Jen Anderson and Dan Sharman (Incentives); and Amy Frost, Jessica Pearson and Eliza Moore (Employment).

Daniel Shilvock, Partner in Shoosmiths’ corporate team, said:

“We are delighted to have advised shareholders and management on the sale of Skyrise to TapTap. The business has gone from strength to strength under the stewardship of the management team and will now embark on an exciting growth journey with TapTap as part of its European growth strategy, delivering advertising solutions at global scale. The transaction highlights the continued strength of the UK technology sector and the increasing volume of cross-border deals involving innovative growth businesses. Shoosmiths is proud to be at the forefront of this trend, supporting technology companies, founders and investors on strategic transactions. Congratulations to all involved.”

Michelle Vint, Founder of Skyrise Intelligence, said:

“This transaction marks an exciting new chapter for Skyrise. Since founding the business, our focus has always been on helping brands and agencies make smarter decisions through privacy-conscious data and actionable insights. We are incredibly proud of what the team has built and the reputation we have established in the market.

TapTap's global platform, technology and ambition make them an excellent partner for the next stage of Skyrise's growth. I am excited to see the opportunities that this combination will create for our employees, customers and partners as the business continues to expand internationally.

I would also like to thank the team at Shoosmiths for their outstanding support throughout the transaction. Their commercial advice, responsiveness and guidance were invaluable in helping the shareholders and management team successfully navigate the sale process and achieve this outcome.”

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When unfair dismissal becomes uncapped: are executive share plans ready?

Wed, 16 Sep 2026 00:00:00 +0100

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When unfair dismissal becomes uncapped

Are executive share plans ready?

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The removal of the unfair dismissal cap means that incentive arrangements are likely to be examined more closely in executive exit disputes.

Published: 16 September 2026
Authors: Dan Sharman

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From 1 January 2027, the qualifying period for ordinary unfair dismissal protection will reduce to six months and the statutory cap on compensatory awards will be removed. The impact of these changes to executive share plans should not be underestimated.

Where the employee being dismissed is a senior executive with valuable share options, growth shares, interest in a management incentive plan or other long-term incentive arrangements, the removal of the cap changes the value of any potential unfair dismissal claim they might have. Losses that previously have been theoretical because they exceeded the cap, will become central to settlement discussions and tribunal proceedings.

Why equity incentives may become part of the compensation analysis

The compensatory award for an unfair dismissal is based on what the tribunal considers just and equitable, having regard to the loss sustained by the employee because of the unfair dismissal. That can include loss of benefits the employee might reasonably have expected to receive but for the unfair dismissal.

Once the cap is removed, senior executives are more likely to argue that they would have remained employed until a vesting date, liquidity event or exit, and would have received value under the relevant plan. They may then seek to include that alleged lost value in any compensatory award.

Contractual provisions limiting loss on termination may help in wrongful dismissal claims, but they are unlikely to effectively waive statutory unfair dismissal rights. Those rights can only be surrendered through a valid settlement agreement or COT3.

What steps can employers take to protect their position?

Employers operating executive incentive plans should consider reviewing their documentation and processes before the 2027 changes take effect. Any review should focus on:

(1) Settlement agreements and good leaver status

Amending leaver provisions in plan documentation so that they work sensibly alongside settlement agreements.

For example, the definition of a good leaver (and the vesting of an award) could be expanded to include an individual who enters into a company approved settlement agreement on termination, waiving claims against the employer.

In high-value executive departures, this may help achieve a negotiated settlement rather than having to engage in protracted and costly legal disputes.

(2) Valuation provisions

Carefully drafted valuation language can help evidence the nature of the right and the degree of contingency attached to it. For example, plan documentation could make clear that any valuation must take account of investor preference rights, debt, transaction costs, dilution, restrictions and other relevant plan terms; and hypothetical transactions or possible future exits should not be assumed unless they have actually occurred or are sufficiently certain.

This will not prevent an employee from advancing a claim for the hope value of the equity incentives. It may, however, help the employer argue that the alleged value is too contingent or speculative to justify a substantial award.

(3) Tighten discretion wording

Reviewing discretion wording in plan documents. Broad discretions over leaver status, vesting, performance conditions, valuation and exercise can be useful, but may invite challenge if exercised inconsistently or without evidence.

(4) Communication

Ensuring grant letters, plan summaries, investor communications and exit discussions are aligned with the plan rules and expectations. Avoiding language suggesting guaranteed value, inevitable vesting or assured participation in an exit is helpful unless that is genuinely intended.

(5) Follow a fair process

Reviewing existing practices to ensure that a fair process is followed prior to any decision to dismiss being made. Although senior employee exits often necessitate speed over procedural fairness, the scales may tip once the cap is removed. As a result, the importance of following internal processes will increase. If the dismissal is found to be fair, the issue of compensation does not arise.

However, often with senior executives, it is not always practical to undertake lengthy performance improvement processes. Often there may be a potentially fair reason for dismissal, but no time for procedure. In those cases, the employer’s best defence is that the compensation should be limited to just the short period it would have taken to have carried out a fair dismissal. Employers should not assume that seniority removes the need for procedural fairness. Recent authority confirms that even at CEO level tribunals will generally expect meaningful warnings, consultation and an opportunity to respond before dismissal. However, where a tribunal concludes that a fair procedure would nevertheless have resulted in dismissal, compensation may be reduced to reflect the period that a fair process would have taken. In some cases, that may substantially limit claims based on future salary, bonus or incentive awards.

Employers should also revisit probationary periods and early-stage performance management in light of the shorter six-month qualifying period. Clear objectives, regular reviews, feedback and appropriate support will help identify issues before unfair dismissal protection applies. It will no longer be acceptable to allow probation periods to drift on.

Could any other potential solutions help?

Employee shareholder status

Employee shareholder status may look attractive because an employee shareholder gives up certain statutory rights, including ordinary unfair dismissal rights, in return for fully paid-up shares worth at least £2,000.

However, it has significant limitations. Employee shareholders retain important rights, including protection against discrimination and certain automatically unfair dismissals. The historic tax advantages are no longer available to new entrants, and existing employees cannot be forced to accept the status.

Although employee shareholder status is rare nowadays, it may have a narrow role for a sophisticated senior hire who accepts the rights trade-off knowingly, but it should not be treated as a simple workaround for uncapped unfair dismissal compensation.

LLP membership

LLP structures may also appear attractive. In principle, a genuine LLP member is not an employee and would not ordinarily benefit from protection against unfair dismissal.

However, recent case law and HMRC guidance demonstrate that simply describing an individual as an LLP member is not enough and the requisite substance to the arrangements must exist, such as legally enforceable governance rights, genuine participation in the affairs of the LLP and meaningful economic risk. Equally, from an employment rights perspective, LLP members are not entirely outside the protection of employment legislation. They still qualify as “workers” and retain important statutory protections, including whistleblowing and discrimination rights.

Conclusion

The removal of the unfair dismissal cap means that incentive arrangements are likely to be examined more closely in executive exit disputes. For employers, the best protection will be a combination of careful drafting of plan rules/agreements, realistic valuation expectations, properly governed discretion, and fair dismissal processes.

If you would like to discuss this further, please speak to Dan Sharman dan.sharman@shoosmiths.com or Adam Lambert adam.lambert@shoosmiths.com.

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Ofgem’s draft licence advances onshore transmission competition

Tue, 15 Sep 2026 00:00:00 +0100

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Ofgem’s draft licence advances onshore transmission competition

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What Ofgem’s draft CATO licence means for competition, investment and delivery across the UK’s evolving onshore electricity transmission market.

Published: 15 September 2026
Authors: Sarah Johnson & Jacques Camilleri

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Ofgem’s consultation on the draft Competitively Appointed Transmission Owner (CATO) licence and accompanying guidance marks an important development for competition in onshore electricity transmission. It provides the clearest indication yet as to how a functioning CATO regime may operate in practice.

The publication follows several years of policy and legislative development aimed at introducing competition into the delivery of selected onshore electricity transmission assets. While the first CATO projects have yet to be identified, the publication of the draft licence is another indication that the regulatory framaework is continuing to evolve from policy concept towards implementation.

The proposed licence and guidance

The draft licence is intended to apply to successful bidders appointed through an onshore electricity transmission early competition tender. This means that a CATO would be responsible for designing, financing, building and operating transmission assets on the electricity network. The draft licence broadly takes a “familiar where it can be, specific where it needs to be” approach.

Ofgem has sought to align the draft with existing transmission licence conditions where appropriate for CATOs, while adapting or introducing provisions to reflect the characteristics of a competitively appointed transmission owner. The draft licence also touches upon the mechanics of the CATO commercial framework, including security during construction, revenue conditions, asset health, refinancing, exit arrangements, milestone payments and the possibility of a CATO of Last Resort.

Sitting alongside the draft licence is the draft guidance, which is intended to help explain how the licence conditions will operate in practice. It covers matters such as processes, roles and responsibilities, information submission requirements and the obligations that would fall on a CATO.

Consultation timeline and wider market activity

The consultation is open until 16 October 2026. We will be following developments closely. The publication also coincides with continued progress in the offshore transmission sector, including recent OFTO tender activity for Hornsea Project 3.

Additional tender activity is expected to launch towards the end of October 2026, further demonstrating the continued expansion of competitive delivery models across the UK’s transmission infrastructure.

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Will the UK change its course on AI regulation?

Mon, 14 Sep 2026 00:00:00 +0100

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Will the UK change its course on AI regulation?

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Draft legislation that would prohibit the “development, deployment and operation of artificial superintelligence systems” has been introduced into UK Parliament as a private member's bill (the UK Artificial Superintelligence Security Bill). The draft legislation seeks to establish a framework for monitoring and restricting precursors to superintelligent AI systems, and promote progress towards international consensus on the prohibition of the most powerful AI systems.

Published: 14 September 2026
Authors: Stefanie Hughes & Oscar Tang

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Despite the absence of a universally accepted definition of artificial intelligence, the bill defines artificial superintelligence (“ASI”) as an “AI system which can cause serious damage to the security of the United Kingdom because of its capability to neutralise, displace, circumvent, subvert, or render ineffective relevant human authorities in the exercise of their functions”.

The bill aims to eliminate the grave threat that the technology might pose to national security, by banning such systems in their entirety and ensuring that any resources or inputs which could be used in the development (so-called “precursors”) are suitably monitored and restricted to avoid a situation in which they could materially contribute to the development of ASI.

Drafted by non-profit ControlAI and introduced by Alex Sobel MP in September 2026, the bill follows several recent high-profile incidents in which AI agents were reportedly able to circumvent security controls, escape their test environments and compromise third-party infrastructure. In July of this year, OpenAI disclosed that a combination of its models had escaped controlled test environments (designed to test the models’ cyber capabilities) and compromised the production infrastructure of AI model-sharing site, Hugging Face. In a subsequent update, OpenAI confirmed that its ongoing review of the incident had led to additional findings that the models had used “publicly exposed credentials” on other “publicly available services”.

A short while later, another frontier model provider, Anthropic, released a statement saying that the disclosure had prompted it to review its own cyber evaluations, and in doing so, it had also discovered that some of its own models had accessed the internet and compromised the infrastructure of three organisations. Details released by Anthropic suggest that the models were inadvertently able to access the internet in the closed test environments due to a misunderstanding between Anthropic and its evaluation partner, as opposed to a deliberate attempt by the models to escape the test environment. Nonetheless, the findings illustrate that seemingly innocuous mistakes or instructions may lead to unintended consequences.

The UK’s own AI Security Institute (“AISI”) has published research and findings into AI model behaviour which it terms ‘cheating’ (i.e. when a model pursues a task which is out of scope of the original task, or explicitly prohibited by rules for the task which have been communicated). The AISI research suggests that as models become more capable, the ways in which they cheat could become harder to detect, and more damaging, particularly in critical domains such as cybersecurity. The rapid progression of model capabilities and the apparent emergence of ‘cheating’ behaviour (deliberate or otherwise) have fuelled calls from industry, academia and policymakers for frontier model providers to slow the pace of development.

Concerns are seemingly not limited to the UK, with Senator Bernie Sanders and Congressman Greg Casar proposing similar legislation, The Artificial Superintelligence Ban Act, which seeks to ban the development of ASI, and impose a moratorium on the development of the technology more generally until the US has established safety regulations. Recognising that individual jurisdictions cannot address the issue in isolation, the proposals also seek to secure international alignment on the position.

Alongside this, members of the House of Lords have proposed amendments to the Cyber Security and Resilience (Network and Information Systems) Bill in the UK, which would introduce ”kill-switch” powers for AI systems that pose a substantial risk to essential services. The proposed amendments would grant the Secretary of State “last resort” powers to direct the shutdown of data centres or AI systems in certain circumstances and could also extend to the closure of premises, or orders to switch off systems where an issue impacting a data centre or an AI system poses a catastrophic risk to critical infrastructure, national security or human life. However, the UK government has now publicly rejected the proposal. In comments to BBC News, the Cabinet Office stated that the UK cannot “simply turn AI off”, adding that blocking access would not prevent systems from developed or misused elsewhere. Government opposition does not automatically prevent the amendments progressing through Parliament, but it substantially reduces the prospects of a statutory AI "kill switch" becoming law in the near term.

Nevertheless, an increased focus on prohibiting the most capable systems and creating emergency intervention powers suggests that concerns about frontier AI are gaining greater prominence in the UK’s regulatory debate. The introduction of proposals to prohibit artificial superintelligence, alongside calls for emergency shutdown powers, illustrates a willingness to contemplate state-level interventions. At the same time, the government’s rejection of the proposal reflects the UK’s broader preference for a measured, internationally coordinated approach rather than prescriptive controls. This tension between precautionary intervention and innovation-favourable regulation will be a defining feature of the next phase of UK AI policy. As Alex Sobel MP remarked when introducing the bill, “this is the least powerful or autonomous that AI systems will ever be”.

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Payment Innovators Network podcast by Shoosmiths: Ep2 with Luca Predebon

Fri, 11 Sep 2026 00:00:00 +0100

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Podcast | 21 min listen

Payment Innovators Network podcast by Shoosmiths

Episode 2 with Luca Predebon

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Luca Predebon, VP, Risk Operations at Checkout.com joins us on the Payment Innovators Network Podcast. We explore Luca’s extensive experience across the payments and fintech sector, his career journey, and his perspectives on the trends, challenges and opportunities shaping the future of payments.

Published: 11 September 2026
Author: Thomas Brown & Luca Predebon, VP, Risk Operations at Checkout.com

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Buying a UK plc: What catches overseas buyers by surprise

Thu, 10 Sep 2026 00:00:00 +0100

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Buying a UK plc: What catches overseas buyers by surprise

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Eight practical issues international buyers should understand before acquiring a UK-listed company.

Published: 10 September 2026
Authors: Ed Nisbet

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The UK remains one of the world’s most attractive public M&A markets. Its takeover framework is transparent, predictable and internationally respected. Yet overseas buyers are often surprised by how differently UK takeovers operate.

In our experience, issues rarely arise because an overseas buyer misunderstands a technical provision of the City Code on Takeovers and Mergers (Code). They arise because the buyer applies the wrong transaction mindset.

For overseas buyers, the key lesson is straightforward: UK public M&A is challenging not because the rules are unclear, but because the timetable leaves little room for late decisions. By the time a Rule 2.7 firm intention announcement is made, a buyer should already understand its financing, regulatory approvals, shareholder support and integration plan.

Below are eight of the most important issues overseas acquirers should understand before embarking on an acquisition of a UK-listed company.

1. Choose the transaction structure carefully

A UK public acquisition will usually be implemented either by a court-sanctioned scheme of arrangement (a Scheme) or by a contractual takeover offer (an Offer).

Most recommended transactions use a Scheme because, once approved by a majority in number of the relevant shareholders voting, representing at least 75% in value of the shares voted, sanctioned by the court and made effective, it binds the Scheme shareholders and provides an effective route to 100% ownership. In the right circumstances, a Scheme can reduce execution risk.

An Offer may be preferable, including where the approach is hostile or shareholder dynamics make a scheme vote less attractive. Depending on the buyer’s aims, an Offer can be successful once the buyer secures more than 50% of the voting rights. 75% enables the buyer to implement certain post-offer steps, including seeking cancellation of the target’s listing, while obtaining 100% ownership usually requires acceptances reaching 90% and use of the statutory squeeze-out.

Practical tip: Decide at the outset what level of ownership is genuinely required. Control, delisting and complete ownership are different outcomes, with different thresholds and consequences.

2. The Rule 2.7 announcement is the “point of no return”

One of the most distinctive features of the UK regime is the significance of a firm intention announcement under Rule 2.7 of the Code. Once made, a buyer is effectively committed to proceed.

In practice, the buyer’s financing must be arranged, key due diligence complete, material regulatory issues understood and key transaction documentation in place by that point.

This often surprises overseas acquirers familiar with merger agreements containing broad termination rights, financing conditions or material adverse change protections. A long list of conditions in a Rule 2.7 announcement should not be mistaken for broad optionality: conditions cannot normally be invoked unless the relevant circumstances are of ‘material significance’ in the context of the offer.

Regulatory approvals are often among the most significant execution risks. Depending on the target’s sector and the buyer’s profile, a transaction may require merger control, foreign investment, national security or sector-specific approvals, including under the UK National Security and Investment Act 2021, CMA or European Commission merger control, CFIUS in the United States or financial services, defence, telecoms, energy or healthcare regimes.

Formal regulator engagement may be difficult before announcement, but the buyer should still understand the likely filings, approval risks, timetable, level of target cooperation required and route to clearance before it commits publicly.

Regulatory or antitrust conditions may, depending on the drafting and circumstances, be more capable of satisfying the Code’s ‘material significance’ threshold if approval is refused or imposed on unacceptable terms. That should not be assumed. Many commercial, operational or market concerns arising after announcement are unlikely to meet that threshold.

The UK system is built around bid certainty. Work that might happen after signing in other jurisdictions therefore needs to be completed, or at least sufficiently advanced, before the Rule 2.7 announcement is released.

Practical tip: Before launch, ask: “If we learned nothing more about the target, would we still buy it on these terms?” If the answer is no, the buyer is not ready to publish its Rule 2.7 announcement.

3. Financing cannot be an afterthought

The UK’s cash confirmation regime often requires the most preparation. Where cash is offered, the buyer’s financial adviser must publicly confirm that sufficient resources are available to satisfy full acceptance of the offer.

The financing package and evidence for the cash confirmation must withstand detailed scrutiny. The issue is not merely whether money is available, but whether it will remain available when needed. A small inconsistency in an authorisation, drawdown condition or group funding step can become a launch issue.

A buyer’s financial adviser will focus closely on this workstream because, if it has not acted responsibly and taken all reasonable steps to assure itself that sufficient resources are available, it may be required to provide the necessary funds.

Overseas buyers, whose funds are often in currencies other than GBP, must have a plan to manage foreign exchange risk over the period between the Rule 2.7 announcement and the funds being required.

Practical tip: Start the cash confirmation workstream alongside the first serious approach. Agree responsibility for the maximum consideration calculation, financing capacity, documentary conditions precedent, FX exposure and the evidence the financial adviser will require.

4. Focus due diligence on the issues that matter

Diligence on a UK public company acquisition is more constrained than on a private M&A transaction. The buyer will usually have less access to management, less bespoke information and less ability to revisit the economics after announcement.

Public disclosures are an important starting point, but not a substitute for buyer-specific diligence on the issues that could affect price, structure, financing, regulatory strategy or willingness to proceed.

Practical tip: Ask the business team to identify the key facts that, if wrong, would change the investment decision. Build the diligence plan around testing those assumptions first.

5. Approach stakebuilding with care

Stakebuilding can improve the buyer’s tactical position, but it can also disclose interest too early, complicate a scheme vote, affect the minimum price or form of consideration and leave the buyer with an illiquid minority holding if the transaction fails.

It should also be considered alongside any Rule 9 analysis, particularly where the buyer or its concert parties already hold shares.

Practical tip: Before acquiring shares, model the consequences through to 100% ownership and through to failure, including voting, acceptance, squeeze-out, minimum-price, form-of-consideration and disclosure effects.

6. Be wary of Rule 9: a share purchase can trigger an obligation to bid

Overseas investors may assume that launching a takeover is always voluntary. In the UK, Rule 9 can require a person to make a mandatory offer where it, together with its concert parties, acquires shares carrying 30% or more of the voting rights, or where they already hold between 30% and 50% and acquire any further interest.

A mandatory offer is not simply a voluntary offer with a different label. It must normally be made in cash, or with a cash alternative, at not less than the highest price paid by the buyer or its concert parties in the preceding 12 months and is subject to much more limited conditionality.

The recent mandatory offer for Integrated Diagnostics Holdings plc, on which Shoosmiths advised the independent directors, illustrates the point. Hena Holdings increased its holding to approximately 49.61%, triggering a Rule 9 obligation. IDH’s independent directors did not recommend the offer and advised shareholders not to accept it. The net result was that only a small handful of shareholders accepted the offer.

A share purchase can create a live offer obligation before the buyer has completed the workstreams that would normally precede a voluntary bid.

Practical tip: If an acquisition could trigger Rule 9, prepare the mandatory offer before completing the share purchase. Concert party analysis, offer price, funding, cash confirmation, announcement drafting and communications strategy should all be addressed in advance.

7. The board is not the only audience that matters

Overseas buyers sometimes concentrate on the target board and underestimate the investors who will ultimately decide the outcome. UK institutional shareholders are accustomed to forming their own views on valuation, strategic rationale, execution risk and available alternatives.

A conventional premium analysis can be misleading where the share price does not reflect the board’s or long-term investors’ view of value.

Where the offer terms and rationale are compelling, material shareholders may provide irrevocable undertakings or non-binding letters of intent. In many recommended transactions, shareholder support is a critical pre-announcement workstream.

The buyer must also be mindful of the so-called “rule of six”, which can limit the number of shareholders it may approach before a Rule 2.7 announcement.

A buyer may go public to put pressure on a reluctant board, but that can reduce flexibility, start a regulatory timetable and give competing bidders more time. A public approach should be used because the shareholder analysis supports it, not because private discussions have become frustrating.

Practical tip: Map the register before approaching the board. Identify which investors are likely to focus on headline premium, fundamental value or strategic rationale. A shareholder-engagement strategy developed after announcement is usually too late.

8. Contractual protection is limited, while intention statements require discipline

The UK regime is less accommodating than many other jurisdictions when it comes to arrangements designed to deter competing offers or lock up a transaction. Overseas buyers should not assume that extensive break fees, exclusivity restrictions or implementation covenants will be available.

The Rule 2.7 announcement and offer documentation must also contain detailed statements about the buyer’s intentions for the target’s business, employees, management, places of business, research and development and pension schemes. Those statements must be accurate, properly considered and supported by the buyer’s actual intentions.

If a buyer makes a post-offer intention statement, it must report to the Panel at the end of the relevant period on whether it has taken the stated course of action and publish details of that report.

Practical tip: Replace unavailable contractual protection with preparation: a credible strategic rationale, deliverable financing, early regulatory analysis and a properly tested shareholder strategy. Draft intention statements from an agreed integration plan, not from generic precedent wording.

Shoosmiths comment

Significant work is required on a UK public M&A exercise before publication of a Rule 2.7 announcement. Buyers may need to settle financing that would remain conditional elsewhere, make public statements about the target and its business before ownership, assess regulatory issues across jurisdictions and form a view on value with less diligence than in private M&A.

Shoosmiths advises international corporates, financial sponsors and advisers on the practical steps needed to move from acquisition strategy to a deliverable UK takeover. Our Public Markets group regularly supports clients on public M&A transactions on AIM and the Main Market. If you are considering an acquisition of a UK-listed company, speak to Shoosmiths early.

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Shoosmiths advises Investec on a London PBSA financing

Wed, 9 Sep 2026 00:00:00 +0100

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Shoosmiths advises Investec on a London PBSA financing

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Shoosmiths has advised Investec on its financing of a purpose-built student accommodation (PBSA) in London.

Published: 9 September 2026

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The £47m senior investment facility was provided to YourTRIBE, a London-based purpose-built student accommodation operator and student living brand, to refinance a newly completed 226-bed PBSA scheme in Elephant & Castle, London.

This transaction marks another financing instruction for Shoosmiths in the living sector, which continues to be a highly active asset class for the firm whether representing lenders, investors or operators. This transaction demonstrates Shoosmiths' expertise advising clients across a variety of investment and development real estate assets.

The deal was led by James Spencer, Real Estate Finance Partner, supported by Amanda Gilliland, Charlie White, Tom Jenkins and Saffron Stay.

James Spencer commented: “We're continuing to see strong momentum and appetite across the living sector for sponsors and lenders alike. We're delighted to have worked alongside Investec to deliver this financing.”

This latest transaction builds on Shoosmiths' strong relationship with Investec and follows a number of financings completed for the bank across the PBSA and flexible living sectors, including the redevelopment of a PBSA/co-living asset in Wimbledon Park, the development of a PBSA/co-living scheme in Elephant & Castle, and a flexible living development in Morden.

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Operating forklift trucks: LOLER and the wider legal framework

Wed, 9 Sep 2026 00:00:00 +0100

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Operating forklift trucks: LOLER and the wider legal framework

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This article summarises key requirements relating to forklift trucks and practical steps to help organisations manage the risks arising from their use and comply with the law.

Published: 11 September 2026
Authors: Rubina Zaidi

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What is a forklift truck?

For the purposes of this article, “forklift truck” is used to refer principally to rider-operated forklift trucks. These are primarily designed to lift, lower and move materials. The article does not address fixed lifts and hoists or mobile elevating work platforms, such as cherry pickers and scissor lifts, which are intended primarily to lift people. A non-integrated working platform attached to a forklift truck should be used to lift people only in the exceptional circumstances described in Health and Safety Executive (HSE) guidance.

The wider legal framework

Forklift trucks can create serious risks for operators, pedestrians and others. The relevant framework extends beyond the Lifting Operations and Lifting Equipment Regulations 1998 (LOLER). Depending on the circumstances, duties may also arise under the Health and Safety at Work etc. Act 1974, the Management of Health and Safety at Work Regulations 1999, the Provision and Use of Work Equipment Regulations 1998 (PUWER), and the Workplace (Health, Safety and Welfare) Regulations 1992.

A forklift truck is work equipment under PUWER and, when used to lift or lower loads, is lifting equipment under LOLER. The regimes commonly apply together.

The legislation covers specific risks associated with operations involving lifting equipment. Those responsible for the safe operation of such equipment should review their arrangements to ensure the associated risks are being properly identified and controlled and that applicable legal duties are being met.

Key duties under LOLER

LOLER applies to employers in respect of lifting equipment provided for use or used by employees at work. In specified circumstances, its requirements also apply to relevant self-employed persons and to persons who, in connection with a trade, business or other undertaking, control lifting equipment, those who use, supervise or manage its use, or the way it is used, but only to the extent of their control (regulation 3).

Principal duties include:

strength and stability: equipment must be of adequate strength and stability for each load. Every part of a load and anything attached to and used in lifting it must also be of adequate strength (regulation 4)
lifting people: equipment must prevent a person using it from being crushed, trapped or struck, or falling from the carrier. Where activities are carried out from the carrier, those risks must be prevented so far as is reasonably practicable. Subject to a limited exception, suitable devices must prevent the risk of the carrier falling, and a trapped person must not be exposed to danger and must be capable of being freed (regulation 5)
positioning and installation: equipment must be positioned or installed to reduce, so far as is reasonably practicable, the risk of the equipment or load striking a person, or a load drifting, falling freely or being unintentionally released (regulation 6)
marking: lifting machinery and accessories must be clearly marked with their safe working load. Additional marking requirements apply where capacity depends on configuration and where equipment is, or is not, intended to lift people (regulation 7)
lifting operations: every operation must be properly planned by a competent person, appropriately supervised and carried out safely (regulation 8)
thorough examination: lifting equipment must be thoroughly examined and inspected in prescribed circumstances (regulation 9).

Thorough examination, reports and records

Before lifting equipment is first put into service, it must be thoroughly examined unless it has not previously been used, the relevant declaration of conformity could or should have been drawn up, the employer has received that declaration, and it was made no more than 12 months before the equipment was put into service. Alternatively, where equipment is obtained from another person’s undertaking, it must be accompanied by physical evidence showing the last thorough examination required by regulation 9 has been undertaken.

Where safety depends on installation conditions, examination is required after installation and before first use, and after assembly at a new site or location.

Equipment exposed to conditions causing deterioration liable to result in dangerous situations must be thoroughly examined at least every six months if used to lift people or if it is a lifting accessory, and at least every twelve months for other lifting equipment, or in accordance with an examination scheme. Examination is also required following exceptional circumstances liable to jeopardise safety. Where appropriate, inspections must take place at suitable intervals between thorough examinations.

A thorough examination is a systematic, detailed examination of the equipment and safety-critical parts by a competent person, not routine maintenance, servicing or a pre-use check. The person should have appropriate practical and theoretical knowledge and experience of the equipment and be sufficiently independent and impartial to make objective decisions.

The examiner must notify the employer forthwith of any defect which is or could become dangerous and, as soon as practicable, provide the employer and anyone from whom the equipment has been hired or leased with an authenticated written report containing the particulars required by Schedule 1.

Where a defect involves an existing or imminent risk of serious personal injury, the report must also be sent to the relevant enforcing authority. Equipment must not be used before an existing dangerous defect is rectified. If a defect could become dangerous by a specified time, it must not be used after that time until rectified (regulation 10).

Required declarations of conformity, thorough examination reports and inspection records must be retained for the periods prescribed by regulation 11.

Practical steps for dutyholders

Organisations should integrate LOLER compliance with their wider arrangements for work equipment and workplace transport. Practical measures include:

identifying the lifting operations and equipment within the organisation’s undertaking or control, including non-routine work, attachments and relevant contractor activities
assessing each task by reference to the truck, load, centre of gravity, capacity, attachment, route, ground conditions, visibility, people exposed to risk and foreseeable abnormal use
selecting a truck and compatible attachment suitable for the task, and ensuring the rated capacity is understood and not exceeded
ensuring operations are planned by a person competent for the task, with proportionate supervision and an appropriate safe system of work
providing adequate training and authorisation for operators, and sufficient information, instruction and training for managers and supervisors
maintaining an accurate equipment register and coordinating pre-use checks, defect reporting, preventive maintenance, PUWER inspections and LOLER thorough examinations
checking examination reports are complete, acting on defects within the specified timescale and withdrawing equipment from use where regulation 10 requires
ensuring purpose-designed access equipment is used to raise people rather than forks or an improvised platform. Any exceptional use of a non-integrated platform on a forklift truck should be undertaken in accordance with HSE guidance, using a suitable and compatible truck-platform combination and appropriate planning and risk controls.

Finally...

A current report of thorough examination alone does not demonstrate compliance with every relevant duty. Safe operation depends on suitable equipment, competent people, effective planning and supervision, maintenance, inspection, pre-use checks and prompt action on defects. For forklift trucks, LOLER should therefore be treated as part of an integrated system for managing work equipment and risks relating to workplace transport.

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Shoosmiths advises TMA on Magnesium Capital investment

Fri, 4 Sep 2026 00:00:00 +0100

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Press release | 1 MIN READ

Shoosmiths advises TMA on Magnesium Capital investment

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Shoosmiths has advised the selling shareholders and management of TMA, a leading UK-based energy data collection and aggregation business, on a private equity investment from Magnesium Capital.

Published: 4 September 2026

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The deal marks a significant milestone for TMA and reflects the growing interest in the data and digital infrastructure underpinning the UK’s energy transition. Magnesium Capital’s acquisition of a majority stake in TMA will support its continued growth throughout the implementation of the Market-wide Half-Hourly Settlement (“MHHS”), a key reform to the industry that places businesses with TMA’s capabilities at the centre of the energy market.

The MHHS reform officially went live for industry migration on 22 October 2025 and has demanded the reshaping of the UK electricity market, now requiring meters across residential and commercial sites to be settled based on consumption data recorded every 30 minutes. The programme is scheduled to complete in spring 2027.

Shoosmiths has previously advised TMA on a range of corporate matters over several years, including its initial MBO and several bolt-on acquisitions and in this deal provided support to TMA, Shareholders and Management across multiple service lines including Corporate, Equity, Tax and Management Incentives.

Lisa Sigalet, Partner in Shoosmiths’ Corporate team, said: “TMA plays a critical role in the GB energy market, and this investment comes at a pivotal moment for the industry with MHHS reshaping data infrastructure demands. The investment positions TMA to build on its reputation as a trusted partner to some of the UK’s leading energy suppliers as the market undergoes this phase of transformation.”

Rob Kitchen, Group Managing Director at TMA, said: “This investment represents an important milestone for TMA and a strong endorsement of the business we have built, the quality of our people and the role we play in supporting the UK energy market. With Magnesium Capital’s backing, we are well placed to continue investing in our technology, services and customer relationships as the industry transitions through MHHS and beyond. Shoosmiths were fantastic throughout the process, providing clear, commercial and pragmatic support from start to finish. Their understanding of our business and the dynamics of the deal made them a valued partner at every stage.”

The Shoosmiths team advising on the acquisition was led by Corporate Partner Lisa Sigalet and supported by Senior Associate Charlotte Constantinides and Associate Kerry Coomer. Equity advice was provided by Partners Holly Hirst and Alison Chivers, and Associate Jake Bowdler. Incentives advice was provided by Partner Dan Sharman and Principal Associate Marie Mann and Tax support was provided by Partner Laura Board, Principal Associate Caroline Airey, Senior Associate Carly Cutler and Associate Pritpal Virdee. Employment advice was provided by Partner Stuart Lawrenson and Associates Charlotte Gamblin and Ashlie Cheshire.

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Modern slavery reporting: Are you ready for tougher rules?

Fri, 4 Sep 2026 00:00:00 +0100

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Modern slavery reporting: Are you ready for tougher rules?

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Introduced into the House of Commons on 30 June 2026, the Immigration and Asylum Bill 2026 (the Bill) looks set to significantly overhaul the UK's corporate modern slavery reporting regime.

Published: 4 September 2026
Authors: Michelle Craven-Faulkner

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The current reporting framework under the Modern Slavery Act 2015

The existing corporate modern slavery reporting regime is set out in the Modern Slavery Act 2015 (the MSA) and requires commercial organisations within its scope to publish an annual slavery and human trafficking statement. Pursuant to section 54 of the MSA, the statement must describe the steps the organisation has taken to ensure that slavery and human trafficking are not taking place within its supply chains, or any part of its business. Alternatively, an organisation may publish a statement confirming that it has taken no such steps.

The MSA has long been criticised for imposing relatively limited reporting obligations on commercial organisations, and for lacking meaningful sanctions. The Bill would introduce the most significant changes to the UK’s corporate modern slavery framework since the enactment of the MSA over a decade ago.

Mandatory reporting under the Immigration and Asylum Bill 2026

Whilst the MSA identifies a number of topics that organisations may choose to address in their statements, it does not mandate the inclusion of particular information. Organisations are therefore free to determine the content of their statement, with brevity often the preferred approach.

The Immigration and Asylum Bill would significantly overhaul this position by introducing mandatory reporting requirements relating to the content of slavery and human trafficking statements. Under the draft proposals, organisations would be required to report on:

their structure, operations and supply chains
steps taken to identify, assess, and mitigate the risk of slavery and human trafficking in their business and supply chains, and where no such steps have been taken, the reasons for this
any policies relating to slavery and human trafficking and, where no such policies are in place, the reasons for this
any training made available to staff, and, where no such training has been provided, reasons as to why
due diligence which has been conducted and implemented in relation to modern slavery risks
any measures taken to assess the organisation’s effectiveness in ensuring that slavery and human trafficking is not taking place in its business and supply chains.

Financial penalties

Financial penalties under the updated regime will be determined under secondary legislation but would be capped at the higher of: (a) 1% of total turnover (for commercial organisations) or total budget (for public authorities), or (b) GBP 1 million. The updated regime would also extend to public authorities that meet certain financial thresholds (which will also be determined by way of secondary legislation).

Increased governance and accountability

In addition, organisations should prepare for:

a longstop statement publication deadline of six months after the end of their financial year
increased visibility at board level, with statements requiring governing body approval, as well as a personal declaration from the signatory that the statement is “accurate to the best of their knowledge and belief”.

Preparing for the proposed reforms

For organisations with established supplier due diligence, internal governance and training programmes, the proposed reforms may not require a radical overhaul of their existing processes. However, organisations that have thus far adopted a minimum-compliance approach to their reporting obligations should start to prepare now. Whilst the Bill is not yet law, the scale of the proposed reforms should not be underestimated. For example, an organisation that has not yet taken action in relation to any one of the mandatory reporting areas will be required to issue an explanation as to why, creating significant reputational risk and regulatory scrutiny for those demonstrating inaction.

Steps organisations can take now

Organisations may wish to review their supply chain operations and existing practices to ensure they have the information necessary to identify and appropriately mitigate modern slavery risks. Such review may include a deep dive into current risk-assessment processes when engaging new suppliers or renewing existing contracts. It may also include a thorough review of internal governance procedures, such as existing policies and training programmes, with a view to identifying areas where further controls may be required.

Organisations may also wish to check existing contracts for audit rights, as well as provisions requiring the supply of information. This will provide crucial visibility into the supply chain which can be used for risk-assessment purposes. Organisations that supply to the public sector should also be prepared for enhanced due diligence during any public procurement processes.

Key takeaways

The proposed reforms signal a shift from a largely transparency-focussed regime to one with a real emphasis on accountability. Organisations should use this time to review their current compliance frameworks and ensure that these can withstand any incoming enhanced obligations.

Further information

You can find further details on the Immigration and Asylum Bill here.

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New Express Market route widens AIM’s appeal for overseas companies

Thu, 3 Sep 2026 00:00:00 +0100

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New Express Market route widens AIM’s appeal for overseas companies

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The revised AIM Rules expand the pool of international issuers able to consider a more proportionate route to London’s growth market.

Published: 3 September 2026
Authors: Ed Nisbet

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AIM has long helped ambitious growth companies access capital, pursue acquisitions and accelerate growth. It has attracted companies from a wide range of jurisdictions and sectors, supported by an experienced investor base and adviser ecosystem familiar with the needs of growing businesses.

International companies have not, however, always found it straightforward to access AIM.

The former Designated Market route was intended to provide an accelerated route to admission for companies listed on select overseas markets where regulatory standards were deemed sufficiently high.

In practice, however, many international issuers and advisers did not view it as a genuinely streamlined path into London’s capital markets: the work involved was often only marginally less extensive than on a traditional IPO.

The challenge was not AIM’s underlying appeal, but whether the route into AIM was compelling for companies already subject to established public market regulation elsewhere.

That exposed the weakness of the old approach: an overseas company could have an established public market track record and a robust disclosure regime yet still fall outside the accelerated route because its market was not included within the prescribed Designated Market framework.

The new AIM Express Market route, introduced as part of the revised AIM Rules effective from 5 August 2026, seeks to address both criticisms.

First, it introduces a wider definition of an Express Market (in broad terms, any equity market that is regulated by a member of the International Organisation of Securities Commissions). Second, it introduces a more proportionate admission framework intended to recognise the regulatory scrutiny, disclosure history and public company experience that qualifying overseas issuers have already demonstrated elsewhere.

The significance of the reform therefore extends beyond a change in admission mechanics. AIM is seeking to create a more credible and internationally competitive route for established overseas companies that wish to access London’s capital markets without unnecessarily duplicating work already undertaken in their home market.

What has changed?

Issue

Previous Designated Market route

New AIM Express Market route

What this means for issuers

Eligible markets and applicants

Limited to issuers on a prescribed list of designated markets

Applies to qualifying applicants admitted to a broader category of Express Markets

More international issuers may be able to use an accelerated route, but eligibility remains rules-based

Admission documentation

Some documentation concessions were available

Documentation depends on the issuer’s market and the securities being admitted

Some applicants may avoid a separate AIM admission document; others may use a simplified one

Dual-market admissions

No dedicated framework for coordinated dual-market admissions

A dedicated dual-market applicant regime

Simultaneous overseas and AIM admissions become a more credible option

The practical effect is that the new regime asks a more commercially relevant question: has the company already demonstrated an appropriate public market track record on a market that meets the Express Market criteria?

Who can benefit from the AIM Express Market route?

For an applicant to meet the AIM Rules definition of ‘express applicant’, it must:

have been admitted to an Express Market for at least three years
have satisfied the relevant continuity of business and board requirements
have a minimum expected market capitalisation on AIM admission of £20 million
have published in English any relevant admission documentation and the disclosure required in its home jurisdiction.

The formal Schedule One process is also significantly shorter than under the standard admission route: three business days rather than 10 business days. However, companies still need to complete the necessary legal, financial and nominated adviser work required for admission.

Eligibility does not guarantee admission

Meeting the express applicant conditions does not create an entitlement to admission. Applicants must still appoint a nominated adviser, which remains responsible for assessing whether the applicant is appropriate for AIM and advising it on its obligations under the AIM Rules. The Exchange also retains discretion to refuse, delay or impose conditions on an admission where appropriate. The Express Market route should therefore be seen as a means of reducing unnecessary duplication for suitable applicants, not a form of automatic passporting onto AIM.

Will an express applicant need an AIM admission document?

Not necessarily. An express applicant will not be required to produce a separate AIM admission document where its securities are already admitted to an Express Market that is also a specified market under the FCA Handbook and the securities being admitted to AIM are of the same class.

Where those conditions are not met, the company may still qualify as an express applicant but will generally be required to prepare a simplified AIM admission document. As a result, the reforms extend beyond companies quoted on specified markets, but the amount of AIM-specific documentation required will depend on the applicant’s circumstances.

A new route for dual-market applicants

The reforms also introduce a separate dual-market applicant route.

This applies where an applicant:

ü is being admitted to AIM concurrently with admission to an Express Market

ü is publishing a document in connection with its admission to that Express Market

ü is undertaking an equity fundraise of at least £6 million, or the equivalent amount in another currency, as part of its initial public offer in connection with its admission to an Express Market.

The document published for the Express Market admission may serve as the applicant’s AIM admission document, provided it also includes the supplementary information required by Schedule Two, Part Two of the AIM Rules.

For an international business wishing to maintain a strong presence in its home or principal market while also accessing London investors, this creates a more credible framework for a coordinated dual-market IPO.

It allows the company to consider how two markets may support its capital-raising and strategic objectives, rather than necessarily treating the choice of listing venue as binary.

A dual-market strategy will still require careful planning. The company and its advisers will need to assess the compatibility of the relevant admission timetables, disclosure standards, accounting requirements, settlement arrangements and continuing obligations in each market.

Why AIM remains attractive

Against a backdrop of intense competition between global exchanges, the reforms are a reminder of what AIM continues to offer and why a more proportionate route to admission may matter for overseas companies.

Unlike many international exchanges, AIM has long been accustomed to supporting founder-led growth companies, acquisitive businesses and international issuers. For companies seeking access to public capital without necessarily moving into a framework designed primarily for the world’s largest listed groups, that combination remains distinctive.

Few growth markets can point to a comparable track record of capital formation, secondary fundraising activity and support for acquisitive growth companies. AIM has attracted businesses from a broad range of jurisdictions, sectors and stages of development while developing an investor and advisory community experienced in supporting smaller and growing public companies.

For international companies, those benefits may include:

access to UK and international growth investors
the potential to enhance the company’s profile beyond its domestic market
a platform for future equity fundraising
the ability to use publicly traded shares as acquisition consideration
a public market platform that may support wider financing opportunities
a potential liquidity mechanism for existing shareholders.

Which companies should be considering AIM?

The new route may be particularly attractive for:

international technology companies seeking access to specialist growth investors
healthcare and life sciences businesses pursuing international expansion
natural resources and energy companies seeking to broaden their investor base
founder-led businesses considering public capital as part of their next phase of growth
acquisitive companies seeking an additional form of transaction currency
companies planning simultaneous public offerings in London and another jurisdiction
established overseas-listed issuers seeking greater visibility with UK investors.

Not every company within these categories will be appropriate for AIM or benefit from dual admission. The decision should be based on the company’s objectives, investor proposition, expected trading liquidity, governance arrangements and the costs and obligations associated with maintaining quotations on more than one market.

Part of a wider package of reform

The Express Market route forms part of a broader package of changes intended to modernise AIM, including reforms that:

permit incorporation by reference within admission documents
replace the traditional working capital statement with more targeted financial disclosure
permit the use of UK GAAP and, potentially, equivalent accounting standards rather than requiring accounts to be reported under IFRS
support founder-led businesses through permitted special voting share structures
simplify various aspects of the admission process.

Taken together, these changes are intended to reduce unnecessary cost, complexity and duplication while retaining the nominated adviser-led model that has long distinguished AIM from other growth markets.

For further information regarding these reforms, please see our insight.

Time to revisit AIM?

The strategic message from the reforms is clear: AIM has widened the international audience with which it is prepared to engage and created a more proportionate admission framework for companies that have already established their credentials on another public market.

The reforms reduce unnecessary friction, but companies will still need to satisfy the AIM Rules, applicable securities laws and any relevant home-market obligations. For international companies that may previously have dismissed AIM as unavailable, overly complex or insufficiently differentiated from their existing listing, the revised AIM Rules provide a compelling reason to revisit that analysis.

Shoosmiths’ Public Markets team advises companies, investment banks, nominated advisers and other market participants across IPOs, secondary fundraisings, public M&A and ongoing listed company matters. We regularly support transactions involving international operations, cross-border shareholder bases and multi-jurisdictional execution. That cross-border experience is particularly valuable when assessing how AIM fits within an international company’s wider growth, financing and shareholder strategy.

For overseas listed and internationally ambitious companies, the reforms create a timely opportunity to revisit AIM as part of a broader capital markets strategy. We can help assess whether the new Express Market route is available, how it compares with other listing options and the practical steps needed to deliver an AIM admission or dual-market transaction.

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Supreme Court upholds Right to Manage claim despite procedural breach

Fri, 28 Aug 2026 00:00:00 +0100

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Supreme Court upholds Right to Manage claim despite procedural breach

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Readers with an interest in leasehold management will be aware of the long-running dispute in Avon Freeholds Ltd v Cresta Court E RTM Co Ltd where a freeholder challenged the validity of an RTM notice on the basis of a procedural irregularity.

Published: 28 August 2026
Author: Laura Kent

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We now have the final word from the Supreme Court, confirming that a Right to Manage company can give a valid claim notice even where it has failed to serve a Notice of Participation on all qualifying tenants.

Background

The facts of the case are simple. Avon, the freeholder of Cresta Court, granted Ms O’Connor a long lease of Flat 17 on 17 April 2020. As is not uncommon, it was some time before the new lease was registered with HM Land Registry – with the consequence that, during the registration gap, there was no express mention of the lease on the freehold title (although there were pending applications for registration against the title, which were not investigated).

In the meantime, the RTM company was formed to acquire the right to manage a self-contained part of Cresta Court – including Flat 17.

Under s.78(1) of the Commonhold and Leasehold Reform Act 2002 (CLRA), at least 14 days before giving a claim to acquire the right to manage, an RTM company must first give notice (a notice of invitation to participate or NIP) to each person who, at the time the notice is given:

(a) is the qualifying tenant (QT) of a flat contained in the premises,

but

(b) neither is nor has agreed to become a member of the RTM company.

The NIP enables QTs who are not already part of the RTM company to make an informed choice about whether to join in the acquisition of the right to manage the premises in which their flat is located. QTs do not need to respond to the NIP.

In this case, the RTM failed to give notice on Ms O’Connor, because it had no record of her interest. It then gave Avon notice of its claim to acquire the right to manage.

Section 79(2) of the Act states that:

“The claim notice may not be given unless each person required to be given a notice of invitation to participate has been given such a notice at least 14 days before.” [our emphasis]

There was some dispute in the lower courts as to whether, as an equitable tenant during the registration gap, Ms O’Connor was a qualifying tenant under s.75 CLRA. It was determined by the courts that she was and therefore entitled to receive an NIP.

The remaining question, decided differently in each court, was therefore: did the procedural failure by the RTM company to give a NIP to every qualifying tenant mean that the claim notice couldn’t be validly given?

1) The First-tier Tribunal decided that the claim could be validly given: because the RTM had no actual knowledge of the existence of Ms O’Connor’s lease, and had served NIPS on all other QTs.

2) The Upper Tribunal agreed: but on the basis that the claim was neither wholly valid nor wholly invalid, but voidable at the instance of the tenant. Here, Ms O’Connor had subsequently given her consent to become a member of the RTM, but after notice of the claim was given to Avon.

3) The COA decided that the claim notice was invalid: because it considered that the clear effect of s.79(2) CLRA was that a failure to give a NIP to all QTs meant the claim notice may not be given, and that such an interpretation didn’t give rise to any absurdity.

Supreme Court decision

The decision of the Supreme Court (SC), handed down yesterday, confirms that the RTM company’s failure to give Ms O’Connor a NIP did not invalidate its claim.

The SC was willing to take a more broadbrush approach, focussing on the interplay of the provisions of CLRA – an Act in which various other inaccuracies are expressly stated not to give rise to invalidity (for example incorrectly including persons who are not QTs).

The difference between the SC and COA decisions was the narrowness of their readings of s.79(2). The SC distinguished the obligation to give a NIP to all QTs (s.78(1)) from the separate obligation to leave 14 days before serving the claim in s.79(2).

The SC put particular weight on the overall purpose of the statutory scheme, noting that, if (as the COA held) the claim were a complete nullity for all purposes, the whole RTM process would fall down: the landlord would not be able to give a valid counter-notice because there was no valid claim, and the RTM company would not be able to invoke the FTT’s jurisdiction to resolve a dispute about its entitlement to acquire the right to manage – not least because entitlement must be shown at the ”relevant date”, which is the date that the claim notice is given.

Instead, following the UT decision, the Court relied on the Soneji principle: where there is no express statement of the consequences of a failure to comply with a statutory procedural requirement, the court must infer Parliament’s intentions.

On the facts of this case, the SC held that there was no basis for saying that the defaults in procedure caused Avon, Ms O’Connor or anyone else any prejudice. Maintaining a narrow interpretation would have enabled persons to defeat the transfer of the right to manage on strict procedural technicalities.

Comment

Interpretation of leasehold legislation is generally tilted in favour of qualifying tenants, in order to ensure that the process is just and fair towards what are often individuals seeking better management of the buildings in which their homes are located. Lord Briggs, giving the main judgment, describes invalidity as “taking a blunderbuss to a shooting gallery” [para 59], considering that giving discretion to the court whether to impose any sanction on minor procedural defaults would be more appropriate.

Limited importance was placed on the fact that Ms O’Connor later joined the RTM, but it is worth wondering whether there would have been a different decision if she had opposed or been neutral. As the SC decision notes however, the lateness of the addition of one member – or a decision by a member not to join – would do nothing to improve or weaken the RTM’s claim if the requisite number of QTs are in favour, as QTs have no statutory right to object.

For those of us at the front line, it also is worth noting Lord Briggs’s comments at para.35(v). It can be complicated to work out which parties are qualifying tenants, but limited weight was given to the “much ink [spilt] and time spent in advocacy” arguing over the ways in which one might determine the correct QTs. Whilst prospective applicants will still need to check the identity of relevant QTs before starting an RTM claim, the decision shows that a minor oversight is not fatal.

If you have any questions on right to manage claims, or residential leasehold management more widely, please contact Lucy Walsh, Legal Director.

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The return of venture discipline: what deal terms reveal beneath the funding rebound

Fri, 28 Aug 2026 00:00:00 +0100

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The return of venture discipline

What deal terms reveal beneath the funding rebound

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The UK venture market has entered a markedly different phase from the challenging conditions that characterised much of the period between 2022 and 2024. Funding activity has recovered, larger rounds are returning and investors continue to compete for the highest-quality opportunities, particularly in AI, DeepTech and other technology-led businesses capable of demonstrating genuine scale and market leadership. What is striking, however, is that improved market conditions have not resulted in a material softening of deal terms.

Published: 28 August 2026
Authors: Alistair Hammerton

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One of the defining features of the current market is the concentration of capital around a smaller number of businesses. Shoosmiths is seeing increased investor appetite for companies with proven execution, differentiated technology and a credible route to scale. Whilst funding conditions have improved, competition for capital remains highly selective, with the strongest AI-led businesses attracting a disproportionate share of investor attention. Yet despite this improving funding environment, Shoosmiths’ proprietary data shows little evidence that investors have relaxed their approach to founder alignment, governance or downside protection.

The result is a more mature venture market. Capital is available for strong businesses, but investors remain highly focused on how value is protected, how management teams are incentivised and how future liquidity can ultimately be achieved.

Market trends emerging from Shoosmiths' deal data

Technology, including AI, remains the largest sector across Shoosmiths’ dataset, accounting for 48% of all deals in 2026. However, the trend is more nuanced than a simple story of technology dominance. Technology represented 60% of all deals in 2024 and 56% in 2025, before reducing to 48% in 2026. The position differs significantly by deal size. Technology represents 67% of the £5m–£10m segment in 2026 but only 33% of transactions exceeding £10m. That suggests larger venture transactions in Shoosmiths’ dataset are drawing in a broader range of sector themes than earlier-stage rounds. However, that does not mean capital is becoming more evenly distributed. Shoosmiths continues to see strong investor appetite for AI, DeepTech and other technology-led businesses with clear routes to scale. Whilst interest in sectors such as energy, infrastructure, healthcare and advanced manufacturing is increasing, much of that activity is itself being driven by technology and AI-enabled innovation.

More interesting, however, are the trends emerging from deal terms.

Founder leaver provisions remain a standard feature of venture transactions. They appear in 83% of all deals in 2026 and in every £5m–£10m and £10m+ transaction in the dataset for that year. More revealing, however, is how those provisions are structured. Across all deals, two-category leaver frameworks have become the dominant approach, appearing in 67% of 2026 transactions. The same trend is even more pronounced in the £0–5m and £5m–£10m brackets, where two-category structures appear in 78% and 100% of deals respectively. By contrast, the £10m+ market shows greater sophistication, with three-category leaver structures appearing in 83% of deals in 2026.

The same emphasis on management commitment can be seen elsewhere in the data. In 40% of Shoosmiths’ ECVC transactions recorded so far in 2026, 100% of the relevant founder shareholding remained at risk if the founder ceased involvement with the business. Whilst lower than the 66% recorded in 2024, it nevertheless demonstrates that investors continue to treat long-term founder retention as a core investment consideration rather than a peripheral governance point

That distinction is significant. Smaller and mid-market transactions continue to favour relatively straightforward good leaver/bad leaver frameworks, whereas larger transactions increasingly adopt more nuanced approaches that distinguish between different circumstances of departure (at least partially) and seek to reward value built to date. As cheque sizes increase, investors appear more willing to tailor founder retention mechanics rather than rely on a single, binary outcome.

Exit control is another area where investor discipline remains clear. Across all deals, drag thresholds set at 50–59% increased from 44–45% between 2023 and 2025 to 61% in 2026. At the same time, investor consent rights remain highly prevalent, appearing in 83% of all deals in 2026 and in all £5m–£10m and £10m+ transactions within the dataset. Investors appear increasingly focused on ensuring that successful businesses have a practical route to liquidity whilst retaining an appropriate degree of control over when and how that liquidity event occurs. As businesses remain private for longer and shareholder bases become more complex, exit execution continues to be an important consideration in venture deal structuring.

Liquidation preferences remain prevalent across the market, with non-participating preferences representing the clear market standard for most of the period covered by the data. Across all deals, non-participating preferences accounted for 54% of transactions in 2023, rising to 57% in 2024 and 64% in 2025. The trend is even more pronounced in larger transactions, where non-participating preferences appeared in 86% of £10m+ deals in both 2024 and 2025.

The 2026 figures present a more mixed picture, although caution is required when drawing conclusions from a partial-year dataset. Participating preferences account for a higher proportion of the 2026 data than in previous years. However, the broader trend continues to point towards non-participating preferences as the prevailing market position, particularly in larger transactions..

Other terms reinforce the same theme. Vesting arrangements remain widespread, with the market continuing to converge around three- to four-year vesting periods. In 2026, 47% of all deals with vesting provisions used a 37–48 month period, with a further 33% adopting a 25–36 month period. Option pools also remain an important feature of venture transactions. Whilst the precise mechanics vary by deal size and stage, the underlying objective is consistent: ensuring management teams remain committed to long-term value creation and that businesses retain sufficient equity to attract future talent.

How this compares with the wider market

The trends visible in Shoosmiths’ data are consistent with what we are seeing more broadly across the venture ecosystem. Funding conditions have improved significantly, but much of that capital is flowing into a smaller number of higher-quality businesses with a strong AI bias. Investors continue to focus on companies with differentiated technology, strong execution and clear routes to scale, whilst larger and later-stage transactions are attracting increasing levels of international capital. The market's recovery has therefore been highly selective rather than broad-based.

That helps explain why deal terms continue to exhibit a high degree of discipline. Investors are prepared to commit capital, but they remain focused on governance, founder retention and liquidity. The data suggests that improving market sentiment has not materially reduced the importance of those issues. If anything, larger and more competitive financing rounds often involve more sophisticated alignment and control mechanisms than smaller transactions.

Another notable development is the growing focus on liquidity. As companies remain private for longer, investors, founders and employees are increasingly exploring structured liquidity opportunities alongside primary fundraising rounds, such as secondary transactions and the emergence of PISCES. That trend helps explain why issues such as drag rights, shareholder alignment and exit mechanics continue to feature prominently in venture transactions. The ability to secure an eventual liquidity event is becoming a more important consideration from the outset, particularly in larger and later-stage financings.

What happens next?

The next phase of the venture market is likely to be characterised by continued selectivity rather than indiscriminate growth. AI and DeepTech businesses will continue to attract significant investor attention, but strong companies operating in other sectors should also benefit from improving market conditions but only where they can demonstrate genuine differentiation and a credible path to scale.

For founders and management teams, the message is clear: governance, alignment and liquidity planning are no longer secondary considerations. Investors are paying close attention to founder retention mechanisms, exit rights and downside protection from the outset of a transaction. For investors, the challenge will be balancing that discipline against competition for the highest-quality opportunities.

The market has undoubtedly recovered. Shoosmiths' proprietary data suggests, however, that investors have not forgotten the lessons of the last few years. Capital is flowing again, particularly towards AI, DeepTech and other high-growth technology businesses. Shoosmiths' data suggests, however, that investors have not responded by relaxing the underlying mechanics of the deal. Founder retention, investor protection and exit execution remain central themes. The flow of capital may have changed, but discipline remains firmly embedded in venture deal terms.

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Shoosmiths advises on Labyrinth Laboratories strategic partnership

Thu, 27 Aug 2026 00:00:00 +0100

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Shoosmiths advises on Labyrinth Laboratories strategic partnership

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Shoosmiths has advised the management team of Labyrinth Laboratories Holding Limited (Labyrinth), one of the UK's leading dental laboratory groups, on a strategic partnership Ethos Partners LLP (Ethos). The transaction completed on 20 August 2026 and will support the next phase of growth for the business.

Published: 27 August 2026

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Headquartered in Birmingham, Labyrinth is the fourth largest full-service dental laboratory in the UK, serving more than 2,000 dentists nationwide across the NHS and private sectors. The business has developed a strong reputation for quality, service and innovation, supported by its digitally enabled manufacturing platform and adoption of technologies including intraoral scanning, CAD/CAM and 3D printing.

The partnership will support the continued growth of the business, with founders Michael Coldicott, Kuldip Bhandal and Jeffrey Rabone continuing to lead the company and drive its strategic vision. Labyrinth will be chaired by Zak Smith, who joined the board in early 2025 to support the group’s growth strategy. Zak has previously scaled and been involved in the sale of two independent dental chains and brings deep sector experience, strategic insight and an extensive network to the business.

The Shoosmiths team was led by Partner David Meisel with support from Partner Alison Chivers, Legal Director Natalia Tombs, Senior Associate Hugh White and Associate Sarah Palmer.

David Meisel, Partner at Shoosmiths, said:

"It was a pleasure to support the management team on this important transaction. Labyrinth has built an impressive business with a strong reputation across the sector, and this partnership provides an exciting platform for future growth and innovation."

Zak Smith, Chair of Labyrinth Dental, said:

"We're delighted to be embarking on this next chapter with Ethos. We'd like to thank the Shoosmiths team for their support throughout the process, providing practical and commercial advice that helped us achieve a successful outcome."

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Shoosmiths advises AVK on £1bn Partners Group investment

Tue, 25 Aug 2026 00:00:00 +0100

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Shoosmiths advises AVK on £1bn Partners Group investment

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Shoosmiths has advised the selling shareholders of AVK Power Solutions ("AVK”), one of Europe’s largest and fastest-growing suppliers of power solutions for data centres and AI infrastructure, on the sale of their shares to the Swiss based private equity house, Partners Group, who will acquire a majority stake in the business and intends to invest more than $1 billion of equity, backed by debt financing, to accelerate AVK’s expansion.

Published: 25 August 2026

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Headquartered in the UK, AVK designs, installs and maintains power solutions for data centres, including back-up power generation, behind-the-meter energy infrastructure and modular electrical power units. The business has delivered more than 20,000 projects and installed approximately 3.5 GW of power to date, with operations spanning established and emerging data centre markets across Europe.

The investment will support AVK’s continued growth as demand for data centre infrastructure accelerates across Europe, including the development of the business into an infrastructure platform providing long-term Energy-as-a-Service solutions to data centre operators. AVK’s management team will retain a minority stake in the business.

Shoosmiths advised AVK on all aspects of the transaction. The team was led by Partners Stephen Porter and Claire Checketts, with support from Principal Associates Adam Frost and Sarah Mitchell, Senior Associate George Peyton, Associates Olivia Ashcroft and Sam Enderby, and Trainee Solicitor Maddie Fretwell. Partner Laura Gould advised on tax and Partner Stuart Lawrenson on employment matters.

Stephen Porter, Partner at Shoosmiths, commented: “We are delighted to have advised AVK’s shareholders on this key transaction. AVK has a strong position in a market that continues to see significant appetite for growth, and this investment will enable the business to meet this demand with new innovations. We look forward to seeing AVK continue to deliver the best outcomes for its clients and partners alongside Partners Group.”

Ben Pritchard, Chief Executive Officer of AVK, commented: “AVK’s new partnership with Partners Group and the addition of capital to our power solutions portfolio, is an exciting new chapter for the business, allowing us to turn speed-to-power from an ambition into action and for AVK to meet our customers exactly where the data centre sector and power market demands. We are grateful to the whole team at Shoosmiths for their dedication and support in helping deliver this transaction. Their expertise and calm, pragmatic and solutions-focused approach throughout, meant they proved to be trusted advisers to AVK from start to finish.”

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Shoosmiths bolsters digital regulation offering with new partner hire

Mon, 24 Aug 2026 00:00:00 +0100

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Shoosmiths bolsters digital regulation offering with new partner hire

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Shoosmiths is pleased to announce the hire of Oscar Tang as a Partner, within the firm's Privacy & Data team, part of Shoosmiths’ market-leading Commercial Group. He will split his time between the firm’s London and Brussels offices.

Published: 24 August 2026

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Oscar strengthens the firm’s digital regulation capability and deepens its expertise across key sectors including Technology & AI. Oscar joins Shoosmiths from Clifford Chance, bringing over a decade of experience advising clients on digital regulation across safety and security regimes, from online safety and platform regulation under the Online Safety Act and Digital Services Act, to EU and UK cybersecurity regulation. His client base spans major global technology platforms, online brands, financial institutions and platforms, and media, aerospace and electronics businesses.

Oscar has particular strength leading on complex Big Tech mandates including investigations before the European Commission, Ofcom, and other technology and consumer regulators. He also has an established practice advising APAC and Chinese businesses. His addition enhances Shoosmiths' global capabilities and offerings across its key sectors, including Technology & AI, Financial Services and Consumer & Retail.

Robin Webb, Partner and head of Shoosmiths’ Commercial Group, said: “We’re thrilled to welcome Oscar to Shoosmiths. We’re seeing sustained and premium demand in areas like digital and platform regulation, cybersecurity and AI, and Oscar’s arrival deepens what we can offer our international clients. He has a remarkable track record advising leading technology companies and is consistently trusted to deliver on complex, global mandates on risk and regulation, a priority area for the firm as we continue to progress our 2030 growth strategy.”

Commenting on his appointment, Oscar said: “Most of the rules governing our online lives and digital platforms are being written as we speak. That work, whether in protecting online business or AI, needs lawyers who can read the technology as well as statute, and engage in the right policy conversations, globally. Shoosmiths is building for exactly that, and I am glad to be joining colleagues already doing the work here and across the Asia Pacific.”

Shoosmiths continues to see strong growth in London, adding 17 partners since April 2025, including AI and technology lawyer Sarah Reynolds and IP lawyer France Delord. The appointments of Corporate Partners Kurt Ma and Wei Wu will bring Shoosmiths to three ESEA partners supporting an expanding APAC presence and business. Also, the appointments bolster the firm’s capability to manage both national and international mandates across the firm’s core practices and key sectors.

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Shoosmiths advises on strategic restructure of car park portfolio following NCP collapse

Thu, 20 Aug 2026 00:00:00 +0100

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Shoosmiths advises on strategic car park portfolio restructure

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Shoosmiths has advised Lysara on the restructure of its UK car park portfolio following the administration of National Car Parks Limited (NCP), delivering a complex, multi-disciplinary transaction involving 30 sites across the UK.

Published: 20 August 2026

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The properties were fully let to NCP prior to its administration. Working closely with Lysara, Shoosmiths supported the implementation of a new long-term operating strategy, including the grant of new leases to Q-Park across 20 sites and management agreements with Apex Parking for a further 10 locations.

The transaction supports Lysara's strategy to enhance the long-term performance of the portfolio through strengthened operational arrangements, investment in technology and infrastructure, and improved customer experience. It also creates flexibility for future initiatives, including the potential introduction of electric vehicle charging facilities.

The project involved expertise from across Shoosmiths' Real Estate, Commercial, Real Estate Litigation, Competition, Employment and Restructuring teams. The Shoosmiths team was led by client partner Nathan Rees, Chris George and Kathryn Kinsey, supported by colleagues from across the firm.

Nathan Rees, Partner at Shoosmiths, said:

"This was a complex transaction delivered against a challenging and evolving backdrop. By bringing together expertise from across the firm, we helped Lysara implement a long-term solution that supports its strategic objectives and positions the portfolio for future growth. The project demonstrates the value of an integrated approach, combining legal expertise, sector knowledge and technology to deliver complex transactions efficiently and at scale."

Scott Parsons, chief executive of Lysara, said:

“Shoosmiths combined commercial insight, innovative thinking and deep sector expertise to help us deliver a highly complex transaction. Their collaborative approach and seamless teamwork provided real value throughout the process, enabling us to achieve our objectives efficiently and with confidence. They proved a trusted partner at every stage.”

The transaction highlights Shoosmiths' ability to support clients through significant real estate, operational and restructuring-related projects, providing seamless advice across multiple practice areas to deliver strategic outcomes in complex market conditions.

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Shoosmiths advises Livingbridge on Hg's investment in Nourish Care

Thu, 20 Aug 2026 00:00:00 +0100

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Shoosmiths advises Livingbridge on Hg's investment in Nourish Care

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Shoosmiths has advised Livingbridge and management on the sale of Nourish Care (“Nourish”) to private equity firm Hg, one of the world’s largest software and services investors. Shoosmiths also advised Livingbridge and management on their respective reinvestments into the business. The investment marks the beginning of the next chapter of growth for one of the UK’s most impactful care technology providers.

Published: 20 August 2026

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The transaction represents a successful outcome for Livingbridge’s Enterprise 3 fund and will support Nourish in continuing the evolution of its products and services which improve customer experience, support front-line carers and enable the delivery of safer, high-quality care at scale. Livingbridge will retain a minority equity stake and continue to support the business alongside Hg.

Founded in 2011, Nourish supports care teams to plan, record and coordinate care with the person receiving support at the core of care delivery. Through its continued focus on innovation, the business has established itself as a trusted partner to many of the UK's leading care providers.

Partners Dan Shilvock, Holly Hirst and Senior Associate Alice Richmond led on the sale process and Livingbridge reinvestment, with further support from Partners Tim Nye and Elizabeth Ward. The advice in connection with the management reinvestment was led by Partner Kiran Dhesi and Senior Associates Nathan Turley and Molly Cullen. Advice was also provided by Associates Kamil Piekarski, Uzoma Udoyeh and Connor Ogdon.

Dan Shilvock, Partner at Shoosmiths, commented: “We are delighted to have advised on this significant transaction working with Livingbridge, Nuno and the Nourish team. Having supported Livingbridge on the initial investment in 2022, it has been exciting to watch the business become one of the UK’s leading care technology platforms. The commitment of Nuno and his team to improving care outcomes and Nourish’s mission of delivering better care for everyone have underpinned that growth, and we look forward to seeing the business continue its success alongside Hg with continued support from Livingbridge.”

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Shoosmiths advises shareholder of Phoenix ME on investment by H.I.G. Capital

Wed, 19 Aug 2026 00:00:00 +0100

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Shoosmiths advises on Phoenix ME investment deal

Supporting the shareholder on H.I.G. Capital's investment

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Shoosmiths has advised the shareholder of Phoenix ME Limited (“Phoenix ME”), a leading provider of integrated mechanical and electrical engineering system design, installation and commissioning services, on an investment by H.I.G. Capital, a global alternative assets investment firm.

Published: 19 August 2026

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Founded in 1931, Phoenix ME has developed a strong industry reputation among its core client base of data centre, life sciences and commercial end markets for its high quality and reliable service. The investment will support the acceleration of Phoenix ME’s growth strategy, strengthening its position in high-growth sectors like data centres and expanding its presence across the UK and Europe.

Shoosmiths advised on all legal aspects of the transaction, including Phoenix ME CEO Lee Compton’s reinvestment in the business. The team was led by Partner Amit Nayyar and supported by Partner Claire Checketts, Principal Associate Sarah Mitchell, Senior Associate Alice Richmond, Associate Jake Bowdler and Associate Georgia Edmondson. Tax support was provided by Partner Laura Board and Associate Thomas Wilkinson, and Senior Associate Charis Brown advised on employment matters.

Amit Nayyar, Partner at Shoosmiths, commented: “We’re pleased to have advised on the sale of Phoenix ME to H.I.G. Capital. The business has built a remarkable reputation for over 90 years and is well positioned to take the next steps in its growth journey. The acquisition reflects the continued investor appetite and desire for high-quality, specialist services businesses with a positive trajectory.”

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Consultation on the withholding tax regime: What you need to know

Tue, 18 Aug 2026 00:00:00 +0100

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Consultation on the withholding tax regime

What you need to know

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The UK Government is consulting on the simplification of the UK withholding tax regime. One of the changes being mooted is a move towards a ‘self-assessment’ style system whereby UK borrowers assess whether the conditions for relief from UK withholding tax are met rather than applying for, and relying on, directions from HMRC to this effect.

Published: 16 August 2026
Author: Thomas Wilkinson & Laura Gould

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Background

The UK Government quietly launched a consultation in July 2026 regarding withholding tax on payments of interest made to overseas lenders. The aim of the consultation is to seek views on whether the administration of treaty relief from the UK’s withholding tax (WHT) regime could be simplified without resulting in a loss of tax.

The government acknowledges that the current system can be “costly and challenging to navigate”; we agree with this comment - in our experience, the current system can be complex, costly and time consuming.

The current system

At a high level, where treaty relief is considered to apply, a UK borrower is required to withhold tax at the basic rate (20%) from UK source yearly interest payments made to an overseas lender on account of that overseas lender’s UK tax liability unless HMRC provide directions that the borrower may make a payment to the overseas lender gross of UK WHT (subject to some exemptions).

In practical terms, where an overseas lender is ‘passported’ (i.e., it has a DTTP number), a borrower can submit a DTTP2 application to HMRC requesting directions that interest may be paid gross of UK WHT (or at a reduced rate depending on the terms of the double tax treaty between the UK and the jurisdiction of the relevant overseas lender). If the lender is not ‘passported’ but is nonetheless entitled to treaty relief in relation to interest payments it receives from a UK borrower, a standard double tax treaty application must be submitted to HMRC before interest can be paid to the overseas lender gross of UK WHT – it can take HMRC many months to process these applications.

Until HMRC issue directions to a borrower that it may pay interest to an overseas lender gross of UK WHT, the borrower is not entitled to make interest payments to an overseas lender without withholding tax at the basic rate, even if it is quite clear that the relevant conditions for treaty relief are met.

This can lead to increased costs for borrowers who are usually required to "gross up" the lender under facility agreements until a direction is received. Where treaty relief is sought, due to the length of time is takes to obtain a direction outside of the DTTP scheme, the first interest payment date may need to be pushed back to enable a borrower to make the payment free of withholding tax. Relying on alternative WHT exemptions may also need to be explored.

In other words, under the current system, HMRC acts as gatekeeper and their advance clearance is required before interest payments may be paid subject to treaty relief.

A move towards borrower ‘self-assessment’?

To simplify the regime, the consultation seeks views on, amongst other things, a move towards a ‘self-assessment’ style system. Under this system, a borrower would assess whether the conditions under the relevant double-tax treaty between the UK and the overseas lender’s jurisdiction are met and, assuming it considers the relevant conditions are met, the borrower could make the interest payment(s) gross of UK WHT to the overseas lender without directions from HMRC.

This would certainly represent simplification for HMRC as they would no longer be required to consider these applications and issue directions to borrowers in response to the same.

In some respects, this would also offer simplification for UK borrowers in that they would likewise no longer be required to deal with the administrative burden of submitting DTTP2 applications to HMRC. However, this would shift a different type of compliance burden onto borrowers as they would need to assess whether they consider, ahead of making an interest payment to an overseas lender, whether the relevant conditions for relief are met such that they can legitimately make these payments gross of UK WHT. If borrowers get that assessment wrong, HMRC could seek the underlying tax which should have been withheld as well as penalties and late payment interest from the borrower.

Additionally, since HMRC are keen to maintain effective reporting requirements “even where no UK tax is payable”, any move to a self-assessment style system would likely see additional reporting requirements for borrowers.

Concessionary treatment where things have gone wrong

As mentioned, HMRC ‘gatekeep’ the WHT regime and issue directions providing that borrowers can make interest payments to overseas lenders gross of UK WHT (or at a reduced rate) if they are satisfied that the necessary conditions for relief are met under the relevant double tax treaty between the UK and the overseas lender’s jurisdiction.

Up until recently, HMRC operated a concessionary treatment under which, where interest was paid to an overseas lender gross of UK WHT (or at a reduced rate) without the necessary directions from HMRC, but the conditions for relief under the relevant double tax treaty were met, HMRC would not seek to recover the underlying tax from the borrower and would instead seek to recover only late payment interest and penalties.

This felt like a fair and common-sense approach – after all, HMRC are not ultimately entitled to this tax as the overseas lender’s jurisdiction has taxing rights over the interest pursuant to the double tax treaty. The borrower simply failed to get the necessary directions in place ahead of making the interest payment gross (or at a reduced rate) to the overseas lender.

However, this concession is currently paused and is flagged as being not within scope of the consultation. That is not particularly surprising because if there was a move towards a self-assessment style system, there would be no need for the concessionary treatment.

Either a UK borrower:

correctly determines that full or partial treaty relief is available and makes the appropriate payment to the overseas lender; or
incorrectly determines that full or partial treaty relief is available and makes a payment to an overseas lender gross of withholding tax or at a reduced rate. Since this was incorrect and withholding tax was indeed due, the borrower is rightly liable for the UK WHT that should have been withheld – the concessionary treatment would not offer the borrower any forbearance in this scenario in any event.

Conclusion

We agree that the current system is complicated and ripe for simplification – a move towards a ‘self-assessment’ style regime therefore appears to be sensible and there is precedent for this in relation to royalties.

However, this will mean that borrowers will be required to take on the risk of assessing whether the conditions for relief from UK WHT are met – with potentially significant tax liability (as well as interest and penalties) if borrowers get that assessment wrong. Clearly, a borrower’s assessment of the UK WHT position can only be as robust as the information provided to it by the overseas lender in question – naturally, if a ‘self-assessment’ style regime is adopted, loan documentation will have to carefully consider how to allocate risk on this point between borrowers and overseas lenders.

HMRC are clearly nervous about the potential for a loss of tax arising from a simplification of the regime and are consulting on potential safeguards which can be put in place to ensure compliance. There is a delicate balancing act here – if the compliance requirements on borrowers are particularly onerous under any new regime, this will limit the extent to which the UK WHT regime has been simplified and risks swapping one type of administrative complexity for another.

The consultation closes on 7 September 2026 and HMRC's next steps will be watched with interest by banks, private equity sponsors, and multinational groups amongst others.

If you would like to discuss the potential impact of the consultation on your financing arrangements, please contact a member of the Shoosmiths tax team.

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Technology team contributes to Legal 500 Comparative Guides

Mon, 17 Aug 2026 00:00:00 +0100

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Technology team contributes to Legal 500 Comparative Guides

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Shoosmiths has authored the UK chapters of Legal 500’s AI and TMT Country Comparative Guides 2026, reflecting its work across AI, technology, telecommunications, cybersecurity and emerging technologies. The guides provide a pragmatic overview of the law and practice of technology law across a variety of jurisdictions.

Published: 17 August 2026

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Joe Stephenson, Partner, and Stefanie Hughes, Professional Support Lawyer, contributed to the Artificial Intelligence and Technology, Media & Telecommunications (TMT) guides, providing insight into the legal and regulatory developments shaping the UK technology landscape.

Artificial Intelligence Guide

The Artificial Intelligence Country Comparative Guide 2026 explores the UK's evolving approach to AI regulation, governance and adoption. The chapter themes cover:

the UK's AI strategy and implementation of the AI Opportunities Action Plan
transparency, explainability and disclosure obligations when deploying AI systems
human oversight and automated decision-making
liability for AI-related harm, including contractual liability, negligence and product liability considerations
intellectual property issues relating to AI-generated works and AI training data
workplace considerations, including algorithmic bias, employee monitoring and governance
privacy and data protection challenges associated with AI systems, including transparency, data minimisation, DPIAs and training datasets
the legal and regulatory implications of data scraping from both privacy and intellectual property perspectives

Read the AI Comparative Guide here: Legal 500: Artificial Intelligence Comparative Guide

Technology, Media & Telecommunications Guide

The Technology, Media & Telecommunications (TMT) Country Comparative Guide 2026 provides an overview of the legal and regulatory framework governing the UK technology sector. Topics covered include:

protection and ownership of software and technology-related intellectual property rights
legal and commercial considerations in software licensing, SaaS and cloud services arrangements
regulatory requirements affecting technology providers and regulated businesses, including operational resilience and outsourcing considerations
telecommunications regulation and cybersecurity obligations impacting UK networks and service providers
the UK's evolving data protection and cyber resilience landscape
artificial intelligence governance and the UK's principles-based regulatory approach
emerging regulation affecting blockchain and crypto assets, online platforms, search engines and social media services
new developments in areas such as spatial computing, quantum technologies and digital infrastructure

Read the TMT Comparative Guide here: Legal 500: TMT Comparative Guide

Continuing to shape the conversation

The guides reflect the firm’s commitment to providing practical, forward-looking legal insight to help clients address what matters now and prepare for what matters next across an increasingly complex technology, legal and regulatory environment.

Special thanks to Sarah Reynolds, Alex Kirkhope, Alice Wallbank, Claire Kershaw, Jo Tunnicliff and Nicky Jenkins for their contributions to the AI guide, and to Christian Cockcroft, Andrew Whalley, Nicky Jenkins, Liam Phillips, Matthew MacLachlan, Jo Tunnicliff, Felicity Forward, Sarah Reynolds, Manoj Peiris and Jon Smart for their input into the TMT guide.

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New AIM rules (August 2026)

Fri, 14 Aug 2026 00:00:00 +0100

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article | 7 min read

New AIM Rules (August 2026)

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The London Stock Exchange has implemented significant reforms to the AIM Rules for Companies and the AIM Rules for Nominated Advisers (AIM Rules), following consultations earlier in 2026 (see our post on the previous consultation here). The majority of the reforms consulted on have been adopted and the reforms, which became effective on 5 August 2026, represent the most comprehensive changes to the AIM Rules since the AIM market was launched in 1995.

Published: 14 August 2026
Authors: Oliver Pilkington

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The changes reposition AIM following changes to the UK Listing Rules implemented in July 2024 which had rendered the rules applicable to AIM companies similar, and in some areas more stringent than, those applicable to Main Market companies. The changes are intended to reduce regulatory burdens, improve access to capital and make AIM more attractive to founder-led and growth companies. The key changes are summarised below.

1. Admission process simplified

Working capital statements abolished

The requirement for an admission document to contain a formal working capital statement has been removed. Instead, issuers must provide disclosure regarding their capital resources, financial commitments and obligations, the use of proceeds of any fundraising undertaken on admission, and expected funding requirements over the 12 months following admission. Responsibility for assessing the company's financial position remains with the company and its directors.

Incorporation by reference permitted

Admission documents may now incorporate publicly available information by reference, which should help to reduce document length and duplication. Hyperlinks to the relevant information must be included in the admission document and such information must remain publicly available for as long as the admission document itself is required to remain available under AIM Rule 26.

Accounting flexibility

AIM applicants incorporated in the UK or EEA may now prepare and present their accounts in either IFRS or local GAAP. This is intended to avoid the need for accounts to be restated under IFRS in connection with an AIM admission which can add significantly to transaction costs and affect timing.

2. Capital access windows

AIM companies conducting an equity fundraising or other transaction involving the issue of AIM securities may request a temporary suspension of trading referred to as a "capital access window". The purpose of the capital access window is to give issuers a controlled environment to manage negotiations, reduce execution risk, and prevent market volatility or price shifts from derailing capital raises.

The Exchange has deliberately avoided prescribing minimum or maximum periods and will consider requests on a case-by-case basis. Companies remain subject to UK Market Abuse Regulation (MAR) and AIM Rules obligations during the suspension period.

3. Transaction rules modernised

Reverse takeovers narrowed

A transaction will only constitute a reverse takeover if it results in a fundamental change to the company's business, board or voting control. Exceeding 100% under any of the class tests is no longer, of itself, determinative. Instead, the Exchange expects consultation where the transaction exceeds 100%, is not a fundamental change and shareholder approval is not being sought. Decisions will be made on a case-by-case basis.

Substantial transaction threshold increased

The threshold for a substantial transaction has increased from 10% to 25%, aligning AIM with the UK Listing Rules.

Related party transactions

Participation in a fundraising by directors or substantial shareholders will no longer constitute a related party transaction provided (i) they participate on the same terms as other investors and (ii) the price is set either by directors not participating in the fundraising or by agreement with investors who are not related parties.

The definition of related party has been expanded to include: (i) any company one or more of whose directors is also a director of the AIM company; and (ii) any person with a 10% interest (or more) in an AIM company's subsidiaries and/or assets.

Nominated advisers are no longer required to provide a "fair and reasonable" opinion on non-standard remuneration arrangements where they are satisfied reasonable commercial protections exist for the AIM company and such protections are disclosed. Guidance has been added on what constitutes ‘standard’ and ‘non-standard’ remuneration and provides that, where a nominated adviser is not satisfied that reasonable commercial protections are in place, shareholder approval of any non-standard remuneration should be sought.

4. Ongoing Developments

Rule 11, which previously required general disclosure of price sensitive information, has been replaced with a new ‘Ongoing Developments’ rule which makes it clear that the disclosure regime under the AIM Rules is not intended to conflict with the disclosure regime under MAR. The new Rule 11 specifies that an AIM company must have in place procedures enabling it to monitor and identify any changes that may have a material impact on its business, must keep its nominated adviser updated regarding any such changes and have due regard to the views of its nominated adviser when considering its disclosure obligations under MAR.

The guidance to Rule 11 states that, when providing any view regarding market impact, a nominated adviser is undertaking its obligations to the London Stock Exchange and its view should therefore be considered authoritative. The guidance also provides that, where a nominated adviser considers that a change or development is likely to have a market impact but the AIM company decides not to notify the information without delay (and there is no basis to delay under article 17(4) of MAR) the AIM company and/or its nominated adviser must notify the Exchange immediately and provide the rationale.

5. Special voting shares permitted

AIM will now permit special voting shares at admission, allowing founders, management teams and pre-IPO investors to retain enhanced control rights. Enhanced voting rights may not be exercised in relation to (i) remuneration, (ii) related party transactions involving the holders of such shares or (iii) cancellation of admission.

Special voting shares cannot be issued, nor can the rights attached to them be extended, at any time after admission. A holder of shares with special voting rights may not transfer such rights to a person who would not have qualified to receive them at admission.

Unlike many other markets (including the Main Market), the Exchange has not imposed any mandatory sunset provisions or time limits. An AIM company may reduce or withdraw such rights at any time following consultation with the Exchange.

6. Corporate governance

AIM companies are no longer required to adopt a recognised corporate governance code or disclose how they comply with such a code under the "comply or explain" model.

Instead, AIM Rule 26 now requires disclosure across the following prescribed governance areas: (i) board composition, (ii) director roles, responsibilities and functions, (iii) remuneration and performance, (iv) risk and controls framework and (v) investor relations. The intention is to provide investors with sufficient understanding of governance arrangements without forcing AIM companies to comply or explain non-compliance with a pre-existing code.

7. Express market admission route

The existing Designated Market route has been replaced by a broader ‘Express Market’ route. This is intended to provide for a quicker and less onerous and admission process for companies already listed on an Express Market (essentially any market overseen by a member of the International Organisation of Securities Commissions. Express Applicants must (i) have had its securities traded on an Express Market for at least 3 years, (ii) not had any fundamental changes to its board or business in the last 12 months, (iii) have a proposed market capitalisation on admission to AIM of at least £20 million, and (iv) have any relevant admission documentation and all disclosure required under the rules of its home market published in English.

If you wish to discuss this article, please contact the author or your usual Shoosmiths contact. We are here to answer any questions you may have.

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