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As also mentioned under the Disputes section, the Leasehold and Freehold Reform Act 2024 (“LFRA 2024”) received Royal Assent in the wash up period of the last Parliament in May 2024.  Most provisions have not yet come into effect and secondary legislation is awaited.   From a transactional perspective, LFRA 2024 amends the law for houses and flats owned on leases of more than 21 years.  With some exceptions it will ban new leasehold houses, it increases the standard lease extension term for leasehold dwellings and brings in other tenant protection provisions.

For further details of the changes, please refer to our article Leasehold and Freehold Reform Act Published | Foot Anstey

The King’s Speech included a draft bill which will enact further reforms to abolish leasehold and reinvigorate commonhold as well as confirmation that they will implement LFRA.

LURA gives local authorities powers to arrange for a rental auction to be carried out in respect of qualifying high-street premises, with the objective of improving the high streets. The Local Authorities (Rental Auctions) (England) and Town and Country Planning (General Permitted Development) (Amendment) Regulations 2024 will come into force on 2 December 2024 and lay out the steps the Local Authority must take if it wants to auction a lease of a vacant High Street property.

The Government hopes the auctions will improve the areas in which the vacant premises are situated. It will however likely take many local authorities time to implement the regulations.

Please see this article for more information ‘Fair Warning’ for the High Street.

From 9 December 2024, Land Registry information services fees (including the cost of official copies and title plans) will increase by £4 per item. Changes to fees for HM Land Registry’s information services from December – GOV.UK

The Levelling Up and Regeneration Act 2023 (“LURA 2023”) included requirements for disclosure of contractual rights over land in England and Wales.  Secondary legislation will determine how the information will be requested but the requirements for disclosure will include key information such as the type of agreement, the parties involved, the date of the agreement and details of the solicitors involved in the transaction. This will impact certain land agreements including option agreements, conditional contracts and promotion agreements.  The Government consulted on draft regulations seeking views on the implications of collecting and publishing information on contractual control agreements. The consultation closed in March 2024.

Potential disclosure requirements in relation to contractual control agreements will mean that parties to such documents will have to supply more potentially sensitive commercial information. This will also cause further administrative steps for developers and their advisers to correctly file information in line with regulations.  If information is not provided or false information is given knowingly or recklessly, this could constitute a criminal offence under LURA 2023 which carries a maximum of 2 years imprisonment and an unlimited fine.

Given the change in Government, it is not yet clear whether these proposals will still be implemented.

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In 2021, the Government proposed to raise the minimum energy efficiency standard to C by 2027 and B by 2030. The government has since abandoned the requirement for an increasing minimum energy efficiency standard for domestic (that is, residential) properties but the position for commercial property is less clear.

The Government is yet to confirm whether it will implement the original plans. Developers will want to know whether existing property is exempt under the proposed changes and may consider undertaking works to improve their EPC rating in the long term.  They will also want to know the standard to which they must construct new properties.

Following concerns raised by the legal profession about the detail of the new 5th edition of form TA6 (the Property Information Form used for residential conveyancing transactions), the Law Society confirmed a dual approach until 15 January 2025, allowing firms to use the 4th or 5th edition.

The Law Society has now postponed compulsory use of the new form for an undetermined period while it reviews responses to its consultation with members of the Conveyancing Quality Scheme. A further update will follow in 2025. An open letter from the Property Lawyers Alliance has called for withdrawal of the 5th edition.

In the newly-formed Government’s first Budget, it was confirmed that the Ministry of Housing, Communities & Local Government (MHCLG) has launched a consultation around rent policies in the social housing sector. The proposals suggest setting a rent policy to remain in place for a minimum of 5 years from 1 April 2026 with an intention to set a further 5 year settlement for the period beyond this. The proposals would ‘generally’ permit social rent and affordable rent to increase by up to CPI plus 1 percentage point per year.

MHCLG seeks views on whether their proposals will have a positive impact on housing providers’ willingness to invest in new homes. This consultation will close on 23 December 2024.

On 30th October it was announced that 7 local authorities (including Fareham Borough Council and East Devon District Council) will receive approximately £45M in additional funding to implement nutrient mitigation measures. This is part of the Governments Local Nutrient Mitigation Fund (LNMF) which comprises £110M of Government funding to be committed to local authorities’ tackling of this issue as announced in the 2023 Autumn budget. On top of this, approximately another £4M in nutrient funding has been provided towards Councils’ capacity building and towards the management of the 20 largest nutrient neutrality catchments nationwide. Details of the Local Authorities benefitting from the funding can be found here.

These subsequent funding awards from the Ministry of Housing, Communities & Local Government represent both a continued commitment to supporting local authorities’ coordination of nutrient mitigation schemes, and a sustained recognition of nutrient mitigation’s importance to the nation’s wider goal of building £1.5M new homes in the next 5 years.

New guidance issued by PINS in October 2024 brings forward the timeline for submission of a planning obligation (Section 106 Agreement or Unilateral Undertaking) as part of the planning appeal process, in particular where dealing with a written reps appeal. The key points to note are as follows:

• All written reps appeals now need to be accompanied by a completed legal agreement at the point of submission. Local government resourcing likely to make this difficult. It will be key to ensure the S106 provides sufficient flexibility for the Inspector to strike out obligations that they do not consider are CIL Regulation 122 compliant.
• For hearings and inquiries a final draft agreed by all parties should be submitted to PINS “no later than 10 working days before the hearing or inquiry opens”. There is however some uncertainty around the requirements for inquiries and hearings as the summary guidance suggests that these types of appeals should also be submitted with a draft Section 106 Agreement but the detailed guidance does not.

On 1 November 2024, the UK Supreme Court granted permission to appeal the decision of the Court of Appeal in CG Fry & Son Ltd v Secretary of State for Levelling Up, Housing and Communities and another [2024] (the “Case“).
The Case considers the requirements to undertake an “appropriate assessment” of the effects of a project on nutrient neutrality. In its judgment, the Court of Appeal determined that a planning authority may require an appropriate assessment to be carried out at the discharge of conditions stage and the basis of the assessment would be the effects of the project as a whole.
The Court of Appeal’s decision will be reconsidered by the UK Supreme Court. We will continue to track the Case as it progresses to its final stage of appeal. For further information on the Court of Appeal decision, please see our article here.

The consultation on proposed reforms to the NPPF closed on 24 September 2024. There has been much speculation in the industry in respect of when the revised NPPF will be published with many predicting this will be in December this year. Government Ministers had initially indicated that this may be delayed until the New Year as a result of the many thousands of responses received to the consultation.

The High Court confirms that the seabed below the mean low water mark is not land subject to planning control.

In R (Parkes) v Secretary of State for the Home Department [2024], the High Court concluded that the Bibby Stockholm barge is not subject to planning control as the seabed below the mean low water mark is not “land” that is regulated by the Town and Country Planning Act 1990 (the “TCPA 1990”). The Court found:

• Neither the area of the seabed below the barge, nor Portland inner harbour, nor the internal waters in Weymouth Bay form part of Dorset Council’s area. Even if they did, the seabed above which it was moored did not constitute “land” as defined in section 336(1) of the TCPA 1990 as it did not expressly include the seabed beyond the mean low water mark. The position was the same under parallel Scottish planning legislation.
• Even if the Bibby Stockholm remained moored in one position for a substantial period, it could not become land or an accretion to land as it remained a chattel capable of being moved;
• A local planning authority does not have power to serve an enforcement notice in relation to development outside its area;
• There was no merit in the complaint that Dorset Council had failed to consider taking enforcement action. It had neither refused to do so nor was there a duty to reach a decision whether to take enforcement action within a specified timescale; and
• The positioning and use of the Bibby Stockholm did not qualify as a project that required an environmental impact assessment.

The case confirms that planning permission is not required for developments taking place on the seabed beyond the foreshore.

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In CG Fry & Son Ltd v Secretary of State for Levelling Up, Housing and Communities and another [2024] the Court of Appeal clarified the requirement to undertake an “appropriate assessment” of the effects of a project on nutrient neutrality.  The case confirms that a planning authority may require an appropriate assessment to be carried out at the discharge of conditions stage and the basis of the assessment would be the effects of the project as a whole.

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As mentioned under disputes, following the Grenfell disaster the renewed focus on Building Safety led to the Building Safety Act 2022 (“BSA”).  We expect further cases in relation to remediation of building safety defects as the BSA further beds in and impact of implementation is felt across the industry.  The new dutyholder regime is of particular interest to developers from a construction perspective.  Please see our summary of this new regime for further details about the changes here.

Our team across practice areas can help with advice on the BSA 2022.  Our Building Safety page gives details of the impact for construction lawyers.

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The King’s Speech confirmed the Arbitration Bill will be progressed to implement the recommendations made in a 2022 Law Commission review of Arbitration Law to clarify the law applicable to arbitration agreements, codifying a duty for arbitrators to disclose any doubts about impartiality, and empowering awards for issues which have no realistic prospect of success on a summary basis.

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One of the main parts of the Government’s Autumn Budget released in October is “Rebuilding Britain” with a focus on housing which includes:

• Delivery of 1.5 million homes;
• £500m boost to the affordable homes programme to build up to 5,000 additional affordable homes;
• £3bn additional support for SMEs and the Build to Rent sector in the form of housing guarantee schemes;
• Commitment to improving building safety and acceleration of unsafe housing remediation works following Grenfell.

In addition to the Autumn Budget, the Government also published the “Invest 2035: the UK’s Modern Industrial Strategy” paper in October. However, the paper failed to include construction as one of the eight key “growth-driving” sectors that will be prioritised for support. The Department for Business & Trade is collating feedback that will inform the Industrial Strategy’s final shape (due Spring 2025) until 24 November 2024 here.

JCT continues to release its updated suite of standard form construction contracts and ancillary documents. However, we are still awaiting the much-anticipated release of the new Target Cost Contract family of contracts designed to offer the parties more flexibility in relation to project costs.

In Abbey Healthcare (Mill Hill) Ltd (Respondent) v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) [2024], the parties disputed the obligation to pay the cost of remediation of defective works carried out to a care home with the original contractor challenging the adjudicator’s jurisdiction.  The Supreme Court agreed with the contractor and decided that most collateral warranties could not be construction contracts within the meaning of section 104 of the Housing Grants (Construction & Regeneration) Act 1996 (and so do not carry a right to statutory adjudication) as they are not agreements for construction operations.

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This case concerned a contract for the construction of several buildings. The contract included provisions that allowed the contractor to terminate in the event of an employer default (two of which occurred throughout the project). The court considered a contractor’s entitlement to terminate its employment under cl 8.9.4 of the JCT Design & Build Contract (2016 edition) even in cases where no such right to terminate had accrued under cl. 8.8.3. The court held that the wording used under cl. 8.9.4 was broad enough to cover any situation where a contractor had not given a notice specified by cl. 8.9.3. The case is relevant when considering the options available to contractors for termination of contracts if the employer persistently defaults.

As mentioned under “Land” issues, the snap election led to LFRA being rushed through Parliament. The key changes LFRA makes are:

1. To make it cheaper and easier for leaseholders to extend their leases or buy freeholds.
2. To introduce a new standard valuation method for leasehold enfranchisement and lease extensions, by removing “marriage value” and discounting the value of any ground rent in excess of 0.1% of freehold value.
3. Increasing to 990 years the standard lease extension term for both houses and flats.
4. Making it easier for leaseholders to manage their own buildings.
5. Extending access to redress schemes.
6. Preventing excessive buildings insurance commissions and costs being recovered from tenants through service charges.
7. Banning the sale of new leasehold houses (subject to certain exceptions).
8. Standardising the format in which landlords issue service charge bills.
9. Scrapping the presumption that landlord’s legal costs are recoverable through the service charge and requiring landlords to apply to the First Tier Tribunal for costs orders where “just and equitable.”

LFRA is now law, however most of the provisions require further legislation to confirm the precise details before they come into force. When this happens will depend on how Labour prioritises them. Provisions relating to the regulation of rent charges and amendments to the Building Safety Act 2022 will come into force on 24 July 2024.

We expect parties to require advice on potential disputes in relation to implementation of LFRA as it comes in to force.

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On 31 October 2024 the Leasehold and Freehold Reform Act 2024 (LAFRA) amended Part 5 of the Building Safety Act 2022 (BSA) to introduce the term relevant step to the BSA. A relevant step is defined as a step which has as its purpose:

(i) preventing or reducing the likelihood of a fire or collapse of the building (or any part of it) occurring as a result of the relevant defect,
(ii) reducing the severity of any such incident, or
(iii) preventing or reducing harm to people in or about the building that could result from such an incident.

The introduction of relevant step to the BSA by LAFRA means that the landlord cannot charge the costs of these steps to qualifying leaseholders. The change also introduces relevant step to Remediation Orders and Remediation Contribution Orders.

The First Tier Tribunal can now order that Landlords take relevant steps instead of remedying a defect itself, therefore where mitigation (i.e. relevant steps) can adequately preclude a risk and it would be disproportionate to insist on remedying a defect, only the relevant steps need be taken. Landlord will likely therefore welcome this change, however it has not been tested in the Tribunal yet.

In respect of Remediation Contribution Orders, the costs of relevant steps can now be recovered. The costs of obtaining expert reports and temporary accommodation costs can be claimed. In addition, LAFRA permits additional prospective costs beyond those of remedying relevant defects to be claimed via Remediation Contribution Orders, as the First Tier Tribunal can “determine that a specified body corporate or partnership is liable for the reasonable costs of specified things done or to be done”.

Our Building Safety page sets out the range of issues we anticipate developers encountering in relation to their property portfolios.

The Bill seeks to improve public safety at large events and premises open to the public. This includes shops, hotels, restaurants, bars and nightclubs, sports venues, hotels, hospitals, places of worship, schools, colleges and universities, bus and railway stations, museums and venues that host entertainment activities.

The Terrorism (Protection of Premises) Bill 2024 – GOV.UK was introduced to Parliament on 12 September 2024 and is expected to be passed into law in Q1 2025. It will impose a legal duty on parties responsible for premises and events to implement measures to reduce the risk of harm during terrorist attacks. It will categorise venues into “standard” and “enhanced” premises based on their capacity. The person in control of the premises in connection with its use will be responsible for compliance. The Security Industry Authority (SIA) will monitor compliance. Non-compliance could be a criminal offence in some instances and will carry the risk of regulatory inspections and substantial fines, from £10,000 to £18 million, or 5% of global revenue for enhanced premises or events.

The Bill is known as Martyn’s Law in tribute to Martyn Hett, who was killed in the 2017 Manchester Arena attack. This Bill could be relevant to developers who own or develop premises which falls within the criteria in the Bill.

After 70 years in force and of prominence in the UK property industry, the Law Commission review of Part 2 of the Landlord and Tenant Act 1954 (LTA) was announced in March 2023 and on 19 November 2024 the consultation was launched. Part 2 of the LTA gives business tenants the right to renew their tenancies, also known as “security of tenure”. It applies automatically to most business tenancies unless the parties have specifically opted-out of the provisions before the grant of the lease.

The aim of the review and consultation is to modernise commercial leasehold legislation, as the last significant updates were made nearly 20 years ago. The review intends to create a framework which will be used more widely and will improve the use of commercial space in town centres, taking into account net zero targets.

The consultation paper asks for responses about four possible models for reform by 19 February 2025. The Law Commission plans to then publish a technical consultation based upon the analysis of the first consultation.

Please see this article for more information – Standing the test of time? Law Commission review of the LTA 1954.

The Renters’ Rights Bill (RRB) is a bill intended to improve and modernise the private rental sector and increase security and stability for residential tenants. It is expected to become law by Summer 2025. The changes intended by the RRB will significantly change the residential rental landscape in England.

The RRB will abolish the ability of a residential landlord to evict a tenant on a “no fault” basis by serving a notice under section 21 of the Housing Act 1988. This will apply to both existing and new tenancies. The change will mean landlords must provide a statutory reason to evict a tenant. Reasons like rent arrears will remain, but the thresholds will be increased.

The RRB will also abolish assured shorthold tenancies (ASTs) and fixed-term assured tenancies of less than 7 years. These types of tenancies will be made periodic (i.e. month to month). The practical effect of this is that tenants will be able to stay in a residential property until they decide to end the tenancy by giving two months’ notice, unless one of the statutory grounds for the landlord to terminate the tenancy is satisfied.

As alluded to, the RRB makes significant changes to the grounds for possession available to landlords, including by: (1) introducing new mandatory and discretionary grounds, (2) altering or removing existing mandatory or discretionary grounds, and by (3) general increasing notice periods and where certain grounds are used, such as new mandatory ground 1A, which will allow a landlord to evict a tenant if they wish to sell a property (or let it for more than 21 years), preventing the landlord from re-letting the property for 12 months from the notice date.

The Bill places significant limits on landlords’ ability to increase rent. Landlords will only be permitted to increase rents once per year on two months’ notice to the tenant. Tenants will also be given increased powers to challenge the rent increase and validity of the notice to the First Tier Tribunal. Rental bidding beyond the levels of rent advertised for a property will also be prohibited, with breaches punishable by financial penalties.

The RRB also requires all private rented sector landlords to register with a new independent Private Rented Sector Landlord Ombudsman, likely for a small annual fee. The Ombudsman will be able to make binding decisions regarding tenant complaints, enforceable using both civil penalties and criminal prosecution. Landlords will also need to register with a new Private Rented Sector Database to let a property and obtain an order to evict a tenant.

These changes will have wide-ranging consequences for landlords and managing agents, with increased administrative burdens and a reduced ability to remove tenants.

Please see this article for more details in the context of landed estates – Renters’ Rights Revamp – Key points for landed estates.

The Government published a Guide to the Renters’ Rights Bill – GOV.UK (www.gov.uk)

The King’s Speech announced the Labour Government’s plans for commonhold reform to “reinvigorate commonhold tenure”. It has been an available alternative to leasehold ownership since 2002. Commonhold ownership has not however been favoured in the UK. It is more common in Australia and North America. There are approximately 20 commonhold ownership structures in use in the UK.

Commonhold is a way of owning freehold properties which have communal facilities. The unit holder owns the freehold interest in their respective unit and is a member of the commonhold association which owns and manages the common parts of the building or estate.

Labour plans to restrict the sale of new leasehold flats so that commonhold becomes the default.

In the case of Triplark Ltd v Whale and others [2024] the High Court held that the proposed renewal of a communal heating and hot water system was not within the landlord’s repairing obligations, as the works would increase the maintenance burden on the tenant.

The Judge found that the repairing covenant in the lease should be interpreted in line with what was contemplated by the parties when entering into the lease, despite the landlord’s desire to improve the system. Introducing improvements to the system therefore changed the way that the lease operated, as the new system required two heating devices whereas on the grant of the lease there was only one.

This decision makes clear the importance of considering future changes which landlord’s may wish to make to services in buildings and their ability to recover the costs of those works, particularly in the context of longer leasehold interests.

In the case of Lehner v Lant Street Management Company Ltd  [2024] the Upper Tribunal was presented with an appeal from the First Tier Tribunal concerning whether the costs of works undertaken by the landlord to the insulation and cavity barriers behind the external screen of the cladding were not part of the cladding system, which meant that the leaseholders were responsible for the costs of the works as the leaseholders protections under the BSA would not therefore apply.

The Upper Tribunal disagreed with the First Tier Tribunal’s decision and found that the costs of the works undertaken by the landlord were protected by the leaseholder protections in the BSA, as the works were undertaken to the cladding system of the building, despite the works not including works to the external screen of the cladding.

The Upper Tribunal’s decision is most notable for taking the opportunity to set out a sequence of questions for landlords and leaseholders to ask when determining whether service charges are payable by leaseholders or landlords where the leaseholder protections provided by the BSA may apply. The decision highlighted the importance of the evidence being relied upon by the parties when considering the works undertaken to the building in question and the need for them and whether they relate to a cladding system. Parties must provide relevant, up-to-date evidence such as surveys and drawings, photographs, any records of the need for the works, scopes of work, tender documents and records and descriptions of the works undertaken.

Dandara South East Ltd v Medway Preservation Ltd & Anor [2024] EWHC 2318 (Ch) (10 September 2024) is an important decision on the impact of expert determination clauses, which are widely used in development agreements, sale and purchase contracts, overage and option agreements, promotion agreements and other agreements at the heart of many developments across the country. In this case, the Buyer (Dandara) served notice to terminate a conditional contract for the purchase of a development site, alleging that the Seller had not complied with one of the contractual requirements which would make the contract unconditional.

The Seller disputed that Dandara had validly terminated the contract, but also argued that a dispute resolution clause requiring all disputes to be determined by an expert (rather than the Court) applied to the current dispute and would survive the termination of the contract in any event. Dandara argued that the expert determination provisions should not apply to this dispute because the determination structure in the clause was not suited to resolving the issues in dispute.

The Court determined that the dispute resolution clause would survive the termination of the contract in this case (it was severable from the contract) because it required all disputes arising from the contract to be referred to an expert rather than the Court. The Court did not therefore have jurisdiction to determine whether or not Dandara had terminated the contract. An expert had to make that determination.

Expert determination is typically best suited to specific issues requiring (as the name suggest) expert opinion. The appointed expert(s) can then use their own experience and expertise to reach their decision. Clauses providing expert determination of any and all disputes arising from the contract should be approached with caution and used only where they are appropriate in all the circumstances.

In the recent decision of the First Tier Tribunal (FTT) concerning Smoke House and Curing House, 18 Remus Road, London, the FTT confirmed that it considered a roof garden to be a storey for the purposes of establishing whether a building is a higher risk building (HRB) under the Building Safety Act 2022 (BSA). This is important because previous Government guidance on how to measure buildings to determine whether they are a HRB confirmed that not to be the case.

A HRB is a building at least 18m high or which has at least 7 storeys and contains at least 2 residential units. Amongst various other regulations and restrictions applicable to HRBs, they must be registered with the Building Safety Regulator and have a Principal Accountable Person appointed.

The Government and the Building Safety Regulator have confirmed in this guidance Criteria for determining whether a building is a higher-risk building during the occupation phase of the new higher-risk regime – GOV.UK that they are considering the FTT’s decision, which could see a review of the published guidance. For practitioners and owners of buildings who have assessed their building to only marginally not be a HRB, the decision will undoubtedly give cause to review the details of the decision and the facts of the case; and to reconsider the Government guidance once it is updated. The decision also shows that whilst helpful in some instances, the guidance is not a source of law and each set of facts should be assessed and interpreted against the legislation itself.

Labour is driving forward investment in clean, home-grown energy production by creating a new publicly owned company, Great British Energy. The Bill aims to grant the Secretary of State for Energy Security and Net Zero the authority to officially establish Great British Energy as a statutory company.

The Great British Energy’s first investment has been in the offshore wind space, having concluded a partnership with the Crown Estate in July 2024. It is not currently clear what the Great British Energy’s investment remit is going to be, but it is hoped that investment will be made in less established technologies, such as green hydrogen and carbon capture and storage, both of which are a focus for the Labour Government. Neither of these technologies have attracted the level of private investment that the former Government had anticipated and an investment by a publicly owned company is likely to assuage concerns by private investors as regards the viability of such technologies.

We anticipate that the remit of the Great British Energy, will largely be driven by the output of the National Energy System Operator’s work on the Clean Power Plan 2030. This is expected to be finalised by the end of 2024 and will outline the Government’s plans to deliver a fully decarbonized power system by 2030. The deployment of clean energy projects (both of established and less-established technologies) is likely to provide additional opportunities to those operating within the developer sector to decarbonise their stock.

The majority of the obligations imposed on Charge Point Operators (‘CPOs’) under the Public Charge Point Regulations 2023 (“Regulations”) have now taken effect (as of 24 November 2024).

Where developers have the ownership and responsibility for the maintenance and operation of public charge electric vehicle charge points, they will be considered CPOs for the purposes of the Regulations.

For more information see here: New Public Charge Point Regulations in force from 24 November 2024: How will they impact the Energy sector?

Following the enactment of the Energy Act 2023 (‘Act’), the former government was in the process of consulting on the secondary legislation that will bring the provisions of the Act into force.

The Labour Government has expressed its continued support for the Boiler Upgrade Scheme. In the Autumn 2024 Budget the Government has committed £5.8 million of funding to develop England’s first heat network zones in 5 cities (Leeds, Plymouth, Bristol, Stockport, Sheffield and London). Construction is expected to start from 2026. The Government also reaffirmed its plans to introduce secondary legislation as outlined above.

So far, OFGEM has consulted on proposed measures that are intended on protecting the end consumers (for instance the tenants of residential buildings), by providing for transparency around pricing and a set of standards that suppliers need to adhere to. OFGEM will have regulatory responsibilities under the proposed new regime.

A lot of the detail is yet to be ironed out, so for now developers are encouraged to: (i) where they own or operate buildings that are connected to a district heat network identify whether they are a “heat supplier” or “operator” in anticipation of these activities becoming regulated and (ii) monitor the developments in this space to ensure that they are well placed to respond to any transitional arrangements that the Government may put in place.

On 7 November 2024, a joint consultation between DESNZ and Ofgem was launched to seek the views of the industry on the practical implementation of the proposed consumer protection framework. On 8 November 2024, Ofgem has also launched a consultation on how it intends to discharge its role as a regulator of heat networks. Both consultations close on 31 January 2024. Developers with an interest in heat networks, are encouraged to actively engage with such consultations.

Due to the complexity of the regulatory landscape and the need to consult on numerous elements of this new market framework, it is proposed that existing heat networks will become regulated from January 2026 onwards.  Prior to that date (from April 2025), certain ‘Consumer Advocacy and Advice’ functions will be introduced, allowing consumers access to Citizen’s Advice and the Energy Ombudsman.

Please see our articles:

Is it getting hot already? Regulating for the heat networks of the future

Ofgem Consultation: Heat networks regulation: authorisation and regulatory oversight

Heat Networks: Regulating for the consumers

All new developments, whether they are residential or commercial or an energy project require a connection to the grid to be able to import electricity (and where there is on-site generation) export electricity to the grid. Whether a development is connecting to the distribution system or the transmission system, it will be affected to some extent by the Grid Connection Reform that National Grid has instigated.

The Grid Connection Reform is a process by which the manner in which applications for new connections are submitted, assessed and managed is significantly amended. Additionally, the existing queue for projects connecting to the transmission system is going to be rearranged.

National Grid is currently working on a modification to the CUSC (Connection and Use of Systems Code), which is intended to implement the plans outlined above. If the modification is approved by OFGEM (which we anticipate will be), then the new process will come into force from April 2025.

For more information on how the Grid Connections’ Reform process is progressing see here: Grid connection reform: The big shake-up

The Economic Crime and Corporate Transparency Act 2023 introduces changes to the operation of the registration of companies at Companies House and a verification of identity requirement for directors and others.  Other administrative changes are included, though implementation will require secondary legislation which is anticipated later this year.  The new administrative requirements are outlined in this article below which applies as well to companies in the developer sector as in the energy sector.

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Since July 2024 there have been the following key corporate governance updates:

• 17 July 2024 – The Government announced proposed legislation for audit reform and corporate governance in the King’s Speech
• 22 July 2024 – The Financial Reporting Council (the FRC) announced significant changes to the Stewardship Code
• 5 August 2024 – The FRC issued a consultation on Going Concern Guidance
• 19 September 2024 – Updated duty to report on payment practices and performance
• 27 September 2024 – Companies House published new guidance on enforcement and penalties

Please see our article below for further detail about each of these:

Corporate governance key updates | July – October 2024

On 1 September 2025 a new Failure to Prevent Fraud offence will come into force. Large organisations will be liable for up to an unlimited fine if they benefit (or are intended to benefit) from the fraud of an employee, agent, subsidiary, or other an “associated person”. The organisation will have a defence if it had reasonable procedures in place to prevent fraud, and recent Home Office guidance issued on 6 November 2024 assists organisations to understand what “reasonable” fraud prevention procedures might look like.

Our own research found that 45% of organisations had a fraud incident in the preceding 12 months, so even though smaller organisations may be out of scope of the Failure to Prevent Fraud offence, the losses, reputational damage and risk that they find themselves facing fraud-based claims brought by third parties are potentially existential.

Please see our article below for further detail: Failure to Prevent Fraud Offence – Home Office Guidance Update

The Worker Protection (Amendment of Equality Act 2010) Act 2023 came into force on 26 October 2024. The Act:

• Introduced a proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees.
• Enables employment tribunals to increase awards against employers by up to 25% where employers are found to have breached the new duty.

On 26 September 2024, the EHRC published the final version of the technical guidance and an eight-step guide for employers on preventing sexual harassment at work.

The Employment Rights Bill was introduced by the Labour government, proposing wide-ranging and fundamental reform of employment law, including (amongst other measures):

• Banning zero-hour contracts
• Ending “fire and rehire”
• Introducing worker “day-one” rights
• Extending probation periods
• SSP rights for workers
• Better flexible working arrangements
• Additional protection for women
• Updated trade union laws

This is a detailed and wide-ranging programme of updates to the employment landscape, and will have a wide-ranging impact on all employers.

The National Living Wage increased in April 2024, but the new government has committed to additional improvements by linking it directly to the cost of living, ensuring that the Low Pay Commission must take account of the cost of living when recommending the new rates.

Labour has also said it will remove the 18-20 age band. The band currently allows employers to pay a lower hourly rate to under 21s.

The below changes came into force for irregular hours and part-year workers who have leave years beginning on or after 1 April 2024 (if you use a calendar year as the holiday year, these changes will only apply from 2025). The key points are:

• An accrual method of calculating holiday entitlement for workers with irregular hours and part year workers.
• Rolled up holiday pay (calculated at the classic 12.07% rate) has returned as an option for holiday pay calculation for casual, irregular-hours and part-year workers. Rolled up pay will be available for leave years starting on or after 1 April 2024.
• A new definition of ‘normal renumeration’ – when calculating holiday have been specified, for example payments related to the performance of tasks (including commission payments) and regular overtime should be included.

Since 6 April 2024, women selected for redundancy have had the right to suitable alternative employment if they are pregnant (and have told their employer this) or if their expected date of childbirth was less than 18 months ago.

The new government now plans to prevent the dismissal of those returning from maternity leave except in specific circumstances. The details of those circumstances will need to be clearly defined.

Labour plans to review the parental leave system within the first year of government and make parental leave a day one right. It is unclear how far reaching this review and any reforms will be.

The Neonatal Care (Leave and Pay) Act 2023 is expected to come into force in April 2025 and means that parents who have babies in neo-natal care within their first 28 days of their life (for seven continuous days or more) are allowed to take neonatal leave and pay for up to 12 weeks. This will be a day one right.

The DBT launched a consultation on strengthening the remedies against abuse of the current rules on collective redundancy consultation and fire and rehire.

The consultation seeks views on:

• Increasing the maximum protective award that can be made by an employment tribunal for failure to comply with the obligations to collectively consult and making interim relief available to employees who bring claims for the protective award.
• Introducing a right for employees to make an application to an employment tribunal for interim relief where they are unfairly dismissed in a fire and rehire scenario.

This is a Private Members’ Bill. Although unlikely to pass into law, the Bill provides for a statutory definition of bullying at work; to make provision relating to bullying at work, including to enable claims relating to workplace bullying to be considered by an employment tribunal; to provide for a Respect at Work Code to set minimum standards for positive and respectful work environments; to give powers to the Equalities and Human Rights Commission to investigate workplaces and organisations where there is evidence of a culture of, or multiple incidents of, bullying and to take enforcement action.

A second reading is scheduled for 20 June 2025, so watch this space.

The Claimant was employed as a support worker and involved in planning and taking part in lawful strike action. After the strikes ended, she was suspended.

The Claimant complained to the Employment Tribunal, that her suspension amounted to a detriment imposed for the sole or main purpose of preventing her from taking part in trade union activities or penalising her for having done so, in breach of section 146 of Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

On final appeal, the Supreme Court made a declaration that the failure of s. 146 of TULRCA to provide any protection against sanctions short of dismissal for union members taking part in lawful industrial action is incompatible with Article 11 of the ECHR.

We will keep an eye on legislative developments in light of the Supreme Court’s ruling and await action (if any) from Parliament.

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This was a Supreme Court decision which overturned the Court of Appeal, restoring an injunction granted by the High Court which prevented Tesco from using “fire-and-rehire” to withdraw a collectively agreed contractual benefit that it had previously described as “permanent”.

Fire and rehire is now a politically and socially sensitive practice which is not advised without careful consideration of wider workplace and press fallout.

This case hit the news in October 2024. The employment tribunal upheld a claim for harassment related to sex brought by the Claimant in relation to an incident in which a colleague admitted an offensive slur related to his baldness and admitted that he had intended to threaten and insult him in doing so. The tribunal found that this conduct was unwanted and that the words had been used with the purpose of violating the Claimant’s dignity and creating an intimidating, hostile, degrading, humiliating or offensive environment for him.

The EAT upheld the tribunal’s decision that comments about an employee’s baldness were harassment related to sex. It held that the tribunal had correctly considered that the context of a remark said to constitute harassment under section 26(1) of the EqA 2010.

The EU’s Data Act entered into force on 11 January 2024 and will become enforceable by mid-2025. It requires affected entities to make personal and non-personal data accessible to other parties for repurposing. Affected entities include i) manufacturers of physical connected products which collect or generate data concerning their use, where such products are placed on the market in the EU, ii) suppliers of related digital services and software in the EU, iii) data holders which make data available to data recipients in the EU; and iv) providers of data processing services in the EU.

Whilst the Act’s formal enactment appears in the far distance, affected organisations should begin assessing their compliance strategies as the Data Act’s obligations may require significant time to implement. Although the Data Act will not directly apply to the UK as a result of Brexit, organisations should continue to pay heed to their content regulation obligations in overlapping policy initiatives and legislation, including the Online Safety Act 2023.

On 21 May 2024 the Council of the EU formally adopted the AI Act which lays down harmonised rules on artificial intelligence. The regulation aims to improve the functioning of the Internal Market and promote the uptake of human-centric and trustworthy AI, while ensuring a high level of protection of health, safety, fundamental rights, and the rule of law against the harmful effects of AI systems. It seeks to harmonise the rules for the placing on the market, putting into service and use of AI systems in the EU, prohibitions of certain AI practices, requirements for high-risk AI systems, transparency rules, as well as rules for general-purpose AI models, market monitoring, market surveillance, governance, and enforcement.

Developers situated or operating in the EU that use, develop, distribute or otherwise work with AI applications will need to be cognisant of the AI Act, particularly if they use or intend to use AI systems characterised as being “Unacceptable” or “High” risk (which include real-time remote biometric identification in public spaces and those relating to critical infrastructure).

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Applicable to the UK

This European Commission Directive aims to enhance the security of network and information systems within the EU by requiring operators of critical infrastructure and essential services to implement appropriate security measures and report any incidents to the relevant authorities.

EU Member States have until 17-Oct-24 to transpose the Directive into national law.

Building on the original Network and Information Security Directive, regulators are mandating that entities in highly critical sectors regularly engage with and report to authorities regarding cybersecurity.

The requirements will revolve around: cybersecurity incident response and crisis management processes, incident reporting, vulnerability management and disclosure, testing of cybersecurity controls, and data protection.

Whilst there is no action to take at the moment from a UK perspective (although the UK is considering similar changes to the original regulations), this legislation may be relevant if developers have non-UK suppliers in their IT supply chain.

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With increasing threats to critical infrastructure, the UK government has expressed a clear intention to update its cybersecurity framework, signalling changes that will impact various sectors. The government announced its intention to introduce a Cyber Security and Resilience Bill in the Kings Speech, which is likely to introduce long awaited updates to the Network and Information Security Regulations (NIS). This bill is expected to focus on expanding cybersecurity measures, especially in sectors managing sensitive data or critical services.

Find out more here.