A payment in lieu of notice (PILON) made pursuant to a term in the contract of employment constitutes contractual remuneration for the purpose of paragraph 3(2)(a) of Schedule 13 of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992) and therefore has to be set off against the employer’s liability to pay statutory maternity pay (SMP). The position in respect of a non-contractual PILON payment is less clear and will have to be determined in a future case. First-tier Tribunal Tax Chamber: Ladiverova v (1) HMRC (2) Chokdee.

Arbitration analysis: The Queensland Court of Appeal held that non-parties to an arbitration could be contractually bound to pay by reference to amounts determined in an award, where their contracts expressly adopted the arbitral outcome as the mechanism for fixing their own payment obligations. The court held that under the interconnected deeds, the appellants were required to pay their proportionate share of the royalty owed by the respondents to Tri-Star, matching the amounts actually payable by the respondents. Those amounts were determined by an arbitration between the respondents and Tri-Star, to which the appellants were not party. Accordingly, the appellants’ liability was fixed by the arbitral award between the respondents and Tri-Star even though the award was agreed to be wrong, not by any fresh calculation of a theoretically ‘correct’ sum. This decision signals that courts are likely to give effect to drafting that allocates liability by ‘back‑to‑back’ provisions even if this involves the adoption of erroneous decisions determined in an international arbitration to which the payer was not a party. Written by Amanda Lees (partner), Sati Nagra (senior associate) and Yan Zhang (solicitor) at King & Wood Mallesons.

STOP PRESS: Regulation (EU) 2026/1744 amending Regulation (EU) 2024/1689, Regulation (EU) 2018/1139 and Regulation (EU) 2023/1230 as regards the simplification of the implementation of harmonised rules on artificial intelligence (Digital Omnibus on AI) was published in the Official Journal on 24 July 2026 and entered into force on 27 July 2026. This Checklist will be updated shortly to reflect amendments to Regulation (EU) 2024/1689, the EU Artificial Intelligence Act. For further information on the changes introduced by the Digital Omnibus on AI, see Practice Note: EU Digital Omnibus—tracker and News Analysis: Digital Omnibus proposal—re-writing the EU's digital rulebook. This Checklist highlights the key procurement, licensing and contractual issues relevant to artificial intelligence (AI) or machine learning (ML) solutions. Depending on the specific application, the inclusion of AI may mean adding simple automated functionality, through to creating a complex, intelligent tool controlled by either a third party or by the customer. This Checklist assumes that the AI will be capable of an element of learning and that, as such, one or both

Part 11 of the Levelling-up and Regeneration Act 2023 (LURA 2023) established a framework for increasing transparency regarding interests and dealings in registered land by enabling certain information about contractual control agreements to be provided to the Chief Land Registrar and published in a public database. The regime is intended to improve the visibility of agreements affecting land, such as option agreements, conditional contracts and pre-emption agreements, and has potential implications for real estate finance transactions. The contractual control agreements database is likely to be of interest to lenders when taking security over land as it aims to improve transparency regarding land ownership and control by providing a reliable and accessible source of information for the relevant stakeholders. It will assist with due diligence in this regard. It will also be relevant to development finance transactions as developers use arrangements such as options, conditional contracts and pre-emption rights to secure future interests in land in order to manage potential development

Property Disputes analysis: This case looks at the application of a common lease clause, entitling a landlord to recover legal costs that are ‘incidental to the preparation and service’ of forfeiture notices. The landlord council brought County Court proceedings for arrears of service charge which were transferred to the First-tier Tribunal (Property Chamber) (the FTT). The FTT determined that the service charges were reasonable and recoverable and the proceedings were then transferred back to the County Court. The Court of Appeal held that (i) the FTT proceedings were too remote to be ‘incidental’ to the ‘preparation and service’ of forfeiture notices; and (ii) the County Court had no power to award costs in the FTT including pursuant to section 51 of the Senior Courts Act 1981 (SCA 1981). Written by Robyn Cunningham, barrister at Tanfield Chambers.

This Practice Note considers damages for contract breach where the damages sought are for wasted expenditure, management time and litigation costs caused by the contract breach. They are a species of pecuniary loss. For guidance on contractual damages generally, see Practice Note: Contractual damages—general principles; which includes the dicta of Baron Parke in Robinson v Harman as to the compensatory nature of damages for contractual breach, ie that a party who suffers loss as a result of breach of contract is entitled: ‘to be placed in the same situation, with respect to damages, as if the contract had been performed.’ For further specific guidance on recovering losses for breach of contract, see Practice Notes: • Contractual damages—pecuniary losses (expectation, reliance or gains based financial losses) • Contractual damages—non-pecuniary losses (non-financial losses) Note that contracts often seek to limit or exclude the type of losses that may be recoverable in any particular breach scenario, which can lead to significant disputes and should be a key consideration for lawyers when drafting agreements.

This Practice Note considers the general principles of recovering damages for contractual breach, starting with the compensatory function of damages and the different kinds of damages for pecuniary and non-pecuniary losses, as well as nominal damages, damages under the Sale of Goods Act 1979 (SGA 1979), default damages clauses, contractual mechanisms for remedying a breach and interest on damages. Per Baron Parke in Robinson v Harman, a party who suffers loss as a result of breach of contract is entitled: ‘To be placed in the same situation, with respect to damages, as if the contract had been performed.’ Compensatory function of damages for breach of contract The normal function of damages for breach of contract is the same as that in tort, namely, compensatory (see, eg British Westinghouse v Underground Electric Rlys). The aim being to compensate the true loss suffered by the innocent party and place them in the same position, so far as money can do it, as if the contract had been performed. To this extent (and while there are exceptions,

This Practice Note considers the different categories of contractual damages that may be available for non-financial loss (non-pecuniary loss), ie punitive damages, damages for loss of enjoyment and loss of amenity, restitutionary damages and negotiating damages (previously known as ‘Wrotham Park damages’). For guidance on contractual damages generally, see Practice Note: Contractual damages—general principles. For guidance on claiming damages for financial (pecuniary) loss for breach of contract, see Practice Note: Contractual damages—pecuniary losses. Contractual damages—categories of non-pecuniary loss Damages for non-pecuniary loss are awarded only in exceptional cases. This is because their award is contrary to the general rule that damages are strictly compensatory in nature. They fall into the following categories: • punitive damages • damages for loss of enjoyment and loss of amenity • restitutionary damages • negotiating damages Non-pecuniary loss—punitive damages Punitive damages are awarded to an innocent party in circumstances where the defaulting party has conducted itself in such a way that the court considers that party should be punished. Such damages are rare in tort cases and almost certainly irrecoverable

This Practice Note considers the different categories of contractual damages that may be available for financial loss (pecuniary loss), ie expectation-based damages, reliance-based damages and gains-based damages. For guidance on seeking to recover wasted expenditure resulting from a breach of contract, see Practice Note: Contractual damages—damages for wasted expenditure and management time. For guidance on contractual damages generally, see Practice Note: Contractual damages—general principles; which includes the dicta of Baron Parke in Robinson v Harman as to the compensatory nature of damages for contractual breach, ie that a party who suffers loss as a result of breach of contract is entitled: ‘…to be placed in the same situation, with respect to damages, as if the contract had been performed.’ For guidance on claiming damages for non-financial loss for breach of contract, see Practice Note: Contractual damages—non-pecuniary losses. Note that contracts often seek to limit or exclude the type of losses that may be recoverable in any particular breach scenario, which can lead to significant disputes and should be a key consideration for lawyers when drafting

Where an employee is subject to a disciplinary or dismissal procedure which has contractual force, breaches of express terms of that procedure by the employer that occur during the period leading up to the employee's summary dismissal cannot usually sound in damages in a contractual claim in the civil courts (although such breaches may perhaps attract injunctive or declaratory relief before dismissal), and so damages in such civil court claims are limited to (a) a sum to compensate for the duration of the contractual notice period, plus (b) a sum for the extra period (the 'Gunton extension period') which would have had to elapse had the employer honoured the procedure, according to the majority of the Supreme Court in the combined appeals of Edwards v Chesterfield Royal Hospital NHS Foundation Trust and Botham v Ministry of Defence.

THIS PRACTICE NOTE APPLIES ONLY TO PENSION SCHEMES IN ENGLAND AND WALES What is contractual enrolment? Contractual enrolment is where workers are enrolled into a pension scheme under the terms of their employment contract and (by reference) the rules of the scheme. By contrast, auto-enrolment is where workers are enrolled automatically into a qualifying scheme in accordance with the statutory regime under the Pensions Act 2008 (PenA 2008). The main advantage of contractual enrolment is that if the employer enrols all of its workers contractually into a qualifying pension scheme (including those workers who the employer is not required to enrol automatically under statute), it does not need to assess all of its workers under the auto-enrolment regime. For this reason, contractual enrolment is generally perceived as a simpler option to auto-enrolment. However, contractual enrolment could also potentially introduce administrative complexity or confusion due to the way in which it interacts with the auto-enrolment regime. Employers should therefore keep track of which workers have been enrolled contractually and which have been enrolled automatically in order to ensure that they comply

This Practice Note discusses contractual estoppel as it has evolved from the decision in Peekay Intermark v ANZ Banking Group. For a summary of illustrative decisions concerning contractual estoppel since Peekay, see Practice Note: Contractual estoppel—illustrative cases. Contractual estoppel—arising from the general principles of the doctrine of estoppel Before discussing what has become known as contractual estoppel in detail, it is helpful to begin with a reminder of the nature of estoppel generally, taken from the dicta of Lord Denning MR in Amalgamated Investment v Texas Commerce (at 584) (as cited with apparent approval by Lord Bingham in Johnson v Gore Wood): ‘…When the parties to a transaction proceed on the basis of an underlying assumption (either of fact or of law, and whether due to misrepresentation or mistake, makes no difference), on which they have conducted the dealings between them, neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it,