This Practice Note, by Susanna Heley of RadcliffesLeBrasseur, highlights key legal and regulatory changes that affect or will affect in-house lawyers in 2020/2021. While some are set in stone, others are more speculative at this stage or subject to the Parliamentary timetable. It was last updated on 10 January 2021.

The ongoing uncertainty arising from the coronavirus (COVID-19) pandemic and the speed at which the situation continues to move will have a lasting impact on all areas of law, regulation and policy development. Inevitably some of the anticipated developments in this tracker will be affected and new issues may arise, particularly regarding the availability and extent of business support. We are monitoring the impact of the coronavirus closely and reporting changes via our news updating service. To help you find and access relevant news, practical guidance and Q&As from across Lexis®PSL Practice Areas all in one place (subject to subscription), Lexis®PSL has also launched a coronavirus (COVID-19) toolkit. In addition to coronavirus-specific content, the toolkit also highlights additional guidance and support materials of general relevance. See: Coronavirus (COVID-19) toolkit.

Category Details Expected or actual date

Coronavirus job retention scheme (CJRS) and job support scheme (JSS)

The government introduced the CJRS in March 2020. Employees whose jobs would have been redundant due to lockdown may instead be furloughed and paid through the CJRS. A revised version of the CJRS was in place between 1 July and 31 October.

On 24 September 2020, the Chancellor announced a replacement JSS which was intended to come into effect from 1 November 2020.

On 31 October 2020, the government announced that the CJRS was to be extended from 1 November 2020 and that the JSS would not come into effect until the extended CJRS ends. On 5 November 2020, an extended version of the CJRS was announced. This extended CJRS applies from 1 November 2020 and is intended to run until 31 March 2021.

For further information on the extended CJRS, see Practice Note: Coronavirus Job Retention Scheme (extended version from 1 November 2020) and News Analysis: CJRS extended to end of March 2021, JRB and SEISS amended.

For information on the original CJRS, in place from 1 March 2020 to 30 June 2020, see Practice Note: Coronavirus Job Retention Scheme (original version to 30 June 2020).

For information on the revised CJRS, in place between 1 July 2020 and 31 October 2020, see Practice Note: Coronavirus Job Retention Scheme (revised version 1 July to 31 October 2020).

For information on the JSS, see Practice Note: Job Support Scheme.
Note: Penalties related to abuse of the CJRS are included in Finance Act 2020. There is a rolling 90-day period for notification of overclaims to avoid imposition of penalties.

The extended CJRS is due to be in place until 31 March 2021. The JSS is due to come into effect when the CJRS ends.

Employee protection legislation

The government announced its intention to introduce a new Employment Bill to enhance employee rights as the UK leaves the EU. The main elements of the Bill are:

  • —creating a new, single enforcement body
  • —ensuring tips left for workers go to them in full
  • —introducing a new right for all workers to request a more predictable contract
  • —extending redundancy protections to prevent pregnancy and maternity discrimination
  • —allowing parents to take extended leave for neonatal care
  • —introducing an entitlement to one week’s leave for unpaid carers, and
  • —subject to consultation, make flexible working the default unless employers have a good reason not to

See: LNB News 19/12/2019 23.

Three private members’ bills potentially affecting employment rights are scheduled to progress faster through the Parliamentary timetable than many bills currently before Parliament:

  • —the Employment (Dismissal and Re-employment) (No. 2) Bill is intended to prevent dismissal and re-employment to avoid accrued employment rights
  • —the Employment (Reasonable Adjustment for Carers) Bill is intended to ensure employers offer reasonable adjustments to employees with caring responsibilities
  • —the Equal Pay (Information and Claims) Bill was introduced on 20 October 2020 and is intended, among other things, to give employees the right to access pay information of comparators and to reform equal pay claims and remedies

These bills are in the early stages but bear watching as time has been found in the parliamentary timetable to progress them.

See: Legislation tracker—Employment—Private Members’ Bills.

Employment Bill announced in the Queen’s Speech in December 2019. Draft Bill not yet published. Employment (Dismissal and Re-employment) (No. 2) Bill, introduced on 4 November 2020 to replace an earlier draft. Due for second reading on 5 February 2021. Employment (Reasonable Adjustments for carers) Bill. Due for a delayed second reading on 29 January 2021. Equal Pay (Information and Claims) Bill. Introduced on 20 October 2020 and will have its second reading on 22 January 2021.

Burden of proof—discrimination

The Supreme Court will consider who bears the burden of proof in considering whether discrimination contrary to the Equality Act 2010 has occurred in an appeal from the Court of Appeal decision in Royal Mail Group Ltd (Respondent) v Efobi (Appellant) [2019] All ER (D) 129 (Jan), which held that the claimant carries the initial burden of proof.

See: Case tracker—Employment.

Hearing 18 March 2021.

Live-in workers’ entitlement to national minimum wage

Shannon v Rampersad t/a Clifton House Residential Home (joined with Royal Mencap Society v Tomlinson-Blake in Court of Appeal) [2018] All ER (D) 50 (Aug) concerns the question as to whether home workers required to remain at home for their shift and workers who sleep in are entitled to payment at national minimum wage for time not spent performing some specific activity.

The Court of Appeal held that only time spent working had to be taken into account, overturning the High Court at first instance. Appealed to the Supreme Court.

This case could have wider implications for sectors requiring employees to be physically present at a specific location as part of their employment.

See: Case tracker—Employment.

Hearing 12–13 February 2020. Supreme Court judgment awaited.

Age discrimination—justifying pay policy

In Heskett v Secretary of State for Justice [2019] All ER (D) 12 (Jul) the Employment Tribunal (ET) and Employment Appeal Tribunal (EAT) held that a policy of reducing the rate at which probation officers progressed up an incremental salary scale was prima facie discriminatory in favouring employees over the age of 50 as against younger employees but that the policy was, in all the circumstances, justified.

The Court of Appeal dismissed the appeal—see News Analysis: Compelled need to reduce expenditure may justify indirect discrimination on pay (Heskett v SoS for Justice).

Hearing in May 2020. Court of Appeal judgment 11 November 2020. See: Heskett v Secretary of State for Justice [2020] EWCA Civ 1487

Off payroll working in the private sector (IR35)

The IR35 rules are designed to ensure that individuals who provide services through an intermediary (usually a personal services company) but would have otherwise been an employee pay the same PAYE and NICs as direct employees. The responsibility for this rests with the intermediary, but the government believes that this is not an effective control and that only 10% of those who should comply with IR35 rules do so.

The government’s position is to move to similar rules that already apply in the public sector where the public-sector employer is responsible for determining whether IR35 applies and for paying tax and NICs if it does. The draft legislation was expected to be in force by April 2020 to apply to certain medium-sized and large private sector businesses (as amended by the incoming Finance Act). The reforms have however been delayed by at least one year due to the coronavirus pandemic.

HMRC has produced guidance on preparing for the changes.

See: IR35—history, developments and key difficulties, IR35—off-payroll workers, LNB News 07/02/2020 83 and LNB News 12/02/2020 8.

Delayed until 6 April 2021.

Equal pay

Asda Stores v Brierly UKSC 2019/0039

The Supreme Court will consider the appropriate comparators in equal pay claims in which female claimants in retail stores seek to use male comparators working largely in distribution centres.

See: Case tracker—Employment

Supreme Court hearing 13–14 July 2020. Awaiting judgment.

Individual rights arising from trade union membership

Kostal UK v Dunkley A2/2018/0108, [2019] EWCA Civ 1009, UKSC 2019/0153

Case about whether an employer’s attempt to bypass a recognised trade union by negotiating directly with individual employees regarding changes to terms and conditions amounted to unlawful inducement contrary to section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992.

The EAT held that the ET had not erred in finding that it did—see report of 15 December 2017. The Court of Appeal allowed the employer’s appeal, held that it did not amount to unlawful inducement and dismissed the claim—see report of 14 June 2019.

The Court of Appeal handed down judgment on 13 June 2019. Appealed to Supreme Court.

Relevant to employers who recognise trade unions.

See: Case tracker—Employment.

Supreme Court hearing 18 May 2021.

Non-disclosure agreements (NDAs)

Following political interest in the alleged misuse of non-disclosure agreements to prevent reporting of harassment and criminal conduct, DBEIS announced its intention to:

  1. —introduce legislation to regulate use of NDAs, and
  2. —consult on a potential requirement that all employers should be entitled to a basic reference

The Women and Equality Select Committee urged the government to treat this issue as a priority on 29 October 2019.

See DBEIS: Crack down on misuse of NDAs in the workplace.

Announcement 21 July 2019 following consultation issued in March.

Timetable to implementation has not been fixed.

Meanwhile, the Solicitors Regulation Authority updated its warning notice on the use of NDAs on 12 November 2020.

Immigration post-Brexit

The Immigration and Social Security Co-ordination (EU Withdrawal) Act brings to an end free movement under retained EU law and contains powers to modify provisions arising from retained EU law. Employers will need to be aware of the implications for work permits.

The post-Brexit EU-UK Trade and Cooperation Agreement (TCA) was published on 24 December 2020.

See: Brexit legislation tracker—Immigration and Social Security Co-ordination (EU Withdrawal) Bill 2019–21.

Royal Assent 11 November 2020.

Category Details Expected or actual date

Data protection

The Information Commissioner’s Office (ICO) published a new data sharing Code of Practice on 17 December 2020. This sits alongside a suite of data sharing resources, including FAQs and guidance for small organisations and businesses on data sharing.

Further, more general, data protection guidance is expected following two recent consultations on statutory guidance (closed November 2020) and the role of ethics in GDPR compliance (closed January 2021).

17 December 2020.

Further guidance likely in spring/summer 2021.

International data transfers

The European Court of Justice delivered judgment in the ‘Schrems II’ case on 16 July 2020. This case concerns the lawfulness of data transfers outside of the EU based on standard contractual clauses (SCCs) and, in particular, affects mechanisms for transferring data to the US.

In its judgment, the Court of Justice invalidated the EU-US Privacy Shield.

The court also took the view that parties using SCCs must verify, on a case-by-case basis, whether the law in the recipient country provides a level of protection that is essentially equivalent to that provided under the GDPR. If not, it may be necessary to supplement the SCCs with other clauses or additional safeguards.

See Practice Note: International data transfers—practical compliance—Is the transfer covered by appropriate safeguards?

Following the end of the Brexit implementation period, transfers from the UK to other countries, including to the EEA, are subject to the UK GDPR. Transfers from the UK to the (i) EEA, (ii) Gibraltar and (iii) third countries that have the benefit of an EU Commission adequacy decision can continue as normal. If this is not an option, the UK GDPR permits transfers to be made on the basis of SCCs.

Transfers to the UK from the EEA are subject to the EU GDPR. See Practice Note: International data transfers—practical compliance—Transfers from EEA countries. In an ideal world, such transfers would be based on an adequacy decision granted by the EU Commission in favour of the UK. The UK government is seeking such an adequacy decision, but this has not yet been granted. In the meantime, the TCA provides for the continued free flow of personal data from the EEA to the UK for a period of four months, extendable to six months.

For more information on the impact of Brexit and the Schrems decision on international transfers of data, see Practice Notes: What does IP completion day mean for Risk & Compliance? and International data transfers—practical compliance.

European Court of Justice judgment 16 July 2020

Adequacy decision unknown.

Whether loss of control of personal data amounts to damage

Lloyd v Google LLC [2019] EWCA Civ 1599

The Supreme Court has given permission to appeal in the Lloyd v Google LLC case in which Mr Lloyd is seeking to bring a representative action against Google for placing cookies on users’ devices without the users’ consent.

The issue on appeal centres on whether Mr Lloyd should be given permission to serve out of the jurisdiction on Google LLC. To obtain permission, Mr Lloyd needs to show an arguable case and demonstrate that loss of control of personal data may constitute ‘damage’ for that purpose.

Permission granted 11 March 2020

Category Details Expected or actual date

Pension Schemes Bill

The Pension Schemes Bill creates new criminal offences relating to pension schemes and creates added reporting duties for pension scheme administrators and employers. The Bill introduces stricter rules about the transfer of pensions and enhances powers of the Pensions Regulator to impose fines of up to £1m. The new measures are intended to deter employers from acting recklessly with regard to pension monies.

See: Legislation tracker—pensions.

The Bill was reported with amendments and will return to the House of Lords for consideration of Commons amendments. The date is not yet confirmed.

Category Details Expected or actual date

Dividends

The Supreme Court will consider whether payment of a lawful dividend may amount to a transaction defrauding creditors contrary to section 423 of the Insolvency Act 1986 (IA 1986).

In BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112, the Court of Appeal clarified when remedial relief under IA 1986, s 423 may be granted and when directors’ duties to have regard to the interests of creditors (the creditors’ interests duty) may apply.

See News Analysis: Challenging lawful dividend payment as a transaction defrauding creditors and for breach of directors’ duties (BTI 2014 LLC v Sequana SA and others; BAT Industries plc v Sequana SA).

Hearing provisionally listed for 4–5 May 2021 following adjournment.

Climate-related disclosures

The FCA is issuing new guidance on statements to be included in annual financial reports of UK premium listed commercial companies. Regulations apply to accounting periods from 1 January 2021 and will affect financial reports filed from Spring 2022.

Accounting periods from 1 January 2021.

Category Details Expected or actual date

Loyalty penalty

The FCA published its final report on general insurance pricing practices in September 2020 and is now consulting on ‘radical’ proposed reform of the home and motor insurance market to address the issue of loyalty penalties. Some of the remedies proposed may apply to the wider insurance market. The consultation covers other proposed new measures designed to promote competition and ensure fair pricing.

The CMA’s draft annual plan for 2020/2021 confirms that the loyalty penalty remains a key plank of its consumer protection work. This is likely to be extended into issues such as auto renewal of contracts and the antivirus market.

See: LNB News 22/09/2020 66.

The FCA consultation closes on 25 January 2021.

Competition—findings of fact in CJEU

In SS for Health v Servier Laboratories Ltd [2020] UKSC 44, the Supreme Court considered the extent to which findings of fact made by the General Court of the European Union in competition proceedings are binding as res judicata on UK courts in a follow-on damages action. The High Court and Court of Appeal held that the findings were not binding. The Supreme Court agreed in the circumstances of this case and laid down some principles as to the applicability of the EU’s absolute res judicata rule.

See News Analysis: UK Supreme Court rules EU General Court findings not binding in domestic case (Secretary of State for Health v Servier Laboratories).

Hearing 9 June 2020. Decision 6 November 2020.

Economic duress

The Supreme Court will consider the ingredients of economic duress in the case of Pakistan Airline Corporation Limited (Respondent) v Times Travel (UK) Ltd (Appellant)  (2019/0142). The case concerns whether or not a contractual waiver of pre-existing claims was avoidable as a result of economic duress. The contract was avoided at first instance but that decision was overturned on appeal.

See News Analysis: Commercial contract not avoided on economic duress grounds where duress was lawful (Times Travel (UK) LTD v Pakistan International Airlines Corporation).

Hearing 2 November 2020. Judgment awaited.

Category Details Expected or actual date

SFO powers

In R (on the application of KBR Inc) v Director of the SFO UKSC 2018/0215 the Supreme Court will consider the powers of the SFO to require a foreigner to produce material overseas. This is relevant to UK companies with parent companies located overseas.

Hearing 13 October 2020. Judgment awaited.

Solicitors’ liens

The Supreme Court will assess the limits to the principle under which a solicitor can ask the court to grant an equitable lien to protect his entitlement to unpaid fees. This is relevant to companies seeking to obtain material from solicitors where fees are unpaid or in dispute and to companies offering legal services.

See: Bott & Co v Ryanair DAC UKSC 2019/0054 and News Analysis: Court of Appeal: solicitors have no equitable interest in compensation which is paid in cases where there is no dispute (Bott & Co v Ryanair DAC).

Adjourned at the parties’ request. No new hearing date has yet been published.

Powers of the Court to regulate solicitors’ firms, enforcement of solicitors’ undertakings

In Harcus Sinclair LLP (Respondent) v Your Lawyers Ltd (Appellant) UKSC 2019/0098, the Supreme Court will consider whether the court has inherent jurisdiction to regulate the entity through which a solicitor practices and whether enforcement of solicitors’ undertakings should be subject to public policy considerations in relation to restraint of trade.

See further News Analysis: NDA non-compete clause held unenforceable restraint of trade (Harcus Sinclair LLP and another v Your Lawyers Ltd and another).

Hearing 24–25 March 2021.

Digital markets

The CMA has published its annual plan for consultation. A central plank of its work for 2021/2022 will be to establish a Digital Markets Unit for the purposes of developing regulation of digital markets. Primary legislation will be recommended to Parliament during 2021.

See: LNB News 03/12/2020 109.

The plan covers the main themes for the CMA’s work in the 2021/2022 financial year. The consultation is open until 28 January 2021.

Category Details Expected or actual date

Brexit

The Brexit transition/implementation period ended at 11 pm on 31 December 2020, marking ‘IP completion day’—a significant moment for UK law.

An extensive TCA was published on 24 December 2021 which sets out the basis of the continuing relationship between the UK and EU.

Brexit has far reaching effects across all areas of law including consumer rights, employment, immigration, import and export and taxation. Professional qualifications will no longer qualify for automatic recognition absent express agreement. The REL regime has largely fallen away and RELs must find alternative means of lawful practice, including as RFLs or by requalification.

To track the progress of legislation introduced as part of the UK’s withdrawal from the EU, see our Brexit legislation tracker.

For an overview of the TCA, see News Analysis: Brexit Bulletin—examining the EU-UK Trade Cooperation Agreement.

Our Brexit toolkit brings together relevant content on the various legal requirements and implications of Brexit and includes links to Practice Notes, Checklists and Q&As as well as News Analysis and Legal Updates across a range of legal topics.

11pm on 31 December 2020 (IP completion day).

Trade Bill

Introduced on 21 July 2020, the Trade Bill provides the framework for the UK’s approach to international trade post Brexit. It provides for the establishment of the Trade Remedies Authority to protect UK business from unfair trade practices and addresses obligations under the Government Procurement Agreement.

See: Brexit legislation tracker—Trade Bill 2019–21

The Trade Bill is nearing the end of its passage through Parliament.

Overseas property register

Proposed register of ownership and control of foreign companies that purchase property in the UK.

The draft Registration of Overseas Entities Bill was considered by a select committee in May 2019. The select committee reported and generally endorsed the proposal with some recommended improvements to minimise possible avoidance.

The government responded in July 2019. It stated that the types of overseas entity that will be exempt will be set out in secondary legislation, which will also set out any evidence that might be required to be presented to the land registries to demonstrate that an overseas entity is or was exempt (eg a conveyancer’s certificate). It confirmed it intends to publish, and consult on, draft regulations to ensure that the proposals are workable and will have no unintended consequences.

This moves the UK one step closer to a ‘world-first’ public register of overseas entities owning UK property.

Relevant to overseas businesses that purchase property in the UK.

See subtopic: Risk & Compliance forecast.

The new register is expected to become operational in 2021.

Following the general election in December 2019, the draft Registration of Overseas Entities Bill has not yet been republished but it was included within the Queen’s Speech.

While there is no indication that the proposal is being abandoned, it is likely to have been delayed by the coronavirus pandemic.

Business interruption insurance

The FCA sought declarations as to the extent of business interruption insurance coverage in an effort to secure clarity amidst the coronavirus pandemic. It selected a range of policies as a test case and judgment was handed down on 15 September 2020.

The FCA has indicated that the judgment is binding on the eight insurers directly involved but should be treated as persuasive by all other insurers dealing with relevant claims and applied across the board. The FCA published guidance on this issue and continues to update its dedicated webpages.

See: The Financial Conduct Authority v Arch Insurance [2020] EWHC 2448 (Comm) and News Analyses: FCA finalised guidance on the coronavirus (COVID-19) business interruption insurance test case and Coronavirus (COVID-19) business interruption test case (post-judgment analysis) construction, composite perils and causation.

First instance judgment handed down 15 September 2020. The FCA announced on 29 September 2020 that it and seven insurers had filed precautionary leapfrog appeals. Supreme Court hearings took place 16–19 November 2020. Judgment awaited.

UPDATE: The Supreme Court handed down its judgment on 15 January 2021, substantially allowing the FCA appeals. See: LNB News 15/01/2021 107.

Extent of duty of care

The Supreme Court is considering the extent to which a UK domiciled parent company of a multinational group owes a common law duty of care to individuals suffering harm as a result of systemic health, safety and environmental failings in its overseas subsidiaries.

See: Okpabi v Royal Dutch Shell UKSC 2018/0068.

Hearing 23 June 2020. Judgment awaited.