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 8 October 2020.

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 on a reducing basis from 1 July 2020 to 31 October 2020.

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

For more information on the CJRS changes from 1 July, see Practice Note: Coronavirus Job Retention Scheme (revised version from 1 July 2020).

For more information on the JSS, see Practice Note: Job Support Scheme.

The CJRS will reduce gradually from 1 July to 31 October 2020.

The JSS will come into effect from 1 November 2020.

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.

Two private members’ bills potentially affecting employment rights will have their second reading in October 2020:

  • the Employment (Dismissal and Re-employment) 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

These two 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) Bill due for second reading on 30 October 2020.

Employment (Reasonable Adjustments for carers) Bill due for second reading on 16 October 2020.

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.

See: Case tracker—Employment.

Hearing in May 2020. Awaiting reserved judgment.

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—key difficulties and HMRC’s approach, 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.

Application for permission to appeal lodged on 11 July 2019.

Supreme Court.

Permission granted on 11 February 2020.

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:

  • —introduce legislation to regulate use of NDAs, and
  • —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.

Immigration post-Brexit

The Immigration and Social Security Co-ordination (EU Withdrawal) Bill 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.

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

Third reading 12 October 2020.

Category Details Expected or actual date

Data protection

The Information Commissioner’s Office (ICO) is consulting on draft statutory guidance, which details how it will regulate and enforce data protection legislation in the UK. This is a requirement of the Data Protection Act 2018 and will inform the ICO’s approach to assessment and enforcement of data protection legislation.

See:  LNB News 01/10/2020 11.

The consultation was published on 1 October 2020 and runs until 12 November 2020.

Data protection and digital marketing

The ICO has already fined companies for profiteering from the coronavirus pandemic and has indicated its intention to take action against those taking advantage of the current crisis by flouting the law. 

See:  LNB News 08/10/2020 65 and  LNB News 24/09/2020 40.

Cases published 24 September 2020 and 8 October 2020.

ePrivacy

The  Draft Regulation on privacy and electronic communications is intended to replace the current ePrivacy Directive ( Directive 2002/58/EC) and align electronic privacy requirements with the General Data Protection Regulation,  Regulation (EU) 2016/679 (the GDPR).

For any organisation other than technology communication providers, the main areas to watch will be the implications on direct marketing and cookies.

After years of negotiations in the Council of the EU, the draft regulation was rejected at the end of November 2019 by the Committee of Permanent Representatives (the body responsible for preparing the Council’s business).

The coronavirus outbreak caused work on the legislation to be postponed. Shortly before it was postponed, a slimmed-down compromise proposal was presented representing a significant change from previous versions. See the  text of 6 March 2020 and also see News Analysis:  Telecoms and big tech face revised, slimmed-down EU draft ePrivacy regulation.

On 1 July 2020, Germany took over the presidency of the Council of the EU and shortly afterwards issued a discussion paper indicating that it believed that reaching a general approach on the draft legislation was possible. However, as the presidency noted in its the paper, Member States have not yet reached agreement on even some of the fundamental propositions of the new rules such as whether ‘legitimate interests’ should be included as a legal basis for processing electronic communications metadata and placing cookies on users’ devices.

The German presidency’s optimism will be encouraging to some, but a significant amount of work remains to be done and it should also be remembered that the current draft delays the applicability of the Regulation until 24 months after its entry into force. This means that long-awaited change to the ePrivacy regime in Europe still remains years away.

See:  ePrivacy Regulation—timeline.

Not known—currently postponed indefinitely

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 SCCs are solely intended to provide contractual guarantees that apply uniformly in all third countries. 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 EU data protection regime. If not, it may be necessary to supplement the SCCs with other clauses or additional safeguards.

See News Analysis:  Privacy Shield invalidated and use of appropriate safeguards (including Standard Contractual Clauses) require case by case assessments (Facebook Ireland and Schrems).

Given the far-reaching implications of this case, further guidance from the ICO and EDPB is anticipated. The European Commission has also indicated that revised SCCs may be finalised before the end of 2020.

See News Analysis:  EU companies to see revamped SCCs for international data transfers by end-2020, Justice Commissioner says .

European Court of Justice judgment 16 July 2020

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 is currently at committee stage and a report is expected on 5 November 2020.

Category Details Expected or actual date

Taxation—personal liability

Section 100 of the Finance Act 2020 introduces potential joint and several liability for directors in respect of tax due from a company in certain circumstances.

Schedule 13 sets out three broad circumstances where such liability may arise: 

  • —tax avoidance and tax evasion cases (paragraph 2(1))
  • —repeated insolvency and non-payment cases(paragraph 3(1)), or
  • —cases involving a penalty for facilitating avoidance or evasion (paragraph 5(1))

The Act received Royal Assent, and section 100 came into force, on 22 July 2020.

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 25 March 2020. Judgment awaited

Extended time for filing

The  Corporate Insolvency and Governance Act 2020 ( CIGA 2020) provides for temporary extensions of the period for companies to file their accounts and reports as a result of the coronavirus pandemic.

The Financial Conduct Authority (FCA) has similarly announced extensions of time for reports due to it.

See Practice Note:  Coronavirus (COVID-19)—impact on annual accounts and reports.

Note that some temporary time limits in  CIGA 2020 relating to moratoria have been shortened pursuant to the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Early Termination of Certain Temporary Provisions) Regulations 2020,  SI 2020/1033—see:  LNB News 25/09/2020 48.

The ‘relevant period’ for  CIGA 2020 was extended to 31 March 2021 by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020,  SI 2020/1031).

See:  LNB News 24/09/2020 71.

Hearing 25 March 2020. Judgment awaited

Taxation

The Franked Investment Income group litigation continues with HMRC’s appeal to the Supreme Court challenging decisions regarding compatibility of UK tax laws with EU requirements. The appeal is due to be heard on 7–10 December 2020.

See: Test Claimants in the Franked Investment Income Group Litigation v HMRC UKSC 2016/0229.

Hearing 7–10 December 2020

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.

See:  LNB News 22/09/2020 66.

The FCA consultation closes on 25 January 2021.

Competition—findings of fact in CJEU

The Supreme Court will consider 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.

See: SS for Health v Servier Laboratories Ltd  UKSC 2019/0150 and News Analysis:  Protecting pharma patent rights and the difficulties of establishing the tort of unlawful interference (Secretary of State for Health v Servier Laboratories Ltd).

Hearing 9 June 2020. Decision awaited

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.

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.

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).

Hearing 27 October 2020.

Category Details Expected or actual date

Brexit

The UK has left the EU on the basis of the Withdrawal Agreement as implemented in the  European Union (Withdrawal) Act 2018 and the  European Union (Withdrawal Agreement) Act 2020. However, we are now in an implementation period running until 31 December 2020 during which time the UK will generally continue to abide by EU rules.

See:  Brexit risk management guide and  Brexit toolkit—Commercial.

Draft bills have been published including the Immigration and Social Security Co-ordination (EU Withdrawal) Bill which addresses the end of freedom of movement within the EU.

Consultations as to regulatory reform of financial services have also been published.

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

The UK’s exit took place at 11 pm on 31 January 2020 (exit day).

The implementation period runs until 31 December 2020 during which time the UK will generally continue to abide by EU rules.

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

Currently at committee stage in the House of Lords.

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.

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. Decision awaited.

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