Legal trends that could affect your business in 2024

While many may share the view that the legal industry is old and traditional, laws and regulations are constantly evolving to adapt to new technologies and practices. Similarly, the changing economic climate challenges us to approach contractual relationships differently to better manage risk and streamline our ability to do business.

At Harper James, an important part of what we do is empowering our clients to make informed decisions and, as forward-thinking lawyers, this means looking ahead for trends that could impact or benefit your situation.

To help you stay ahead of the competition, here’s our shortlist of predictions, trends and changes you can expect to see play out in 2024.

Business Disputes

Businesses will be expected to exhaust all available alternative dispute resolution (ADR) options, including mediation and, if appropriate, neutral evaluation before they resort to litigation. For those that do end up in court, the silver lining is that the move to online court processes will continue to gain ground, helping streamline the litigation process.

We expect the trend of limiting the costs recoverable by the winning party will continue, building on the new Fixed Costs regime for claims up to £100,000 and through judicial control of costs budgeting in larger claims.

Business Immigration Law

The UK Government has announced a ‘five-point plan’ to cut net migration with new immigration rules, which are scheduled to come into force in Spring 2024. Among the proposed changes, care workers will not be able to bring family dependents to the UK and the minimum skilled working salary will increase by almost 50% to £38,700. The planned changes will have significant impact on companies recruiting key talent and filling roles with migrant workers.

Commercial Law

Despite reduced inflation, tricky trading conditions will continue. This means that good contract management will still be required to ensure risks are identified and managed – and to support strong commercial relationships.

Compliance will take centre stage for many businesses as more provisions from the Online Safety Act come into force, and the Digital Markets, Competition and Consumers Bill passes through Parliament. It goes without saying that each business must identify its legal obligations – as they change over time – and ensure that it meets those obligations.  Failure to do so has a range of consequences, including in some cases breach of contract claims.

If your business is using auto-renewal provisions, 2024 will be the year to review that use. When it becomes law, the Digital Markets Competition and Consumers Bill is likely to restrict the use of auto-renewal provisions in consumer contracts and to require compliance with detailed requirements if they are to be enforceable. Meanwhile, B2B subscription customers are becoming savvier in relation to auto-renew clauses and may be less willing to sign up to ‘evergreen’ contracts (or to stay in those contracts).

Commercial Property Law

2024 will continue to see office tenants analysing their real estate needs as the post pandemic hybrid working model seems to be here to stay. As well as tenants looking to reduce their rental liabilities, they will be thinking about how they can attract and retain staff with high quality, collaborative working space.

ESG aspirations continue to be high on the agendas of both landlords and tenants (and their investors, clients and employees). We can expect to continue to see the rise in green leases and investment by landlords in improving their office offering to comply with MEES regulations and tenant demands for high quality, sustainable flexible office space.

Corporate Law

In the new year, we’re going to see more appetite for mergers and acquisitions (M&A), particularly management buy-out transactions (MBOs). Selling via an MBO allows your management team to take ownership of your business, often leading to better company performance, employee satisfaction and involvement. If you're in an ambitious management team, use the new year as an opportunity to evaluate if an MBO might be a route for you.

Data Protection & Privacy Law

The rise of Artificial Intelligence (AI) presents exciting opportunities but also additional legal considerations, particularly concerning personal data, as businesses battle how their employees use AI tools or look to integrate AI into their own products. It’ll be important to keep a watchful eye on regulatory developments, following agreement of the EU AI Act and progress of the UK Government’s approach to AI regulation.

Global data transfers continue to be a challenge. Following the US approved data bridge, we’ll wait to see if other ‘adequacy’ decisions are agreed, or if there will be a Schrems lll.

The Data Protection and Digital Information Bill is currently working its way through parliament but we’ll have to hold our breath to see whether there will be any significant changes to the current text, and whether it receives Royal Assent in 2024.

We do expect to see increased regulatory action, particularly in relation to cookie compliance and Privacy and Electronic Communications Regulations (PECR) compliance.

Employee Share Schemes

We anticipate a rise in business owners opting to sell their legacies via employee ownership trusts (EOTs). According to a recent study by Ownership at Work, more than two-thirds of senior owners of small to medium-sized businesses with 10-249 employees plan to sell or transfer their ownership within the next decade, potentially affecting around 120,000 SMEs. Among this group, 43% foresee the need for entirely new owners or risk closure, suggesting approximately 51,600 SMEs may face this situation. Additionally, the government has hinted at potential future alterations to EOT regulations in the future.

Employment Law

2024 will bring a series of UK employment law changes to safeguard employee rights following the UK’s exit from European laws. Employee rights will continue to increase with changes giving some employees additional rights on flexible working while giving others much needed certainty. We will also see amendments in the Equality Act to provide specific protection for breastfeeding mothers and guidance on the definition of disability. New legislation on sexual harassment will require employers to take reasonable steps to prevent this in the future and penalties if they fail to do so. We’ll cover these and other upcoming changes in our webinar on 17 January 2024 - Navigating recent and upcoming employment law developments.

Finance and Investment

We will see a lot more advanced subscription agreements (ASAs) and convertible loan notes (CLNs) in the new year. Based on feedback from our clients, many are struggling to secure funding and their proposed funding rounds are being pushed forward. This means they require an injection of cash now and some are considering more short-term solutions to secure this to buy additional time to complete the full funding round. We’re mainly seeing this affect our IT and app based clients.

Financial Services Regulation

In 2024, we will continue to see some of the biggest changes to regulation in years. Along with the ongoing Edinburgh reforms, the government will publish a National Payments Vision, setting the priorities for UK payments, and looking to unlock the full potential of Open Banking. Additionally, AI and its regulation will continue to impact Fintech services, providing opportunities for those able to adapt quickly. 

Insolvency and Corporate Recovery

Unfortunately, we’ll likely see a continuing increase in companies collapsing in 2024, when the businesses that were able to hang on as a result of government loans have to move into formal insolvency. The sooner a business addresses any problems it has, the greater the chances of a recovery.

Intellectual Property

2024 will see the Supreme Court’s ruling in the long-running Skykick trade mark battle. The Supreme Court will consider what constitutes a ‘bad faith’ trade mark application, in particular looking at situations where applicants seek protection for overly broad lists of goods/services with no intention to use the mark for those goods/services. This could result in a wholesale change in trade mark prosecution practice in the UK, potentially seeing UK and EU trade mark law diverging.

The above represents just a shortlist of trends and changes we predict will come into play in 2024. We’ll be providing updates and further guidance on important changes throughout the year, so unless you already receive our monthly newsletters, you can sign up to receive them here to help you stay up-to-date and compliant.

As your business navigates the challenges and legal landscape of 2024, our team is on-hand to support your business. If you anticipate any impact from the trends discussed, please do get in touch.