Business legal trends for 2025

As we leave 2024 behind, it’s clear that businesses are still navigating challenging waters. Many of the trends we highlighted last year remain relevant, a reflection of the continuing economic pressures faced by UK businesses. But it’s not all doom and gloom - change brings opportunity, and with the right approach, 2025 could be another year your business thrives.

Here, we share the legal trends we think you’ll want to keep on your radar, helping you stay one step ahead.

Commercial Law: Building resilience in uncertain times

The need for resilience in your contracts has never been more pressing. Cybersecurity remains a hot topic, with the anticipated Cyber Security and Resilience Bill set to tighten regulations even further. Combined with a rise in ransomware attacks, it’s essential to have robust security provisions baked into your supplier and customer contracts. Clear processes for managing breaches can make all the difference.

Data transfer rules are also evolving. The UK’s Data Use and Access (DUA) Bill and new Standard Contractual Clauses (SCCs) in the EU mean it’s time to revisit your contracts if you work with international partners. Meanwhile, liability clauses are under scrutiny in courtrooms, with recent case law reminding us that clarity and precision are key to avoiding costly disputes.

In a turbulent economy, flexible pricing mechanisms that adapt to market conditions could help maintain long-term business relationships. Similarly, well-drafted force majeure clauses are essential for managing the unexpected. And as AI continues to transform industries, getting ahead on issues like IP ownership and confidentiality will safeguard your interests in this fast-moving space.

Data Protection: The regulatory spotlight grows

Data protection remains firmly in the regulatory spotlight. If your business uses AI, now’s the time to clarify your role under UK GDPR and ensure your processes for training AI models are lawful. The ICO has also stepped-up enforcement on cookie compliance, so it’s worth revisiting your website’s practices to avoid fines.

Recent fines for inadequate data security, such as the £6 million penalty for Advanced Computer Software, show the ICO will hold data processors directly accountable for breaches. We expect the Cyber Security and Resilience Bill to reinforce this trend. Adding to the complexity, the transition from the DPDI Bill to the DUA Bill will introduce a new Information Commission with stronger enforcement powers, alongside EU legislative changes. Reviewing your cross-border data transfer mechanisms now could save headaches later.

Employment Law: Shaping the workplace of tomorrow

2024 saw transformative changes to employment law with the Employment Rights Bill, and the momentum continues into 2025. Flexible working and family-friendly policies are reshaping workplaces, while trials of a four-day work week are gaining traction. For employers, staying ahead means thinking not just about compliance, but about how to attract and retain talent in a competitive market.

Meanwhile, mental health and wellbeing policies, for example on menopause, are becoming central to workplace strategies, and the updated National Living Wage rates underscore the need to adapt to evolving employee expectations. If you’re navigating gig economy protections, the coming year may bring new challenges—and opportunities.

Business Immigration: Adapting to stricter rules

The landscape for business immigration is shifting. Changes to the Immigration Rules, including increased costs for employer sponsorships, are placing more pressure on businesses that rely on overseas talent. Digital advancements in the sponsorship system may simplify processes, but with further increases to visa fees and the Immigration Skills Charge expected in 2025, it’s a good time to review your workforce planning.

Commercial Property: Sustainability meets flexibility

Sustainability is no longer a nice-to-have; it’s a necessity. Stricter Minimum Energy Efficiency Standards (MEES) are coming, and planning reforms promise to streamline approvals—but with new compliance demands. Businesses are also adapting to the rise of agile workspaces, prompting changes to lease structures. Whether you’re a landlord, tenant, or developer, understanding these shifts is key to staying competitive in the property market.

Corporate Law: Renewed opportunities

Corporate transactions are poised for a resurgence in 2025, although we note that April’s rise in Business Asset Disposal Relief (previously Entrepreneurs Relief) may impact sales strategies. Nevertheless, practical due diligence remains crucial to getting a deal over the line. Buyers are focusing on financial stability, including the accuracy of records, debt levels, and dependencies on key customers, suppliers, or staff. Intellectual property ownership and data protection compliance are also essential, particularly for businesses with proprietary technology or digital operations. Even in smaller deals, cybersecurity and the scalability of digital infrastructure are becoming critical considerations.

For start-ups and early-stage businesses seeking venture capital, the funding environment in 2025 will present both opportunities and challenges. Investors are likely to prioritise businesses demonstrating strong growth potential in sectors like artificial intelligence, fintech, and green technologies. Start-ups with scalable business models, defensible intellectual property, and clear paths to profitability will attract attention. However, the tightening of funding in recent years has created a more selective market. Robust financial forecasting and a compelling narrative about a business’s mission and impact are now essential.

Employee Share Schemes: Incentivising through change

Employee ownership trusts (EOTs) remain a popular choice for succession planning in 2025, thanks to a 0% CGT rate with no cap on sale value. While the government’s new procedural requirements are expected to align largely with current practices, navigating the finer details will require expert legal advice to ensure a smooth transition. With rising CGT rates, EOTs continue to offer an attractive route to long-term employee ownership over traditional trade sales.

Meanwhile, rising National Insurance Contributions (NIC) are prompting businesses to rethink their remuneration strategies. Share-based remuneration is gaining traction as a way to offset payroll costs while retaining top talent. In a climate of financial strain, these creative approaches provide businesses with much-needed flexibility and resilience.

Financial Services: The age of AI and its regulation

AI continues to revolutionise financial services, offering tools for credit risk assessment and fraud monitoring. But as these technologies evolve, so do the regulatory frameworks around them. Changes to Buy-Now-Pay-Later (BNPL) regulations will require adjustments, while increased scrutiny from regulators, including the FCA, means business plans need to be centred around compliance. The FCA themselves are also under scrutiny following a recent APPG report which could mean we see a change in accountability mechanisms affecting firm-regulator interactions.

Business Disputes: Finding solutions in tough times

The pressures of a challenging economy are leading to more shareholder disputes. Ensuring clear governance and open communication can help prevent these issues from escalating.

At the same time, systemic underfunding in the civil justice system is causing delays, leading to a widening split between how the High Court operates and the understaffed and slow processes within the County Court system. Strategic planning can help businesses navigate these challenges while minimising disruption.

Intellectual Property: Taking a closer look

The resolution of Skykick v. Sky Ltd is a wake-up call for businesses to review their trade mark portfolios. Overly broad applications are now more likely to face challenges, so narrowing your descriptions could save time and money. Looking ahead, the new EU Directive on designs expands protections for digital and non-physical products, making it easier to safeguard innovative designs.

Key Takeaways

If there’s one thing 2024 has taught us, it’s that the pace of change isn’t slowing down. Many of the challenges we saw last year remain, but that doesn’t mean they’re insurmountable. Instead, they offer an opportunity to reflect, adapt, and strengthen your approach.

Looking ahead to 2025, we encourage you to be proactive: review your contracts, stay ahead of regulatory changes, and think strategically about your workforce and operations. By taking small steps now, you can position your business to thrive in the year ahead. And remember, we’re here to support you every step of the way.