In-house lawyer tracker: Stay ahead of key legal & regulatory changes across Economic crime, Employment, ESG, Professional regulation and Property

In-house lawyer tracker: Stay ahead of key legal & regulatory changes across Economic crime, Employment, ESG, Professional regulation and Property

This Practice Note highlights key legal and regulatory changes that affect or will affect in-house lawyers in 2023 and beyond. While some are set in stone, others are more speculative at this stage or subject to the parliamentary timetable. It was last updated on 9 February 2023.

Subjects covered in this blog include:

  • Economic crime
  • Employment
  • ESG, responsible business and sustainability
  • Professional regulation
  • Property

To find out more on Commercial, Corporate law and governance, and Data & privacy click here.

Economic crime

The table below represents edited highlights that are not sector specific. For more details, see: Risk & Compliance forecast.

CategoryDetailsExpected or actual date

Financial sanctions

The strict liability nature of sanctions offences and in particular the ongoing Ukraine conflict presents challenges to all businesses in the UK. Staying up to date is critical—see:

 

See also Practice Notes:


 

Ongoing

Failure to prevent offence

The Law Commission has consulted on the law regarding corporate criminal liability, including extending the scope of failure to prevent offences to cover fraud and other economic crimes. The consultation closed on 31 August 2021.

The Law Commission’s published its on 10 June 2022. The paper contains ten options for reform, including expanding the number of failure to prevent offences to cover fraud, human rights abuses and computer misuse. Other recommendations include options in relation to monetary penalties, use of Serious Crime Prevention Orders and reporting requirements.

It had been anticipated that a new failure to prevent offence might be included in the Economic Crime (Transparency and Enforcement) Act 2022, but no such offence was in fact included. However, during the Commons Report Stage of the Economic Crime and Corporate Transparency Bill on 25 January 2023, Security Minister Tom Tugendhat MP confirmed the government’s intention to bring forward a failure to prevent fraud offence in the Bill when it progresses to the House of Lords.


The Law Commission had recommended that further work and consultation would be necessary on the scope of any new offences, however it is unclear what will now happen given indications suggest that the Bill may receive Royal Assent in the spring of 2023.

Economic crime levy for MLR 2017 regulated firms


On 21 September 2021, HM Treasury announced that anti-money laundering (AML) regulated entities with over £10.2m in UK revenue will be charged an economic crime levy of £10,000 to £250,000 depending on UK revenue. The levy will be applied on an annual basis for each financial year, commencing in the tax year 2022/2023. Payment will be due within six months of the end of the financial year, ie by 30 September, although collectors (HMRC, the FCA and the Gambling Commission) may require earlier payment if this aligns with their existing fee processes.

See News Analyses: Finance Bill 2022—the economic crime levy and The Economic Crime (Anti-Money Laundering) Levy.

The Economic Crime (Anti-Money Laundering) Levy Regulations 2022, were made to make provision relating to the assessment, payment and collection of the Levy. They came into force on 1 April 2022. The first charge for the levy will be for the 2022/2023 financial year with the first payments due to be made before 30 September 2023.

AML and counter-terrorist financing


The Money Laundering and Terrorist Financing (Amendment) (No 2) Regulations 2022 contain some key changes in relation to:

—Trust and Company Service Providers (re business relationships)

—proliferation financing

—reporting discrepancies, and

—supervision and information-sharing

See News Analysis: Money Laundering and Terrorist Financing (Amendment) (No 2) Regulations 2022—key amendments for compliance teams.

This is not the end, however, as the government published a forward-looking   in June 2022. Alongside this, the government also published two post-implementation reviews to fulfil its statutory obligations, one of the Money Laundering Regulations 2017 and one of the OPBAS Regulations 2017.

We therefore expect a rolling programme of change to the AML regime in the coming months and years. See:  .

The No 2 Regulations 2022 come into force on various dates between August 2022 and September 2023. See News Analyses: Money Laundering and Terrorist Financing (Amendment) (No 2) Regulations 2022—key amendments for compliance teams

The discrepancy reporting provisions will come into force on 1 April 2023.

European AML package


The European Commission has published a package of , including:

—two draft Regulations (to create a single EU supervisory authority (AMLA) (the AMLA Regulation) and to set out detailed rules and requirements in areas such as client due diligence (the Conduct Regulation))

—a new directive—6MLD

See Practice Note: European Commission 2020 Action Plan on AML/CTF and 2021 legislative package.

AMLA is scheduled to start work in 2024 with the aim of reaching full staffing and direct supervision in 2026.

New SAR online portal

The NCA is replacing the current SAR Online portal with a more modern digital service.

In January 2023, the NCA published five new pieces of guidance aimed at helping users navigate the new SAR Portal. See .

In a webinar held in August 2022, the NCA said that organisations are being moved across to the new portal in batches between October 2022 and February 2023.

The webinar was not widely advertised and it does not appear to be accessible through the NCA website. However, you can register to view the webinar .

 

Employment

The table below represents edited highlights that are not sector specific. For more detailed trackers, see:

Category Details Expected or actual date
Holiday pay

Following the Supreme Court’s judgment in Harpur Trust v Brazel , the government is on its proposal to make holiday entitlement for part-year and irregular hours workers proportionate to the annual hours they work.


For further information, see: .

The consultation closes on 9 March 2023.
Statutory rates and limits—April 2023 changes
The national living and minimum wage rates will increase as follows: for workers aged 23 or over from £9.50 to £10.42 per hour; for workers aged 21 to 23 from £9.18 to £10.18 an hour; for 18 to 20-year-olds from £6.83 to £7.49 per hour; for 16 to 17-year-olds from £4.81 to £5.28 per hour; and for apprentices from £4.81 to £5.28 per hour. See: .

The rates of Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP), Statutory Shared Parental Pay (SSPP) and Statutory Parental Bereavement Pay (SPBP) will increase from £156.66 to £172.48 per week. See: .

The rate of Statutory Sick Pay (SSP) will increase from £99.35 to £109.40 per week. See: .

For further information, see Practice Note: Employment-related statutory rates and limits.

Increase to rate of NMW: 1 April 2023.

Increase to rate of SMP, SPP, SAP, SSPP and SPBP: 2 April 2023.

Increase to rate of SSP: 6 April 2023.

Employment contract—dismissal and re-engagement

The government has launched a on a new Code of Practice on dismissal and re-engagement, to tackle the controversial use of ‘fire and rehire’ practices to change employees’ terms and conditions of employment.

For an analysis of the first draft of the Code, see News Analysis: Increased liabilities under new draft Code on dismissal and re-engagement—evidence is all.

The consultation closes on 18 April 2023.
Industrial action
The , introduced to Parliament on 10 January 2023, enables regulations to be made by the Secretary of State setting minimum levels of service that must be maintained during a strike in specified public services, namely, health, fire and rescue, education, transport, border security, and nuclear decommissioning and management of radioactive waste and spent fuel.

If passed, this legislation will allow an employer in those sectors to serve a ‘work notice’ on a union notifying it of a strike under , identifying the persons required to work and the work to be carried out so that the relevant minimum service level (as set out in regulations) is provided.

Unions will lose their protection from certain tortious liabilities if they do not take reasonable steps to ensure that the workers identified in the notice comply with it. Those workers identified in the notice will lose their unfair dismissal protection if they do not comply with the notice.

It would seem that this Bill is intended to replace the , which was introduced in the House of Commons on 20 October 2022, but which has not progressed to a Second Reading.

This Bill is expected to come into force during 2023.
Retained EU Law (Revocation and Reform)—employment
Under the
(REULRR Bill) (previously known as the Brexit Freedoms Bill), the special status of retained EU law under UK law will be ended from the end of 2023.

Retained EU law includes the Working Time Regulations 1998, the , TUPE 2006, the Agency Worker Regulations 2010 and Part-time Worker Regulations 2000.

The Bill will enable the government to specify, amend, repeal and replace retained EU law more easily via secondary legislation. 

The Bill contains provisions on sunsetting the majority of retained EU law, ending the principle of supremacy of retained EU law and associated EU law principles in UK law, creating a new category of ‘assimilated law’, facilitating departures from retained EU case law, allowing easier modification of retained EU legislation, and further powers relating to EU law and assimilated law.

For further information, see: Practice Note: Retained EU law in employment, and the House of Lords Library on the REULRR Bill.

By 31 December 2023.
Data protection and employment practices
The Information Commissioner’s Office (ICO) has announced that its (not yet updated for UK GDPR or the ) will be replaced by an Employment Practices Hub.

The ICO is releasing draft guidance for different topic areas in stages. It has already consulted on draft and guidance to be included on the Hub.

The consultations closed in January 2023 and final guidance is awaited.

The monitoring at work consultation closed on 11 January 2023.

The health information consultation closed on 26 January 2023.

Final guidance is awaited.
Immigration—skills shortages
The Migration Advisory Committee (MAC) has been commissioned to review the shortage occupation list for sponsored Skilled Workers. This includes considering whether, and if so, how, jobs at a skill level lower than RQF 3 should be added to the list.

See: and .

Note: in its annual report for 2022, issued in December 2022, the MAC stated that the review ‘is currently on hold at the request of the Home Office pending clarification from the Government on migration policy’.

See: .

On hold
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2023 should see further significant steps in the ongoing process of digitalisation of the UK immigration system. This will include the delivery of the first two stages of the ‘sponsorship roadmap’ to streamline IT aspects of the work sponsorship system, and the phased introduction of Electronic Travel Authorisations (ETAs). When ETAs are introduced, persons who currently do not require a visa to travel to the UK for business trips (such as US nationals) will be required to apply online for prior authorisation to do so.


Ongoing

 

ESG, responsible business and sustainability

The table below represents edited highlights that are not sector specific. For more details, see: Risk & Compliance forecast.

Category Details Expected or actual date
Independent review of the ( )

The government has been engaged in a review of since 2018. It has announced a number of changes will be made to and government guidance.

See Practice Note: How to prepare a slavery and human trafficking statement—Future changes to slavery and human trafficking statements.

Revised government guidance was due to be issued in 2020, with further revisions once the legislation has been changed. This guidance is still awaited.
Sustainability reporting—
The new CSRD will extend the scope of reporting requirements under the Non-Financial Reporting Directive (NFRD) to a broader spectrum of companies, require the audit of reported information, and introduce more detailed reporting requirements including a requirement to follow mandatory sustainability reporting standards.

Notably, the CSRD will capture all large companies (ie companies with more than 250 employees and more than €40m in turnover and/or more than €20m in total assets) as well as all listed companies (save for micro-enterprises).

In addition, the CSRD contains extraterritorial provisions and will extend the scope of reporting requirements to listed SMEs and non-EU companies with substantial activity in the EU market.

Companies within scope of the CSRD will need to report in compliance with European Sustainability Reporting Standards (ESRS), which will be adopted by the Commission in the form of delegated acts by June 2023.


 

 

Published in the Official Journal on 16 December 2022 and in force on 5 January 2023.

The application of the CSRD will be phased, as follows:

—1 January 2024 for large public interest companies already subject to the NFRD, with reports due in 2025 

—1 January 2025 for ‘large’ companies not presently subject to the NFRD, with reports due in 2026

—1 January 2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings, however for a transitional period of two years relevant SMEs will have the option to opt out of the reporting requirements subject to including an explanation as to why sustainability information has not been provided in the management report

—1 January 2028 for non-EU undertakings within the scope of the CSRD, with reports due in 2029.
Supply chain due diligence—forest risk commodities
Following a in 2020, the includes new provisions requiring larger businesses to undertake due diligence to show that they have taken proportionate action to ensure they are not using ‘forest risk commodities’ in their supply chains.

The detail of the proposed requirements will be implemented through secondary legislation and following a by the Department for Environment, Food & Rural Affairs (Defra), the government has confirmed that the due diligence requirements will apply to large companies and the definition of turnover will be aligned with the Companies Act 2006. The threshold will be based on turnover in the previous financial year. In respect of the other consultation questions, the government merely says it will take into account consultation responses in developing the legislation and accompanying guidance, and publish the government’s approach to secondary legislation in due course.


No timescale has been given.
Supply chain due diligence—EU Directive on Corporate Sustainability Due Diligence
The European Commission published a proposal for a Directive on Corporate Sustainability Due Diligence on 23 February 2022. The aim of this Directive is twofold—to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations into companies’ operations and corporate governance. It would introduce a corporate due diligence duty, requiring certain companies to undertake due diligence checks of their supply chain to identify actual and potential adverse impacts of their activities on human rights and the environment.

Notably, the proposal will provide victims of identified harm recourse to bring civil claims before the competent national courts, to hold companies to account.


Legislative proposal adopted on 23 February 2022. The Council of the EU published its general negotiating position on the proposals on 1 December 2022. The European Parliament’s legal affairs committee (JURI) is expected to vote on the proposal on 13 March 2023.

 

Professional regulation

The table below represents edited highlights that are not sector specific. For more details, see: Risk & Compliance forecast.

CategoryDetailsExpected or actual date
Continuing competence
The SRA has published an in response to a statement of policy on ongoing competence issued by the Legal Services Board. As part of the action plan, the SRA is intending to carry out more thematic review work, which it has said will include a focus on in-house solicitors as well as other parts of the profession.

Ongoing
Regulation of solicitors—keeping of the roll

Following a consultation, the SRA has announced it will be reinstating the annual keeping of the roll exercise for solicitors who do not have a practising certificate but wish to remain on the roll of solicitors.

The exercise will restart from April 2023. There will be an administration charge in the range of £20–£40 to remain on the roll of solicitors as a non-practising solicitor.
Health and well-being at work—solicitors
The SRA has on changes to its rules and the SRA Codes of Conduct to clarify issues surrounding the appropriate treatment of work colleagues, and the risks regarding an individual solicitor’s health and fitness to practise. 

In its the SRA has confirmed it will be bringing forward most of the proposed changes, including a new regulatory requirement for solicitors to treat colleagues fairly and with respect and not to bully, harass or discriminate unfairly against them.

The new provisions are expected to take effect in Spring 2023.

 

Property

The table below represents edited highlights that are not sector specific. For more detailed trackers, see:
CategoryDetailsExpected or actual date
Minimum energy efficiency standards—commercial leases
Under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, from 1 April 2018 landlords were prohibited from granting new leases or renewal leases of commercial and residential properties in England and Wales which are rated F or G on their EPCs. Before such properties can be let, cost effective energy efficiency improvements must be performed so that the property attains an EPC rating of E or above. From 1 April 2023 the requirements will apply to all commercial leases (ie including those already in existence). Landlords who consider that an exemption applies under these regulations are still able to let F and G rated properties, but will need to lodge an exemption on a centralised .

1 April 2023 for all commercial leases.
Registration of overseas entities

The Economic Crime and Corporate Transparency Bill makes further provision about the registration of overseas entities—see: Corporate law and governance.

See: Corporate law and governance.
Vacant high street properties and property information and records
The Levelling-up and Regeneration Bill deals with various planning matters. Parts 10, 11 and 12 of the Bill deal with letting by local authorities of vacant high street premises after letting auctions, information and records about interests in, and dealings with, land and for the changes to pavement licences to be permanent.

See: .

This public Bill has now completed all its stages in the House of Commons and the second reading in the House of Lords, the general debate on all aspects of the Bill, took place on 17 January 2023.

Committee stage, where there will be a line by line examination of the Bill, is scheduled to begin on 20 February 2023.
Commercial contracts—conclusive certification provisions in the Supreme Court—pay now, argue later
The Supreme Court has delivered its judgment in Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2, in which it considered the effect of a common provision within a commercial lease. The clause in question provided that the landlord was to certify the amount of service charge payable by a tenant and that such a certificate, in the absence of manifest or mathematical error or fraud, ‘shall be conclusive’. By a majority of 4–1, the court decided that the certificate is conclusive as to the tenant’s liability to pay service charge, but only at the time that it is issued. Accordingly, payment of the certified sum does not preclude the tenant from later disputing liability for all or part of that payment, which can be recovered in separate proceedings. Interestingly, the court rejected both parties’ submissions on the meaning of the clause. The Supreme Court’s solution to the problem was labelled by Lord Hamblen as creating a ‘pay now, argue later’ regime, which achieved practical justice while remaining true to the words of the clause interpreted in its full documentary and commercial context.

Supreme Court judgment 18 January 2023.
Electronic Communications Code—renewal of agreements
Vodafone Ltd v Gencomp (No 7) Ltd and AP Wireless II (UK) Ltd is a decision which presents a potentially considerable problem for site providers who have become landlords of operators by taking overriding or concurrent leases from an original site provider; such site providers will now not be able to terminate an operator's rights under the Electronic Communications Code.

The Court of Appeal is due to hear the appeal on 10 May 2023.
Electronic Communications Code—Consultation: Electronic Communications Code—Proposed Template Notices resulting from amendments to the Code
Ofcom is required to prepare and publish template notices which must or may (depending on the circumstances) be used by operators and landowners or occupiers under the Code when they seek to exercise Code rights.

This consultation seeks views on the form of two notices Ofcom is required to prescribe following amendments to the Electronic Communications Code made by the . These notices relate to the upgrading and sharing by an operator of apparatus situated under privately-owned land and are required to be given by the operator before the operator begins to upgrade the apparatus or share its use.

See: .

The deadline for responding to the consultation is 6 March 2023.
Carbon emissions from buildings

The Carbon Emissions (Buildings) Bill requires the whole-life carbon emissions of buildings to be reported; to set limits on embodied carbon emissions in the construction of buildings; and for connected purposes.

This is a Private Members' Bill and was presented to Parliament on Monday 20 June 2022.

The next stage for this Bill, second reading, was scheduled on Friday 25 November 2022 and has been adjourned to Friday 24 February 2023.

 

 

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About the author:
Allison Wooddisse
Allison is a former partner of Shoosmiths, with extensive experience of legal management and practice compliance.