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What’s in store for the legal sector in 2018?

Posted on 8th January, 2018

As we all return from Christmas holidays it is time to look ahead to 2018 and to consider plans. For the first blog of the New Year I have asked our teams to give us some thoughts on what they think may be the “burning” legal issues of 2018.

Corporate and Commercial

2018 will definitely be the year of GDPR. For those not aware, the EU General Data Protection Regulation (GDPR) comes into force in the UK on 25 May 2018. It represents the first major overhaul of data protection law in 20 years, during which time technology and the use of personal data have changed beyond all recognition.

The extensive content of the GDPR introduces a raft of changes including an increase to the territorial scope of EU data protection law: new and extended rights of the individual, including enhanced notification requirements as well as rights to compensation; additional obligations and liabilities for data controllers and data processors; and a transformation of the regulatory regime together with extended powers that incorporate potential high level fines which the supervisory authorities (such as the Information Commissioner’s Office (ICO)) may levy against companies who commit a data breach.

From now until May we will be assisting our clients and helping them to plan and prepare their strategy for compliance with the GDPR, and during the coming weeks/months we will be running a number of talks and seminars on the subject, details of which can be found on our website.

Commercial Property

New regulations come into force from 1st April 2018 which prohibits the letting of ‘substandard’ non-domestic property.  This means that from 1st April 2018 a landlord of non-domestic property must not grant a new tenancy (including a renewal) after 1st April 2018 and must not continue to let a non-domestic property after 1st April 2023 where the property is substandard.   This is classified as being a property where a valid EPC has a rating below ‘E’ unless:

  1. The landlord of such property has made all relevant efficiency improvements for the property that can be made or that there are no relevant energy improvements that can be made (and the property is still substandard) and the landlord registers an exemption on the Exemptions Register; or
  2. An exemption applies and has been registered on the Exemptions Register.

There is a list of buildings which do not require EPC’s.

To prepare for the implementation of these regulations landlords should be:

(1) Carry out audits of their property portfolios to identify any properties which do not have EPC’s and any which are substandard.(2) Carry out any necessary EPC’s.(3) Look at their lease documents and identify renewal dates, EPC expiry dates, break dates etc. to assess the potential impact of these rules on their portfolio income.(4) Review their standard leases to ensure all new documents incorporate appropriate lease provisions to cover these regulations.Dispute Resolution

In 2018 there is likely to be a continued push by the government for parties to embrace forms of alternative dispute resolution, in particular mediation, in order to reduce the caseload of the courts. The pilot for the Online Court will run through 2018 until 30th November 2019 and is likely to be introduced across the board for claims under £10,000. The courts are also determined to take action to narrow the scope of electronic documents having to be considered in litigation, encouraging greater use of computer software and algorithms. Artificial intelligence will impact upon disclosure of electronic documents and across small claims concerning simple issues and is likely to have an impact upon the Online Court providing virtual judgments.

Employment

2017 will be remembered as a year of significant developments in Employment Law and all the signs are that 2018 will continue this trend. The reforms to employment status brought about by a number of high-profile judgments and the Government-requisitioned Taylor Review will remain pertinent as the Uber and Pimlico Plumbers cases continue their progress through the appellate courts, although a reversal of the decisions which found nominal self-employed contractors granted workers’ rights in these cases seems unlikely. Individuals taking steps to challenge their employment status either through internal grievance processes or employment tribunal proceedings could be a theme this year, particularly given that since the Supreme Court’s decision last summer would-be claimants are no longer prohibited by fees when it comes to pursuing employment tribunal claim. This makes an insurance-backed employment protection scheme, such as Jacksons Shield an increasingly attractive option for many businesses. Forward thinking employers are already reviewing their contracts, policies and procedures, however with May 2018 heralding the inception of GDPR there is even more reason to undertake an employment documents audit.  As our trundle towards Brexit gathers pace, business immigration issues will become a pressing concern for many employers and expert advice from a specialist in this field such as Stacey West will become essential. Then there is the ticking time-bomb of mental health in the workplace, an issue which has been overlooked for some time but is growing increasingly relevant as more individuals become capable of meeting the definition of disability in the Equality Act 2010 on account of stress, depression and other mental impairments. It looks like another busy year for Employment Law, fortunately our team of specialist solicitors are on hand to guide and support your business along the way.      

Corporate Recovery and Insolvency

Corporate: expect to see more companies trading without bank debt. Either companies are borrowing elsewhere (e.g. various government schemes or asset based lending) or they are now managing to trade without bank lending.

Insolvency Service: an increase in the action taken directors and bankrupts. This includes criminal prosecution, director disqualification and bankruptcy restriction orders (extending certain effects of bankruptcy).

Personal: banks are claiming against guarantors where the company that they guaranteed failed years ago.  A nasty surprise to those who felt that with the passage of time the bank wouldn’t be talking action. There is also a general concern that personal debt is out of hand again and that an increase in interest rates, even modest, coupled with (i) interest only mortgages reaching the end of their term and (ii) a slight downturn in the economy will lead to increasing bankruptcies.

Family

It is anticipated that given the huge success of Cohabitation Awareness Week in 2017 we will be witnessing some strides towards recognising the increasing social trend of living together rather than marriage.  The myth of the common law husband and wife has been exposed and moving forward with this knowledge, couples will be better prepared to protect their financial assets through cohabitation agreements and declarations of trust. In the meantime, it is a case of watch this space in relation to the progression of the Draft Cohabitation Bill through the House of Lord. We have been delighted with the interest of local MP’s Chi Onwurah for Newcastle Central and Stockton South MP Dr Paul Williamson, in relation to this issue when they came to our office. It is hoped that during 2018 they will have the opportunity to echo concerns of many lawyers as to the lack of protection cohabitees are afforded at Westminster as well as in their constituencies.

The other topic which is likely to be in the spotlight is the public centred on-line divorce process currently being consulted upon. In the New Year, Jacksons’ family department has been invited to work with one of the Court’s researchers. We have welcomed the opportunity to support our clients in making aspects of their divorce quicker and more affordable. For many couples the relationship may have broken down beyond repair but they cannot afford advice from a solicitor to progress a divorce, as well as negotiate a settlement to protect their financial assets. If the research goes well in 2018 with a pilot scheme to follow, this will certainly break down barriers and be the start of making family courts more accessible.

Wills, Trusts and Probate

Video Wills? Following the launch of the Law Commission’s consultation on reforming the law of Wills this year, conclusions and final recommendations are expected to be the big topic in 2018. The Law Commission in particular, is considering whether, in exceptional circumstances, texts, emails and other electronic communications should be recognised as a valid will. At present, a Will must be written voluntarily by someone over the age of 18 who is of sound mind and the Will must be signed in front of two witnesses, over the age of 18, who are also required to sign the Will as witnesses. The new proposals could see this level of formality relaxed and in exceptional circumstances, disregarded all together. 2018 could therefore see the law regarding will making taking a step towards the approach recently taken in Australia whereby the Supreme Court of New South Wales accepted a Will made by video as a legally valid document.

Although a new approach could bring the law surrounding Will writing into the modern world, the Law Commission has acknowledged that the proposals could result in family arguments and significant legal costs being incurred by estates to ensure the legislative requirements have been met as any cases of informal wills will need to be considered by the courts. All good reasons to spend the time and effort now in making a traditionally valid Will.

Residential Conveyancing

With the shift to the “information age” and the heavy reliance these days on mobile phones and computers to keep us up to date with what is going on in the world, there have been many changes within Conveyancing to try and keep up with the fast pace of modern day society. Where this falls down is when a wet signature and witness is required on deeds in accordance with Land Registry requirements. This can be time consuming and deeds sometimes have a tendency of losing their way in the post. The Law Society did publish a practice note on the execution of a document on 21 July 2016, which hung a question mark over whether e-signatures would be implemented and accepted with Land Registry.

However, Land Registry quickly cleared up this argument early last year, by saying that they would not be adopting this approach in relation to a dispositionary deed for registration, as they were not convinced that an electronic document with an electronic signature could be regarded as a deed without a statutory provision confirming this to be the case. All hope is not lost as they have taken a view in relation to Digital Mortgage Services and have compromised on the use of e-signatures in the process when a mortgage is added to an existing title register, where there is no change of ownership. This will enable borrowers to digitally sign, which cuts the time taken in posting copies of the deeds for signatures. This has been tested throughout 2017 with positive feedback, so it will be interesting to see if this will be rolled out this year across the board and whether it will change the mind set of Land Registry moving forward.

 

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