AI has the potential to reduce the number of mundane tasks junior professionals must deal with, enhance efficiencies and reduce the incidence of human error, which is a significant cause of claims. The advantages are obvious, but they must be balanced against the risks, primarily through safeguards to check outputs. Recent well publicised cases have demonstrated the legal and regulatory risks inherent in using AI that will impact all professional services firms. As AI technology advances, professionals are having to keep pace with its developing capabilities and manage the risks through governance and risk management. Professional service firms should be acting now to assess their risks by developing internal policies, issuing guidance and training to their staff and structuring methods to ensure compliance. Firms will also be considering the cover that their professional indemnity insurance provides, how the policy will respond, for example to multiple errors caused by a failure in the technology, and whether there are any gaps in cover. AI is here to stay and the question therefore is just how we manage the potential risks.

While the accountancy market as a whole is not expected to see seismic change, the Financial Reporting Council is in transition to a renamed and potentially augmented regulatory regime, that is if long anticipated legislation is passed under this government. The Financial Reporting Council enforcement division will be led by a new Executive Counsel, and tax advisers are awaiting further significant developments with the new budget in November. Meanwhile, all eyes will be on the anticipated judgment in NMC Health - after a dearth of case law in this area, trial in this multibillion pound claim is wrapping up and the judgment promises to shed light on numerous areas, not least tricky questions around the liability of UK firms connected to the audit of overseas subsidiaries.

The Financial Conduct Authority (FCA) will continue to focus on 'greenwashing' (i.e., misleading claims made about the environmental credentials of an organisation/product). On 31 May 2024, the FCA's anti-greenwashing rule (AGR) came into force. While the FCA already prohibited misleading statements, firms must ensure that environmental/social statements made to their 'audience' in the UK about their financial products/services are consistent with that product/service, fair, clear and not misleading. Failure to do so could result in enforcement action. As we have previously predicted, enforcement taken under the AGR regime may also encourage additional disputes (including shareholder litigation) and investigations by other regulators.

Claims against mechanical and electrical (M&E) consultants are likely to increase as greater demand for services and design creativity is required to address the effects of climate change. The UK experienced its hottest summer ever in 2025. Indeed, all five of the UK's warmest summers have occurred this century. Climate change is not on the way, it is already here, bringing with it an increased need for powerful cooling systems in both commercial and residential premises, whether new build or by way of refurbishment. Design parameters and capacity for such systems will need to adapt to the changing climate. We have already seen several large claims against M&E consultants for inadequate cooling (and heating) designs. We also predict that new building projects in the UK are likely to become subject to compulsory 'net zero' standards within the next few years. Currently, compliance with the UK Net Zero Carbon Building Standards is not obligatory, but it is unlikely to stay that way. This could well become an evolving source of claims against M&E engineers (and other construction professionals) operating in this space, given that litigation for failure to achieve net zero targets has already begun in other arenas.

The government announced in Autumn 2024 that from April 2027 unused pension benefits will fall within the estate of a deceased person and be subject to inheritance tax. This change will prompt a significant shift in the way people with larger pension pots approach long term financial and estate planning. They will require advice from financial advisers on its impact both before and after the change is implemented. If that advice is not provided or is not provided correctly, it is likely to prompt complaints.

As lawyers continue to adopt AI, we have seen several cases that underline the need for careful governance and risk management. It is obviously imperative that lawyers keep up to date with technological advances and guidance from their regulatory bodies including the SRA and Bar Council. The misuse of AI can lead to negligence claims, regulatory issues and reputational damage. AI is already embedded in many law firms. Its use will only become more prevalent, including by the court and clients. Lawyers will need to review retainers to reflect how AI and clients' data will be used to avoid inadvertent disclosures, data breaches and the breach of client privilege and confidentiality. Leaders of law firms must ensure that all their colleagues who provide legal services understand and comply with their duties when using the AI tools that are available. Lawyers who fail to do so (for example, by relying upon non-existent case citations) risk severe sanctions which will also impact on their firms from a financial and reputational perspective. Supervision of output has never been so important.

Pensions schemes continue to face a daunting workload with major initiatives being continually announced and progressed. These significant changes will be wide reaching and inevitably give rise to risks that balls may be dropped. The list includes: the regulator's new guidelines and standards addressing the risks arising from cyber threats and AI; various new GDPR obligations including impact assessments prompted by Pension Dashboards (going live in 2026); the burdens created by the imposition of inheritance tax on pensions; reforms around small pots; the agenda to improve value by using super funds; new legislative amendments to resolve the Virgin Media issues; and new rules to make the payment of surplus to employers easier. This list is not exhaustive, even before considering the implications of the highly anticipated judgment expected imminently in the Pension Trust Litigation.   

In recent years, the issue of valuation sustainability has been at the forefront of thinking amongst property professionals: the global pandemic caused cosmic change in working patterns; generational thinking around work/life balance is very different now than in decades past; climate change continues to throw up challenges for the built environment; and building safety has come to prominence in the aftermath of Grenfell. Throw into this mix both the continuing housing shortage and the ever-tighter regulation disincentivising private rental provision. Despite all these challenges, claims against professionals active in this sector remain quiet, which has softened premiums considerably. A word of warning however: these challenges may come home to roost as the UK economy continues to flat line, geopolitical instability remains and government continues to encourage lenders to lend. For now, soft is justifiable but 'knowing your client' is crucial against a real risk of an uptick in claims.

The ever increasing deployment of AI technology as part of the provision of many types of services will lead to an increase in errors resulting from inadequate checking or review of outputs and resulting claims. This development coupled with the rising fragmentation of technology services provision (where many technology products or services incorporate or rely on products or services from other providers) will increase the uncertainty in predicting risk based on the activities of an insured and bring the importance of properly drafted exclusions and limitation of liability clauses (and their effective incorporation into contracts) once again to the forefront of risk analysis.