In September 2025, the UK Civil Aviation Authority published the electric Vertical Take-Off and Landing (eVTOL) Delivery Model in anticipation of commercial flight operations by the end of 2028. The Delivery Model provides a regulatory framework addressing certification, pilot licensing, vertiport integration, and operational approvals. The pioneering technology of eVTOLS represents a bold step toward a cleaner, smarter future for aviation — one that not only accelerates decarbonisation but redefines how we connect and move across the globe. eVTOL assembly and battery production facilities have been established in the UK to support certification and early production. By positioning itself at the forefront of aerospace innovation, the UK seeks to unlock new possibilities for sustainable travel and economic growth. As we edge towards commercial eVTOL operations, this is dialling up a need for a range of tailored advanced air mobility (AAM) insurance cover to include hull liability, war, passenger, cargo, third party liability, spares, hangar keeper and product liability insurance. In 2026, we will see the London and global aviation insurance market continuing to evolve, to respond to the needs of emerging AAM technology.

With ongoing advances in aviation automation and autonomous flight there is a need to reconsider related legal and regulatory frameworks. The UK Civil Aviation Authority, in conjunction with the Law Commission of England and Wales, is undertaking a three-year review of existing liability models relating to the future of flight modes including electric Vertical Take-Off and Landing (eVTOL), drones, novel air traffic management and air navigation services to uncrewed aircraft. A final report is scheduled to be published in early 2026. Included in the review are current mechanisms for attributing criminal and civil liability. In particular, the Law Commission is considering (i) where the law allocates responsibilities to a human (e.g. a pilot) and the issues that arise if functions are performed by autonomous systems and (ii) how to allocate civil and criminal responsibility where functions are performed by a system or shared between a human and a system. Meanwhile, in its general Discussion Paper ('AI and the Law') published in July 2025, the Law Commission, in provoking debate, suggested that the option of granting some AI systems legal personality is increasingly likely to be considered. One key objection against that argument is that AI systems might be used as 'liability shields' protecting those at fault from criminal and/or civil accountability. In the field of aviation, where safety, responsibility and accountability are paramount, we predict any such future proposals will be met with strong resistance.

In the wake of the MH17 crash and against the backdrop of rising world conflict, the UK Civil Aviation Authority (CAA) is changing regulations concerning international flight operations over or near conflict zones, to align with Standard 4.1.2 of ICAO Annex 6 Part I. The proposed amendment (effective from 31 January 2026) requires operators not to commence flight or continue as planned unless it has been ascertained by every reasonable means available that the airspace containing the intended route from aerodrome of departure to aerodrome of arrival, including the intended take-off, destination and en-route alternate aerodromes, can be safely used for the planned operation. While the focus is commercial flight, under consideration is the extension to other types of operations, such as non-commercial and specialised non-commercial operations. From an insurance perspective, in the event of an associated accident or incident, the adequacy of the operator's enquiry and decision to continue planned flight operation will be at the forefront. In the CAA consultation, the definition of 'reasonable' is wide, intended to denote the use of information available to the operator either through official information published by the aeronautical information services or 'readily obtainable from other sources'.

As PFAS become subject to increased regulation in the United States, European Union and UK, we anticipate more related injury and environmental claims. Recent technological breakthroughs for the destruction of PFAS have provided a glimmer of hope for addressing the 'forever' impact of the chemicals from an environmental standpoint, notwithstanding their bio-accumulative nature. These removal treatments come at considerable cost, potentially borne by manufacturers responsible for environmental contamination and their insurers. In the United States, settlements totalling nearly US$11 billion have been agreed to resolve one manufacturer's liability for PFAS contamination in drinking water and specific environmental claims. For injury-related actions, despite the first bellwether trial for the Aqueous Film-Forming Foams multidistrict litigation recently being postponed, we expect to see further injury-related PFAS claims in the United States and beyond. In France, activist groups have announced they are preparing to bring an action on behalf of citizens alleging injury from PFAS contamination caused by chemical and petrochemical manufacturing in the Rhone valley. In the UK, two leading claimant firms announced investigations into possible environmental and injury claims caused by PFAS contamination in North Yorkshire.

Regulation of, and litigation over, ultra-processed foods (UPFs) is expected to gain traction in 2026. Mounting evidence linking UPFs to chronic diseases, including obesity, type 2 diabetes and fatty liver disease is intensifying regulatory scrutiny and fuelling litigation. Political rhetoric, including references to UPFs as 'poison' has emboldened US states to introduce restrictions on UPFs. While federal regulation remains uncertain, the US Food and Drug Administration (FDA) and the US Department of Agriculture (USDA) are actively considering a uniform definition, which is expected to provide greater legal and regulatory certainty regarding the scope of UPFs. UPF class actions and personal injury claims are increasing, targeting alleged deceptive marketing and the intentional design of UPFs to be 'hyper palatable' or addictive. However, plaintiffs will continue to face significant challenges in establishing causation, with alternative legal theories being explored. The forthcoming FDA/USDA definition is likely to spark further claims activity and heighten exposure for food manufacturers and distributors.

Further to the Ministry of Justice's 2024 consultation looking at the adequacy of the law on apologies, expect stronger safeguards to ensure an apology cannot be misconstrued as an admission of liability. Section 2 of the Compensation Act 2006 already states that an apology, offer of treatment or other redress does not amount to an admission of liability, but new legislation could see the introduction of a statutory definition of complaint (as is the case in Scotland), underpinned by a broad acceptance that the use of apologies in highly sensitive cases such as those involving child sexual abuse can aid the healing process for victims.

Set against a backdrop of rising veterinary costs which have caused dramatic increases in the cost of domestic pet insurance, we expect the investigation by the Competition and Markets Authority to yield a package of remedies aimed at improving competition and consumer outcomes. Options include the requirement for veterinary practitioners to provide itemised estimates; an overhaul of complaints handling and redress processes; regulatory oversight where veterinary practices are run by non-qualified persons; and generic prescribing to reduce costs.

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.

A new-ish but under-used industry Code will be written into more policies as the frequency and severity of water damage incidents on construction sites increases. Recognising the need for robust risk management, experts from both the insurance and engineering industries have developed a Joint Code of Practice for Escape of Water (EoW) Prevention and Management on Construction Sites and Buildings Undergoing Refurbishment. The Code applies across the supply chain to both permanent and temporary water systems and puts in place a collaborative risk-based approach that addresses the root causes of EoW during pre-construction and construction phases and mitigates the effect when it occurs. The focus on prevention includes the incorporation of modern technology to detect anomalous flow rates and then automatically isolate pipework and inform the planned emergency response. EoW incidents can lead to costly claims due to delayed handovers, damaged materials and wasted resources but they can also adversely impact a project's environmental and sustainability goals to monitor and reduce water consumption. Risk management is key and insurers should write in Code compliance to ensure that good practice is stringently followed.

Environmental and climate-related risks will remain a central threat to companies and their directors and officers. Regulatory scrutiny is intensifying, driven by evolving environmental, social and governance (ESG) frameworks, mandatory climate disclosures, and enforcement in Europe of the EU Corporate Sustainability Due Diligence Directive. Directors face growing personal exposure to claims alleging mismanagement of climate risks, misleading sustainability statements, and breaches of fiduciary duty. Litigation funders are increasingly backing climate-related actions, including greenwashing claims and shareholder claims. Regulatory bodies are also expanding their remit, targeting boards for inadequate oversight of environmental impacts. As climate risk becomes embedded in financial and operational decision-making, we anticipate a rise in complex, cross-border claims. For multinational companies, getting the balance right will be a challenge. Directors will need to ensure robust governance, transparent reporting, and proactive risk mitigation to avoid claims and exposure.

The Employment Rights Bill is a key priority for the UK government and reflects many of its manifesto commitments to strengthen workers' and trade union rights. The first changes will be introduced shortly after Royal Assent (expected late 2025) but there are more significant changes happening in April and October 2026, followed by a raft of changes in 2027, including the abolition of two years' service to bring an unfair dismissal claim, which will inevitably increase claims. In 2026, all businesses will need to deal with trade unions having the right to access their premises as well as having digital access too. They will also have to increase steps to prevent sexual harassment, as well as facing potential liability for the harassment of employees by third parties such as customers, clients and suppliers. Large employers will be expected to produce gender equality action plans in 2027, even though there may be a roll-back on diversity, equity and inclusion in the United States. All these changes are significant and, when coupled with the doubling of employment tribunal time limits from three months to six months, mean the exposure to claims is equally increased.

The effectiveness of the UK's opt-out class action regime in the Competition Appeal Tribunal (CAT) is under the spotlight. A decade on from the introduction of the opt-out collective actions regime in competition law, the government has launched a review of its operation. Concerns exist that consumers are not obtaining meaningful redress and businesses are being disproportionately burdened. These have been heightened by the nine year legal battle in Merricks v Mastercard, which settled for just 2% of the pleaded claim value, and the CAT's dismissal of its first consumer trial (Le Patourel v BT Group PLC) which found that BT's pricing was not unfair or an abuse of dominance. The government is now exploring alternative dispute resolution and voluntary redress schemes to better balance consumer justice with business impact. This review comes swiftly after the Civil Justice Council (CJC) recommended in June 2025 that legislation be introduced swiftly to clarify litigation funding agreements are not damages-based agreements, reversing the impact of the Supreme Court decision in PACCAR and the significant uncertainty created. The CJC also recommended the 'light-touch' regulation of the litigation funding market with enhanced regulation in consumer claims. The CJC proposals are likely to lead to continued growth of litigation funding in the UK and provide for a more stable, regulated environment in which funders have confidence in the enforceability of funding agreements.

The Data (Use and Access) Act 2025 provides data subjects with a new statutory "right to complain". Once the relevant provisions are effective, controllers will need to ensure they have a complaints policy in place which meets the new requirements (including mandatory acknowledgement within 30 days). While many controllers will already have a complaints process in place, all will need to review these policies to ensure compliance with the new regime. This will ease the growing workload of the Information Commissioner's Office (ICO), particularly as data subjects will be formally required to raise a complaint with the relevant controller prior to pursuing a complaint with the ICO, but it is likely to have the opposite effect on controllers. This may be exacerbated by the recent significant increase in the use of generative AI by data subjects to submit complaints more quickly and in greater volume. If controllers are not prepared for the potential tidal wave of complaints, the mere failure of adequately handling complaints could result in further ICO investigations and liability beyond the subject of the original complaint.

As the sector seeks to unlock the value of its datasets for analytics and AI training, the tension between anonymisation and pseudonymisation is becoming ever more pressing. True anonymisation remains the gold standard but often strips away the richness that gives data its value. Pseudonymisation preserves that utility but keeps data within the scope of data protection law. The Court of Justice of the European Union's SRB decision brings welcome nuance, confirming that whether pseudonymised data counts as personal depends on the realistic means of re-identification available to the controller, not theoretical possibilities. This more contextual approach could open new space for innovation, provided businesses can show re-identification risks are genuinely low. Those in the sector that invest early in verifiable safeguards and governance frameworks will be best placed to harness data confidently and compliantly in the age of AI.