The UK's regulatory framework for VTOLs (vertical take-off and landing aircraft) is promisingly taking shape. In September 2024, the Civil Aviation Authority (CAA) announced the establishment of two key working groups and it is now focused on introducing regulations that are in step with other regulators (principally the US and EU) but appropriate for the UK environment. In January 2024, the CAA consulted on (i) the handling rules for VTOL aircraft using battery power for propulsion and (ii) design proposals for vertiports at existing aerodromes. All this bodes well for the UK's ambitions to lead the way in this important sector of the aviation industry, while maintaining its usual high regulatory standards. As outlined in the UK's Future of Flight action plan (a Government-Industry Statement of Intent, published in March 2024), piloted eVTOL flights in the UK are identified as a key aim in 2026 "as a first step to scaled operations and a sustainable industry". The plan envisages a partnership between government, the CAA and industry to forge operational capabilities, physical infrastructure and the nurturing of associated manufacturing and technological development. As we look to the next 12 months, the UK's position of prominence in the VTOL space looks assured.

From 1 January 2025, it will be mandatory in the UK for a functioning carbon monoxide (CO) detector capable of alerting via aural and/or visual warnings to be fitted in certain piston-engine aircraft when operating with passengers. The aim is to restore "an acceptable level of safety".  CO poisoning has been cited as a factor in multiple general aviation accidents globally. Under CAA Safety Directive SD-2024/001 (V2), which comes into effect from 1 January 2025, the Civil Aviation Authority (CAA) will recognise both aviation-standard and commercial, off-the-shelf CO detectors. As to the latter, there is a wide range of competitively priced, commercially available units intended for use in domestic environments. Although not specifically approved for aviation use, findings from the CAA’s 12-month study suggest that these devices can function reasonably at typical recreational GA altitudes.

UK amateur ballooning looks set for regulatory oversight in 2025. Currently, the UK's Civil Aviation Authority (CAA) neither regulates nor publishes guidance for competition balloon flying in the UK. While guidance is published by the British Balloon and Airship Club (BBAC), the BBAC is a sporting body and not a regulator. A fatal balloon accident in June 2023 is seen as the catalyst for change. The UK's Air Accident Investigation Branch reporting in May 2024 made two safety recommendations to the CAA as regards the need for published safety guidance. On 9 August 2024, the Coroner published a Prevention of Future Deaths Report directed to the CAA and advocating for a review of the regulation of balloon flying in the UK, considering in particular whether there should be regulation of the design, construction, inspection and testing of amateur or home-built balloons, and of competition balloon flying.

Reform of UK slot regulations at Level 3 co-ordinated airports is on the cards for 2025. Proposed changes may call time on grandfather rights to slot allocations (take-off and landing rights) that are perceived to give an unfair advantage to incumbent slot holders and present challenges both to established carriers seeking to expand existing services and to new entrants. The UK's Department for Transport (DfT) seeks to make the UK's slot system "more efficient, dynamic and transparent". In August 2024, the Competition and Markets Authority, the UK's competition watchdog, endorsed the DfT's proposed changes. These include (i) a revision of the 'use it or lose it' rule, (ii) redefining the new entrant rule, and (iii) establishing a clear legislative framework for secondary trading of slots.

Improvements under the Arbitration Bill were reintroduced in the King's Speech. Key proposals include a new general principle to disclose circumstances that might reasonably give rise to justifiable doubts about an arbitrator's impartiality; the governing law of the arbitration defaulting to that of the seat of the arbitration; and the inclusion of an explicit power for arbitrators to dispose of disputes summarily, where a case has 'no real prospect of success'. As a result, we are likely to see applications for summary disposal at an early stage, clarity over the applicable law, and a wider array of potential arbitrators. The key question that should be on all parties' lips when negotiating a contract should be: "what dispute resolution process should we choose? Is arbitration easier to enforce and better for this contract?" For those already facing arbitration, the improvements proposed by the Bill serve as a reminder that there is no 'one size fits all' arbitral procedure and early consideration should reap dividends further down the line.

Before any legislation for the proposed Hillsborough Law is introduced, there will be fundamental questions to be addressed, particularly over the implications of the planned duty of candour on the right to silence and the right against self-incrimination. Following the King's Speech and the Labour Party conference, Sir Kier Starmer promised that the Hillsborough Law will be introduced in Parliament before April 2025 to establish a legal duty of candour for public authorities in the aftermath of major public tragedies. Back in 2017 when the original Public Authority (Accountability) Bill was introduced by Andy Burnham MP, its aim was to "protect other families from going through what the Hillsborough families went through and from a similar miscarriage of justice." The Bill fell due to the general election in 2017 and there is currently no draft legislation before Parliament. It is anticipated that any future wording will closely align with that of the 2017 Bill.

The Law Commission consultation on contempt of court closed in November 2024, and its conclusions will lead to a longer term debate about the need for change in this area. The wide-ranging consultation reviewed the existing law on contempt of court, considering the need for reform to improve effectiveness, consistency and coherence. The Law Commission proposed that the two-year maximum sentence for contempt should remain. As an important tool for insurers when tackling fraudulent claims, our own response to the consultation agreed with that proposition. The maximum sentence should be applied more frequently if contempt is to be used as a true deterrent, although it is apparent that while Operation Safeguard (on prison overcrowding) remains live we are unlikely to see an increase in the number of or severity of contempt sentences being applied.

Proposals to establish legislation to deter and punish harassment of individuals through online misinformation campaigns will gather momentum. A recent High Court decision found that two victims of the Manchester Arena bombing in 2017 had been harassed by an individual who claimed that the attack had been staged, and that the victims were perpetrating a hoax along with others as 'crisis actors'. The claim was brought under the Protection of Harassment Act, and the Court concluded that the actions of the defendant represented a reckless abuse of media freedom. In response to the decision, one of the victims proposed a new law to deter individuals from publishing unfounded opinions and allegations in their efforts to challenge official accounts of serious incidents, causing further injury to and promoting harassment of victims.

In Sky v Riverstone, it was held that the main contractor, who was appointed pursuant to a JCT contract, was not insured under an owner controlled insurance programme following practical completion, because it no longer had any rights or interests in the property insured. That decision has not been appealed. Consequently, main contractors (and their brokers) will need to review and carefully consider both their construction contracts and project insurance arrangements, to fully assess their coverage and joint insurance position in respect of post practical completion losses. Failure to do so could leave them exposed to subrogated actions by project insurers. 

LEG 3, one of the key defects clauses introduced by the London Engineering Group nearly 30 years ago, has come under scrutiny in two recent US decisions for its alleged ambiguity, particularly in relation to improvement costs. As a result, the LEG committee is being urged by some to revisit its wordings. We anticipate the committee will be more concerned (rightly, in our view) about the approach the US courts took in relation to the meaning of 'damage'. We predict the committee is more likely to address that issue rather than seeking to clarify what amounts to an 'improvement' or undertaking any wholesale redrafting.

The 'anti-greenwashing' rules recently announced by the Financial Conduct Authority (FCA), aimed at ensuring that managers of UK based investment funds are correctly labelling their investment products, are a further example of the FCA's hardening approach to companies that make misleading statements to their customers. With a greater focus on climate and wider environmental, social and governance issues, corporate disclosures and statements are being closely scrutinised for accuracy and they are providing fertile ground for shareholder litigation in England and Wales. Claims are typically pursued under s90 and s90A of the Financial Services and Markets Act 2000, which provide a path to redress for shareholders of listed companies if they have allegedly suffered loss due to untrue or misleading statements. Activists are increasingly buying stakes in companies in order to use their shareholding to hold officeholders to account and challenge corporate behaviour. The increase in regulation, alongside an increasingly active investor population, will continue the growth of shareholder litigation.

The omission of the Litigation Funding Agreements (Enforceability) Bill in the King's Speech in July 2024 was surprising. The Bill would have reversed the Supreme Court's decision in the PACCAR judicial review and clarified the enforceability of litigation funding agreements (LFAs) by amending s58AA of the Courts and Legal Services Act 1990 and confirming LFAs are not damages-based agreements. The government is set to conclude its general review of the litigation funding sector, including the need for greater regulation and safeguards to protect claimants, by Summer 2025. Uncertainty over the enforceability of LFAs is therefore now set to continue for at least another year. Such a long wait is disappointing for the litigation funding industry and restricts the vital funding options available to individuals and small businesses, potentially preventing them from accessing justice and pursuing claims against better resourced corporations.

On 26 October 2024, a new positive duty on employers to take "reasonable steps" to prevent sexual harassment in the workplace came into force. Employers must now proactively implement measures to embed a respectful work culture through zero-tolerance policies, staff training on inappropriate conduct, and effective and sensitive complaints handling procedures. Neglecting to prepare for this new duty could lead to an increase in harassment claims and more compensation. If an employee succeeds with a claim for sexual harassment and the employer has breached the new duty, the tribunal can increase compensation by up to 25%. The Equality and Human Rights Commission (EHRC) can also investigate and take enforcement action. Action can be taken based on a suspicion of non-compliance; there does not need to be an incident of sexual harassment before the EHRC will consider exercising its enforcement powers.

Fraud offences in the UK are changing. The Economic Crime and Corporate Transparency Act 2023 (ECCTA) creates a new "failure to prevent fraud" offence, committed when an employee of a large organisation perpetrates a fraud and the organisation has failed to implement reasonable fraud prevention measures. ECCTA also reforms the identification principle, making it easier to attribute criminal liability to corporations for economic crimes committed by a 'senior manager' acting within the actual or apparent scope of their authority. This represents a substantial widening of potential liability, as the definition of senior manager is broader than the board of directors and may include any individual with substantial management authority. ECCTA brings a greater risk of corporate and D&O prosecutions, and therefore organisations must implement robust fraud prevention procedures and safeguards to oversee the conduct of their senior managers. The consequences of non-compliance will otherwise be severe.