Argentina’s new flight operations framework will reduce legal friction and reshape compliance strategies in 2026. A recent regulatory resolution has simplified the reporting process for regular, non-regular, and special flights, eliminating prior authorisation requirements and introducing automatic approvals for international operations. This shift lowers administrative burdens and enhances predictability for both domestic and foreign carriers. For aviation clients, the new regime demands updated compliance protocols, timely reporting mechanisms, and robust documentation. Legal teams need to be prepared to advise on operational risks, enforcement exposure, and strategic use of the streamlined system to optimise route planning and market entry.

Sanctions impacting a swathe of lines of business will keep requiring careful consideration in 2026. The past year has seen a rise in disputes related to sanctions regimes and the decisions of insureds – especially in the maritime sector. These decisions have not only related to the decisions of corporates that have breached sanctions, but also decisions made not to act pursuant to sanctions concerns (where this decision not to act has given rise to breach of contract). They have also highlighted the potential commercial liabilities of advisors (such as solicitors holding funds in escrow on behalf of parties that subsequently become subject to US sanctions) and the complexities of the (dis)application of the extraterritorial effect of certain sanctions regimes. These cases demonstrate that the English courts are increasingly subjecting the sanctions compliance decisions of businesses to high levels of scrutiny in order to assess whether they are objectively reasonable. Recent decisions indicate an increasing willingness by the courts to conclude that businesses are liable for damages in circumstances where cautious decisions are made to seek to comply with sanctions regimes of multiple jurisdictions and where the basis for those decisions might be undermined by other available evidence. Insurers need not only to be aware of the plethora of sanctions implications at play in international trade and business, but also to ensure that their decisions are thorough, well-documented and reasonable in deciding when to continue and when to hold back on the basis of sanctions breach concerns.

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.

Although M&A activity has slowed in recent years, the deals going through demand increasingly complex due diligence. Buyers must assess a wide range of factors including the target’s exposure to economic and geopolitical volatility, regulatory compliance, tax, environmental, social and governance performance, and litigation risk. AI technologies are now playing a pivotal role in streamlining this process. Advanced AI tools enable enhanced due diligence by rapidly reviewing vast datasets, identifying financial crime and anti-money laundering compliance issues, and flagging inconsistencies or potential risks for further investigation by the buyer and its legal team. This not only improves accuracy and efficiency but also frees up valuable human resources, allowing deal makers to focus on strategic elements such as negotiation and stakeholder engagement. With appropriate oversight, the integration of AI into the M&A lifecycle offers transformative potential, reshaping how transactions are assessed, executed and managed.

The Digital Operational Resilience Act (DORA), in force since January 2025, is a significant legislative framework designed to enhance digital/cyber security and resilience for financial institutions in Europe. DORA requires management bodies to define, approve and supervise the information and communication technology risk management framework of financial entities. DORA allows for regulatory investigations and the imposition of administrative and remedial penalties in the event of a breach. Importantly, penalties can be imposed personally on management responsible for compliance. This includes directors and officers. Although many D&O policies do not cover regulatory penalties imposed, any breaches could also result in potential liabilities to third parties such as shareholders. These claims may trigger D&O coverage, meaning insurers should both be familiar with the steps that their policyholders are taking to ensure compliance, and check that policies are appropriately worded to limit coverage where necessary.

Influenced by increasingly strict safety homologation rules within the European Union, expect the percentage of vehicles with Advanced Driver Assistance Systems to continue to increase. These rules require manufacturers to gain approval from a national authority for a vehicle's entire type, regardless of where components are sourced, therefore confirming compliance with safety, environmental, and market surveillance standards. It allows vehicles to be registered and sold across the EU single market which will accelerate the incorporation of advanced safety systems which is expected to lead to a continued reduction in road traffic claims.

Business bankruptcies are rising across Sweden, reflecting economic pressure from higher interest rates and tighter credit conditions. This creates greater legal and financial risk for company boards, as directors can face personal liability if they are accused of mismanagement. Demand for directors and officers insurance is therefore growing. Smaller and mid-sized firms are increasingly looking for policies that include legal support and compliance guidance, helping protect decision-makers in a more challenging business environment. This shift is likely to continue as insolvency levels remain elevated.

Buttressed by stricter limits on drinking water, sector-specific regulation and expanded reporting requirements, the regulatory environment for PFAS will become more rigorous in both the United States and the European Union. However, a diverse and fragmented approach to PFAS regulation will still exist, with a significant number of PFAS-related bills having been introduced across a wide range of states in the United States. These efforts are filling a space increasingly vacated by the federal Environmental Protection Agency (EPA). EU Member States also voted in support of a Commission proposal to ban all PFAS in firefighting foams in April 2025, with a staged transition period and sector-specific extensions. However, compliance deadlines remain uncertain. The EPA is now expected to confirm in Spring 2026 that it will be extending the compliance deadline to achieve PFOA and PFOS Maximum Contaminant Levels in drinking water from 2029 to 2031. In the European Union, the outcome of proposals for a 'universal' PFAS restriction under REACH has been postponed, with the European Chemicals Agency's scientific evaluation now scheduled to conclude by the end of 2026.

Over the next 12 months, we will see greater adoption of privacy enhancing technologies (PETs) and their closer integration with AI systems. For several years, PETs have been highlighted as having the potential to aid data protection compliance, in a variety of different contexts. In its 2023 guidance on PETs, the ICO specifically cited privacy by design and by default; data minimisation; security; and secure data sharing as capable of being supported by PETs. However, since then we have seen only intermittent PET adoption by organisations. In the coming year, PETs such as homomorphic encryption and federated learning will be used increasingly to train AI models.

From early 2026, with a phased approach, all providers of building works in Ireland must be registered on the Construction Industry Register Ireland. It is eventually expected to affect over 20,000 providers. It is anticipated that the register will eliminate unqualified operators, enforce compliance with building regulations, and help restore consumer confidence. This is particularly the case where providers are required to demonstrate competence in accordance with prescribed criteria. However, increased regulation will raise the risk of claims arising from regulatory investigations by the admissions and registration board which will be established by the Construction Industry Federation (the statutory registration body) which may result in financial or criminal sanctions.

PFAS-related litigation in France will accelerate, with the class action near Lyon expected to become the largest of its kind in Europe. The legal environment in respect of PFAS is shifting rapidly, with France banning PFAS in cosmetics, clothing, footwear, and ski waxes from 2026, and in all textiles from 2030, marking a regulatory turning point. Enhanced monitoring of drinking water is also underway. The 'polluter pays' principle is also gaining traction, increasing the risk of significant indemnity exposures for both liability and environmental lines. Insurers must be aware of the introduction of additional regulatory requirements, which will drive up compliance costs and could trigger coverage disputes, especially for legacy and silent exposures.

The launch of a new regional airline in 2026 will activate a wave of regulatory and transactional aviation work across Argentina and neighbouring jurisdictions. With Argentina as a strategic hub in its route network, legal teams should prepare for increased activity around bilateral air service agreements, AOC certification processes, slot allocations, and employment structuring. Enabled by the open skies frameworks, the carrier will operate with fewer restrictions, but local compliance, airport access, and operational licensing will require careful navigation. For aviation clients, this is a timely opportunity to engage in regulatory strategy, cross-border partnerships, and infrastructure planning as a neighbouring country reclaims its flag carrier status.