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.

The growing wave of class actions in the United States related to biometric data privacy violations will continue to rise, with the state of Illinois at its forefront with its Biometric Information Privacy Act. There have already been a number of significant settlements with companies like Facebook, Google, TikTok and Meta in various states, with further actions expected. Enforcement efforts are expected to continue, particularly in California, with clarity on enforcement expected from its Supreme Court. Legal challenges over insurance coverage for biometric data privacy claims will also develop as jurisdictions interpret cover for novel actions. 

While activist litigation has been high profile across several jurisdictions in 2024, 'polluter pays' litigation based on contribution to harm caused by climate change will continue to progress. In the US, a series of claims have been issued by states and municipalities against fossil fuel companies, including in City & County of Honolulu v Sunoco LP, based on the defendant's allegedly deceptive marketing and its failure to warn of the climate change impacts of its products. A petition filed by the defendant arguing that the claim should be dealt with federally is outstanding in the US Supreme Court and, in June 2024, the Supreme Court invited the Solicitor General to file a brief expressing the views of the US.  Other actions do not seek damages, but rather funds for remediation. Outside the US, we continue to watch similar cases brought by individuals (often from the Global South), such as Lliuya v RWE, which has now reached the evidentiary stage. This stage itself has the potential to effect substantial change and momentum as further information comes to light. If successful, these claims will result in significant damages awards against carbon majors and precedent for yet further classes of action.

PFAS litigation citing environmental contamination and product-related exposures is predicted to rise as states and municipalities in the US enforce regulations and pursue actions regarding contaminated water. However, the prominent multi-district litigation in South Carolina leading the pack has narrowed, both in terms of active defendants (following recent substantial settlements) and scope (focusing on certain classes of alleged bodily injury). Nevertheless, new plaintiff groups will continue to emerge and new defendants will likely also enter the litigation arena as the scientific research and regulatory scrutiny intensifies.

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.

Growth is expected in a wide range of claims relating to school environments, encompassing both injury claims and those based on the Equality and Human Rights Acts. Such claims cover a wide range of scenarios, from direct physical assaults perpetrated at student/student and teacher/student level to the misuse of equipment and claims arising out of alleged defects in the fabric of school premises. Reinforced Autoclaved Aerated Concrete (RAAC) has been identified in over 22,000 schools and the presence of remedial works, in some cases together with temporary and adapted buildings, is likely to increase risks and the potential for claims.

The number of claims reported via applications for Industrial Injuries Disablement Benefit arising out of silicosis is rising.  The UK has not seen the large scale litigation which is ongoing in Australia and the US and similar class actions are unlikely in this country.  A recent article in the British Medical Journal suggested that the use of engineered stone should be prohibited given the risk associated with it, though we are not aware of any intention on the part of the UK government to impose such a ban. There is an increasing awareness of the risks of silicosis. While this has yet to translate to claims, given the latency period between exposure and manifestation of symptoms, such claims may still be several years away.

We anticipate that the widely reported trend of problems arising out of road surfaces, such as potholes and general surface degradation, is likely to continue upward both in relation to own policy and third party claims. Road surface issues give rise to risks not just in respect of vehicle damage but also for vulnerable road users such as cyclists and motorcyclists, with highway authorities increasingly having to defend their inspection and repair procedures. As own policy claims increase, it is likely that there will be a concomitant rise in recovery actions by motor insurers. Increased repair costs generally across the motor market are likely to have significant upward impact on the value of road surface related claims which, combined with a higher incidence of such claims, will result in a costlier claims area for insurers.

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.

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.

AI has reshaped the financial services industry. It is widely used to summarise information, automate credit and loan decisions, detect and prevent fraud, drive operational efficiency and productivity, and reduce the risk of human error. But if AI learns from incomplete or imperfect data, there is a significant risk of unintended discrimination or unconscious bias, and unchecked reliance on AI could affect large data sets within a customer base and ultimately lead to claims for consumer redress. Recognising the critical importance of AI to corporate strategy and operations and the claims risk, financial institutions are increasingly appointing Chief AI Officers (CAIOs) to oversee the execution and integration of AI projects, promote ethical AI-practices, and ensure the adoption of AI aligns with corporate vision and regulatory requirements.

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.

Representing one of the most significant global technology outages since NotPetya in 2017, the CrowdStrike incident will act as a poster child to prompt policyholders and insurers to review their policy wordings and coverage where a systemic or supply chain cyber incident has the potential to cause a massive financial impact. Coverage for non-malicious cyber events, including 'system failure' cover, is not always available or purchased by policyholders, and the CrowdStrike incident highlights its need. The CrowdStrike incident acts as a useful case study to review appropriate interruption periods, 'waiting periods' and retentions for non-physical damage BI cover, if purchased. It also prompts future discussion as to where the line is drawn between a policyholder's software and systems, and a managed services provider. Policyholder reliance on systemically important and vulnerable systems is continuing to increase beyond infrastructure and the cloud, challenging insurers to determine appropriate coverage limits and value appropriate premiums.