Legal Horizon August 2026

Corporate/general commercial

The Financial Reporting Council published an insight on applying materiality in corporate reporting. The report is intended to help companies, investors and other users of UK annual reports understand how materiality should be applied and assessed. The FRC describes materiality as central to high-quality reporting and stresses that directors must exercise judgement in deciding what information to include in a company’s annual report. The new webpage answers FAQs and offers practical tips to help companies develop their own approach to applying materiality when preparing annual reports.

The Dematerialisation Market Action Taskforce published its implementation plan, recommending steps to withdraw paper share certificates as evidence of ownership and replace them with digital share registers by the end of 2027. The plan is the first stage of a phased programme to modernise the share ownership framework for publicly traded UK companies, with the long-term aim of moving to a fully intermediated system in which all institutional and retail shareholders hold shares digitally. The government has accepted all of the Taskforce’s recommendations and will legislate to require all publicly traded UK companies to maintain digital share registers and stop issuing paper share certificates. The legislation is expected to come into force before the end of 2027, with the exact date to be confirmed.

The Competition and Markets Authority published updated unfair contract terms guidance to help businesses make sure their contract terms and notices are fair and transparent to consumers.

The Prime Minister announced that new rules to end subscription traps will now come into force in January 2027. He also wants to ban retailers from making misleading claims to customers about discounts.  A consultation in autumn will assess whether tactics such as fake “was” prices, invented discounts and misleading recommended retail prices should be added to the list of banned practices under the Digital Markets, Competition and Consumers Act. These two measures are part of a planned wider rollout of everyday fixes to help with cost of living pressures.

The government announced a new weighting in public contracts to boost British jobs and support local communities.  This procurement policy note sets out the new social value model which will apply to procurements commenced on or after 1 January 2027. Accompanying guidance will be published in autumn 2026.

The government issued a call for evidence on digital product records to inform future policy development and understand the potential impacts for businesses, consumers and supply chains. Feedback is requested by 21 September 2026.

The Home Office published guidance on the notification requirement under ‘Martyn’s Law’, which introduces a new legal duty for organisations to consider terrorism risks in their day-to-day operations. The requirement won’t come into force until after 3 April 2027, to give in-scope organisations time to prepare.

A recent Supreme Court decision clarifies the limits of public nuisance on private land, in an important development for landowners, occupiers and businesses facing protest, or other trespass, activity. See our recent article explaining the legal and practical implications.

Also see our recent article on traps and tips for serving effective notices and the first edition of our refreshed Intellectual Property Newsletter.

Data protection/cybersecurity/tech and digital

The government is looking into whether data regulation is fit for purpose in the age of AI and other data-intensive technologies. Successful delivery of the government’s AI adoption plans depends on how well data is accessed, shared, governed and reused. But while most firms handle and analyse data, few harness its full potential. The government wants practical insights from businesses and innovators on what’s working well, where uncertainty remains, and where they see friction and challenge now and in the future. This will inform the need for further guidance, targeted regulatory changes or more fundamental reform.

At the same time, the government is reviewing the UK’s approach to international data transfers. Again, it’s asking for practical insights on the effectiveness of the current regime and where reform may be needed. The deadline for responses to both calls for evidence is 9 September 2026.

The Cyber Resilience Pledge officially launched, with more than 60 businesses signing up and committing to strengthen their cyber defences.

The National Cyber Security Centre published new response and recovery guidance for organisations on how to handle a highly disruptive cyber incident.

The Cyber Security and Resilience Bill received its second reading in the House of Lords on 14 July. Concerns raised include cumulative regulatory burden, divergence from the EU regime, absence of a dedicated regulator and the Bill’s failure to specifically address AI. Line by line examination of the Bill begins in September.

The Department for Science, Innovation and Technology, which played a central role in advancing the UK’s AI ambitions, has been abolished by the Burnham government. Most of its responsibilities will be absorbed into the newly named Department for Business, Innovation, Science and Trade and Department for Digital, Culture, Media and Sport. A new Office for the Prime Minister and the Cabinet will include an AI taskforce to drive the government’s overall AI strategy. Responsibility for AI strategy, public sector AI adoption and the AI Security Institute moves to the Cabinet Office, while dedicated AI minister Kanishka Narayan will attend Cabinet. Only time will tell whether the new structure can deliver the progress needed and ensure AI retains its strategic importance within government.

The UK Jurisdiction Taskforce published a landmark legal statement on liability for non-deliberate AI harms under English private law. With the rapid development of generative AI use and capability, the aim is to provide much needed legal certainty and predictability in an area where few cases have reached the courts. Many issues will be fact-specific, but here are the headline points:

• Contract will generally be the main mechanism for allocating liability for harm within an AI supply chain and between AI users and those harmed by its use. While poor drafting or unclear requirements may create difficulties, AI raises no unique contractual issues.
• Where no contract applies, liability will usually be assessed under well-established negligence principles, which are flexible enough to address AI-related harm. Generally, while careless AI users and developers of narrowly targeted applications are likely to be liable for foreseeable harm, foundation model developers are unlikely to be liable for harm from unforeseeable or insufficiently tested uses of their general-purpose models.
• As AI is not a ‘person’ in the legal sense, others can’t be held vicariously liable for its actions or failures. But employers and those owing non-delegable duties may be liable for AI-related harm caused through human wrongdoing, in the usual way.
• A professional may be found negligent for using AI inappropriately, using an unsuitable model, failing to conduct proper due diligence or failing to test AI or validate its outputs effectively. Equally, a professional could be liable for failing to use AI in circumstances where a competent member of their profession would have done so.
• Currently, strict liability for death, personal injury, or damage to private property caused by a defective product, regardless of whether the manufacturer was at fault, would arise only where AI is integrated into physical products (such as an automated industrial machine or a robot). The key question, as usual, is whether the product’s safety is lower than what people are generally entitled to expect.
• AI developers and deployers are unlikely to be liable for misuse by bad actors unless the AI was obviously dangerous or the misuse could and should have been prevented. By contrast, they are likely to be liable for foreseeable harm caused by the AI acting autonomously.
• Liability for negligent misstatement will generally be established if a legal person holds out an AI chatbot as communicating on their behalf.
• For defamation, those who exercise any manual review over the output before it’s published will be liable as editors. Those deploying an AI model or application to publish statements publicly in the course of business will most likely be liable for the output as a commercial publisher.

The EU AI Act’s transparency obligations are now in force. The European Commission published guidelines for AI providers and deployers and a code of practice that can be used to demonstrate compliance.

The UK’s Technology Trade Association techUK published an industry brief on agentic AI. It sets out how organisations across the UK economy can move beyond pilots and proofs of concept to deploy agentic AI responsibly and at scale.

The government announced reforms through the Regulating for Growth Bill to help businesses test and commercialise new products faster and published guidance on what participation in a regulatory sandbox would feel like from a business perspective.

Sustainability/ESG

The government’s Immigration and Asylum Bill was introduced to parliament. The Bill proposes significant changes to section 54 of the Modern Slavery Act 2015, including new prescribed content for modern slavery statements and a new penalty regime for non-compliance.

See our recent articles on climate transition planning and Science Based Targets.

The Advertising Standards Authority published practical guidance to help advertisers develop clear, accurate and evidence-based environmental claims.

The Law Society published new climate change guidance for in-house solicitors.

The Financial Conduct Authority published a webpage for regulated firms on climate adaptation and resilience, providing information on how physical risks from climate change, such as flooding, may impact the property insurance and mortgage markets.

A Private Members’ Bill was introduced to parliament to place a duty on commercial organisations and public authorities to prevent human rights and environmental harms, including an obligation to conduct human rights and environmental due diligence, in their own operations, subsidiaries, and value chains in line with international standards. While Private Members’ Bills rarely become law, they can indirectly affect legislation due to the publicity they attract on a particular topic.

The European Commission adopted revised sustainability reporting standards and a voluntary reporting standard for smaller companies as it seeks to reduce administrative burdens.

The EU’s ban on destroying unsold clothing, clothing accessories and footwear is now in effect. Under the EU Ecodesign for Sustainable Products Regulation (ESPR), companies must publicly disclose what they discard. Manufacturers, importers and distributors operating in the EU must now comply with significant sustainability requirements. Click here for more information on the ESPR.

The government responded to the Environmental Audit Committee’s report on regulating so-called ‘forever chemicals’. The government isn’t making any new commitments but has pledged greater EU cooperation to reduce unnecessary friction.

People

The Employment Rights Act 2025 is making sweeping changes to UK employment law. To help you navigate the changes, we’ve created a tracker to keep you updated on the proposals, what they mean for employers and how you can prepare, organised by topic and timeline. The government recently published an updated implementation timeline which is reflected in the tracker.

The government published a response to the consultation on the draft code of practice on trade union access to the workplace and laid a revised draft code and regulations before parliament. See our recent article on how employers can get ready.

The government also published a response to the consultation on the revised code of practice on access and unfair practices during the trade union recognition/derecognition process and laid a revised draft code before parliament.

A draft updated Acas code of practice on time off for trade union duties was published and laid before parliament.

The government published the new code of practice on electronic and workplace balloting for statutory trade union ballots. It will come into force alongside the new balloting regime on 25 August 2026.

Acas is consulting until 23 September 2026 on a new draft code of practice on disciplinary and grievance procedures. This is a substantial overhaul, the last full revision being in 2009. See our recent article on the impact of AI on employee disputes and strategies for management, which talks about the draft code.

The Equality and Human Rights Commission code of practice for services, public functions and associations came into effect on 5 August 2026.

The government is consulting until 30 September 2026 on proposals to support the fair, transparent and responsible use of workplace monitoring technologies, including whether regulatory intervention is necessary.

And finally, the government is consulting until 27 October 2026 on reform of the equal pay framework.