Retail Matters – Spring 2019


Food and Drink: Eco-conscious packaging
Current trends/Pressures Globally, the production of plastic has risen overwhelmingly over the past 70 years […]
Current trends/Pressures
Globally, the production of plastic has risen overwhelmingly over the past 70 years with 1.5 million tonnes of plastic being produced in 1950 to 300 million tonnes today. It is an inevitability that with such mass production of a non-biodegradable material that there will be a similarly vast impact on the environment. If the current trend continues it is estimated that across all sectors 12,000 megatonnes (12 billion tonnes) of plastic waste will make its way into landfill or the natural environment by 2050.
In 2017, the UK alone produced 1.85 million tonnes of plastic which was used in the production of plastic packaging. In light of this, and the fact that a reported 72% of soft drinks are packaged in plastic, it is easy to see why there are such strong social, governmental and political pressures on stakeholders in the soft drinks industry and other sectors within food and drink where plastic packaging is widely exploited.
Both the Government’s concern and aspiration to change the way in which the industry approaches its obligations towards reducing the use of non-biodegradable packaging can be seen through the implementation of a number of governmental regimes including the Resources and Waste Strategy. The Strategy aims to invoke the ‘polluter pays’ principle and increase producer responsibility for packaging, ensuring that producers are on the hook for the full costs of disposal for any packaging they place on the market.
In April 2018, signatories from 42 businesses who are collectively responsible for more than 80% of the plastic packaging on products sold in UK supermarkets, signed up to a new programme, the UK Plastics Pact, tackling the use of unnecessary single-use plastic packaging. Current signatories include Coca Cola European Partners, Lucozade Ribena Suntory, Arla and Highland Spring Group. There has been a spate of negative publicity centred on other industry leaders following their decision not to sign up to the scheme. This criticism reflects what now appears to be the general societal outlook in regard to businesses’ approach to their environmental responsibilities and plastics in particular (the Blue Planet effect).
Actions from a supply chain perspective
A report by the University of Cambridge Institute for Sustainability Leadership, commissioned by an industry-led working group including high profile members such as Lucozade Ribena Suntory and Harrogate Water Brands, highlights a number of workable actions designed to eliminate plastic packaging waste (the Report). The Report and a number of other working papers suggest that the principal forms of necessary change fall into three broad categories:
1. Innovation
Research and development will play a significant role in transforming the way in which companies both think about and produce their packaging. The Report includes a number of aims which companies should be striving for in their approach to reducing the amount of plastic used in drinks packaging. These aims include undertaking comprehensive research in order to investigate the optimal material for drinks packaging that eliminates plastic waste whilst ensuring the lowest net environmental impact.
This approach is already apparent amongst the industry leaders including Lucozade Ribena Suntory and Carlsberg. LRS’ Lucozade Sport brand has pioneered the use of seaweed based edible packaging for both sports drinks and energy gels at marathon events. The packaging can either be consumed by the user or discarded, in which case the product will decompose in the same manner and timeframe as a piece of fruit would.
Carlsberg have recently brought their “snap pack” beer can product to market. The product, which aims to tackle the traditional six ring can binding, essentially offers a transparent glue which bonds the cans. This product alone could potentially cut the Carlsberg Group’s plastic usage by more than 1,200 tonnes each year once a rollout across each of its 11 markets takes place.
2. A collective approach
In December 2018, the UK Government allocated £60m to supporting a scheme which aims to transform waste into environmentally friendly plastic packaging through technological solutions. This has bolstered the Government’s commitment to the cause having previously invested £140m over the last 3 years in developing sustainable packaging.
The investment is subject to industry entering into partnership with the Government and providing significant co-investment. In line with this, industry heavyweight Nestlé has recently pledged to work towards a “waste-free future”. They have heavily invested in innovation and alternative packaging which has put them in a position to roll out 100% paper packaging for Nesquik in Q2 of 2019 and similarly paper based pouches for the Milo drink brand in 2020. Furthermore, by 2025 Nestlé Waters intends to increase the amount of recycled PET (Polyethylene terephthalate) content in its bottles to 50% for its European brands which includes, Acqua Panna, Buxton, S. Pellegrino and Levissima.
Other examples of collective action include entry into the the UK Plastics Pact (the Pact) mentioned above. The Pact sets out four targets which signatories should aim to achieve by 2025. The targets are:
On a more local level, the recent #leedsbyexample scheme in the city of Leeds is a good example of the industry coming together to address plastic packaging. Under the scheme, environmental charity Hubbub and recycling compliance scheme Ecosurety developed a unique partnership with all levels of the soft drinks supply chain – including drinks companies like Lucozade Ribena Suntory, Coca-Cola GB, Pepsico and Highland Spring, retailers like Asda and Marks and Spencer, and packaging manufacturers like Ball Packaging and Klöckner Pentaplast. Using a combination of technology, recycling facilities, and communications engagement the scheme is aimed at encouraging the recycling of “food to go” packaging by millennials, who have surprisingly low current rates of recycling.
3. Collective industry-wide feasibility study into alternative delivery models
The Report acknowledges that potential, alternative delivery systems will not suit every company, or, more specifically, every product in the sector. For example, bottle refilling, which has been touted as one method of increasing the sustainability of packaging, still needs further and sustained assessment. For example, legally, spring water must be bottled at source in order to be advertised as such, whilst some carbonated drinks cannot be made using syrup, an issue which current drinks dispensing machines are unable to reconcile.
Although it will not be an easy challenge to overcome this issue, companies need to invest significant time and effort into considering new and innovative ways in which they can bring their products to market in a way that utilises plastics already in circulation.
Conclusion
There is an unquestionable global movement aimed at highlighting and addressing the environmental impacts of plastics. This movement has catalysed a number of far reaching programmes aimed at reducing the use and improving the recyclability of single-use plastics.
As environmental and potential health impacts are further understood, both consumer and regulatory attitudes towards the overuse of plastic packaging are becoming increasingly forceful, which has resulted in industry leaders reassessing their approach to the use of plastics. Of course, as mentioned, in many instances plastic packaging may still be the most viable option until a true workable alternative is available. In any event, in the short and medium term, every effort should be made to move towards a more circular economy aimed at extending the life, reuse, remanufacturing and recycling of plastic packaging. The innovative approaches already initiated by the industry and supply chains shows that progress is possible.
http://chemicalleasing-toolkit.org/node/64

New rules banning harmful gender stereotyping: What retailers[...]
Walker Morris’ Retail specialist Gwendoline Davies explains the Committee of Advertising Practice’s imminent ban on […]
Walker Morris’ Retail specialist Gwendoline Davies explains the Committee of Advertising Practice’s imminent ban on harmful gender stereotyping and offers her practical advice for marketers and retailers.
What is changing, and why?
We reported last year that the Committee of Advertising Practice (CAP) planned to introduce new rules banning harmful gender stereotyping in advertising. That followed the Advertising Standards Authority’s (ASA) review which looked at gender stereotyping in advertising and concluded that harmful stereotypes can “restrict the choices, aspirations and opportunities of children, young people and adults”.
On 14 December 2018 new rules were introduced into CAP’s non-broadcast and broadcast codes that marketing communications must not include gender stereotypes that are likely to cause harm or serious or widespread offence. The new rules will take effect on 14 June 2019.
What does this mean for retailers and marketers?
Retailers and marketers need to think very carefully about the use of gender stereotypes, which is an increasingly nuanced area.
From a strictly legal perspective, expert advice may be required as to exactly what potential marketing methods will be caught; and as to whether or not proposed content may be harmful.
There are also, however, more practical considerations.
In the run-up to Christmas, Marks and Spencer faced widespread criticism when its ‘Christmas must-haves’ window display posed women in fancy underwear alongside men in smart suits. Whilst (depending upon the exact content of the window display including any offers or other promotional material) the new CAP rules would not have applied, the window display attracted significant negative PR for M&S, with the juxtaposition of female and male aspirations sparking outrage and upset. Perhaps more than ever, in today’s uncertain market, retailers should take care to avoid any messaging or mis-step at all which could make them seem old-fashioned, unethical or out-of-touch.
By comparison, recent months have seen announcements by retailers including John Lewis, Boots, Abercrombie and Fitch and Nununu about the removal of ‘boys’ and ‘girls’ signage from toys and even some clothing lines. These announcements have generally been very positively received within the press and on social media, with some even attracting celebrity endorsement.
Following last year’s announcement that a ban on harmful gender stereotyping was pending, image asset library Shutterstock commissioned a survey amongst world-wide marketers as to the use of diverse [1] imagery in their campaigns [2]. The survey revealed that by October 2018 some 75% of UK marketers had already been impacted by the imminent new rules; that 60% agree that gender is no longer as important a factor when it comes to targeting in marketing campaigns; and that 88% of Generation X and 90% of Millennials believe that more diverse representation helps a brand’s reputation today.
What will be caught by CAP’s new rules?
The CAP codes apply to marketing communications and therefore cover traditional advertisements in newspapers and magazines; on the TV and radio; and via posters, mail shots and the like. They also cover ‘new’ media such as blogs, social media, websites, text message, etc.
The codes, and therefore new rules banning harmful gender stereotyping, do not generally [3] apply to point of sale displays, such as window displays.
It is also important to note that the new rules do not ban gender stereotyping per se. Rather, only harmful gender stereotypes are prohibited. CAP has stated that the aim is to identify specific harm that should be prevented and not to ban gender stereotypes outright; but it has also made clear that the use of humour or banter is unlikely to mitigate against the potential for harm.
CAP has published guidance to help marketers understand and apply the new rules. For example, the new rules do not necessarily ban adverts which feature “glamorous, attractive, successful, aspirational or healthy people or lifestyles” or which feature one gender only; but they would capture any advert which depicted a man or woman failing to achieve a task specifically because of their gender [4].
The rules do not, however, just deal with potential sexism or contrast between the sexes – they are much wider than that.
For example, the new rules would ban an advert aimed at new mums which suggested that looking attractive or maintaining a new home are priorities; or an advert aimed at young people which directly or indirectly prioritised a particular appearance or body shape over other qualities. Such scenarios may involve gender stereotypes which can negatively impact the emotional and physical wellbeing of vulnerable people.
Next steps
Retailers and marketers now have just under six months in which to familiarise themselves, and train their staff, as to the details of, and guiding principles surrounding, the new CAP rules.
As well as satisfying themselves as to the legalities, retailers and marketers should ensure that they consider the wider commercial and reputational issues associated with any proposed marketing communications/campaigns and any policies or publicity relating thereto.
If you would like any advice or assistance on the issues covered in this briefing, please do not hesitate to contact Gwendoline Davies or any of Walker Morris’ cross-discipline Retail specialists.
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[1] including diversity in terms of race, gender and abilities
[2] See https://www.shutterstock.com/blog/visualizing-diversity-in-advertising-around-the-world; and
http://www.netimperative.com/2018/11/asa-gender-stereotyping-ban-marketers-embracing-more-diversity-in-images/ for more information
[3] although the position may be different if a point of sale display includes a promotion or incentive offer of any kind
[4] given examples include a man struggling to change a nappy or a woman struggling to park a car

2019 Gender Pay Gap Reporting
The 4 April 2019 deadline for private sector employers with more than 250 staff to […]
The 4 April 2019 deadline for private sector employers with more than 250 staff to publish their second round of gender pay gap reports (based on a ‘snapshot date’ of 5 April 2018) is fast approaching. What trends and observations can be drawn from the 2018 reports and how can employers optimise their position in relation to the 2019 reporting round?
As was widely expected to be the case, the first tranche of gender pay gap reports were pored over and scrutinised by the media, business advisors, employees, potential employees and investors and there is no reason to think that this will be any different for 2019. Indeed, if anything, the level of scrutiny and comment will increase as observers will be looking for and highlighting any gaps that have widened or decreased since the last reports. At the time of writing, 1602 companies had reported their data out of around 10,500 expected to be ‘in scope’.
The fact is that gender pay gap reports make a good news story, especially where there is a well-known employer with a significant pay gap. If, for whatever reasons, that pay gap is actually increasing year on year then it can almost be the stuff of headlines. This has been demonstrated by HSBC when it emerged in January 2019 that it not only had a significant gap between mean hourly pay for women and men but that this had actually increased, from 59% in 2017 to 61% in 2018 [1]. Virgin Atlantic were also on the receiving end of negative press attention when their median hourly pay gap increased from 28.4% to 31% [2]. It responded that one of the factors behind this was that 94% of its UK pilots were men and that it has committed to achieving 50/50 male/female representation in senior leadership roles by 2022.
Conversely, alongside the stories of widening pay gaps, a good gender pay gap story will also attract headlines as shown by Moneysupermarket.com which recorded an improvement to its pay gap of 15.6%, down from 24.6%.
The overall trend
Broadly speaking, and ignoring the outliers, the figures do suggest a slight narrowing of the overall UK gender pay gap. Whether this trend is because of mandatory reporting or indicative of a direction of travel that was already in motion is difficult to know. But one thing is clear, it is no longer acceptable for employers to do nothing about a gender pay gap and mandatory reporting is a key driver here. Companies need to have a plan for tackling gender pay inequality and, more than that, they need to be transparent and proactive about this plan.
We all know that the mandatory reporting regime is a blunt instrument and can paint a picture far worse than the reality. For example, some smaller companies’ statistics might be skewed significantly by the departure of one high-earning female. Furthermore, the fact that figures are based on a ‘snapshot’ date rather than a period of time might skew data where there has been a recent restructure, merger or TUPE transfer. This is a limitation of the regime and the Government has recognised this by setting a 5-year period for review of the legislation’s effectiveness. From a business perspective, this limitation is best addressed by providing a detailed and accessible narrative to accompany the report and explain what is being done to address any inequalities, both to the workforce and external observers. A narrative, done well, can be a useful and important PR tool.
The importance of a good narrative
It will inevitably take time to address a gender pay gap if the root cause is that women are under-represented either in the company itself and/or in senior roles. Proactive action taken to address this by recruiting more women at entry-level can, ironically, lead to an increase in the company’s gender pay gap initially. This is the sort of thing that a well thought-out and accessibly presented narrative report can explain and it’s an area where your professional advisors and especially your lawyers can really add value.
Readers are more likely to recall headline points from a well-presented narrative report accompanying a set of hard data. The narrative should capture all the steps the organisation is taking to improve its gender pay gap and gender equality more widely. Examples might include initiatives to:
- recruit more women at entry level or above
- support women in moving into senior and leadership roles
- accommodate flexible and atypical ways of working
- address the increasingly recognised issue of ‘unconscious bias’ through awareness training.
Gender pay gap reporting is a twofold exercise – one part hard number-crunching and one part telling the overriding story. The challenge for employers is to get both these parts right.
Heading in the right direction?
The Office for National Statistics published figures in October 2018 indicating that the UK’s gender pay gap for full-time employees had reduced to 8.6%. This represents an all-time low for full-time employees. When all workers, including part-timers, are assessed it had decreased from 18.4% in 2017 to 17.9% in 2019. Slowly but surely, progress is being made in the right direction and, if there is one take-home point, it is that employers need to stay aligned with or, preferably, ahead of this curve in order to remain competitive and attract the best talent.
If you have any questions about this article please contact David Smedley or Andrew Rayment.
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[1] https://www.theguardian.com/business/2019/jan/08/uks-most-unequal-bank-hsbcs-gender-pay-gap-grows-to-61
[2] https://gender-pay-gap.service.gov.uk/Employer/AsdkKQSO/2018

Online pricing, unfair practices and consumer protection
High street jeweller H Samuel has been fined for providing misleading pricing information online. The […]
High street jeweller H Samuel has been fined for providing misleading pricing information online. The case highlights both what retailers can and can’t do when it comes to posting prices and promotions; and a new national and international drive towards the enforcement of consumer protection laws. Retail and Commercial Dispute Resolution specialist Gwendoline Davies explains and offers practical advice
Why is this case important?
Signet Trading Limited, the owner of high street jeweller H Samuel has been fined for providing misleading pricing information online. The case highlights both what retailers can and can’t do when it comes to posting prices and promotions; and a new national and international drive towards the enforcement of consumer protection laws.
What can retailers do?
If faced with prosecution under the CPRs, it may be possible to raise a defence if the offence was committed because of a mistake, reliance on information supplied by another, another person’s act or default or because of some other accident or cause outside the retailers control; and if all reasonable precautions and due diligence were undertaken to try to avoid commission of the offence in the first place.
It will not be possible to raise the due diligence defence if a retailer knowingly or recklessly allows its or its employees’ conduct to fall below honest and professionally diligent standards.
There are, however, some practical steps that retailers can take to avoid commission of CPR offences. Following these should also provide retailers with evidence to support a due diligence defence if and when any complaint, investigation or prosecution is instigated:
- Providing training to all staff involved, directly or indirectly, with the sales and marketing (including production of hard and soft copy materials) of your services/products and retaining records and evidence of such training achievements.
- Taking care that all information, online and in all other forms, that is gathered and presented to consumers (potential and actual) is accurate, fair, not deceptive or misleading and does not leave out material facts. Having safeguards in place as to the accuracy and security of all such information.
- Updating (or introducing) policies and procedures regarding the review/maintenance/correction and updating of marketing material and other consumer-facing information.
- Signposting consumers to any publicly available information which might affect or assist with their transactional decision.
- Maintaining a comprehensive audit trail of all these efforts.
- There are also some tools that can be deployed in defence of any complaint if necessary:
- Firstly, is the complaint actually time-barred? There is an applicable limitation period which provides that no prosecution can be brought more than three years after an offence was committed or one year after the discovery or report to trading standards, whichever is the earlier.
- Secondly, can a complaint be negotiated away? (If it can, note that negotiating a settlement with a consumer complainant may not, of itself, prevent a prosecution, and it may not guarantee confidentiality.) Retailers should seek specialist legal advice to assist with any settlement negotiations and to make sure that any agreements are properly documented and include confidentiality obligations.
- Treat every customer and potential complainant fairly, politely and professionally, and be honest and open in all dealings, so as to foster good relationships. Good customer relations can avoid or quickly resolve complaints and can help to avoid reports to the authorities.
- Finally, consider whether the due diligence defence can be raised.
Understanding unfair commercial practices – what retailers need to know
The Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) prohibit businesses from engaging in unfair commercial practices in their dealings with consumers. Crucially, consumers are not only those people who actually buy from or pay a business – they also include anyone who is a prospective customer. It is a breach of the CPRs to give information to consumers that:
- Is misleading to a material degree.
- Relates to one or more pieces of information which consumers are likely to take into account when reaching a transactional decision (such as the nature of a product or service, specification, price, locality, sales service, terms of sale, incentives or other aspect or characteristic of the product/service).
- Causes or is likely to cause the consumer to make a different transactional decision.
Information might be misleading because it contains false information or because it is deceptive or likely to deceive a consumer even if, strictly, it is factually correct. This can include information which is given verbally, in writing or visually.
Giving false or misleading information under the CPRs also specifically includes any commercial practice or marketing which creates confusion with competitors’ products or services and advertising that you are bound by any code of conduct, but not adhering to that code.
The CPRs require businesses to be proactive. They impose a duty to disclose material information that a consumer needs to make an informed transactional decision. A common trap for the unwary is that liability for misleading by omission cannot be avoided if you do not know the material information, but have taken no reasonable steps to find it out.
The CPRs also prohibit commercial practices which intimidate or exploit consumers; which restrict or are likely to restrict how they act or make choices; utilise harassment, coercion or undue influence; and/or which significantly impair or limit or are likely to impair or limit a consumer’s freedom of choice.
Finally, the CPRs place a general prohibition on commercial practices where a business fails to act in a professionally diligent manner in accordance with honest market practice and/or good faith and they list, at Schedule 1, 31 specific “banned practices” [1].
The reach of the CPRs is wide, as are the enforcement provisions, which attract both civil and criminal liability. Depending on the circumstances, breach of the CPRs can result in unlimited fines and/or up to 2 years’ imprisonment. Reputational consequences can also, of course, be devastating.
H Samuel case
In the recent case, Torfaen County Borough Council’s trading standards team pursued a prosecution in respect of the misleading pricing of a range of diamond rings on the H Samuel website. The charges related to the relatively common practice of using reference price promotions. H Samuel’s website had failed to inform consumers that items had previously been on offer for sale at lower ‘intervening’ prices. Customers were therefore unaware whether they were receiving a genuine bargain. Signet cooperated with the council’s investigation and pleaded guilty to what the judge accepted were system failings as opposed to deliberate attempts to mislead customers. Whilst credit was given for that, Signet/H Samuel was nevertheless fined £60,000 in respect of the sale of rings which had otherwise resulted in a gain to the company of around £6,500, and was ordered to pay the council’s costs of £13,382. A representative from the prosecuting team said that the H Samuel case represents a “clear warning” to retailers that trading standards officers will act in the interests of consumers and take action where traders fail to adhere to consumer protection legislation.
Consumer protection advice for retailers
Retailers must be very careful, when using reference pricing – either in online promotions or via any other marketing communications – not to mislead customers into thinking they are getting a good deal. Guidance on this, and related pricing issues, is available on the Advertising Standards Authority and Committee of Advertising Practice website and in the Chartered Trading Standards Institute’s April 2018 Guidance for Traders on Pricing Practices.
Retailers should also be aware that the stance adopted by the council in Torfaen is indicative of a wider drive, both within the UK and across the EU, to enforce national and cross-border laws to protect consumers. For example, on 22 February 2019 the European Commission called for online shopping websites to give customers clearer information about pricing and discounts after finding that some 60% of websites screened showed irregularities regarding compliance with consumer protection laws – particularly in relation to the advertisement of pricing promotions and the failure of traders to provide an easily accessible link to the Online Dispute Resolution platform. On 25 February 2019 the Chair of the UK’s Competition and Markets Authority (CMA) announced a package of preliminary proposals to strengthen the CMA’s consumer protection enforcement tools.
Walker Morris will monitor and report on any pertinent proposals and/or legislative developments, but in the meantime retailers should note that this new focus on compliance with consumer protection laws is likely to result in increased scrutiny, at a local, national and even international level, of their online and marketing practices.
For further advice or information, for assistance with the drafting or updating of appropriate policies and procedures, or to enquire about Walker Morris’ CPRs training for businesses, please contact Gwendoline Davies or any member of Walker Morris’ Retail Team.
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[1] http://www.legislation.gov.uk/uksi/2008/1277/schedule/1/made

Canary Wharf Brexit frustration case: The latest
Walker Morris reported, at the end of last month, the High Court’s decision in Canary […]
Walker Morris reported, at the end of last month, the High Court’s decision in Canary Wharf v EMA [1] that Brexit will not frustrate (and therefore effectively terminate) the European Medical Agency’s lease at Canary Wharf. The High Court’s decision was generally welcomed because, had the High Court found for the EMA, countless leases and commercial contracts throughout the UK and even internationally would also have been immediately vulnerable, as other parties may have been tempted to rely on the case to seek to terminate arrangements which Brexit rendered unfavourable.
However, whilst the High Court’s decision was thorough and carefully reasoned, this is a high profile case which has very significant, far-reaching practical implications and we now understand that the EMA has been granted permission to appeal to the Court of Appeal. We will monitor and keep retailers apprised of key developments.

Supreme Court confirms security of tenure
Retail and Real Estate Litigation specialist David Manda explains a security of tenure case that […]
Retail and Real Estate Litigation specialist David Manda explains a security of tenure case that was ‘leapfrogged’ to the Supreme Court because of its importance for commercial landlords and tenants.
Why is this case relevant to retailers?
Where a commercial tenant’s lease is protected under Part II of the Landlord and Tenant Act 1954 (the 1954 Act), the tenant has a statutory right of renewal. Security of tenure is especially important for retailers, as one of their most valuable assets – goodwill – so often attaches to their particular premises. The landlord, however, has the right to oppose the grant of a renewal lease by establishing one of the prescribed statutory grounds for possession. Perhaps the most commonly used ground is set out in section 30(1)(f) of the 1954 Act – it provides that a landlord may oppose a renewal lease on the basis of an intention to demolish, reconstruct or redevelop the premises.
In this case [1], when the landlord opposed the grant of a renewal lease on ground (f), the tenant argued that the landlord did not have the requisite intention to develop the premises – rather, it only intended to regain possession of the property. The tenant relied on the fact that the landlord had not applied for planning permission for the change of use of the property, nor sought the consent of the superior landlord, to contend that the landlord’s intention was not a “firm and settled” intention, as it should be to satisfy the legal test.
The High Court ruled that a landlord’s right to oppose on the ground that it intends to redevelop the premises remains unfettered even if the motive for the redevelopment is to obtain vacant possession. The High Court held that the key issue is what the landlord proposes to do; and whether the landlord intends to do it… Why the landlord is choosing to develop the premises is irrelevant, as the statutory ground refers to “intention” rather than motive.
Why was the case ‘leapfrogged’ to the Supreme Court?
The High Court’s decision, although dealing only in established legal concepts, brought potential loop-holes in the 1954 Act into focus and highlighted its vulnerability to sharp practice and abuse on the part of unscrupulous landlords. Obtaining authoritative clarification on the proper interpretation and application of the ground (f) test therefore justified a ‘leapfrog’ appeal to the Supreme Court.
What did the Supreme Court decide?
The Supreme Court agreed that a landlord’s motive was irrelevant; however it confirmed that a ground (f) case turns on “the nature and quality of the intention that ground (f) requires”. The Supreme Court therefore held that the landlord’s intention to carry out works had to exist independently of the tenant’s claim to a renewal tenancy and there had to be an intention to carry out the works whether or not the tenant vacated the premises.
In this particular case, the Supreme Court found that the landlord did not have the required intention to carry out the proposed works. It noted that, on the facts, if the tenant gave up possession voluntarily, the landlord had no intention of carrying them out. Likewise, the landlord did not intend to carry out the works if the tenant persuaded the court that the works could reasonably be carried out while it remained in possession. Accordingly, the appeal was allowed.
What does this mean for commercial landlords and tenants?
This decision will come as welcome relief to all retailers operating out of leasehold premises. The High Court’s earlier judgment could have left them vulnerable to landlords simply serving schedules of disruptive works in order to prompt tenants to vacate, and thereby to losing their valuable security of tenure.
Going forward, retail tenants whose renewals are being opposed on ground (f) should critically assess their landlord’s development plans with a particular focus on whether or not there is a genuine intention for the scheme to proceed even if the tenant vacates voluntarily.
This decision seems to present an additional hurdle for landlords opposing renewal leases on the grounds of redevelopment to overcome. As such, landlords may increasingly look to rely on other statutory grounds [2] in order to oppose tenants’ renewal lease requests.
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[1] [2018] UKSC 62
[2] See 1954 Act, section 30 (1) (a) – (g)

Retail fraud on the rise
Walker Morris’ Retail and Commercial Dispute Resolution specialists Gwendoline Davies looks at some of the […]
Walker Morris’ Retail and Commercial Dispute Resolution specialists Gwendoline Davies looks at some of the latest fraud challenges facing retailers today, and some of the technical, practical and legal solutions on offer.
What are the issues and key risks?
Recent analysis released by payments group Adyen has revealed that 60% of British retailers have noticed an increase in fraud over the last year. This is backed up by hard statistics – the Office for National Statistics figures released at the end of 2018 showed an increase in consumer and retail fraud, up 27% on the previous year, despite a stabilisation in fraud figures as a whole.
Retail fraud can occur in myriad ways, but of primary concern in the current climate is cybercrime – in particular the hacking and theft of customer data.
According to a report published by ThreatMatrix in 2018, e-commerce attacks increased by 93% between the first quarters of 2017 and 2018, and every day of 2018’s first quarter showed higher cyber attacks than any one day in the previous three years – and that is just the attacks that are reported. Hugo Rosemount, Crime and Security Policy Adviser to the British Retail Consortium has commented that “[c]yber attacks on the retail industry are doubly damaging in that there are two sets of victims… both the customers (whose data is hacked) and the retailers themselves.” Cybercrime can therefore expose retailers to financial harm (both directly and potentially indirectly if/when they compensate customers), regulatory investigation concerning data protection and breaches and, perhaps of most concern, reputational damage.
One of the reasons that retail fraud is on the rise is the proliferation of electronic and mobile marketing techniques, sales platforms and payment options. Weaknesses in, or gateways between, different IT systems can provide an ‘in’ for hackers; the use of unsecure mobile devices to create and log in to customer accounts; and point-of-sale payment card skimmers represent some of the real risk areas.
However, whilst technology offers fraudsters ever more inventive ways to target victims, it can also provide improved security options for retailers.
What technical and practical solutions are on offer?
Biometric security systems are one area in which technology is being deployed to target fraud, and with many smartphones already capable of using biometric data such as fingerprints, facial recognition and iris scanning to authenticate identity, many consumers are open to having this type of protection implemented for payments too. According to a survey by GlobalData, 67% of consumers would be happy to use a biometric security method to protect their payment details. Biometric security systems may also generally improve the security of mobile devices, and of e-commerce account creations and transactions conducted thereon.
Biometric security systems bring their own legal challenges in the form of data protection concerns, but they highlight the increased sophistication that businesses are considering in the face of rising fraud. Industry analysts predict that biometric payment cards will become widely available on the consumer market during 2019.
Engaging cybersecurity specialists to continually review and improve IT security measures is essential, as is implementing and maintaining comprehensive policies, procedures and staff training as to the various types of retail fraud and the risks associated with handling customer data.
Retailers may also wish to consider reviewing their communications with customers. Whilst there is a fine line to tread between preventing fraud and not putting off prospective customers with onerous security requirements, there might be significant brand credit to be had from, say, warning customers at the point of account creation that it may be safer to proceed privately on a secure PC rather than on an unsecure mobile device or in public; and/or from reminding customers at the point of sale to be alive to the various risks of payment fraud.
What legal options may be open to retailers?
Where retailers do find themselves or their customers a victim of fraud, as well as following any internal incident management regime, retailers should also immediately notify the police. They may be able to recover any stolen monies and potentially take action against the fraudsters.
It may also be necessary or appropriate to notify any insurer, any other parties to the transaction (such as the customer) and any industry representative body.
In addition, retailers should seek immediate specialist legal advice. Walker Morris’ Commercial Dispute Resolution team has significant expertise in fraud claims and would, in some cases, be able to urgently obtain forensic input to help the retailer to understand and to limit the extent of any data breach or any other theft or damage suffered as a result of a cyber attack.
In some cases it may even be possible also to urgently initiate a freezing injunction to try to preserve any stolen monies in the fraudsters’ bank account(s) and/or to obtain an order from the court requiring disclosure of assets to be provided by the suspected fraudsters. If the whereabouts of monies is unknown, Walker Morris has extensive experience in tracing and recovery.
There are also a number of civil remedies that affected retailers may be able to pursue. Depending on the type and circumstances of the fraud, there may be breach of contract; negligence, breach of trust; unjust enrichment and/or tracing claims which could mitigate any losses and potentially help to recover lost funds. It may also be possible to obtain compensation or contributions from other involved parties (such as IT security consultants or the like).
If you would like any further advice or assistance in relation to any form of retail fraud, please do not hesitate to contact Gwendoline Davies.