From housing and estate planning to employment and diversity, 2017 has been packed with regulatory updates and legislative changes across the UK. Despite Brexit falling through the fingers of government officials, and the Autumn budget bringing into light few new measures, the end of year has still managed to see triumph in the development of some sectors.
Below Lawyer Monthly has heard Your Thoughts on some of the key legal developments across the UK this year. Now we wait in anticipation for the big 2018 changes.
Elaine Roche, Partner, JMW:
Residence Nil Rate Band
The biggest legal development within my specialism was the introduction of the Residence Nil Rate Band, affecting the amount of money people can leave to their offspring without being subject to Inheritance Tax (IHT). This was set at £100,000 per person in April 2017 and will rise by £25,000 each year to 2020, as part of a pledge set by the Conservative government in their election campaign. The move effectively means that couples could avoid paying IHT on up to £1 million of their estate passing this to children and grandchildren.
Lasting Power of Attorneys
Another strong area for us in 2017 was around Lasting Power of Attorneys (LPAs), when we saw record numbers of clients seeking advice in this area. This has been largely down to more publicity around the importance of LPAs. The Financial Conduct Authority has suggested the Office of the Public Guardian should make the process of making an LPA completely digital, which resulted in LPAs hitting the headlines once again. In response to this rising demand, we created a quiz on our website to guide people through the process of deciding whether someone has mental capacity to make their own decisions, or whether they require an LPA. I expect the trend for more interest in LPAs to continue into 2018, as this remains a strong talking point on the news agenda.”
Emma Bartlett, Partner, Charles Russell Speechlys:
Abolition of Tribunal Fee Regime
In July 2017, the Supreme Court (SC) found that the level of employment tribunal fees hindered access to justice and abolished the tribunal fee regime: the immediate impact was that no more fees can be asked for under the current regime and almost £32 million fees are to be repaid. The SC emphasised the public importance of claims being brought, establishing principles of law that benefit not only those bringing the claim but society as a whole, both today and in the future. There was such a dramatic reduction in claims of 70% in 2014 when fees were first introduced, which could not be explained merely by saying that unmeritorious claimants had been deterred.
The new regime marks the start of what will probably prove to be an unsettled time for employers who may have become inured to a less volatile environment with regard to tribunal claims. Already, tribunal claims are reported to have risen by two thirds in the last quarter of 2017, but we are still some way off pre-2014 levels.
Gig Economy and the Taylor Review
The government has pledged to explore options for longer term reform of employment status tests for clarity on employment rights and tax treatment. The “gig economy” cases forcing this issue have seen individuals, engaged as “self-employed contractors” by Pimlico Plumbers, Uber, CitySprint, Addison Lee and other employers, claiming “worker” or “employee” status in order to qualify for national minimum wage, holiday pay and other concomitant rights. The judicial trend has been to protect individuals working in the gig economy, affording them worker status.
Uber and City Sprint rely heavily on individuals using automated electronic processes to become approved and access jobs. Tribunals still take a multi-factorial approach to determine worker status, but primarily the level of control held over the workers makes the concept of genuine “self-employment” difficult to sustain.
The latest ground-breaking recommendation is for those working in the gig economy to automatically be given worker status unless the contrary can be proven. Alternatively a proposed penalty on companies flouting worker rights by mislabelling a worker’s status as self-employed contractors could be costly given the number of gig economy workers.
Gender Pay Gap Reporting
It is impossible not to mention the mandatory gender pay reporting for large private and voluntary sector employers brought into effect in April 2017. Large employers must publish their gender pay gap by 4 April 2018, uploading prescribed data to a government website and their own. It is now possible to search and compare large employers’ gender pay data by reference to industry sector on the government website. Narratives are key to providing additional information to employees and interested bodies, including trade and national press and prospective employees to explain gender pay differentials. The key to managing an employer’s reputation and ensuring its employees, prospective recruits and any other third parties understand that an employer’s objective to work towards gender pay equality and improve diversity in its workforce is the narrative.
Kevin Barry, Criminal Barrister, 36 Group:
Cybercrime Comes of Age
2017 has undoubtedly been the year when big-time cybercrime landed with a crash of bytes and Bitcoin in the Crown Courts. Crime has well and truly gone digital. Entrepreneurial hackers are cashing in by selling malware and attack/infiltration packages as an off-the-shelf service marketed commercially over the Dark Web. Law enforcement in the UK has finally begun to catch up with cybercriminals. Police specialist Regional Cybercrime Units have been investigating much bigger, more complex hacking cases and other types of cybercrime than ever before. It’s become routine for sophisticated criminals to use Bitcoin or other cryptocurrency to assist in laundering the proceeds of frauds, drug dealing and all manner of other criminal activity. The police, CPS and NCA have responded by developing strategies to identify cryptocurrency assets, trace immensely complicated international transactions, and finally to seize and confiscate it from criminals. The unpreceded explosion in the value of Bitcoin – and the wildly unpredictable volatility in its value - has led to very difficult decisions as to when, and how, law enforcement should realise crypto assets: cash in too early and there may well be claims that the asset was sold too cheaply at the wrong point in time. This has all resulted in many big, complex – and fascinating – cyber cases arriving in Court this year – with the trend set to continue apace next year.
Joseph Dalby SC, Barrister, 36 Group:
Air Navigation Order
2017 was the year in which the drones began to become normalised. They are still revered as marvellous, with shiny prospects of changing the shape of how business is done, but the imagining of ‘what-may-become’ has yet to be replaced by a regulatory regime that caters for it before this comes into effect.
A year after the Air Navigation Order (ANO), the main statutory instrument for all civil aviation was updated to consolidate the Rules of the Air for drones; the Government settled on its policy, following a consultation ending in June.
Later in November, the Government announced its intention to publish a bill in Spring 2018 to amend the ANO to enable the powers to require:
- Drone users of drones of 250g and above to register themselves, and their drone(s) centrally. In tandem, work will continue on embedding electronic identification labels and tracking software into equipment as part of the whole approach to geo-fencing.
- Mandatory competency testing, such as online tests, to all users (and not just commercial users at present) including restricting users to fly certain classes of drones.
The bill will also grant new police powers where drone users would need to produce registration documents on request, ground a drone safely in certain circumstances and the ability to seize and retain a drone’s components if there is reasonable suspicion of it having been involved in an offence
The government also announced that it will review the restriction of all drones flying above 400 feet, as well as the use of drones within the proximity of an airport.
In the meantime, prosecutions are few and far between. In one instance, a man was fined £1,800 for 17 offences under the ANO for flying a drone over an airfield as well as over homes and a school. The drone had allegedly been modified to increase its flight distance capabilities.
Miriam Carrion Benitez, Barrister, 36 Group:
Brexit Settled Status
The main change to the future rights of EU citizens and their family members is that after Brexit residence, documentation will be a condition for lawful residence.
Under the Withdrawal Agreement, the criteria for granting ‘settled status’ will remain the same, i.e. five years’ continuous residence as a worker, self-employed person, student, self-sufficient person or family member thereof. Those seeking temporary residence need to fall within one of these categories.
EU nationals here before 27 March 2019 but not able to evidence five years’ residence can apply for temporary status until they can build up the five years. Those arriving after 27 March 2019 will be required to register. After 27 March 2021 all EU nationals residing in the UK without residence documentation may be removed subject to an appeal process.
Family members of EU nationals in the UK prior to March 2019 can apply for residence documentation. Thereafter only ‘direct family members’ (spouse/partner, child) can apply to join a EU national. Extended family members will be treated as all other non-EU nationals. This will present particular difficulties to elderly parents of EU nationals, no longer able to join their relatives unless they satisfy the strict ‘adult dependant relatives’ rules.
Stephen Bishop, Barrister, 36 Group:
Grenfell & Social Housing
I think it is impossible to summarise Property Law over the year in a few short paragraphs.
This year has in a way been dominated by the Grenfell Tower tragedy. For those that travel through that part of London the charred remains are a daily reminder. The tragedy has highlighted the divisions in society and raised many questions including issues as to: access to justice and legal funding, as the tenants were unable to obtain legal aid for advice due to the legal aid cuts; the legal protection of tenants both in private and social housing; the inability of council tenants to enforce or seek to have enforced basic fitness standards under the Housing Health and Safety Rating System and Housing Act 2004 (HHSRSA), and the purchase of housing stock by local authorities.
Grenfell reminds us that landlords have no obligation to their tenants to put or keep the property in a condition fit for habitation. This is despite our Victorian ancestors considering that rented residential accommodation should be ‘fit for human habitation’ (s.12 of the Housing of the Working Classes Act 1885). One shudders in this day and age at the name of that Act, though its provisions are arguable more progressive than we have today.
Grenfell has driven a private members bill by Karen Buck MP - Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill, which seeks to address fitness for habitation along the ability for council tenants to enforce Housing Act 2004/HHSRS standards. The bill has a second reading in January 2018.
The private member’s bill and Grenfell have also resulted in the announcement by Sajid Javid MP on 19th September at the National Housing Federation annual conference 2017 that the government would be bringing forward a green paper on social housing in England. Stating that he wanted to “kick off a nationwide conversation on social housing”.
Time will tell, but Grenfell may have a positive outcome in 2018 and beyond in the return to a fitness for habitation obligation and more.
We would also love to hear more of Your Thoughts on 2017’s key legal developments in the UK, so feel free to comment below and tell us what you think!
