The legal trends and changes anticipated in 2024 that business owners should be aware of include a rise in merger and acquisition activity, compliance, property law and changes to employee rights.
6 legal trends that could affect your business in 2024
- Management buy-outs: A strategic opportunity
The outlook for 2024 signals a rise in activity levels for mergers and acquisitions, especially management buy-outs (MBO). This comes as a welcome change following a difficult year in 2023, where high inflationary pressures forced a lot of potential buyers to sit on the sidelines. The projected economic stabilisation makes this year an ideal time for business sales.
MBOs present a unique opportunity for management teams to take ownership, often leading to improved performance and employee satisfaction. For those considering selling their business, 2024 offers a promising environment to explore an MBO as a strategic option.
- Mergers and acquisitions: A rise in deals after a unique year
2023 was not a standout year for mergers and acquisitions (M&A), but looking back, the trends were somewhat expected. Here’s why:
- Adjusting to a post-covid world: Business owners were still figuring out how to operate in the new normal after the pandemic. The big changes caused by Covid-19, both in how we live and in the economy, brought a lot of uncertainty.
- Rising interest rates: The Bank of England raised its base rate from 0.1% to 5.25% over 14 meetings from December 2021 to August 2023. This was the highest rate in 15 years, and way above the target rate of 2%. Since September 2023, the rate hasn’t changed, suggesting that the worst of inflation might be behind us.
- World events adding pressure: Recent geopolitical conflict has made things tougher for the global economy. These challenges slowed down the M&A market in 2023 by causing inflation, disrupting supply chains, increasing energy prices, and keeping the job market too active.
Looking ahead to 2024, things seem brighter:
- The further we get from the peak of the pandemic, the more confident the market should become.
- Interest rates might start to go down, and with companies having strong cash flows, consumer confidence should grow.
- The rush of activity we saw in 2020 is settling down, and it looks like we’re getting back to business as usual.
- While geopolitical tensions are still a factor, the market realises that waiting for everything to stabilise might not be necessary to push growth.
- Commercial law: Compliance and contract management
Effective contract management remains crucial for risk mitigation and maintaining robust commercial relationships.
With new legislation such as the Online Safety Act 2023, and the Digital Markets, Competition, and Consumers Bill currently making its way through the legislative process, compliance is becoming more of a focus for legislators.
This will have a significant impact on businesses, that must stay updated on their growing legal obligations to avoid potential breaches.
2024 also calls for a re-evaluation of auto-renewal clauses in contracts, such as those created by venders using a subscription sales model. The approaching Digital Markets, Competition, and Consumers Bill will tighten regulations around these clauses in consumer contracts, by imposing the introduction of:
- Specific pre-contract information requirements.
- Clauses covering reminders that must be sent to consumers before a control rolls over or auto-renews for a further term.
- Rights for consumers to cancel subscription contracts during cooling-off periods.
- Simpler cancellation process.
Please don’t hesitate to get in touch if you need advice or support with drafting your commercial contracts.
- Commercial property law: Adapting to the evolving landscape
As hybrid work models continue to gain popularity, tenants are looking for ways to both cut rental costs and create attractive workspaces. At the same time, environmental, social, and governance (ESG) factors are becoming increasingly important for commercial landlords, tenants, and their stakeholders.
This shift is driving higher demand for environmentally friendly leases and office spaces that are both sustainable and adaptable, pushing landlords to invest in properties that not only comply with minimum energy efficiency standards (MEES) but also match the growing expectations for quality and eco-friendly office settings.
Tenants should stay informed about crucial dates in their lease agreements, such as break dates, rent reviews, and the end of the lease term. This knowledge enables them to make the most of their leasing agreements and maintain flexibility in their office space needs.
- Data protection & privacy law: Staying ahead of compliance
Expect an increase in regulatory enforcement, particularly concerning cookie compliance and adherence to the Privacy and Electronic Communications Regulations (PECR). Understanding and complying with these evolving regulations is crucial for businesses operating in the digital sphere.
Additionally, the Data Protection and Digital Information Bill, making its way through the UK Parliament, holds significant implications; watch out for any major amendments to the bill.
With the rapid development of generative AI as one of the key drivers for this, it will stay in the spotlight as legislators attempt to stay on top of, and ultimately get ahead of, whatever environment they think this technology will end up creating.
- Employment law: Enhancing employee rights
This year, we’ll see a strengthening of employee rights. Key updates include amendments to the Equality Act, new laws on preventing sexual harassment in the workplace, more rights for carers, and increased job security for employees on parental leave.
Read about the 7 changes to employment law in 2024 here.
Staying ahead with Rubric Law
These highlighted trends represent only a fraction of the dynamic changes we anticipate in the legal field this year.
We are committed to offering continuous updates and insights. Our dedicated team is here to support and guide your business through legal shifts and challenges.
Please feel free to reach out to us at any time should you need legal advice.
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