With a new year comes new legal horizons, ushering in changes that businesses can’t afford to overlook.

In the following article, we have set out some of the most notable changes that are affecting businesses that need to be on your radar. Is your business ready to navigate the challenges and opportunities that this year is set to bring? Let’s dive in.

Digital Markets, Competition and Consumers Bill

There is a new bill likely to take effect in 2024; the new Digital Markets, Competition and Consumers Bill. This bill aims to enhance consumer protection in a digital space. This will apply from a consumer protection perspective to all business to consumer contracts entered into after the bill comes into force, in the UK.

Failure to comply can result in various enforcement penalties including the possibility of a fine up to £300,000 or 10% of global annual turnover. Let’s take a look at what this covers…

Auto-renewal in contracts

If you use “auto-renewal” in your contracts so that these are set to automatically renew each year, you may need to review them once the bill takes effect. This applies to consumer contracts between businesses and individuals (not business to business contracts).

Businesses with subscription contracts (for the supply of goods, services and digital content) will need to provide consumers with pre-contract information (for example, auto-renewal process, frequency and amount of payment, details on how to exit) in writing, in one go, and as close as possible to the consumer entering into the contract. The pre-contact information must be provided separately from other general information, and the information must be provided in a way where the consumer is not required to take a step to read the information (i.e. to click on a link or download a PDF is unacceptable).

Businesses will also need to remind consumers before a contract automatically renews and when a free trial period/low-cost introductory period comes to an end, as consumers must be able to exit easily (in a single transaction) and quickly.

Ending a contract should not involve complex steps, arrangements must be in place so that a consumer can end the subscription contract in a single communication and without having to take any unreasonably necessary steps to end the contract. Businesses must acknowledge a cancellation request and overpayments must be refunded. If a contract is entered into online, termination must also be able to take place online.

Consumer Reviews

The bill will not allow businesses to buy or offer (whether with money or an incentive) fake or fabricated reviews, and businesses will need to take steps to ensure live reviews are genuine.

Artificial Intelligence

There is likely to be an increased use of artificial intelligence (AI) this year.  At Hartley Law we have already received requests from clients to review their privacy policies to ensure their use of AI is captured.

Businesses will need to start to consider how employees are to use AI, how they may invest in tools for their business which use AI, or how they may wish to incorporate AI into their products and services. Of course, this means considering whether their data protection and privacy policies and processes will need updating in light of their use of AI.

AI also needs to be carefully considered when drafting contracts; taking into account the potential use and misuse of AI, where liability sits, protections and remedies, as well as accounting for ethical considerations (i.e. lack of transparency), without forgetting arrangements around privacy.

Economic Uncertainty

It is common knowledge that there is increasing economic instability, which is unfortunately set to continue into 2024.  Businesses should begin to consider whether their contracts are ready to deal with this uncertain landscape, for example, considering termination clauses with suppliers – especially around insolvency and ease of terminating early if necessary.

When looking at client contracts, it’s advisable to ensure your payment terms enable you to charge sufficient interest on late payment, and that it’s clear how this is calculated. Do you have the right to charge interest and/or terminate? How is insolvency defined, is a hint of financial trouble enough for you to cancel a contract?

Online Safety

The Online Safety Act came into force in 2023, and with it came a variety of new laws for online businesses that provide user-to-user services. This applies to sites such as social media platforms, gaming sites, dating apps, search engines and online databases.

It’s important to point out that the responsibility to remove illegal and inappropriate content (e.g. terrorism, bullying, self-harm) falls solely on the business itself and not on the end user. Businesses must assess the risk of harm, and in addition, assess the risk of harm to children, while actively managing and reducing such risks.

It must be specifically explained in business terms how users will be protected, ensuring the process for users to report illegal and harmful content and submitting complaints (even if the complaint relates to their account being blocked or post being unfairly removed) is simple and straightforward.

Business must also consider the freedom of expression and right to privacy when making their assessments and enforcing safety measures.

Potential fines could be billions and could even mean imprisonment for senior managers and directors, so this is one to prioritise.

Companies House Changes

The Economic Crime and Corporate Transparency Bill became law in October 2023.  As a result, Companies House have enhanced powers to look behind the identity of all new and existing companies’ directors and shareholders and weed out fraudulent companies. There will also be greater powers awarded to ensure the protection of personal data from fraud and other harm.

To ensure more accurate financial information on the Companies House register, accounts can be filed by software only, and there will be changes to small company accounts filing options. As well as this, small companies will now have to file a profit and loss account and a directors’ report.

In conclusion, the legal landscape for businesses in 2024 is marked by crucial changes, ranging from the Digital Markets, Competition and Consumers Bill to the increasing use of artificial intelligence, economic uncertainty, online safety regulations, and Companies House enhancements.

At Hatley Law, we understand the complexities of these legal shifts and are available to assist you in navigating these changes seamlessly, ensuring your business is not only ready but well-prepared for the challenges and opportunities that lie ahead.

If you would like to get in touch with the Hartley Law team, email us at hello@hartleylaw.co.uk or reach us 24/7 on 01276 536 410

Written by Karenjit Dhaliwal

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]