Commercial Law Update - 2022 in review

As we approach the end of another year, the commercial services team here at Brodies has taken the opportunity to pull together our thoughts on some legal developments in the year which caught our eye but may have passed below the radar for many. After all, it was a busy year – including three UK governments, a war in Ukraine and a cost of living crisis – so not everyone is poring over what's happening in the law.

The aim here is to highlight some selected developments that might be of general interest to your business. In other words, what follows is not comprehensive – so please contact us if you have any queries on what we have discussed below or on anything else that may have happened in 2022. We plan to issue a second companion piece in early January with some thoughts on what we expect to happen in 2023.

1. Data Protection and International Transfers – It was a busy year in the world of data protection, particularly in the context of international data transfers. The UK Information Commissioner's Office (ICO) issued its International Data Transfer Agreement and Standard Contractual Clauses which are available to view on the ICO website, following which the ICO also published its transfer risk assessment tool and guidance. Setting out an additional approach to the one recommended for the EU by the EDPB, the ICO's stated aim was to be more proportionate and risk based. For multinational corporate groups, the ICO also updated its guidance on the UK Binding Corporate Rules approval process for controllers and processors, including revising and simplifying the application forms and tables. Finally, in this area, the Biden administration signed a new presidential executive order providing for binding safeguards that limit access to data by US intelligence authorities and establishing a two layer redress mechanism (in terms of a new Civil Liberties Protection Officer and Data Protection Review Court). These measures resulted in the EU Commission publishing a draft adequacy decision which should pave the way for a new transfer mechanism to replace the Privacy Shield that was struck down by the CJEU decision in Schrems II. For more on Schrems II, read our Schrems II summary.
2. CE marking extended to 31 December 2024 - On 14 November 2022, the UK Government announced that CE marking could continue to be used in Great Britain until 31 December 2024. The period had been due to expire at the end of this year. The post-Brexit replacement for CE marking is the UK Conformity Assessed (UKCA) mark. The extension of the permitted period for CE marking use was justified on the basis that it would reduce business burden, particularly given the wider issues currently faced by the economy, but the Government is still encouraging producers to adopt the UKCA mark as soon as possible and well before the 2024 deadline. Separate arrangements apply for Northern Ireland.
3. Contractual exclusion clauses – in spring, the English Court of Appeal (Soteria Insurance -v- IBM UK) held that, as a matter of contractual interpretation, the exclusion of liability for "loss of profit, revenue, savings (including anticipated savings)" does not exclude a claim for wasted expenditure. The Court held that the words should be given their ordinary and natural meaning and that if a contract is to exclude liability for wasted expenditure then it should do so explicitly. This is a valuable reminder that exclusion clauses are likely to be interpreted narrowly by the Courts so if you rely on exclusion clauses, you need to make sure they are expressly cover the types of losses you are looking to exclude liability for.
4. Immigration - Since 6 April 2022, right to work checks have had to be completed online for those with biometric residence permits, biometric residence cards or frontier worker permits. Manual checks are no longer acceptable. Digital identity verification is now used to check the right to work of British and Irish citizens with valid passports (or passport cards). The UK government has published guidance on right to work checks. The temporary COVID-19 right to work checks adjustments (which allowed scanned documents and video calls) ended on 30 September 2022.
5. Worker exclusivity clauses - Exclusivity clauses are used in contracts to restrict workers from taking on additional work with other employers. Historically, they have been prohibited in zero hours contracts but the ban was extended from 5 December 2022 by the Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022 to contracts with workers whose net average weekly wages do not exceed a prescribed lower earnings limit (currently £123 per week).