Michelmores’ Corporate team has advised the leading Cerebral Palsy charity, Paces Sheffield on its bond offer which is currently being promoted by Triodos Bank and was launched on their crowdfunding website in June. Investors are invited to support the specialist school which offers life-changing skills for children with Cerebral Palsy and other neurological motor disorders. The bond offer will raise capital to support the charity’s ambitious growth plans including a new premises which will enable the school to increase its capacity by 75%.

The team has also advised Mama Bamboo on its EIS share offer, likewise listed on Triodos’ website. Mama Bamboo’s award winning sustainable baby products are made using 100% compostable bamboo fibre and the company is the only UK nappy brand to be B-Corp certified. The company aims to raise over £500,000 to support the marketing and technology required to accelerate sales growth. As an early stage and growth company, Mama Bamboo’s share offer qualifies under the EIS tax relief scheme, as assured by HMRC in May.

Corporate partner, Alexandra Watson led the Michelmores team with support from Adam Quint and Jess Hopkins.

Alex said:  ‘It was a pleasure to support both Paces Sheffield and Mama Bamboo to bring their investment opportunities to market on the Triodos website. The response from investors has already been positive and we look forward to continuing to monitor the individual offers and seeing the progress made in the corresponding growth plans.’

The valuation of rural mast sites under the Electronic Communications Code (“New Code”) has been under the spotlight again with a new decision from the Upper Tribunal in the case of ON Tower UK Limited v JH & FW Green Limited [2020].

The site in question was let on a contracted out 1954 Act lease with provisions which allowed the operator to share and upgrade the site, subject to “payaway” terms to the landlord.

The landlord accepted that the operator had the right to a New Code agreement but the issues in contention were:

• What equipment can the operator install;
• Should the operator’s right to upgrade equipment be limited;
• Should the operator’s right to share the site be limited; and
• What is the correct rent taking these 3 issues into account.

Equipment

The operator wanted freedom to add equipment to the site, whereas the landlord wanted to maintain the status quo, having taken a careful inventory of current equipment.

The landlord was willing to allow sharing and upgrading, but only on a strict interpretation of para 17 of the New Code, so that the changes had to have a minimal adverse impact on the visual setting and impose no additional burden on the landowner (burden meaning an additional adverse effect on enjoyment of the land or loss, damage or expense).

However, these New Code rights only form the statutory skeleton for the agreement between the parties. They are restricted rights and if any meat was to be added to these bones it had to be by way of negotiation or direction of the Upper Tribunal.

The operator’s position was that they were in the business of providing the infrastructure for broadband and mobile phone connections. Upgrading and sharing without limitation was essential, because technology and the market were moving quickly and unpredictably. This concern was exacerbated by the Court of Appeal’s decision in Compton Beauchamp[1] where it ruled that an operator cannot go back to the Tribunal for additional rights once an agreement is imposed.

The landlord had obvious concerns about the roll out of 5G, which requires larger and noisier equipment. Given the operator’s desire to go beyond the basic statutory right, the Tribunal had to consider the evidence from both parties.

The operator acknowledged that the 5G roll out would require a new mast, but argued that the South Downs National Park status of the site would act as a sufficient control.  The landlord stated its concerns about additional traffic, security risks, disturbance, visual appearance and radiation.

The Tribunal had to engage in a balancing exercise to determine the terms of the agreement. Under the New Code it may (not “must”) grant a New Code right, providing that the relevant conditions were met. These conditions are set out in paragraph 21 and are that the prejudice caused to the landlord must be able to be compensated by money and be outweighed by the public benefit that will ensue from the grant of the right. Further, New Code rights are not absolute and may be the subject of terms to ensure that the “least possible loss and damage is caused by the exercise of the code right.”

In exercising this discretion the Tribunal were not convinced that the site’s appearance would change drastically with the upgrade to 5G given its small size (70 sq ft), although acknowledged the other concerns of the landlord were relevant, albeit exaggerated. In any event, disturbance, noise and access issues were addressed in the proposed new lease, so any breach would entitle the landlord to damages or, where necessary, injunctive relief. The Tribunal did not, therefore, see a need to modify the rights to cause the least possible damage to the landowner arising from the grant of upgrading rights, which go beyond the basic terms of paragraph 17.

Site sharing

The Tribunal then had to consider the right to share the site.  This could not be done on the same basis, as sharing is not a New Code right; the Tribunal has discretion to grant a right to share on such terms as are appropriate to ensure that the least possible loss and damage is caused to the landlord. A balance has to be struck between enabling the operator to share the site in order to provide a high quality telecommunications service and the objections of the landlord.;

The operator in this case was an infrastructure provider (rather than a network operator) so its equipment (masts, cabinets and other equipment) were passive. The operator had to be able to share with any network operator or it could not continue its business.  The Tribunal decided the landlord’s objections were not well founded, so granted the operator an unrestricted right to share. The paragraph 17 conditions were not required, given the same safeguards of planning law and lease terms explained above.

Consideration & Compensation

The Tribunal confirmed the approach taken in the Islington[2] case, where any compensation for predictable loss and damage was included in the assessment of consideration, to avoid inevitable subsequent claims. This does not stop a landowner making later claims under paragraph 25, but a second bite only exists for those litigating and is not available if a deal is reached by agreement.

The Tribunal continued in assessing consideration by adopting a framework previously used in the Hanover[3] and London and Quadrant[4]cases:

1. Assess the alternative use value of the site, which would be the rental value of its current use or of the most valuable non-network use. This process would be heavily influenced by location and be a matter of evidence in each case;
2. Add a rental value to reflect any additional benefits conferred on the operator – in Hanover, the site was protected by a manned security gate; and
3. If the letting would have a greater adverse effect on the willing lessor, than the alternative use, on which the existing use value was based, then this should be reflected by a rental adjustment.

This case was the first one arising on a lease renewal, as opposed to a new agreement for a previously undeveloped site. The operator’s expert determined a rental value of £500 p.a. after carrying out the 3 stage process, with half the value attributed to stage 3, to reflect a rolling break clause after 5 years and a right to enter other landlord’s property.

Comparables

Comparable evidence of other rural sites on similar lease terms was also considered by the expert.  Of these 23 renewal agreements, 16 of them contained caveats which made clear that the operator in each case was agreeing a rent higher than that which would be determined by a Tribunal in accordance with paragraph 24 of the New Code.

As such, the expert considered the comparables to be unreliable in terms of arriving at a true paragraph 24 valuation. They were also considered to be too high because they were a blend of consideration and compensation, so the expert deducted the value of what he called an “incentive payment” made by the operators to oil the wheels of commerce.

These deductions were around £1,000 in each case and resulted in rental values of £500 for 16 sites and £1,000 for a further 4, with outliers at greater sums of £1500 and £3,000 for 4 further sites.

Landowner’s expert’s approach

The Landowner’s expert took two approaches to the valuation. The first was market value based on evidence of 15 transactions.  The Tribunal rejected 11 of these, as they were deals that were completed after the New Code came into effect, but implemented terms that reflected the old regime, to which the parties were contractually committed.

The Tribunal pointed out, that in both Hanover and London and Quadrant, evidence of this sort could not be taken as a reliable guide to no-network assumption valuations required by paragraph 24. The expert’s justification for persisting in presenting such evidence was that further research had shown that the rents were, despite the caveat, actually calculated on the basis of the New Code.

This argument was rejected by the Tribunal in terms that thinly disguised its exasperation at having to explain for a third time that such evidence is useless.

The remaining transactions were also not helpful, as they were either 1954 Act renewals to non-Code operators, urban sites or sites with significant alternative use value. The landowner’s expert figure was £5,500 based on these comparables, with an additional £1,500 pa to reflect the grant of access and use of a generator.

The second approach valued the alternative use of the site at £50, with an ultimate consideration of £7,800 pa. This was based on agreements granting access rights to third parties like Network Rail and Northumbrian Water, the granting of non-network benefits by the landowner and compensation to reflect health and safety concerns.

The Tribunal found the evidence presented by the landowner’s expert to be of very little help, with both his proposed valuations being higher than the passing rent. The Tribunal said that this told them that the expert had not accepted or understood the paragraph 24 valuation process.  Under lengthy cross examination the expert remained insistent that his evidence was relevant and the Tribunal fired a clear warning shot in saying that if this happened again, such evidence would be rejected without the need for further cross examination.

Operator’s expert’s approach

In contrast the operator’s expert evidence pointed to the fact that rents of £1500 or above were the norm, ignoring the effect of transitional incentive payments. These were commercial deals struck to avoid the cost of Tribunal proceedings and do not reflect the paragraph 24 reality.

However, the Tribunal considered that the operator was underestimating consideration values and overstating how much was paid as a commercial inducement – a doubling of the consideration was thought to be more realistic.

Tribunal’s approach

Taking the 3 stage approach set out above:

1. The experts agreed a nominal £100 pa alternative use value;
2. Additional benefits conferred on the operator included a right to keep a mast on the site, electric supply, right to enter other property of the landowner and tenant’s rolling break clause after 5 years. The operator said £400, the landowner said £1300 and the Tribunal ruled £600; and
3. Adverse effect on landowner was considered by the Tribunal to be caused by the access rights (to the “heart of a private rural estate”) and the loss of amenity caused by likely replacement of the mast for 5G upgrade purposes. This was valued by the Tribunal at £500, although it stated that if rents of nearby properties were negatively affected, this could form the basis of a subsequent compensation claim.

The cumulative consideration was therefore £1200 pa, which seems right when considered against a comparable put in evidence comprising a consensual deal at £2,500 for a similar wooded site on a rural estate. Compensation was awarded for legal and professional fees. The legal fees were allowed in full but a breakdown of the valuer’s fees was required as the landowner was not entitled to be reimbursed for any litigation related expense.

Our Natural Capital hub contains information and resources written by our team of experts as well as papers and online materials authored by a variety of sources including the UK Government, the UN, Conservation International and the World Forum on Natural Capital.

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and NGOs. The coalition promotes communication about value creation as the next step in the evolution of corporate reporting. and in particular promotes Integrated Reporting <IR>.

Their mission is to establish integrated reporting and thinking within mainstream business practice as the norm in the public and private sectors. Their vision is to align capital allocation and corporate behaviour to wider goals of financial stability and sustainable development through the cycle of integrated reporting and thinking. The resources tab includes useful FAQs, and the International <IR> Framework which establishes the Guiding Principles and Content Elements for integrated reporting.

To access this resource please click here: ‘Integrated Reporting Council‘.

If you have any questions about Natural Capital our Agriculture team would be pleased to hear from you: please click here for their full contact details.

To access our Natural Capital hub, please click here.

For Multi Academy Trusts (MATs), a variety of information must be published on its main website as well as each Academy’s website. Whilst some MATs are operating under multiple Funding Agreements, we recommend that you publish everything required under the latest DfE model Funding Agreement as well as the Academies Financial Handbook. This will need to include any charging information.

On the MAT website, an Academy must publish:

• its annual accounts no later than the end of January following the financial year to which the accounts relate
• its current Memorandum & Articles of Association and Master Funding Agreement
• the required information relating to governance structures, including for example the structure and remit of the members, board of trustees, its committees and local governing bodies, and the full names of the chair of each (where applicable)
• information about its Pupil Premium, including for example the amount of Pupil Premium allocation that it will receive during the Academy Financial Year
• if received, information about its Year 7 literacy and numeracy catch-up premium funding
• various details about its curriculum, including for example the content of the curriculum and its approach to the curriculum.

On the individual Academy’s website, you must publish:

If applicable, the Academy’s most recent Key Stage 2 results as published by the Secretary of State in the School Performance Tables:

• average progress scores in reading, writing and maths
• average ‘scaled scores’ in reading and maths
• percentage of pupils who achieving the expected standard or above in reading, writing and maths
• percentage of pupils who achieving a high level of attainment in reading, writing and maths

If applicable, the Academy’s most recent Key Stage 4 results as published by the Secretary of State under the following column headings in the School Performance Tables:

• progress 8 score
• attainment 8 score
• percentage of pupils who achieving a strong pass (grade 5 or above) in English and maths
• percentage achieving the English Baccalaureate
• percentage of pupils continuing in education of training, or moving on to employment at the end of 16 to 19 study
• information about where and how parents (including parents of prospective pupils) can access the most recent report about the Academy published by the Chief Inspector
• information as to where and how parents (including parents of prospective pupils) can access the School Performance Tables published by the Secretary of State.

Finally, and by way of best practice, we recommend that each Academy’s website includes the following information: contact details, admissions arrangements, Ofsted reports, behaviour policies, values and ethos. Whilst this is not a legal requirement for academies, the information is both important and helpful!

The European Court of Justice (“ECJ”) has given a preliminary ruling on the jurisdiction of member states in relation to copyright materials published without the owner’s consent.

The Austrian case of Pez Hejduk v EnergieAgentur.NRW GmbH, Case C-441/13 concerned the use of photographs by a conference organiser on a website and the subsequent option to download these photos by website users. The owner of the photographs did not consent to this and sued the conference organiser for copyright infringement. It was argued that the Austrian Court did not have jurisdiction to hear the case on the basis that the conference’s organiser’s website had a .de domain name and was directed at German, not Austrian users.

The ECJ’s view was that under Article 5(3) of EC (44/2001) Brussels Regulation, proceedings could be brought in any member state where the relevant website was accessible. As set out in Pinckney v KDG Mediatech AG Case C-170/12, this was sufficient to seise the court, an activity did not need to be “directed” to that member state, i.e. through a country-specific, top-level domain name. However, the ECJ did make it clear that the courts where a website was accessible  could only determine damages which had been incurred within their own member states.

This ECJ decision widens the potential jurisdiction further than in previous case law as unlike in Pinckney, there is no requirement for hard copies to have been received to act as proof of damage in a jurisdiction – anyone can log onto a website and download online materials onto their own devices. It is anticipated that we will see an influx of online copyright infringement claims, as a result.

For potential claimants, this decision is likely to be welcomed as it enables claimants to rely on the jurisdiction of their own member state in order to bring a claim. However, where there has been significant damage, it is likely that the claimant would still be well-advised to sue in the defendant’s member state, to enable it to claim all damages, rather than just those in the claimant’s member state.

For website owners, this decision acts as a reminder to ensure that all content displayed and available for download  has the appropriate consents and licences in place.  This decision will be particularly significant for online users with territory-specific rights, who will now have difficulty arguing that they did not directly target an excluded territory. It is now clear that mere “accessibility” of content in an excluded territory could enable a claim to be made.

For more information please contact Charlotte Bolton, Solicitor in the Commercial Disputes & Regulatory team on charlotte.bolton@michelmores.com or on 01392 687745.

Michelmores has advised the management team of Taking Care PPP, part of AXA Health, on its LDC-backed management buyout (MBO).

Taking Care PPP provides personal alarm and monitoring services and operates as part of AXA Health, a leading UK private healthcare provider with over 82 years’ experience. AXA Health supports more than two million people across the UK and employs over 10,000 staff, including clinicians and healthcare professionals, delivering a wide range of healthcare services including wellbeing, counselling, occupational health, rehabilitation and private medical insurance.

The MBO team was led by Steve Gates and Duncan Worthington. Michelmores has acted for the business for several years and was delighted to support the management team on this significant milestone.

The Michelmores team advising on the deal was led by Richard Cobb, Head of the Firm’s Corporate team and the Firm’s Senior Partner. Richard was assisted by Senior Associate, Victoria Miller, Trainee Solicitor Ellis Arnold, Rachael Lloyd (Partner, Employment), Karen Williams (Partner, Banking) Danielle Collett-Bruce (Managing Associate, Banking). Michelmores worked alongside Ian Barton of Quantuma Advisory Limited and K3 Tax Advisory for the MBO team, with Osborne Clarke and Hogan Lovells acting for LDC and AXA Health respectively.

Richard Cobb commented:

“We were pleased to support the management team on this LDC-backed MBO. It was a pleasure to work with Steve, Duncan and the wider team on an important transaction that positions the business brilliantly for its next stage of growth. The management advisory role on a complex PE backed MBO is one that plays to our strengths, particularly where we have a strong relationship with the underlying business.

Steve Gates, on behalf of the management team, added:

“Michelmores has supported the business for a number of years and know it extremely well. Richard and the team’s practical, responsive approach and deep understanding of the transaction were invaluable in guiding us through this MBO and achieving a successful outcome.”

Michelmores’ award-winning Corporate team of specialist lawyers advises clients across the UK, US, and beyond – on capital markets, mergers and acquisitions, management buyouts, impact investing, energy projects, and more. For more information, visit our website.

The recent case of Save Bristol Gardens Alliance v Bristol City Council [2025] EWHC 3191 (Admin) provides guidance on the Court’s approach to the use of ‘outdated’ versions of Natural England’s Biodiversity Metric in planning applications. As discussed in previous articles, the Biodiversity Metric is used by developers to assess and demonstrate their site’s compliance with the 10% biodiversity net gain requirement under legislation.

The Claimant challenged the grant of planning permission for the redevelopment of Bristol Zoo Gardens (the Site) on three grounds, however, here we focus solely on the first. Namely, that:

‘The Defendant acted unlawfully in adopting the planning officer’s advice and recommendation that the development’s contribution to biodiversity net gain should be measured by applying Natural England’s ‘Biodiversity Metric 3.0′ published on 7 July 2021’.

The chronology of events here is critical:

• The Landmark Practice (Landmark) were commissioned to assess the biodiversity net gain of the proposed Site. Landmark carried out their initial site survey on 21 July 2021;
• At this time, the latest iteration of Natural England’s Biodiversity Metric was version 3.0 (Version 3.0);
• Natural England (NE) published version 3.1 (Version 3.1) of the Biodiversity Metric in April 2022; and
• Notwithstanding the publication of Version 3.1, Landmark published their biodiversity net gain report (the BNG Report) for the Site based on Version 3.0 on 29 October 2022.

The BNG Report

Based on Version 3.0, the BNG Report concluded that onsite gain would stand at ‘4.53 habitat (area) units, which equates to 39.86% net gain, and a gain of 1.96 hedgerow (linear) units, representing 376.35% net gain‘.

In the BNG Report, Landmark acknowledged that the Biodiversity Metric had been updated since their initial site survey, but referred to Natural England guidance set out in Biodiversity Metric 3.1:

‘Users of the previous Biodiversity Metric 3.0 should continue to use that metric (unless required to do otherwise by their client or consenting body) for the duration of the project it is being used for as they may find that certain biodiversity unit values metric 3.1 generates will differ from those generated by Biodiversity Metric 3.0.’

The Bristol Tree Forum’s (BTF) objections to the BNG Report

BTF submitted that Biodiversity Metric 3.0 was unworkable for the purpose of calculating urban tree habitat. The issue had been remedied by Biodiversity Metric 3.1, and this latter metric showed the Site would in fact deliver a biodiversity loss of 22%. BTF concluded that Version 3.0 could still be used in respect of certain calculations within the BNG Report, but Version 3.1 should be used in relation to Urban tree habitats.

On 24 March 2023, Natural England published Biodiversity Metric 4.0 (Version 4.0). BTF stated this latest metric had ‘revolutionised the way urban trees are valued, making it clearer than ever that they are a very important habitat’. They put forward that the Site, under Version 4.0, would result in a net biodiversity loss of 12.52%.

In response, Landmark submitted a further technical note saying it was unreasonable and disproportionate to undertake updates on each release of subsequent versions of the metric. They pointed out that DEFRA themselves felt Version 3.0 was robust enough to release, and be used, to inform development across the country.

What did the Court have to determine?

The Court had to determine whether the planning officer had misled the Committee in any material way in submitting that the BNG Report was reliable, notwithstanding BTF’s objections.

The Court concluded the Committee had not been misled, and that the planning officer had exercised his judgement rationally. Mr Justice Mould set out the following reasoning in his judgment:

• NE’s advice is that the Biodiversity Metric should be used ‘at all stages of a project or scheme, from site selection and options assessment through to detailed design’. The Claimant argued that the first stage of the project must be taken from submission of planning permission (which would have meant a later version of the Biodiversity Metric being used by Landmark). The Court did not accept the Claimant’s argument. The Court stated:

‘considerable lead time…  [is] required… to work up the project from its inception to its state of readiness for submission to the local planning authority under a planning application. NE’s advice in paragraph 1.11 of the metric 3.0 User Guide is founded on that practical reality’. In short, Landmark were right to use and consider Biodiversity Metric 3.0 at the date of the site survey.

• NE’s written advice in such instances is that users should use the metric they began with unless requested to do so by their client or the consenting body. No such request was forthcoming, as Landmark had reflected in their technical note in response to BTF.
• Had BTF’s objections been irrefutable or accepted as correct by the defendant’s nature conservation officer, the decision to treat the BNG Report as reliable would have been difficult. However, on the evidence, BTF’s argument was not irrefutable. Landmark had already refuted it reasonably on the basis of NE’s guidance.
• NE’s guidance on the difference between Versions 3.0 and 3.1 did not state that the contested Table 7-2 in Version 3.0 (that dealt with urban trees) was unworkable or unusable – this was simply BTF’s argument. NE did not suggest that those using Version 3.0 should refresh their work by interpolating calculations.
• It is also worth pointing out that Landmark had re-run the biodiversity calculation applying a more precautionary assumption about the longevity of urban trees on the Site. Landmark acknowledged the proposed gain accordingly dropped from 39.86% to 36%.

Should you wish to discuss any of the issues raised in this article, please contact Edward Wilson.

Since starting our first few months at Michelmores, we have found that our placement year has been an excellent opportunity to develop transferable skills and gain insight into a legal career. We have been involved in important legal work, learning from experts in our teams and developing our understanding of specific areas of law.

Beyond gaining practical experience, we’ve also had the chance to connect with graduates and colleagues across the firm, which has been invaluable in shaping our understanding of the profession and developing future career aspirations.

Reflecting on our experience so far, we have put together our top tips for anyone thinking of applying for a placement year.

Research Firm

Thoroughly researching the firm will help you to really stand out. Moreover, it will help you to understand whether a firm is the right one for you. As a starting point, we recommend researching the firm’s sectors, practice areas, values, culture and goals for the future. You can use the firm’s website to find out more, for example Michelmores has a helpful insight and news article page. For a deeper understanding of the firm’s work, we highly recommend using other sources such as tuning into Michelmores’ podcasts.

Attending law fairs and events enable you to meet and talk to the Early Careers team and current placement students. They can give you more information about the programme and what it’s like to work at the firm so we recommend if you’re interested in applying to utilise these opportunities to help with your research.

Don’t worry about legal experience

Although any prior legal experience can be beneficial, it is not necessary nor expected when applying for a placement year. Instead, focus on the transferable skills you’ve gained through the experience you do have, whether this is from part-time work, volunteering, or extracurricular activities.

The more examples you can draw upon the better. Make sure you understand what is required of you for the role and explain why your experience has made you well-equipped for this opportunity.

Be commercially aware

Strong commercial awareness will help you in your applications as well as navigating work as a placement student. It’s important to understand how changes and events can influence how a law firm works and to demonstrate this in your application.

To keep up to date, using news article pages on a firm’s website can help you to stay commercially aware. You can also keep an eye on current affairs on your favourite news sites e.g. BBC, Financial Times. When reading about a new development, have a think about how this would affect a law firm, their areas of work and their clients.

Michelmores holds an informative commercial awareness workshop that provides a useful breakdown as to what this concept means and how it may be developed.

Keep an eye out for events

As we’ve shared, attending events can help with your research and they are good networking opportunities too. Michelmores host multiple events both in person and online throughout the year, which provide useful information on applications and the Firm itself so make sure you look out for these here: Events at Michelmores.

An event we found particularly helpful was an application and interview skills workshop run by Michelmores at our university so we would suggest seeing what opportunities are running that you can sign up to.

Additionally, universities will hold career events with networking opportunities. This can be a great way to build connections and gain insider tips on how to succeed in a legal career.

Be yourself

While it may be a cliché, expressing your personality throughout your application enables you to present yourself authentically and emphasise the distinctive qualities that differentiate you from other candidates. It is important to be confident in what you have to offer to successfully pitch yourself. Identify your main skills, how you’ve developed these and why these will help you to succeed in a placement role. Additionally, consider what values are important to you and whether these align with the firm.

Ultimately, being yourself will help you in the long term; if you are offered the role, you can feel assured that you were selected for your honest self and the skills you have.

Reach out/get help

Applying for placements on top of the pressures of the academic year can be challenging so it’s important to keep in mind the support that is available.

Using a firm’s website to help with any questions you may have is a good starting place but if you have any further queries, reach out to their Early Careers team. We found that the Early Careers team at Michelmores were keen to offer help when needed.

Furthermore, utilise the placement team/careers team at your university. They were immensely knowledgeable and helped to ease the stress of applications. They can help guide you to any online resources that can assist your preparation for any psychometric tests and interviews that you may be invited to.

Natural capital projects aim to restore ecosystems and deliver biodiversity benefits. They also generate carbon credits which can be sold or used for the benefit of the landowner, developer or initial project investors. These projects are vital for climate action and sustainability, but they involve long-term, complex, multi-party agreements and technical processes. This complexity often leads to disputes that can escalate into litigation. In this article, we explain where disputes can commonly arise during the lifecycle of a natural capital project.

Pre-project stage (contract formation)

The earliest stage of a natural capital project involves negotiating the contracts and defining responsibilities. Disputes often arise over land access and who owns the benefits provided by nature, such as carbon credits.

Carbon credits are tradable certificates representing one tonne of carbon dioxide that has been removed from the atmosphere or prevented from being emitted. Businesses purchase carbon credits to offset their own emissions, helping them improve their own sustainability credentials and potentially achieve “net zero”. If ownership of these credits is unclear, conflicts between landowners, developers, and investors are inevitable.

Misrepresentation is another risk: where environmental benefits or project feasibility are overstated. This can lead to greenwashing claims, where companies are accused of misleading stakeholders about sustainability, or to carbon credits being invalidated after they have been sold. Greenwashing and misrepresentation are major ESG concerns for businesses and will likely continue to be going forward.

Funding commitments also pose challenges; if investors fail to meet agreed milestones, it can trigger breach of contract claims.

It will not be a surprise that we consider clear contract drafting and early legal due diligence on the feasibility and sustainability benefits of projects to be essential to avoid these pitfalls.

Finally, community engagement is also important; failure to secure local support for projects can result in injunctions or reputational harm.

Baseline assessment

Once the project begins, a baseline assessment establishes the starting environmental conditions at the site. This step is critical to show the improvements provided by the project.

Disputes can occur if data accuracy is questioned or if valuation methods for natural capital assets differ. It is essential to use recognised, standard methodologies and transparent reporting from the outset to give clarity to all interested parties, including regulators where relevant. For example, this will reduce the likelihood of disputes over the increased value of the site attributable to the improvement in biodiversity.

Quality of work

Contractors exceeding (or failing to meet) the scope of agreed tasks or failing to deliver tasks to the appropriate standard can lead to claims for delays or defective work. Poor quality, such as planting unsuitable species, may result in a project failing or under-performing.

Successful projects require clear scopes of work and contracts; a clear understanding amongst all parties of the required quality of work and a regular assessment of that work as it progresses to ensure quality (including, for example, potentially prescribing an agreed list of species and age of trees to be planted at a site); and active dialogue with all parties, including contractors and the community to maintain trust and avoid disputes.

Financial model

Natural capital projects often generate revenue through carbon credits.

Disputes frequently arise over the ownership of credits and revenue sharing between landowners and investors. To mitigate these risks, contracts should define ownership clearly, include profit-sharing mechanisms, and address market fluctuations.

Governance and risk management

Breaches of environmental obligations, ESG objectives or misrepresentation in related statements (i.e. greenwashing) can lead to enforcement actions by regulators and civil claims by interested parties.

Another major risk is force majeure: unforeseen events like floods, climate change-related events or policy changes that disrupt projects but have not been caused by the conduct of any of the parties. For example, projects could foreseeably fail in the medium term due to the effects of climate change. If contracts lack clear force majeure clauses, disputes over obligations and termination rights can arise. These risks can be managed in the contract drafting stage and also through the purchase of appropriate insurance, which is essential.

Shareholders are also increasingly active in holding boards to account in relation to taking the environment into account (or complying with any express provisions in a shareholders’ agreement or the company’s Articles). In particular, by suggesting that nature considerations are now part of a director’s statutory duty to exercise due care and skill and promote the success of the company, which includes the long-term consequences of decisions and their impact on the environment.

Monitoring and reporting

Natural capital projects have to be actively monitored throughout their lifespan to ensure that they continue to deliver their intended outcomes, such as carbon capture or biodiversity gains. If they fail to deliver their objectives, carbon credits generated by the scheme and sold can be invalidated. In that case, claims can arise between any parties who have purchased the carbon credits (or who effectively funded the project to benefit from them), those who own or developed the natural capital asset and contractors or those deemed to be at fault for its failure.

Regular independent audits and the use of digital reporting platforms that transparently display the data and are readily accessible by interested parties can reduce the risk of disputes and build confidence in the performance and management of projects.

Long-term management

Long-term management of natural capital projects is a key risk area because they often span decades.

Arrangements must be unambiguously documented in contracts, otherwise disputes can arise over things like ongoing maintenance obligations: who is responsible for maintaining different aspects of a project after the initial investment and funding have ended. Lifecycle funding plans and contracts can cover what happens in different scenarios, like a landowner selling the land or a developer or investor selling its stake in a project, ensuring continuity over the life of a project.

Developing law and policy

This is a developing area of law and policy in England and Wales and that means the law has not always caught up with what is happening on the ground. In early natural capital projects, parties relied on published “guidance” and draft legislation. The fact that the law is developing means that it can change and those changes can impact projects that are already documented. These projects need to be kept under review to ensure they are compliant or are drafted in a way that protects them from such legal developments.

Summary

Natural capital projects offer immense environmental and financial benefits, but they also carry significant legal risks. By understanding these risks and implementing robust governance, transparent monitoring and reporting, and fair and comprehensive contractual arrangements, stakeholders can minimise the risk of disputes and build resilient projects that deliver long-term value.

If you have a dispute relating to ESG compliance, reporting or a natural capital project please contact Nick Roberts, a Managing Associate in Michelmores’ Commercial & Regulatory Disputes team.

Michelmores has advised the sellers of Ocean Fish Group, one of the South West’s oldest and most established fishing and processing businesses, on its sale to Falkland Islands-based Fortuna Ltd.

Ocean Fish Group, whose heritage dates back to 1740, has grown into a leading vertically integrated supplier to UK and European retail, wholesale and foodservice markets. Under the Lakeman family’s ownership, the Group has expanded significantly through targeted acquisitions and strategic partnerships, establishing itself as a key player in the sector.

Fortuna, the largest fishing company in the British Overseas Territories, enters the UK fishing market for the first time through this transaction. The acquisition is expected to support Ocean Fish Group’s ambitions for continued growth, strengthened supply-chain resilience and increased access to global markets.

Michelmores advised the sellers on all aspects of the transaction, drawing on its cross-disciplinary expertise and long-standing relationship with the Ocean Fish business. The Michelmores team was led by Partner Henry Taylor with assistance from Managing Associate Chris Smedley, and Associate Ben Adams, both from the Firm’s Corporate team, Corporate Tax Partner Cathy Bryant, Commercial Partner David Thompson and Real Estate Managing Associate Matt Jones.

Leigh Genge, CEO of Ocean Fish, comments:

“Henry and the wider Michelmores team’s support throughout this process has been invaluable. Their understanding of our business, our heritage and our goals helped ensure a smooth and successful transaction as we join forces with Fortuna.”

Henry Taylor added:

“We are proud to have supported Ocean Fish on this landmark transaction for a business with such deep roots and significance within the South West’s fishing industry. This deal marks an exciting chapter for Ocean Fish Group, and we wish the business all the very best as it moves forward.”

Other advisers to the transaction included FRP Advisory and HSBC.

Michelmores’ award-winning Corporate team of specialist lawyers advises clients across the UK, US and beyond – on capital markets, mergers and acquisitions, management buyouts, impact investing, energy projects, microfinance initiatives and more. Read more on our website.

Michelmores is pleased to announce that it has advised the shareholders of Evolve Commercial Limited, a specialist provider of commercial, procurement, and contract management services, in connection with the successful sale to the FourCentric Group.

Founded to deliver trusted and secure commercial support, Evolve Commercial has built a reputation for excellence, serving complex technology and defence programmes.

The combination with FourCentric, a leading provider of procurement, supply chain, and operational solutions, positions Evolve for continued growth, leveraging the wider group’s expertise while maintaining the values and strengths that have defined the business.

The Michelmores team advising on the deal was led by Partner Francesca Hubbard, alongside Senior Associate Ben Adams, from the Firm’s Corporate team, supported by Senior Associate Anthony Reeves (Tax), Partner Noel Beale (Commercial) and Senior Associate Matthew Warren (Employment).

Francesca Hubbard commented:

“It has been a pleasure supporting Evolve Commercial through this transaction. The team has built a strong, innovative business, and we are delighted to have helped them achieve this next stage of growth with FourCentric.”

Rob Fisher, Director of Evolve Commercial, commented:

“Francesca, Ben, and the wider Michelmores team got the balance right in helping us through this transaction – commercially astute, calm under pressure, and focused on what really mattered. Exactly the partners we needed to see this through.”

This transaction exemplifies Michelmores’ commitment to providing practical, commercially-focused legal advice that enables clients to achieve their strategic objectives. For more information on Michelmores’ Corporate offering, please visit our website.

Judgment in the long running case of CG Fry & Son Limited (Appellant) v (1) Secretary of State for Housing, Communities and Local Government and another (Respondents) was handed down by the Supreme Court this morning.

I have written previously about this case in the High Court decision Nutrient neutrality: Are developments with outline consent caught by the requirements? and the outing in the Court of Appeal CG Fry & Son Limited v (1) Secretary of State for Levelling Up, Housing and Communities (2) Somerset Council.

The issues for the Supreme Court

The issues to be determined by the Supreme Court were:

1. Does Regulation 63 of the Conservation of Habitats and Species Regulations 2017 (Habitats Regulations) require an “appropriate assessment” to be undertaken before a local planning authority decides to discharge conditions which require the approval of reserved matters in a grant of outline planning permission for that development?
2. What is the effect of a grant of outline planning permission, and what is the impact on that grant, of a policy adopted by the government, and a change of scientific advice affecting the application of that policy?

The good news for the developers is that, whilst the Supreme Court rejected the appeal in respect of issue 1, it allowed it on issue 2.

The granting of outline planning permission, subject to reserved matters being decided at a later date, is commonplace. The questions here were whether subsequent approval of those reserved matters is subject to the Habitats Regulations requirements and of the impact of policy change on an outline consent.

The Habitats Regulations issue

On the first issue, the Supreme Court agreed with the Court of Appeal that an appropriate assessment under the Habitats Regulations will be required, when the effect of approval of reserved matters, is to give authorisation for the project to proceed.

The effect on outline planning consents

On the second issue, the Supreme Court considered the nature of a grant of planning permission and concluded that the rights conferred cannot be diluted by government policy. Any conditions attached to a planning permission must be considered objectively and there is no general power for a planning authority to refuse consent on policy grounds (such as RAMSAR site protection), which are not fairly related to the subject matter of those conditions. The reasons for granting or refusing consent must be within the ambit of the reserved matters – revisiting the principles of the original outline grant is not permitted.

The site in this case was a RAMSAR site and not a European Site protected by the Habitat Regulations. The decision on issue 1 means that appropriate assessments under the Habitats Regulations will still need to be carried out in respect of European Sites but not RAMSAR sites.

Impact of the Planning and Infrastructure Bill

The Planning and Infrastructure Bill proposes an alternative route for developers to avoid the impact of the Habitats Regulations, by contributing to larger scale mitigation projects, so the effects of this case may well be limited by future legislation.

However, this litigation has been rumbling on for a few years now and some developers within RAMSAR sites may well have paid to purchase phosphate credits so as to unlock development. If such mitigation was required to secure reserved matters approval, then this judgment means that was a potentially unnecessary and significant expense.