Michelmores has advised H2 Equity Partners’ portfolio companies Global Vans and XLCR on the acquisition of LCV Group, to form the Global Vehicle Group.

The LCV Group is one of the UK’s leading providers of vehicles, based in Swansea, Wales. For more than 20 years, the firm has supplied businesses with the vans, cars, fleet services, and flexible hire options.

The LCV Group will join XLCR and Global Vans to create the Global Vehicle Group, a tech-enabled, SME focussed, van and car leasing broker business. The businesses will continue to have the same management and will retain their individual brands and identities.

The Michelmores team advising on the transaction was led by Partner Adam Kean, supported by Senior Associate Angharad Doyle, Associate Ben Adams and Solicitor Harry Jones of the Corporate team. Employment advice was provided by Associate Omar Mahboob, with additional support from the Transaction Real Estate team by Solicitor Shehroze Khan, and the Commercial Team by Associate Sam Kewellhampton.

Adam Kean comments:

“We are pleased to have advised Global Vans and XLCR on this strategically important acquisition, which adds to the growing portfolio of state-of-the art van and car leasing broker businesses. The addition of LCV Group is an innovative step towards smart expansion, and we wish the Global Vehicle Group all the very best.”

Emma Thomas, Chief Financial Officer at Global Vans, adds:

“We’d like to thank Adam and the team at Michelmores for helping us with this successful transaction, seamlessly guiding us through the acquisition process from start to finish. Adding another business to the Group is exciting, as the Group works towards becoming the UK’s best SME specialist broker for LCVs and cars. I am thoroughly looking forward to seeing what the future brings.”

Michelmores’ award-winning Corporate team of 25 specialist lawyers advises clients across the UK 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 have advised Triple Point Energy Transition plc on the successful sale of its last remaining investments, the hydro‐electric portfolio and the remaining LED receivables finance agreements for a total consideration of £44.1m.

Triple Point supports the transition to net zero by investing holistically across the energy sector whilst targeting a diversified and sustainable income for investors.

Arkaig Bidco Limited, a company owned and managed by Dalmore Capital Limited has purchased the entire issued share capital of TENT Holdings Limited (Holdco), including Holdco’s interests in its six hydro‐electric subsidiaries as well as the remaining LED receivables finance agreements.

The Michelmores team was led by Corporate Partner Alexandra Watson alongside Partners Cathy Bryant and Head of Energy Ian Holyoak. They worked alongside Senior Associate Adam Marques-Quint and Trainee Solicitor Charlotte Pottow, both from the Firm’s Corporate team.

Alexandra comments:

“We are delighted to have supported Triple Point Energy Transition plc on this strategic sale. Congratulations to Dalmore as it takes the portfolio forward.”

This transaction is very much in line with Michelmores’ own environmental principles as we to strive to address the use of renewable energy sources across the UK and work towards a fully decarbonised society. Michelmores has a strong legacy of helping clients to become more sustainable whilst also trying to reduce the impact that our own business has on the environment.

Read more about the Michelmores’ Corporate team on our website.

For my third seat, I was lucky enough to be given the opportunity to go on a six-month secondment to one of Michelmores’ clients – Natural England. Since September 2024, I have been working full-time within Natural England’s in-house Legal team, which has been an extremely interesting and rewarding experience.

Below I reflect on the first few months of my secondment, the things I have learnt, and why I would recommend a client secondment to current and future trainees.

An overview of Natural England

Natural England is an executive non-departmental public body sponsored by the Department for Environment, Food & Rural Affairs (Defra), and is the government’s adviser on the natural environment in England.

It was established by the Natural Environment and Rural Communities Act 2006 (NERC Act), which dissolved two previous bodies (English Nature and the Countryside Agency) and transferred their powers to Natural England.

Section 2 of the NERC Act gives the organisation its general purpose of ensuring that the natural environment is “conserved, enhanced and managed for the benefit of present and future generations, thereby contributing to sustainable development”. This includes promoting nature conservation, protecting biodiversity, and conserving and enhancing the landscape.

Natural England has approximately 3,000 members of staff, and the in-house Legal & Access to Information team is formed of approximately twenty employees working under a Legal Director. The team is spread geographically across Natural England’s multiple offices, and I have worked both with colleagues in the Exeter office and remotely with the wider team across the country throughout my secondment.

The Legal team supports staff from across Natural England in achieving their aims. This involves working across a variety of areas, including advising on developing areas of environmental and conservation law, public and administrative law, planning and property law, litigation and enforcement, and commercial contracts and procurement.

What have I been assisting the Legal team with?

The work I have been doing since joining the team has been extremely varied – never has the phrase “no two days are the same” been more applicable!

Here are a few examples of the types of work I have been involved in:

• Monitoring and responding to new client enquiries, including conducting an initial review of clients’ queries and directing them to the appropriate member of the Legal team.
• Reviewing commercial contracts between Natural England and its external partners and advising clients on negotiating key clauses (such as limits on liability and intellectual property rights).
• Conducting complex legal research and preparing advice for clients in relation to various areas of environmental and conservation law, including law relating to protected sites, species licensing and access to information.
• Regularly attending and taking notes of calls with clients, including being involved in ongoing discussions regarding conservation covenants and nutrient neutrality.
• Assisting with judicial review claims and litigation, including serving documents, preparing court bundles and liaising with counsel.

Outside of day-to-day work, one of the key highlights for me has been travelling to meet colleagues in person, both on my induction day at Natural England’s London office and at a networking event for the Legal, Governance and External Affairs teams.

What have been the most valuable aspects of the secondment?

My secondment experience has been extremely enjoyable – I have had the opportunity to work with enthusiastic and supportive colleagues, whilst undertaking work which I have found extremely rewarding, particularly given my longstanding interest in environmental law.

I have found the two aspects below to be particularly valuable parts of the experience:

1. In-house experience: It has been interesting to compare working in-house with private practice. The breadth of queries that in-house lawyers deal with means that they must be adaptable and willing to apply their skills to various areas of law, as well as engaging with external lawyers and consultants when appropriate. Working in-house has improved my time management skills and my ability to juggle multiple tasks on a range of different topics.
2. Building client relationships and commercial awareness: Being on secondment has allowed me to work independently on a full-time basis with one of Michelmores’ clients. I have therefore been able to act as an ambassador for the firm and build positive client relationships, which I hope to develop further when I return to private practice with the firm. I have also developed a good understanding of Natural England as an organisation, having learnt about its structure, objectives, priorities, and constraints. I hope that having seen things from a client’s perspective will help me provide a better client service in private practice.

Overall, I feel truly fortunate to have been given this opportunity and would encourage current and future trainees to consider any secondment opportunities that they are offered.

The experience has boosted my confidence and my ability to take on new challenges and responsibilities. Working on such a variety of matters has broadened my knowledge and allowed me to discover new areas of interest, which I look forward to exploring further at Michelmores. The skills I have developed will be invaluable as I progress towards qualification later this year.

The National Security & Investment Act 2021 (NSI) gives the UK government the power to block or unwind or impose behavioural remedies on transactions that pose a threat to national security. As part of this the NSI imposes mandatory notification and standstill requirements in relation to a wide range of transactions across 17 defined industry sectors and provides a means for making voluntary notifications for transactions falling outside these that may raise national security concerns. We have covered these in a previous article – National Security & Investment Act 2021: What you need to know.

We have also analysed the latest statistics which show which types of transaction (in terms of sectors and the nationalities of acquirers) have tended to raise national security concerns – UK National Security risks for UK and international acquirers.

A recent case (LetterOne v Chancellor of the Ducy of Lancaster in the Cabinet Office), the first judicial review of the application of the NSI provisions, has shone a light on the previously opaque process by which the government goes about analysing national security risks and potential remedies. This is helpful for parties to the small number of transactions not cleared within the initial 30 working day period (or otherwise subject to a ‘call in’ notice) as it provides a clear focus for their ongoing interactions with government regarding the assessment of national security risks and potential remedies.

Three assessments

The Investment Security Unit (ISU) which sits within the Cabinet Office manages NSI assessments. There are three elements leading to a final decision imposing remedies:

• Investment Security Risk Assessment (ISRA), which includes a Diplomatic Assessment and an Economic Assessment
• Remedies Assessment
• Representations Assessment

The ISRA

The ISRA sets out the ISU’s assessment of national security risks arising from the trigger event. It is authorised by a member of the Senior Civil Service within the ISU. This contains reasons for recommending to the Secretary of State (the decision maker) that a final order be made (or presumably not made).

The ISRA includes information provided by other relevant government departments with relevant knowledge and expertise. It also contains a Diplomatic Assessment by the Foreign, Commonwealth and Development Office and an Economic Assessment by the lead department for the relevant sector of the UK economy.

Remedies assessment

The ISU also prepares the Remedies Assessment which sets out the actions which may prevent or effectively meet the risks described in the ISRA, including a recommendation to the Secretary of State.

The Remedies Assessment analyses each potential remedy according to effectiveness; likely level of compliance; enforceability; cost or burden to the Government; and cost or burden to the parties to the final order.

Individual remedies may be grouped into packages for their cumulative effect.

The ultimate remedy is prohibition (or divestment to an approved new owner for a completed transaction). Other remedies imposed to date, which relate to different categories of concerns in different sectors, include:

• requirements to continue to provide specified services to government;
• retaining operations and decision-making within the UK;
• meeting certain requirements relating to board composition, board committee membership and board committee functions, including:
  • the establishment of a committee or group within the relevant entity to oversee strategic work which has an impact on or is in respect of national security;
  • obtaining UK security vetting clearance for certain members of the Executive and Board of Directors;
  • appointing a government approved board observer with access to all information and meetings; and
  • appointing a security officer with relevant security clearances to have oversight of security requirements;
• requiring the carrying out of a security audit by a government approved auditor and producing a report setting out new security measures;
• imposing requirements in relation to IT equipment, data storage, access and handling;
• implementing protocols concerning site visits and business travel (physical information security requirements);
• requiring government approval for particular operations;
• placing limits on the information provided from the business to its owners;
• imposing notification requirements relating to future ownership changes (beyond the standard National Security & Investment Act requirements); and
• reporting to government on all new customers of particular assets and carrying out specified due diligence checks on customers.

Representations assessment

This summarises all representations received for or on behalf of those who will be affected by a final order, including any representations relating to national security risks and potential remedies.

Final decision

The final decision is made by the relevant Secretary of State (currently the Chancellor of the Duchy of Lancaster in the Cabinet Office) on the basis of these assessments.

Conclusion

Parties to transactions which have been ‘called in’ for detailed scrutiny will need to focus their representations to government with these three assessments in mind.

Parties will also need to understand from the ISU and relevant other government department(s) as far as possible the actual national security concerns to be able to seek to provide comfort in relation to these or propose targeted remedies as appropriate. In some cases this may be obvious, however, in others this may be challenging given the secret nature of national security issues but is important in making headway in these cases and enabling the transaction to proceed.

If you would like to discuss any of the issues raised in this article, please contact Noel Beale or your usual Michelmores contact.

The Home Office has increased their efforts to combat illegal working, conducting targeted raids on businesses across all industries. Between July and November 2024, 996 enforcement visits were conducted in London alone. From those visits, 770 arrests were made and 462 businesses received civil penalties of up to £60,000 per illegal worker.

With enforcement activity on the rise, businesses should take urgent action to review their processes and records to ensure that they don’t suffer disruptions or, worse, legal action when the Home Office compliance officers come a-knocking! Any business that employs staff can receive a visit from the Home Office. This is not reserved to businesses that sponsor workers or to businesses in specific sectors. ALL businesses should therefore take heed of this warning…

What steps should Employers take?

Employers need to be proactive here. We recommend they take the following steps:

• Right to Work Checks: Employers should ensure they follow the three-step process when completing Right to Work checks:

Step 1 – Obtain: You must see the worker’s original documents in person. What documents are acceptable will depend on whether the worker has a permanent or temporary right of residence in the UK.

Step 2 – Check: Conduct a check of the documents in the presence of the worker (either in person or virtually) and ensure all documents are genuine. Employers must reject documents where fraudulence is ‘reasonably apparent’.

Step 3 – Retain: Retain a clear copy of the document, noting the date of the check and who completed it.

• Maintain accurate and clear records: Having an accurate record of dates where checks were conducted and what evidence was provided is incredibly important, especially in situations where Home Office officials make unannounced compliance visits.

Being able to show clear records of all checks and evidence that you have followed the relevant guidance will prevent you from receiving civil penalties. Failing to do so or having gaps in your data will have the opposite effect and could result in severe consequences.

• Training: Training should be regularly provided to any individual who has significant involvement in the recruitment process. This should include ensuring employees familiarise themselves with what documents are acceptable as evidence of the right to work and how this differs depending on the worker’s permissions.
• Policies: Having clear accessible and up to date policies in place will equip staff in the event of an unannounced visit from the Home Office. Allowing them to effectively answer questions and work alongside Home Office officials to ensure visits runs smoothly.
• Encourage proactive communication: Employers should make all relevant individuals aware of their obligations to communicate any changes in their immigration status. As well as communicating when their permission expires and their plans to extend this prior to the expiry.
• Monitor Visa Sponsorship Obligations: If you are a licensed sponsor, you must ensure you regularly keep your Sponsor Management System (SMS) records up to date. Ensuring to report any changes, such as an employee changing roles, within the required timeframes.
• Conduct an audit: Don’t wait for the Home Office to review your documents, records, policies and procedures, conduct your own audit now:
  • Review the policies you have in place regarding recruitment, right to work checks, keeping personnel contact information up to date and managing staff that are subject to immigration control.
  • Check your training records. Are all the members of staff involved in the above suitably trained? Do they need refresher training?
  • Are your managers conducting right to work checks and visa update checks correctly? Conduct a dip sample to identify any vulnerabilities
  • Address any vulnerabilities in the above as a matter of urgency.

What are the risk for Employers?

Employers who fail to show compliance with Immigration laws face severe consequences, including:

• Financial penalties: Businesses can receive fines of up to £60,000 per illegal worker.
• Criminal sanctions: Knowingly employing an illegal migrant can be punishable by up to five years’ imprisonment and an unlimited fine.
• Sponsor Licence revocation: Failure to comply with Immigration laws can result in the Home Office revoking your sponsor licence or preventing you from gaining a sponsor licence in the future.
• Reputational harm: Information on which businesses have failed to comply with Immigration Law is publicly accessible and attracts significant media attention. This could result in your business’ reputation and relationship with others being severely damaged.

How can Michelmores help?

At Michelmores we specialise in helping businesses navigate the complexities of Immigration Law, safeguarding businesses and ensuring full compliance, including:

• Mock compliance visits: We can perform a mock compliance visit where we will review your current processes, identify any issues and work with you to provide solutions and minimise any risks.
• Advice on Penalty Notices: If your business does receive a penalty notice, we can assist you in demonstrating to the Home Office your compliance efforts to help reduce or remove the penalty notice.
• Ongoing training and support: As Immigration lawyers, we stay ahead of all the changes to Immigration laws, which means we are able to ensure your continued compliance. We can also provide you with tailored training sessions and draft up to date policies.

Many compliance visits are unannounced and being unprepared can cause your business significant issues. Do not wait for a penalty notice or a compliance visit to address any compliance issues, protect your business by having a clear plan in place.

Should you need any assistance in safeguarding your business or any questions concerning the contents of this article, please contact Lynsey Blyth.

Michelmores is pleased to have advised Cavanna Homes, the Westcountry’s leading independent housebuilder, on securing £30m of funding from Lloyds – an increase of 50% on the previous funding arrangement.

The deal marks a renewal of Cavanna Homes’ five-year revolving credit facility with Lloyds, which has been supporting the Torquay-based housebuilder with banking facilities since 2012. The new arrangement will provide Cavanna with the liquidity to keep the company safe and to support the firm’s future growth plans.

Cavanna Homes is currently building new homes at sites across the South West with three developments in Exeter – Equinox II, Equinox III and Cavanna @ Elm Park. Properties are also available at Oak Mount, Hemyock, Market Place, Holsworthy and Bellevue, Bude. New developments are coming soon to North Devon, Dorchester and Bridgwater.

The Michelmores team advising on the deal was led by Partner Karen Williams, alongside Solicitor Charlie Parker, both from the Firm’s well-renowned Banking, Restructuring & Insolvency team.

Karen comments:

“It’s been a pleasure to work with Cavanna Homes on this milestone funding package which paves the way for Cavanna’s commitment to delivering much-needed new homes to the South West of England while keeping sustainability of its business operations at its core. Our experience enabled us to secure a successful outcome for Cavanna within the required timescale and we wish them all the best in their expansive and exciting journey.”

Michelmores’ Banking & Finance team’s strengths lie in understanding our clients’ greater commercial objectives and supporting them to achieve their goals, while keeping them ahead of the fast-moving regulatory landscape. Read more on our website.

Michelmores is pleased to have advised Wilder Sensing, a developer of software for biodiversity monitoring using audio and Artificial Intelligence (AI), on securing a £300,000 equity investment from the South West Investment Fund, via appointed Fund Manager The FSE Group. This is the latest of several businesses that Michelmores has advised in respect of an investment received from the South West Investment Fund, with it proving to be a vital source of funding for some of the region’s most exciting scale-ups.

This forms part of a £700,000 investment round that also includes Oxford Innovation Finance and Cambridge Angels. The new funding will enable Wilder Sensing to create new jobs, increasing its capacity to deliver cutting-edge solutions in biodiversity data collection and analysis.

Wilder Sensing’s platform has already attracted a range of customers, including Somerset Wildlife Trust, ecological consultancies and a variety of farming businesses who are committed to improving biodiversity on their farms, as well as a project for BBC’s Springwatch.

Geoff Carss, chief executive and co-founder of Wilder Sensing, said:

“The biodiversity collapse is one of the top global risks identified by the World Economic Forum, with over half of the world’s GDP relying on nature. Our technology addresses the urgent need for accurate, scalable, and unbiased biodiversity monitoring around the world. This investment will enable us to enhance our platform and expand our reach, helping industries and government bodies make informed decisions backed by solid data.”

The Michelmores team advising on the deal was Partner Harry Trick and Senior Associate Adam Marques-Quint, both from the Firm’s Corporate team.

Adam comments:

“We are delighted to have worked with Wilder Sensing on securing this milestone funding, helping to further the firm’s AI technology and address the urgent need for biodiversity monitoring around the world. Wilder Sensing’s environmental aims are very much in line with Michelmores’ own and we are glad that we could assist them on this journey to preserving our planet’s finite resources.”

Michelmores’ Responsible Business commitment centres on the overall impact that we have on our people, the environment, and our communities and is a core part of our strategy and how we work. Our award-winning Corporate team advises clients across the UK and beyond on capital markets, mergers and acquisitions, management buyouts, impact investing, energy projects, microfinance initiatives and more. Read more on our website.

This article first appeared in British Dairying.

In the Autumn Budget, the Government announced that it is going to reform Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026. These are critical tax reliefs for farming businesses and estates and the impact of these changes should not be underestimated.

Inheritance Tax (IHT)

On a lifetime transfer or on death, or on transfers out of trust, IHT is charged. The lifetime rate is 20% (unless the transfer is potentially exempt, for example, a gift to an individual) and the death rate is 40%. Both rates are subject to the available nil-rate band and various reliefs, notably APR and BPR.

In respect of transfers of agricultural property, where it was used for the purposes of agriculture and held for the required period it benefitted from 100% relief. If it was subject to a pre-1995 Agricultural Holdings Act tenancy the rate was reduced to 50%. In respect of transfers of business property, where it had been owned for two years it would also qualify for 100% relief. A reduced rate of 50% was available for transfers of control holdings of quoted shares as well as assets used in – but not owned by – a trading business.

For rural businesses and landed estates, APR and BPR have always gone hand in hand. BPR has often been used to ‘top up’ APR to the extent that the value of property exceeded its agricultural value or in sheltering investment assets used in a composite business which is mainly trading.

What changes are proposed to BPR and APR?

• Key changes to BPR and APR were outlined for implementation in April 2026:
• 100% relief will be limited to the first £1million of the combined value of agricultural and business assets for every person or pre-existing trust. Any agricultural or business assets above that threshold will be subject to IHT but at a discounted 50% rate. In other words, a rate of 20% IHT on death (reduced from 40%), and a maximum rate of 3% IHT for ten yearly and exit charges from trusts (reduced from 6%).
• The £1 million cap will be divided proportionally between agricultural and business property if the combined value of qualifying property exceeds £1 million.
• Certain assets that currently receive 50% relief (e.g., shares in controlling listed companies) will not count toward the £1 million limit. Similarly, AIM-listed shares will be subject to 50% relief starting in 2026 (reduced from the current 100%).
• The £1 million allowance will not be transferable between spouses, so careful estate planning will be essential to avoid wasting any of the allowance.
• The government also introduced anti-forestalling measures whereby transfers made on or after 30 October 2024 where the transferor dies within seven years and after 6 April 2026 will be caught by the new regime.
• The full implications for trusts are still being clarified, but it is expected that each trust will receive its own £1 million relief allowance, provided the trust was established before 30 October 2024. Trusts created by the same settlor after this date will share the allowance. The government have confirmed that they will be consulting on how the new legislation will apply to trusts, with further detail expected in 2025.

We await the draft legislation which will confirm more precisely how these changes will work in practice.

Other Budget measures affecting employers and small businesses

National Minimum Wage and Living Wage

• The Budget introduced a 6.7% increase in the National Living Wage, raising it to £12.21 per hour for workers aged 21 and over, effective from April 2025. Workers aged 18-20 will see a 16.3% increase, bringing their hourly wage to £10. While these wage increases are beneficial for workers, they will also result in higher labour costs for employers, including those in the agricultural sector. Farms with hourly workers will need to plan for these increased payroll expenses.

National Insurance contributions

• From April 2025, employer National Insurance (NI) contributions will rise to 15%, with a reduced threshold of £5,000 per annum. In partial compensation, the government has raised the Employment Allowance from £5,000 to £10,500. While this is designed to help small businesses manage the higher costs, the changes will still represent a substantial increase in the cost of employing staff, which could affect staffing levels and payroll management, particularly in labour-intensive sectors like farming.

Capital Gains Tax (CGT)

• The Autumn Budget also increased rates of CGT, with the lower rate of CGT raised to 18% and the higher rate raised to 24% with immediate effect. The new rates are aligned with the residential property rates, which remain unchanged.
• Changes were also announced to Business Asset Disposal Relief (BADR) which reduces the rate of CGT on qualifying gains made on disposals of businesses, subject to satisfying various conditions. The CGT rate for BADR will increase from 10% to 14% for disposals made on or after 6 April 2025 and will increase to 18% for disposals made on or after 6 April 2026.
• These tax changes may require farmers with significant capital assets to reassess their tax strategies, particularly those considering the sale of assets.

Stamp Duty Land Tax (SDLT)

• The Autumn Budget also raised the SDLT surcharge on the purchase of additional residential properties (such as second homes or buy-to-let properties) from 3% to 5% starting 31 October 2024. Similarly, companies purchasing residential property over £500,000 will see the SDLT rate increase from 15% to 17%.

Conclusion

The proposed changes to APR and BPR are profound and will require a review of strategy for many farming and business owning families. These are undoubtedly worrying times for farmers and there is a strong feeling within the rural community that the tax changes simply do not reflect the reality of what is required to sustain a viable farming business.

Faced with impending change, advisers have been considering what comes next, and how to plan ahead.

There are options. Valuable estate planning tools remain – the ability to gift assets in the hope of surviving seven years, structuring assets efficiently to maximise reliefs, and life assurance, to name a few. Farming families are going to have to carefully consider how and when to pass assets to the next generation – not easy, and there is a difficult balance to be struck between tax efficiency and retaining sufficient control (to ensure business continuity) and comfort in retirement.

Succession is often a delicate subject for families generally – conversations are put in the “too difficult” pile – but the timing of robust business succession planning has never been more important. We are helping to guide families through their options for mitigating this new challenge, to help ensure that viable farming businesses can still be transferred efficiently in the right circumstances.

Should you wish to discuss any of the issues raised in this article, please contact Iwan Williams or Vivienne Williams.

The risk of sexual harassment of staff at work is an issue high on the agenda for many larger businesses, with well publicised action being taken by the likes of IKEA UK and McDonalds. But the risk of these issues arising in the context of smaller rural business may well be just as high. This is especially so where employees are working alone or with just one other employee or manager or where older workers may not be so familiar with modern expectations for behaviour.

On 26 October 2024, the Worker Protection (Amendment of Equality Act 2010) Act 2023 (the Act) will come into force. The Act will introduce a new positive legal obligation on employers to take reasonable steps to protect sexual harassment of their employees. This shifts the emphasis so that employers take a more proactive approach to identifying and addressing risks of sexual harassment.

If an employer breaches the duty, the EHRC will have the power to take enforcement action against the employer. Further, whilst the new duty does not create a standalone claim that employees can bring in employment tribunals, it gives employment tribunals the power to increase compensation for successful sexual harassment claims by up to 25%.

It is not entirely clear what might constitute ‘reasonable steps’, though once the EHRC’s technical guidance on the new preventative duty is updated, this should provide some helpful direction. Nonetheless, employers would be well-advised to consider the following:

Anti-harassment policy

Introduce (or, if one is already in place, update) an effective antiharassment policy. The EHRC’s current guidance contains helpful detail on what such a policy should cover. It is essential that any policy sets out a clear reporting procedure for any instances of sexual harassment. Policies should be regularly reviewed and updated, and employees should be familiar with the policy (see training).

Training

Run mandatory tailored training sessions so staff are familiar with your anti-harassment policy. Sessions should also explore what amounts to sexual harassment, the behaviour expected in the workplace, and how to make a complaint. Consider running additional training for senior employees who will be in charge of investigating and managing complaints under the policy. Refresher training should be provided.

Risk assessments

Conduct risk assessments to identify risks and introduce preventative measures. Conducting staff surveys and reviewing records of complaints and their progress can help identify risks. On this point, monitoring the progress of sexual harassment complaints helps ensure allegations are properly investigated and dealt with, and that any patterns of behaviour are identified. The types of risks will differ depending on the industry, but, for example, roles which are public-facing or involve lone working could result in increased risk. Once risks have been identified, specific measures should be introduced to mitigate those risks.

Reporting

Encourage the reporting of sexual harassment by providing different channels of reporting via different people or methods. Ensure the process is not unnecessarily restrictive (i.e. by requiring specific forms to be completed or deadlines to be adhered to). Ensure that allegations are investigated properly and take action where wrongdoing is identified.

It is easy for small rural businesses with few employees to consider themselves immune from this type of problem, but without taking the steps suggested above businesses may leave themselves open to the risk of enforcement action by the EHRC and more costly claims by employees.

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

A recent South Oxfordshire District Council appeal (ref: APP/Q3115/W/23/3317169) has provided useful detail of what is required for a development to fall within Class Q – conversion of agricultural buildings to residential.

Background – Permitted Development Rights

Permitted development rights (“PDRs) make it lawful to build certain buildings, modify buildings in certain ways and materially change from approved uses of land and buildings, all without the need to obtain planning permission. As such they offer flexibility in a planning system that commentors regularly describe as being broken.

One particular PDR has received a lot of attention and commentary because it offers the ability to create new homes in rural areas that would be refused were a planning application required. These are known as Class Q PDRs. For land in England, the Class Q PDRs are set out in detail in the General Permitted Development Order 2015. They allow agricultural buildings to be converted to residential buildings and (subject to certain constraints) they permit the attendant building operations necessary to make the barn a home.

Recent changes to Class Q

Back in May this year, we commented on recent changes to Class Q PDRs making them that much more applicable and flexible. Our article describes how Class Q extensions are no longer limited to the three-dimensional space of the original barn and that ‘protrusions’ of up to 0.2m are permitted to accommodate building operations, so downpipes and flues can now be lawfully installed.

However, those seeking to rely on Class Q rights must still approach the building works with caution and pay careful attention to the rules.

Conversion v rebuilding 

We have previously commented on the case of Hibbitt and Another v Secretary of State for Communities and Local Government [2016] EWHC 2853 (Admin) (“Hibbitt”). Hibbitt clarified the distinction between converting an existing barn to a house and rebuilding a house on the site of a demolished barn. Class Q is all about the former. If the works amount to a rebuild then the conversion is not permitted by Class Q. The distinction is a matter of planning judgment, but much depends on the facts of each case.

The South Oxfordshire case

This distinction was again confirmed in a recent planning appeal decision concerning a corrugated iron walled, cement roofed 3-bay barn conversion (described as being in poor condition) in South Oxfordshire.

The appeal was required because the local planning authority (LPA) had approved the ‘prior approval’ step for a barn conversion and that approval was subsequently quashed by the courts. In the agreed consent order to quash the original approval, the court ‘encouraged’ the decision maker to look critically at whether the proposal was truly a conversion, or whether it was a re-build.

The applicant sought to keep concrete supports on their pad foundations. The compacted base within the building would be retained but this would be beneath a new concrete slab. Only the skeletal steel frame of the original barn would be retained in the proposals. The existing barn sides and roof were to be demolished. Applying his planning judgment, the Inspector held that where so little of the existing barn would remain it would be ‘in all practical terms, starting afresh with only a modest amount of help from the original building’. Consequently, the Inspector concluded the proposal did not fall within Class Q.

Open countryside question

In addition to the proposal falling foul of the conversion or rebuild question for Class Q, the Inspector was asked to consider the proposal as an application for planning permission. The open countryside location meant the proposal was unable to meet the local plan’s policies on sustainability and permission should be refused. This exemplifies why the Class Q PDRs are such a helpful tool in the first place as the proposals benefiting from Class Q would be unlikely to succeed if exposed to the tests normally applied to planning applications.

Had the original barn been more capable of supporting the proposed design in the manner of a conversion, or had the design been modified to make that so, then the outcome would likely have been different.

Should you wish to discuss any of the issues raised in this article, please contact Fergus Charlton and Grace Bravery.

In good news for landowners and landlords, a key recent decision of the Upper Tribunal has increased the rent that telecoms operators will have to pay for the siting of masts on “unexceptional rural sites”. The case also provides useful guidance on the rights of landlords/landowners who require a redevelopment break right to be included in new leases.

Background

The decision was published on 29 July 2024 and relates to a renewal lease of a greenfield telecommunications site at Vache Farm near Chalfont St Giles in Buckinghamshire (Site).

The equipment on the Site consisted of a 20m high steel mast which was in a fenced 16m x 6m enclosure in a field. There were also several cabins housing telecoms apparatus. The parties to the lease were EE as tenant, and APW (also a telecoms company) as landlord. After the contractual term of the original 15-year lease expired in May 2020, the lease continued under the provisions of the Telecommunications Code (Code).

Code Reminder: a lease that is subject to Code rights (generally most telecoms leases) will continue even after the contractual term ends, unless a prescribed procedure to terminate is followed.

The parties could not agree on the renewal terms for the rent or the redevelopment break right and so the matter was referred to the Tribunal.

Rent for Unexceptional Rural Sites

The tenant, EE’s position was that the annual rent should be based on the figure of £750 per annum. This was taken from several 2022 cases which set £750 as the precedent rent figure for unexceptional rural sites[1]. EE’s surveyor conceded that the £750 should be increased to allow for inflation, taking it to £977, which they rounded to £1,000.

APW’s case was that the rent should be £2,850 per annum, and they submitted detailed valuation evidence that the rent of £750 was too low based on market comparables, and the good access and size of the Site.

The Tribunal took the opportunity to revisit the appropriate rent for rural mast sites, which had not been considered since the 2022 cases[2]. The Tribunal set out the previous thinking on unexceptional rural site valuation and considered whether the guideline figures needed to be reviewed.

It was the first time that the Tribunal had carefully reviewed transactions in relation to setting a value for small rural sites in non-telecommunications use, which can then be used to get the no-network assumption value.

In summary, the Tribunal found that the previous case law determining a rural mast site rent at £750 was much too low. The found that inflation was particularly relevant to valuation and took into account the evidence on comparables for non-telecoms use sites. They concluded that the appropriate rent for this type of site is £1,750.

Redevelopment Break Right

The parties agreed on the principle that APW should have a right to terminate the lease on 18 months’ notice, but they disagreed on how the re-development right should be worded.

APW wanted quite a widely drafted break right to be available to them whenever:

“(a) the Landlord desires to redevelop all or part of the Communications Site or any neighbouring land or any land under the ownership or control of the Superior Landlord (the site owner); or

(b) the test under paragraph 21 of the Code for the imposition of the agreement on the Landlord is no longer met.” Effectively, this was a right to terminate the lease whenever they want to redevelop the Site, or neighbouring land, for any purpose and at any time.”

Code Reminder:

Paragraph 21 contains a 2-part test which sets out that for a Court to impose Code Rights. The Court must be satisfied that:

1. Any prejudice caused to the landlord/landowner by imposition of the code agreement can be adequately compensated by money.
2. The public benefit outweighs the prejudice caused to the landlord/landowner. If a Court is not satisfied that the test is met, then they do not need to grant Code Rights to the operator.

EE wanted a more limited break right requiring APW to show:

1. a “settled intention” to develop the land; and
2. that the land could not reasonably be developed without obtaining possession of the Site.

EE expressly excluded “providing or operating an electronic communications network, or electronic communications services, or the provision of an infrastructure system” from the definition of “development”, as they did not want APW to try and take the benefit of the Site for their own purposes.

The Tribunal decided it was not the Code’s intention to stand in the way of the genuine redevelopment of land, regardless of whether that was for telecommunications purposes or not – and regardless of whether the operator enjoyed more favourable terms than before the lease renewal. The Tribunal refused to impose restrictions on the meaning of the word “development”.

The Tribunal’s imposed break clause wording was a compromise between the two positions:

“The break clause will therefore provide that the Landlord may terminate the new lease on giving 18 months’ notice expiring on the fifth or any subsequent anniversary of the term commencement date if it intends to redevelop all or part of the Site and could not reasonably do so while the new lease continues.”

Comment

This case provides helpful valuation guidance for unexceptional rural sites on which a vast majority of telecoms apparatus is situated and serves to increase the previous “base” rent of £750 to £1,750.

It also clarifies the position with regards re-development for landlords/landowners, which is that the presence of telecoms apparatus should not prevent development on land, even where that could lead to less favourable lease terms for the operator.

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

[1] EE Ltd and Hutchinson 3G UK Ltd v Stephenson and another [2022] UKUT 180 (LC)

[2] where they did so in the following two cases: EE Ltd and Hutchison 3G UK Ltd v. Affinity Water Ltd [2022] UKUT 8 (LC)) and EE Ltd and Hutchison 3G UK Ltd v. Stephenson and another [2022] UKUT 180 (LC)).