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Read our new guidance on generative AI for the legal profession
With the world scrambling to come to grips with the progress of artificial intelligence (AI), we outline the opportunities and risks legal professionals should be aware of when deciding whether and how generative AI technologies might be used.
What you need to know
1. Autumn statement: tax cuts and permanent full expensing
On Wednesday 22 November, the chancellor of the exchequer, Jeremy Hunt, put forward the government’s autumn statement to the Commons.
The chancellor repeatedly spoke of an “autumn statement for growth”, announcing 110 growth measures to get the “economy back on track”.
The chancellor’s flagship business support policy was the announcement that the full expensing scheme – which allows companies to claim corporation tax relief on 100% of the cost of investments they make – will be made permanent, having originally been slated to last three years only.
The chancellor hailed this as the “biggest business tax cut in modern British history”.
However, the chancellor did not make any comment on extending full expensing to encompass firms that operate under the partnership model, meaning such firms are still excluded from this scheme.
We have highlighted how this represents an investment penalty on major law firms and called on the government to extend the scheme to partnerships.
Also central to the chancellor’s autumn statement was:
- cutting the main rate of employee national insurance contributions from 12% to 10%
- reducing class 4 national insurance contributions for the self-employed from 9% to 8%
The government is also freezing the business rates small business multiplier for a further year.
The government has also committed to make changes to the UK’s business visitor visa, including wider coverage for the legal services sector.
We are currently seeking further detail on what this will mean in practice.
We responded to the statement expressing disappointment that legal services have been overlooked.
As well as failing to extend the full expensing scheme to cover legal partnerships, the statement also failed to provide any new money for the justice system, despite well-documented issues with court backlogs, crumbling buildings and chronic shortage of lawyers and judges.
2. Renters (Reform) Bill: MPs highlight our concerns
MPs began line by line scrutiny of the Renters (Reform) Bill on Tuesday 21 November, debating:
- concerns about the delay in the abolition of section 21
- whether there should be a mandatory ground for eviction in cases where tenants were repeatedly in rent arrears, and
- whether plans to prevent a landlord from reletting or reselling a property for three months offer enough protection to tenants
The shadow housing minister, Matthew Pennycook, referenced our head of justice Richard Miller’s evidence arguing that while capacity in the courts is an issue, it does not justify postponing the abolition of section 21.
Pennycook noted we had argued it may be sensible to see the new tenancy system in place first so we can properly understand what a new digital system needs to achieve in respect of the bill.
In response, levelling up minister Jacob Young argued that reform of the courts is a prerequisite for abolition of section 21 and the government is striking a balance on this issue.
MPs also debated plans to create a mandatory ground for repossession in the event of repeated rent arrears over a three-year period.
Pennycook argued this new ground is trying to solve the problem of tenants gaming the system, but the number of tenants who could be accused of this is “vanishingly small”.
He called for the ground to be discretionary instead, echoing our position.
The minister pushed back, noting this measure supported landlords and would stop court proceedings being frustrated when needed. The amendment was voted on but did not pass.
Helen Morgan (Lib Dem) moved an amendment to increase the ban on reletting or reselling a property a landlord had taken ownership of to live in themselves from three months to six months.
Morgan argued a similar measure had been abused in Scotland and that six months is a more reasonable limit.
The minister felt this would be excessive and does not take into account the possibility that a landlord’s circumstances might change. The amendment was voted on and fell.
The bill will continue its committee stage over the coming weeks.
3. UK government commits to joining Hague 19 Convention
After 10 months of deliberation, on Thursday 23 November, the government announced its plan to join the Hague 19 Convention “as soon as practicable”.
This comes after engaging with stakeholders across the legal sector and academia, particularly those with expertise on cross border litigation.
Along with the other responses, our evidence was overwhelmingly in favour of the UK joining the convention as soon as possible, to boost the reputation of England and Wales as a jurisdiction of choice for international dispute resolution.
Hague 2019’s global reach is set to expand over the coming years, with the US, Israel and a number of other countries having already signed the convention.
Joining Hague 2019 now will allow the UK not only to secure the benefits of the convention, but also play a leading role in driving the development of this global framework as judges in the UK will be amongst the first to apply and interpret its terms.
The announcement means that the government will take steps to allow for parliamentary scrutiny before moving ahead with ratification.
We welcome the commitment to accession and is keen to see swift ratification.
Coming up
Our president, Nick Emmerson, will appear before the Justice Select Committee on Tuesday 5 December to give evidence on the regulatory framework for solicitors.
We are working on a number of bills in Parliament:
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