Corporate Update Bulletin - 8 May 2025

Welcome to the latest edition of Corporate Update, our fortnightly bulletin offering a five-minute read of the latest developments which we consider relevant to corporate counsel. Please get in touch with your usual contact if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here.

In this issue:

• News
• Case Law
• Publications

News

Serious Fraud Office (SFO) publishes fresh guidance for corporates on self-reporting

On 24 April 2025, the Serious Fraud Office (SFO) published new guidance regarding self-reporting, co-operation and deferred prosecution agreements (DPA), in order to provide clarity on when it regards a corporate as having been ‘genuinely co-operative’ and what will be regarded as ‘unco-operative conduct.’

The guidance outlines the key factors it will consider when deciding whether to invite a corporate to negotiate a DPA as an alternative to prosecution, and the SFO has confirmed that, if a corporate self-reports promptly, it will invite the corporate to negotiate a DPA rather than prosecuting, unless ‘exceptional circumstances’ apply. For further details, see Publications below.

ISSB announces targeted amendments to IFRS S2 (Climate-related Disclosures)

On 28 April 2025, the International Sustainability Standards Board (ISSB) published an Exposure Draft proposing targeted amendments to IFRS S2 (Climate-related Disclosures) following market feedback. These amendments aim to ease the application of certain greenhouse gas emissions disclosure requirements by providing reliefs while maintaining the overall level of disclosure. The changes are intended to reduce reporting duplication and related costs, offering flexibility to both entities and jurisdictions in adopting or applying these reliefs without compromising alignment with ISSB Standards.

The proposals were based on the Transition Implementation Group’s discussions on IFRS S1 and IFRS S2, along with broader engagement activities, including consultations with jurisdictions on their adoption processes. The Exposure Draft consultation closes on 27 June 2025. The ISSB is seeking to finalise the amendments by the end of 2025 and encourages jurisdictions with their own standards based on ISSB frameworks to remain aligned with the amended ISSB versions.

Government publishes package of tax technical policy proposals

On 28 April 2025, the government released a Written Statement announcing that it has delivered on its promise from the Autumn Budget 2024 and Spring Statement 2025 to introduce a package of measures aimed at simplifying the tax and customs system. A number of tax-related consultations were launched alongside the statement, whilst several new policy papers and responses to existing consultations were also published.

In particular, having received feedback on its earlier April 2023 consultation on proposals to modernise the stamp taxes on shares framework, HMRC has published a summary of the feedback. In light of the responses, the government now intends to proceed with the majority of its proposals. Legislation will be put forward by the government which establishes a single tax on securities to replace stamp duty and stamp duty reserve tax. It is anticipated that this new tax, and the online reporting and payment system to accompany it, will be launched in 2027. HMRC has also published a new consultation seeking views on proposals to reform the 1.5% higher tax rate which applies to certain transfers of UK securities overseas. Responses must be submitted by 21 July 2025.

In addition, HMRC has also (i) launched a technical consultation (following an earlier consultation on this area) on proposed legislation which targets reform on transfer pricing, permanent establishment and Diverted Profits Tax and (ii) published a consultation on proposals to revise the small and medium-sized enterprises exemption from transfer pricing rules, as well as the requirement for certain multinational groups to submit data on cross-border related party transactions to HMRC. Both of these consultations close on 7 July 2025.

EU Commission publishes further materials in relation to the EU Deforestation Regulation

The European Commission has published updated guidance, FAQs, and a draft Delegated Act for consultation, in April, with a view to providing “further simplifications and [reducing] the administrative burden to facilitate the implementation of the EU Deforestation Regulation (EUDR)”. Whilst no changes have been made to the EUDR itself (beyond the amendments to Annex I as set out in the draft Delegated Act), the updates provide additional clarity, particularly with regards to the verification of upstream due diligence, the reporting status of operators who have imported a product which was previously exported from the EU market, as well as the scope of products covered.

Case Law

HNW Lending Ltd v Lawrence [2025] EWHC 908 (Ch)

High Court finds that a third party can enforce a contract term under Contracts (Rights of Third Parties) Act 1999 if the contract expressly says so, despite the contract conferring no benefit.

In HNW Lending Ltd v Lawrence [2025] EWHC 908 (Ch), the defendant borrower had entered into a loan agreement with a lender acting via its security agent, HNW. The defendant argued that HNW did not have the right to bring a claim under Contracts (Rights of Third Parties) Act 1999 (the “Rights of Third Parties Act”), as the benefit had not been expressly conferred onto them in the loan agreement. The defendant’s argument, here, drew upon the judgment made from an earlier County Court case, which had also involved HNW.

A third party is able to enforce a contract term if the contract expressly provides it may under section 1(1)(a) of the Rights of Third Parties Act, or if it purports to confer a benefit on it, under section 1(1)(b). The claimant argued that the defendant’s argument failed to give sufficient weight to section 1(1)(a). The judge found that the loan agreement had been drafted with the Act in mind, and with the intention that the lender’s agent would be able to enforce its obligations in the same way as the lender. In so deciding, the Court found that section 1(1)(a) was not limited to the enforcement by a third party of a term purporting to benefit it, as it is these types of terms which section 1(1)(b) specifically caters for, and that the express provision of a benefit to a third party is sufficient to enable them to enforce it.

Various Claimants v Standard Chartered Plc [2025] EWHC 698 (Ch)

High Court considers the strike out of claims under Schedule 10A FSMA

In this case, the defendant’s (Standard Chartered) application for strike out or reverse summary judgment of claims made under s90A and Schedule 10A of the Financial Services and Markets Act 2000 (FSMA) was rejected. Schedule 10A of FSMA relates to the liability of issuers of securities to pay compensation to those suffering loss arising from either misleading information or dishonest omissions in relation to the securities (under paragraph 3 of Schedule 10A), or dishonest delays in publishing such information (under paragraph 5 of Schedule 10A). Paragraph 3(4) of Schedule 10A provides that, in respect of a claim under paragraph 3, a person will not be regarded as having suffered a loss unless they acquired, continued to hold or disposed of the securities in reliance on the statement, and where it was reasonable for them to rely on it (the ‘reliance requirement’). No reliance requirement exists in relation to paragraph 5.

The Court had recently decided in Allianz Funds Multi-Strategy Trust & Ors v Barclays Plc [2024] EWHC 2710 (Ch) (the 'Barclays' decision) that in relation to the reliance requirement under paragraph 3 of Schedule 10A, each claimant needs to show they had actually read the information that allegedly contained misleading statements or omissions, or else had the gist communicated to them by third parties. The effect was that passive funds which simply tracked an index – a very large segment of the market – could not demonstrate reliance. On this basis, in Barclays, Leech J struck out the claims alleging ‘price/market reliance’, which assumed that neither the claimants not their agents had read or considered the published information themselves, but instead relied on the market’s response to the published information. Leech J also found that liability arose in respect of Delay Claims only where the delayed information is published by the issuer at a later stage.

In this case, the claimants were 217 investors, acting on behalf of 1391 funds, who claimed that the defendant had made untrue or misleading statements in and/or omissions from annual reports, half year reports and other mandatory publications. They had put forward a price/market reliance claim (‘Common Reliance Claims’ under paragraph 3) in a way that was “pretty much” identical to those put forward in Barclays, alongside a ‘Delay Claim’ (under paragraph 5) alleging that the defendant had dishonestly delayed the publication of accurate information. The defendant applied to have both claims struck out, following the Barclays decision.

Green J ultimately felt that he was not bound to follow the judgment in Barclays, as the issue before him was not to decide the meaning of ‘reliance’ under paragraph 3, but, rather, whether to defer a decision on that legal point by striking out the claims. In Barclays, Leech J had granted summary judgment on the basis of his legal conclusions on paragraph 3 but also the particular circumstances pertaining in that case. Green J held that, as a matter of case management, but also in the light of his uncertainty as to the correct answer to the legal question, it was open to him to leave the question to be determined at trial. In relation to Delay Claims, he also doubted Leech J’s conclusions that Delay Claims are dependent on the issuer publishing corrective information at some stage.

Publications

Securing the future of AIM: London Stock Exchange seeks views

Slaughter and May has published a briefing looking at the key changes to the AIM Rules being proposed in the recent discussion paper published by the London Stock Exchange.

From fog to focus: SFO sharpens its stance on corporate co-operation

Slaughter and May has published a briefing on the new self-reporting guidance published by the SFO outlining the key factors it will consider when deciding whether to invite a corporate to negotiate a deferred prosecution agreement. The briefing considers whether the new guidance will reverse the recent decline in both self-reports of corporate wrongdoing and DPAs, and drive a new wave of corporate self-reports and settlements.