Hello and welcome once again to the Pinsent Masons Podcast, where we try to keep you abreast of the most important developments in global business law every second Tuesday. My name's Matthew Magee, and I'm a journalist here at Pinsent Masons. And this week we get a debrief on COP30 from climate expert Michael Watson, while Natalie Harris tells us about some big changes in English home rental laws
But first, here's some business law news from around the world.
UAE launches first bankruptcy court,
EU digital simplification to soften data and AI rules and
Premier League clubs urged to act ahead of new financial regulations.

The United Arab Emirates has launched its first dedicated bankruptcy court. The move, which comes in the wake of modernised insolvency rules brought in last year, replaces a previous regime where cases were handled by general commercial courts. The new court, which will also include a bankruptcy administration department, aims to centralise expertise in insolvency issues in the UAE and says it will allow greater efficiency and transparency around bankruptcy proceedings. The judges forming the new court, which will be based in Abu Dhabi's Federal Court, must be specialised and of rank not lower than appellate. Faisal Attia, a civil law expert with Pinsent Masons in Dubai, said the move would strengthen the UAE's reputation for financial dealings and increase investor confidence in the region.

Plans to relax data protection laws to facilitate AI development and use in the European Union have been outlined as part of a series of measures designed to boost growth and innovation in the trading bloc. A raft of legislation is earmarked for reform across the proposals for a digital omnibus regulation and digital omnibus on AI regulation that the European Commission published last Wednesday, including centrepiece EU frameworks like the General Data Protection Regulation and the AI Act. Amsterdam-based Michelle Seel of Pinsent Masons said by streamlining overlapping obligations and amending outdated rules, the proposal tackles the criticism the EU has faced that it operates a regulatory thicket that stifles innovation and competitiveness in Europe. Policymakers will hope it gives startups and small tech companies breathing room in Europe's digital economy.

English Premier League football clubs have been urged to act now to ensure they can comply with new financial regulations set to take effect from next season. Late last week, the clubs voted to move away from the current profit and sustainability rules to a new framework of financial controls built around two mechanisms: the squad cost ratio rule and the sustainability and systematic resilience tests. Sports law expert Julian Diaz-Rainey of Pinsent Masons said the previous system sometimes prioritised short-term gains over sustainable strategic growth, leaving clubs vulnerable to financial instability if their forecasts did not materialise as planned. This lack of long-term planning meant clubs were unable to absorb external unprecedented events such as the COVID-19 pandemic. The new approach introduces real-time controls and health checks, reducing the risk of financial crises, and should help reduce volatility, he said.

The COP30 climate conference has just concluded in Brazil. This is a mechanism by which governments of the world get together and try to coordinate policies to reduce global temperatures and deal with the effects of climate change. But the political tide in the countries with the biggest economies is beginning to turn against whatever consensus there used to be on climate. COP30 took place without the leaders of the countries with the three biggest economies and also the three biggest polluters in the world: India, China and the US, and it took place against the backdrop of growing political support across the world for the view that we've gone too far on climate action. So it's fair to say that COP30 had its work cut out to effect meaningful change right from the start. Edinburgh-based climate and sustainability expert Michael Watson says there were real achievements at the conference but that it has to be seen in this pretty challenging political context.

Michael Watson: COP30 was billed as the implementation COP and it took place in a tumultuous political environment and if I was to reflect and say, Matthew, what would we say? You know, maybe 7 out of 10 in the context of the kind of political environment and the billing it gave itself, talking about implementation and really trying to drive through delivery against the nationally determined contributions there were certainly some notable achievements. That said, of course, the headline in all of the press is that the failure to include a roadmap to the phasing out of fossil fuels was the key failure or shortcoming of this COP. There were a number of areas where progress was made against the objective to be the implementation COP and when one overlays the political environment, there was some degree of success in some areas.

Matthew Magee: So what were the achievements of this, by all accounts, quite fractious summit?

Michael: There were a range of key initiatives that were developed and I think a couple of the themes were really around adaptation, a commitment to triple adaptation finance by 2030, further commitments on climate finance for emerging and developing countries. Bearing in mind this was the first COP to take place in a rainforest, there were quite a number of commitments made around nature. Possibly the highlight being the Tropical Forests Forever facility, a blended finance facility that countries agreed which incentivises the retention of forestry rather than the removal of forests and creating economic value around that. And also quite a lot around ocean and the role of the ocean and the blue economy in mitigating and addressing climate change. So there's quite a series of individual policy actions. So as a lawyer, I could always criticise the somewhat loose nature of some of these commitments and accelerators and other commitments that were made that they could have been more tightly drafted. Quite a lot of them use language such as "make efforts to" or "convene to discuss further", etc. But they did represent a range of actions that were agreed at COP30, which can be taken forward over the next year as we move towards COP 31. In the context of the difficult negotiating environment with notable absentees and the geopolitical environment, there were a lot of positive actions taken on an underlying basis, but fewer major headlines. To the extent that you're going to get a kind of binding commitment globally, then COP30 most certainly did not deliver that, it created roadmaps, it created action plans in relation to particular areas and it recognised the overshoots that we're going to experience.

Matthew: Many countries had wanted the summit to deliver a roadmap to phasing out the use of fossil fuels, but opposition from some countries, most notably oil and gas producing ones, scuppered that plan. Michael has said that this is the implementation COP, meaning that it was designed to focus on the actions of countries to encourage and to coordinate the process of turning objectives set at previous COPs into hard policies. Each country was meant by now to have outlined their policy approach to meeting climate goals in action plans called Nationally Determined Contributions or NDCs. Those have been collected and analysed now, giving a more solid view of the policy picture. And there was, Michael said, an important development in tracking and measuring and therefore holding countries to account on policy.

Michael: Perhaps for the first time, arguably, there was a very clear benchmark against which countries should then move to delivering the policies that would then implement the nationally determined contributions and this has always been the greatest challenge closing, if you like, the say-do gap at a country level, closing the gap between what the countries said they would do in their commitments and what they're actually doing. But right at the beginning of COP30, one of the really interesting things was the launch by Oxford University of the Oxford Climate Policy Monitor Annual Review, which is a global review of climate policy and regulation across all countries in the world. And what it found was that in over 80 countries in the world in the last year, climate policy has actually increased. The level of regulation and policy has actually increased. Now it's absolutely correct to say that climate policy interventions have increased in the countries that were present at COP30 and decreased in those countries that were not there. But because of the global interconnected world where climate policy uplifts in certain parts of the world, that can drive multilateral action because companies operating in those parts of the world where climate policy increases need to respond to that and comply with that bar, even if the climate policy is not implemented in another country that they're operating in, if that makes sense. So the unilateral acts, like countries implementing climate policy, have multilateral effects. Having a significant number of countries present at COP and negotiating and pushing forward climate policy will have that same multilateral effect on global businesses.

Matthew: So what do COP30's outcomes mean for companies? Michael says that companies will need to make sure that they're prepared for global temperatures overshooting the Paris Agreement's 1.5 degree target, that they will need to stick to the plans they made that align with the Paris Agreement's ambitions, and that they'll have to adapt to increasing climate-related supply chain scrutiny. He said there are four kinds of companies that will be most affected.

Michael: There are probably four main sectors that are predominantly impacted here. Firstly, obviously fossil fuel producers. Second category would be agri-businesses and forestry-linked firms. We saw the announcement of the Tropical Forests Forever facility and the increasing focus on supply chains and any risk of deforestation or other impacts, with supply chains being a very critical focus for COP30. Thirdly, financial institutions, with the need to integrate adaptation finance and resilience into their portfolio analysis. Financial institutions are using transition plans, analysing corporates’ and businesses’ transition plans to decide how credible their borrowers’ or investors’ progress towards their targets may be.And then the final area would be businesses aligned to the transition. Particularly, of course, renewable and green technology leaders remain best positioned to benefit from the expanded climate finance and industrialisation pledges.

Matthew: So this may not have been the most groundbreaking COP in history, but Michael believes that the structures and momentum that are in place on climate action mean that progress will continue even with the changing political winds, and that these big global decisions will affect individual companies’ behaviour.

Michael: Most businesses have set environmental and other targets, just like countries at COP30 set targets, and are increasingly under pressure to achieve their targets. There’s increasing judicial authority for the fact that those countries are exposed to climate action if they fail to take action to achieve their nationally determined contributions. There was a recent International Court of Justice advisory opinion which emphasised this. It is advisory, not binding, but it is being used in COP30 negotiations and by climate activists and NGOs to significantly emphasise on countries the need to not only say they will achieve targets, but demonstrate that they’re doing that by changing their policy environment to meet those targets. The policy environment that you’re going to be operating in will be increasingly aligned to NDCs. One can see an increasing move in the medium term towards alignment, part driven by legal developments like the International Court of Justice and part driven by commercial opportunity, which feeds down from a national level to a corporate level.

Big changes are coming in England to the laws governing rental accommodation and while this will obviously have a huge impact on millions of people living in rented flats and houses, it will also have a big business impact on the companies that invest in existing housing and in building new developments. Before telling us about the impact on investors, London-based property development expert Natalie Harris explained that the law has its roots in the previous UK government.

Natalie Harris: It’s helpful to look at where the Act has come from. It started life as the Renters Reform Bill, which was proposed by the Tory government, and it didn’t quite make its way into law before they had to dissolve Parliament for the general election. When Labour came into power, they kept the core sections and themes of the Act and then they really extended its ambit and reach. The Act then changed its title to the Renters Rights Bill, which gives a feel for what Labour were looking to achieve. The point of the legislation is really to give more protection to tenants of residential property and rebalance the relationship between landlords and tenants because the general perception of the public is that landlords held the power, and that there were instances of poor behaviour from residential landlords. That was really reflected in the press over the last couple of years where there have been a lot of stories about landlords not properly maintaining properties. We’ve seen instances where people have died or been seriously injured because of things like mold. There’s also been a lot of press around tenants being kicked out of their homes on short notice without good reason, and the Act is seeking to address this perceived bad behaviour and bring up standards. There are instances where the legislation might have unintended consequences. Quite often it’s going to create additional administrative burdens and cost, and the net impact of that will obviously be priced in by those investing in the sector. So it does have the potential to constrain supply, at least in the short term.

Matthew: The new laws are very wide-ranging, covering everything from the status of pets to a compulsory landlord database, but Natalie highlights the three biggest developments: changes to tenancy agreements, rent reviews and to what advance payments can be demanded. The new law abolishes assured shorthold tenancies, replacing them with new assured tenancies, and all previous rental agreements will automatically be converted to this new kind. This new agreement gives tenants the right to terminate the agreement on two months’ notice, but imposes a higher bar on landlords who will now need a reason to end the agreement.

Natalie: If you’re the landlord, you’re going to have to rely on what’s known as Section 8 to obtain possession. Section 8 of the Housing Act sets out a raft of different grounds on which a landlord can seek possession. The downside for the landlord is obviously A, you’ve got to make out the ground so you can’t just do it for any reason, B, you’ve got to go to court. So there’s a cost associated with that. And the courts have a massive backlog at the moment, so there’s a real concern that it could take a long period of time to obtain possession. If you’re trying to get possession back because you’ve got a tenant that’s been antisocial, you could actually be in a position where the tenant’s causing safety issues for other residents in a building and it’s damaging your brand and reputation, but you still can’t get them out. So that’s an area which is causing quite a lot of concern for landlords.

Matthew: Rent reviews are changing fundamentally in a way that landlords are concerned about. Tenancy agreements will commonly contain contractual rent reviews, but these are now going to be unenforceable. Landlords will be able to serve a notice of a rent increase, but only once a year and with two months’ notice. What landlords are particularly concerned about is that tenants can refer each increase to the courts, starting with the First-tier Tribunal.

Natalie: There’s not really any disadvantage to a tenant in doing that because essentially what happens is the rent review goes to the tribunal; once they’ve made a decision, if the rent is increased, it’s increased from the date of the decision. So if it takes six months for the tribunal to reach that decision, the tenant has benefited from six months at the lower rent and it’s not backdated. That also impacts on the landlord’s next rent review because they can’t serve another rent review notice until a year from the decision. So it knocks out the rent review cycle. The government have recognised that that’s a real concern of the landlord community. The way they’ve dealt with that to date is to allow scope for regulation to change the date at which the rent review kicks in. So it could backdate to the point at which the notice was served. But they’ve not done anything yet, so the current position remains that the rent review would take effect at the decision date for the tribunal.

Matthew: Natalie says that restrictions on advance payments, for example for tenants with poor credit ratings, is also a concern and could leave some groups of tenants facing difficulty finding accommodation. The changes come at a time when property developers are facing plenty of other challenges, Natalie said.

Natalie: The development sector in the residential space is challenging at the moment because we’ve had a lot of inflation with build costs. And then there’s obviously been significant legislation aimed at building and structural safety in response to Grenfell. Again, all of which is important and welcomed but it’s increasing the cost of construction and causing delays, all of which has an impact on pricing. So this is an additional regulatory burden which increases the cost of operation and creates uncertainty around returns for investors. It is making it a challenge for new schemes to stack up financially and that’s the concern within the sector that it will have an impact on constraining supply.

Matthew: The changes to tenancies will come into force on the 1st of May next year and the government has still to publish lots of detail about how the new laws will work, but they will require landlords to communicate with tenants by the end of that month. All of this will, says Natalie, not only increase the administrative burden on landlords, but could affect the number of property developments that actually get built.

Natalie: There’s going to be a lot more of an administrative burden, so there’s more information that needs to be provided to tenants. There’s potential for more tenant churn because it’s relatively easy for residents to serve notice. There are potential headaches around getting possession. The rent review process is potentially more cumbersome. There’s more risk of challenges and additional costs. So I think at the moment investors are looking at budgeting for an increased operational cost and potentially more administrative headache and burden and if people are looking at new schemes, the flip side of that is that there’s less certainty around their returns. So there’s more financial risk associated and at the moment that’s having a negative impact on things like viability appraisals.

Thank you again for listening, we really appreciate it. Remember, you can keep up with the news day by day, hour by hour on pinsentmasons.com/outlaw, or you can get your own specially tailored version of our news every week in your inbox by signing up at pinsentmasons.com/newsletter. But for now, thank you for listening and goodbye.

The Pinsent Masons Podcast was produced and presented by Matthew Magee for international professional services firm Pinsent Masons.