Instant messages, long term consequences – Insights from DAZN v Coupang

28 November 2025
News

In DAZN Limited (“DAZN”) v Coupang Corp. (“Coupang”), the Court of Appeal has delivered a timely reminder that under English law, informal communications (such as emails and WhatsApp messages), can be sufficient to form a legally binding contract – even where there is reference to the subsequent preparation of a formal written agreement.

While the case is highly fact specific, the Court of Appeal’s decision provides helpful guidance for businesses (particularly those involved in contract negotiation) and a warning that informal communications can have legal consequences.

Background

FIFA (the sole owner of the broadcasting rights to the 2025 World Cup) licensed its rights to the DAZN Group (of which DAZN is a part). DAZN was permitted to sublicense its rights in different territories.
Between January and March 2025, DAZN entered into discussions with Coupang (a major e-commerce and streaming platform in South Korea) regarding the sublicensing of the 2025 World Cup broadcasting rights. Those discussions were conducted primarily via WhatsApp (including voice notes), phone calls and later emails.

On 27 February 2025, Coupang emailed DAZN with a “proposal” to acquire a co-exclusive license to the 2025 World Cup (live and video-on-demand) broadcasting rights in South Korea for US$1.7 million. On 3 March 2025, DAZN sent an email to Coupang stating: “we will accept Coupang Play’s offer for the FIFA Club World Cup 2025 we will start contract drafting and hope to share the draft for your agreement soon”. Two WhatsApp messages were also sent by DAZN to Coupang on 3 March 2025 which similarly confirmed that the proposal in the 27 February 2025 email had been accepted. It was not disputed that the parties had anticipated signing a formal contract at a later date.

The following day, DAZN informed Coupang that it had received a higher offer from another bidder. That rival bid was later increased. DAZN considered that it was entitled to accept that higher bid on the basis that it had only reached a non-binding agreement in principle with Coupang. Coupang disagreed and initiated legal proceedings.

The High Court agreed with Coupang, finding that a binding contract had been concluded. DAZN appealed.

Appeal

The Court of Appeal dismissed DAZN’s appeal in its entirety, finding it clear that “the parties had reached an agreement by which they intended to be immediately and legally bound by the exchange of the emails in question”. Key factors included:

All of the essential terms had been negotiated and agreed in advance via WhatsApp.
It was common practice in the industry for deals to be negotiated orally or informally over WhatsApp and then formalised via email.
There were numerous communications that showed that those negotiating believed that the deal had been concluded.
Though not decisive, the parties did not qualify their discussions as subject to contract and DAZN had done so in other draft heads of terms.
With the World Cup approaching, the deal was time sensitive, but the parties showed no urgency in drafting or signing the formal contract after the 3 March email, which indicated that they did not consider it necessary.

Comment

While the judgment is highly fact specific, it nonetheless serves as an important reminder of the limited formalities required under English law to create a binding contract. Businesses, particularly those operating in fast-paced or informal settings, should therefore consider:

Stating whether negotiations are being conducted “subject to contract” (though this will not necessarily be decisive).
Ensuring that adequate internal policies are in place regarding the channels by which negotiations are conducted and what internal approvals are required before a deal is accepted. Clear lines of communication and approvals processes will be particularly important for businesses with multiple deal teams negotiating often fast-moving transactions, simultaneously with various counterparties.
Ensuring that those negotiating understand when they may be bound by an agreement.
Keeping contemporaneous records of any oral negotiations.
Considering whether negotiations should involve in-house legal counsel (or external advisors).
Involving external advisors promptly where issues arise – particularly where there is time-sensitivity.

The line between informal dialogue and enforceable agreement is where many disputes arise. DAZN serves as a reminder that informality in negotiation does not avoid legal consequence and, as such, the benefits of speed and convenience in instant messaging must be measured against the risks for businesses when things go wrong.

A link to the judgment may be found here: DAZN Ltd v Coupang Corp [2025] EWCA Civ 1083 (08 August 2025)

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2025 Autumn Budget – key takeaways for Private Clients

26 November 2025
News

The 2025 Autumn Budget has delivered a mix of headline reforms and quieter technical adjustments that will impact private clients over the coming years. The most eye‑catching announcement is the introduction of a property tax – the High Value Council Tax Surcharge – applying to homes worth £2 million or more from April 2028.

While some widely‑speculated measures, such as the imposition of an ‘exit charge’ on individuals leaving the UK, the removal of Principal Private Residence (PPR) relief on high‑value homes or Stamp Duty Land Tax (SDLT) reform, have not materialised, the government has pressed ahead with the introduction of targeted anti‑avoidance rules affecting trusts settled by former non-UK domicilaries.

This briefing highlights the most significant developments for private clients, both for those based in the UK and for international clients with UK assets.

Introduction of a property tax

A limited form of property tax is being introduced: the High Value Council Tax Surcharge (“HVCTS”). This will be a new charge on owners of residential property in England worth £2 million or more in 2026, taking effect in April 2028: with a proposed revaluation every five years. It is proposed that the bands will be as follows:

Threshold	Rate
£2m – £2.5m	£2,500
£2.5m – £3.5m	£3,500
£3.5m – £5m	£5,000
£5m +	£7,500

It is important to note that homeowners, rather than occupiers, will be liable to the surcharge and will continue to pay their existing Council Tax alongside the surcharge. The government will be consulting on a variety of measures, including the introduction of a support scheme for those who may struggle to pay the charge (potentially this may mean that the charge is rolled-up and only paid on the transfer of the property on an inheritance, gift, or sale).

The government will consult on possible reliefs and exemptions, and rules for more complex ownership structures, including those involving companies, funds, trusts and partnerships. The consultation will also cover treatment of those who are required to live in a property as a condition of their job (“tied property”).

Questions remain for now about how the government will value properties; whether, in time, the starting threshold might be lowered (as was the case with the annual tax on enveloped dwellings) and how the annual rates will be re-assessed over time.

Several property tax changes speculated in the run‑up to the Budget have not been introduced. PPR relief on high‑value homes remains in place and SDLT has not been reformed.

Inheritance Tax (IHT): no changes to IHT rates or the rules on lifetime gifts

There had been various rumours about extending the seven-year survivorship period (after which gifts fall out of account for IHT) or capping the lifetime gift amount. These have not materialised. The nil rate bands have, as expected, remained frozen for a further year until April 2031.

Agricultural Property Relief (APR) / Business Property Relief (BPR): £1 million allowance transferable between spouses and civil partners

Following lobbying since the previous Budget, the Government has decided that the £1m relievable property allowance (available for qualifying agricultural and business property) should be transferrable between spouses and civil partners.

It had been hoped that this would be announced in the draft legislation released in July, and its absence was notable. This change will align the position with that of the nil rate band (£325k per person) and residence nil rate band (up to £175k per person). This will be a welcome development for those who have been considering fragmenting ownership to maximise the relief.

Moreover, the Government announced that the £1m allowance will be frozen until April 2031. This is contrary to the draft legislation released in July, which stated that the allowance would be index-linked from April 2030.

Pensions: clarification for executors

IHT on pensions (as announced in the October 2024 Budget) will still be implemented from 6 April 2027. However, following lobbying about executors being, strictly speaking, liable for IHT on pensions, the Government has announced that executors will not be liable for IHT on pensions discovered once clearance has been obtained on an estate. This should provide some comfort to executors, but does not go as far as lobbyists were hoping.

Income tax: rates on non-employment income to rise

The Government has announced that the rates of income tax on non-employment income (i.e. savings, property income and dividends) will rise by 2% (other than the additional dividend rate, which will remain the same) as follows:

	Ordinary / Basic (current)	Ordinary / Basic (new)	Upper / Higher (current)	Upper / Higher (new)	Additional (current)	Additional (new)
Dividends	8.75%	10.75%	33.75%	35.75%	39.35%	39.35%
Savings	20%	22%	40%	42%	45%	47%
Property	20%	22%	40%	42%	45%	47%

The new dividend rates will be effective from 6 April 2026 and the new savings and property rates will take effect from 6 April 2027.

The above will be treated as the top slice of income, meaning any employment, trading or pension income will benefit from the personal allowance in priority. The change will not affect specific structural allowances such as the dividend allowance, personal savings allowance and property allowance.

Capital Gains Tax (CGT): no changes to CGT rates or hold-over relief

A 24% rate of CGT is generally seen as the sweet spot at which the rate of tax does not discourage disposals. Many will be pleased to have seen that there was no change to CGT rates in the Budget.

There were concerns that hold-over relief would be restricted or abolished. However, we have seen no sign of this in the Budget documents released so far. Hold-over relief is a particularly important relief, which prevents a dry CGT charge arising on the gift of certain qualifying assets.

Other

Cap to salary sacrifice contributions

From April 2029, the current National Insurance Contribution (NIC) exemption for pension scheme contributions made by way of salary sacrifice will be limited to £2,000. While the existing income tax reliefs will continue to apply to such contributions, employer and employee NICs will apply in full to any salary sacrifice contributions above this limit.

Cash ISA allowance

From April 2027, the annual tax‑free Cash ISA allowance for individuals under 65 will be reduced from £20,000 to £12,000.

Updates to the IHT rules affecting former “non-doms”

The government has released a series of technical updates to the residence‑based tax regime, with the most significant changes summarised below. Extension of IHT “grandfathering” provisions

Somewhat surprisingly, the Treasury has published draft legislation which will introduce a cap on the IHT charges of some existing discretionary trusts settled by non-UK domiciled individuals prior to last year’s Budget. While there had been rumours earlier in the year that the existing “grandfathering” provisions for such trusts might be extended, the tone of communications from the Treasury on the economic climate made many doubt that such an extension would materialise.

A cap of £5m every 10 years will apply to the 10-year anniversary and exit charges in respect of property settled onto trust prior to 30 October 2024 provided that (i) the property is neither UK situated nor derives its value from UK residential property at the time of the charge and (ii) the property was outside the scope of IHT immediately prior to 30 October 2024.

As the maximum rate on each 10-year anniversary is 6%, a £5m cap will only benefit trusts holding assets in excess of approximately £83m. Some might be surprised that the Government has introduced a concession aimed at the largest trusts, rather than a graduated allowance for all affected trusts. It appears that where an individual has settled multiple trusts, the £5m cap will apply to each trust.

IHT anti-avoidance rules

The government has announced two anti-avoidance measures targeted at the IHT regime for discretionary trusts.

The first will target UK agricultural property held in trusts established by individuals who are not long-term UK residents. As it stands, look-through provisions mean that non-UK situated assets held in trusts established by non-long-term UK residents are within the scope of IHT to the extent that their value is attributable (directly or indirectly) to UK residential property. From 6 April 2026, these look-through provisions will also apply to non-UK situated assets that derive their value from UK agricultural property.

It is unclear why the government has only chosen now to extend these provisions to agricultural property, although the timing would suggest that the measure is intended to prevent those trusts that will be affected by the new limit to APR from mitigating IHT by interposing a non-UK incorporated company. While the draft legislation has not yet been published, it is expected that the measures will also mean that non-UK property that derives its value from agricultural property will not be eligible for the £5m cap.

The second measure provides that where a settlor ceases to be a long-term UK resident, there will be an IHT charge if the trust’s assets subsequently become non-UK situated. The rationale for this measure is clear. The current legislation provides that if trust property is neither UK situated nor derives its value from UK residential property, there is an IHT exit charge if the settlor ceases to be a long-term UK resident. In contrast, there is no such exit charge if the settlor ceases to be a long-term UK resident and the trust property is UK situated. The government has identified that settlors and trusts may seek to “onshore” property in advance of a settlor ceasing to be a long-term UK resident to avoid an exit charge, with a view to taking the property outside of the UK subsequently.

Summary

Following significant speculation in the lead‑up to the 2025 Autumn Budget, anticipation was high around which measures would be announced and how they might affect private clients. While there is some relief that the changes were not as wide‑ranging as many feared, this Budget nonetheless represents the highest tax‑raising package in history.

Against this backdrop, private clients will be keen to identify the opportunities available to plan ahead and reinforce the need for proactive estate, property, and investment planning to safeguard wealth.

How we can help

Forsters’ Private Wealth practice is well placed to advise private clients on estate structuring and tax planning opportunities, combining deep technical expertise with practical insight.

For further insights into how the Autumn Budget affects business owners, explore our dedicated briefing and stay informed with the latest analysis and updates through our Autumn Budget hub.

Contact us

Get in touch with your usual Forsters contact, or email [email protected], to discuss how the Autumn Budget announcements will affect you and to explore the planning opportunities available.

2025 Autumn Budget – key takeaways for Private Clients

Delivering a mix of headline reforms and quieter technical adjustments, how will the budget impact Private Clients over the coming years?

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2025 Autumn Budget

Key takeaways for businesses

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2025 Autumn Budget – key takeaways for business owners

26 November 2025
News

The Autumn Statement 2025 started with a bang – an early press release by the Office for Budget Responsibility (OBR); and the threat of criminal sanctions, but after the initial drama and the months of speculation business owners and investors may be relieved.

The Government has introduced a series of tax and investment changes designed to encourage businesses to grow, retain talent, and remain competitive within the UK. This briefing highlights the most significant developments for business owners, from expanded investment limits and employee incentives to adjustments in capital allowances and ownership structures.

Encouraging businesses to grow and stay in the UK – rise in Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) limits

The Government is making tax changes to encourage businesses to scale up and stay in the UK, by raising the limits which have previously meant that companies have grown out of being able to benefit from offering EIS and VCT reliefs and have no longer been able to offer new Enterprise Management Incentives (EMI) options.

In more detail:

the VCT and EIS company investment limit is being increased to £10 million (from £5 million), and £20 million for Knowledge Intensive Companies (KICs) (from £10 million
the lifetime company investment limit is going up from £12 million to £24 million, and to £40 million for KICs (from £20 million).
the gross assets test will also increase from £15 million to £30 million before share issue, and from £16 million to £35 million after.

These changes are to take effect from April 2026.

The increase in these limits should enable individuals to continue to invest for longer in trading companies as they grow, whilst obtaining tax relief for doing so.

Reduction in tax reliefs for VCTs

However, the upfront tax relief for individuals investing in a VCT is to be reduced from 30% to 20%. The Government’s explanation for this is that, unlike VCTs, dividends paid on EIS investments do not qualify for tax relief; this reduction in tax relief for investing in VCTs may encourage individuals to slant their investments towards EIS instead.

Incentivising employees – expanding the Enterprise Management Incentives scheme (EMI)

In order to incentivise the employees of start-up and growing trading companies and make it easier for their employing companies to retain them, EMI options will be able to be granted when the employing company has up to 500 employees, instead of 250 employees. The company share option limit is to be increased from £3 million to £6 million and the gross assets test is to go up from £30 million to £120 million, with these changes taking effect from April 2026. These changes represent a significant improvement as, in the past, we have frequently advised companies that have outgrown the existing limits and have no longer been able to grant EMI options.

The maximum holding period is also to increase to 15 years (including for existing options). The Budget announcement says that the EMI notification requirement is also to be removed from April 2027. More details on this are needed but companies do sometimes fail to make the required notifications to HMRC which can, in some circumstances, prevent employees from benefitting from EMI tax reliefs which they expected to be available, so this would be a helpful change.

Incentives to list in the UK – exemption from Stamp Duty Reserve Tax (SDRT)

As the business scales up and needs greater investment, the Chancellor is now tempting those hungry for capital to list in the UK by offering a three-year exemption from the 0.5% Stamp Duty Reserve Tax (SDRT) charge on agreements to transfer securities of a company whose shares are newly listed on a UK regulated market. The exemption will not apply to the 1.5% SDRT charge (in respect of transfers to depositary receipt systems or unelected clearance services), or where the transfer forms part of a merger or takeover where there is a change of control.

The measure will have effect for agreements to transfer made on or after 27 November 2025. It will apply where the shares of the relevant company are newly listed on or after that date.

Sale of shares to an employee ownership trust – only 50% exempt from capital gains tax (CGT)

Following on from the changes in the Autumn Statement in 2024, which tightened up on the conditions for obtaining relief on the sale of shares to an employee ownership trust (EOT), the Chancellor announced with effect for disposals on or after 26 November 2026 that only 50% of the qualifying gain will be exempt from (CGT). The remaining 50% of the gain will not be chargeable at the time of disposal but will continue to be held over to come into charge on any future disposal of the shares by the trustees of the EOT.

Individuals, partners in a partnership and trustees who are transferring a business to a company in exchange for shares in that company will, for transfers of a business on or after 6 April 2026, have to claim relief. It is interesting to note that for the year 2029/30 the government estimates that this will net the exchequer circa £110 million: one could possibly surmise that HMRC consider that taxpayers are currently over enthusiastically claiming this relief.

Slower capital allowance write-downs

Business owners (who cannot claim full expensing) and who rely on capital allowances will see their allowances within the main pool written down at 14%, rather than the previous rate of 18%, from April 2026, slowing the rate at which businesses can write down their capital expenditure, adding around an extra 7 years before a business fully writes off the value of main rate expenditure.

However, a new 40% first year writing down allowance for main pool expenditure will be available for expenditure incurred from 1 January 2026 – applicable to a wider range of assets than under either full expensing or the annual investment allowance, and unlike full expensing also available for unincorporated businesses and assets used for leasing. Second hand assets, cars and overseas leasing will be specifically excluded.

In summary

The Autumn Budget 2025 delivers a mixed package for business owners: welcome increases to investment and EMI limits, balanced against reductions in certain reliefs and slower capital allowance write‑downs. While the measures aim to stimulate growth and encourage UK listings, they also tighten reliefs in areas where HMRC perceives overuse.

Businesses should take the opportunity to reassess their strategy for the year ahead, and consider whether the new rules will strengthen existing plans or change timelines. In particular, sales to Employee Ownership Trusts (EOTs) have been the focus of successive Budgets, with reliefs increasingly restricted. Against this backdrop, it may be worth exploring a sale sooner rather than delaying until the next fiscal event.

How we can help

Forsters is here to help you navigate these changes – whether you are scaling up, incentivising employees, restructuring ownership, or planning capital expenditure. Strategic advice will be essential to ensure your business makes the most of the opportunities while mitigating the impact of new restrictions.

Contact us

Get in touch with your usual Forsters contact, or email [email protected], to discuss how the Autumn Budget announcements will affect you and your business and to explore the planning opportunities available.

2025 Autumn Budget – key takeaways for business owners

After the initial drama and the months of speculation, could business owners and investors be relieved?

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2025 Autumn Budget

Key takeaways for private clients

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Imminent changes to company register requirements

17 November 2025
News

If you’re a company director, secretary, or responsible for statutory registers, new legal requirements are coming into force on 18 November 2025. These changes will affect how companies manage certain registers and what needs to be filed with Companies House. Here’s a quick overview to help you stay compliant.

What’s changing and why?

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is designed to tackle economic crime and boost transparency. ECCTA introduces several reforms – one of which directly impacts the statutory registers English companies must maintain.

While many companies won’t see major disruption, those handling company records and filings should take note and update their processes accordingly.

Key Changes Under ECCTA

1. Fewer Local Registers Required

From 18 November 2025, companies will no longer need to keep local copies of the following registers:

Directors
Directors’ residential addresses
Secretaries
Persons with Significant Control (PSCs)

Instead, this information must be filed directly with Companies House.

2. Local Register of Members is Still Mandatory

The register of members remains essential. It must be kept locally, either at the registered office or a designated inspection location and be available for public viewing (subject to Companies Act 2006 restrictions).

The register must include:

Full name and service address of each member
Date of becoming or ceasing to be a member
Shareholding details (number, class, and paid-up status)

Members must notify the company of any changes within two months. Failure to do so is a criminal offence and could lead to fines or imprisonment. If any change is made to the register, the company must retain the outdated information for 10 years.

Non-compliance without a reasonable excuse will be an offence.

Practical steps to take now

Audit your current registers to ensure accuracy and completeness.
Regularly confirm details with directors, secretaries, and members to avoid outdated information.
If your register of members is missing or incomplete, court approval may be needed to rectify it.
Keeping local registers for internal use is wise – they can help with future filings or queries.
If your company previously opted for a central register of members, create a new local register and include a note about the prior central record.

Other ECCTA updates to be aware of

Registered Office and Email Requirements

A company’s registered office must be an ‘appropriate address’ – correspondence must reach someone acting on behalf of the company.
Companies must file an ‘appropriate email address’ with Companies House for official communications.

Identity Verification for Directors, LLP Members, and PSCs

Starting 18 November 2025:

New directors, LLP members, and PSCs must verify their identity before appointment.
Existing individuals must complete verification before the next confirmation statement is filed after that date.

For more on identity verification, see our detailed client briefing.

Need help?

If you have questions or want to ensure your company is ready, please reach out to your usual Forsters contact or a member of our Corporate team.

Imminent changes to company register requirements

If you’re a company director, secretary, or responsible for statutory registers, new legal requirements are coming into force on 18 November 2025.

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Five upcoming Home Office changes to UK sponsorship rules: a crucial immigration update for employers

12 November 2025
News

The Home Office has announced imminent immigration changes that will directly affect employers with sponsorship responsibilities.

1. Immigration skills charge increase

Effective 16 December 2025, the Immigration Skills Charge (the amount sponsors must pay per year to sponsor individuals under work routes, including Skilled Workers) will increase by 32%.

Large sponsors will be required to pay £1,320 per year, an increase from the current £1,000 per year, whilst small or charitable sponsors will be required to pay £480 per year, an increase from the current £364 per year.

For large sponsors, for a five-year sponsorship, the total cost will increase to £6,600.

Recommended actions:

Employers are encouraged to review their upcoming hires and current workforce to identify individuals who may need visa sponsorship. Where feasible, applications should be brought forward to avoid higher costs. In addition, employers should assess how this increase may affect their immigration budgets and consider its potential impact on future recruitment and sponsorship planning.

2. English language requirement change

From 8 January 2026, the minimum English proficiency will rise from Level B1 on the Common European Framework of Reference for Languages (CEFR) to B2 CEFR. This change will only apply to individuals making their first applications, with those already holding permission in these routes able to extend without having to evidence this higher level of proficiency.

Other planned changes to English language requirements, including for work route dependants, are being deferred for the time being.

3. Graduate visa duration to be reduced

The Home Office has announced changes to the Graduate visa route, effective 1 January 2027.

The Graduate visa duration for non-PhD graduates will be reduced from two years to 18 months.

PhD graduates will continue to receive three years of permission under this route.

4. Expansion of the High Potential Individual route

The High Potential Individual (HPI) route enables recent graduates from selected international universities to live and work in the UK for up to two years.

As of 4 November 2025, the list of eligible universities has doubled in size, significantly widening access to this route. However, the Home Office has also introduced a new annual cap of 8,000 applications, meaning places will be limited each year.

5. E-visa transition

The UK continues in its transition to a digitalised immigration system, and the Home Office has announced the next phase involving the removal of 90-day vignette passport endorsements for most main applicants on non-work or study routes, as well as dependants of those on work and study routes which transitioned in July. Going forward, applicants will only be granted digital eVisas as opposed to physical immigration documents.

Recommended actions:

Employers should ensure that sponsored employees complete the following steps to maintain access to their immigration records and prove their right to work:

Create a UKVI account – Visit the GOV.UK eVisa portal and set up an online account.
Link existing immigration status – Follow the provided instructions to connect the individual’s current immigration status to their new account.
Keep personal information up to date – Check that passport details and other personal information are accurate, particularly ahead of any travel.
Generate and share status codes when needed – When proof of immigration status is required (e.g., for right-to-work checks or renting), log into the UKVI account to create a share code for the relevant third party to verify.

How we can help:

Forsters’ Immigration team provide tailored advice and practical solutions to support employers manage their sponsorship responsibilities. We help clients to navigate the ever changing landscape of UK sponsorship rules, ensuring both compliance and strategic alignment with your skills requirements. Get in touch with one of our team to discuss how these changes may impact your organisation and to receive bespoke support for your immigration needs.

A crucial immigration update for employers

The Home Office has announced imminent immigration changes that will directly affect employers with sponsorship responsibilities.

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Landlords lose legal challenge to Leasehold Reform Act

3 November 2025
News

Landlord’s lose legal challenge to Leasehold Reform Act

The High Court has dismissed landlords’ A1P1 challenge to key valuation provisions in the Leasehold and Freehold Reform Act 2024 (LAFRA).

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What was challenged?

Landlords challenged four core provisions of LAFRA as incompatible with their A1P1 rights:

Ground Rent Cap: Limits rent input in term calculation in valuation to 0.1% of Freehold Vacant Possession (FHVP)
Marriage Value Reform: The removal of marriage and hope value from the valuation
Cost Recovery Reform: Removes landlord’s right to recover statutory non-litigation costs
Exceptions: Whether certain categories of landlord/tenant should have been excluded from LAFRA

The impact of these reforms were considered individually and collectively, alongside broader reforms widening enfranchisement eligibility (e.g. removal of two-year ownership rule, 50% non-commercial threshold, requirement for landlords to take leasebacks of non-participating flats in a collective).

Who were the landlord claimants?

The claim was brought by six landlords: (1) the ARC group companies; (2) the Cadogan and Grosvenor Estate; (3) Abacus; (4) the Wallace Partnership Group; (5) John Lyon’s Charity; and (6) Portal Trust.

Legal Framework

A1P1 refers to Article 1 of the First Protocol of the European Convention on Human Rights (ECHR), which is incorporated into UK law by the Human Rights Act 1998. It protects the peaceful enjoyment of property by both natural and legal persons.

Under A1P1, property rights are protected but qualified. Interference is lawful if:

Objective: The objective of the measure is sufficiently important to justify the interference
Rationality: The measure is rationally connected to the interference
Less intrusive measure: Whether a less intrusive measure could have been used without unacceptably compromising the objective
Fair balance: Whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure

Courts afford Parliament a wide margin of appreciation, especially in socio-economic policy such as housing.

Legitimate objective and rationally connected

LAFRA’s objective is to address “the inherent unfairness and imbalance in the nature of leasehold ownership”, and particularly the “wasting lease” problem that applies to all leaseholders. Leaseholders pay near-FHVP premiums to buy their lease, but are compelled to enfranchise as the term expires to preserve value and mortgageability.

While the existing enfranchisement legislation provided leaseholders with a legal route to address these issues, the payments that leaseholders are required to make to the landlord included elements which the Government concluded were unjustified (marriage value and the obligation to pay statutory costs) and others which were unfair (ground rent above 0.1% of FHVP).

The High Court found that this was a legitimate objective for the purposes of A1P1 and that the Ground Rent Cap, Marriage Value Reform and Cost Recovery Reform were all rationally connected with that objective.

Ground Rent Cap

The Ground Rent Cap was held to be proportionate. Parliament had evidence that ground rents above 0.1% FHVP impaired saleability and mortgageability. The cap removed only onerous rents and remained linked to FHVP, ensuring that price paid to landlords remained fair compensation.

Marriage Value Reform

The Marriage Value Reform was held to be proportionate. Marriage value was found to arise because leaseholders were compelled to become special purchasers as they needed to enfranchise due to the wasting nature of leases. Marriage value could not be realised in a third-party sale or if the lease ran its full course. Removing it was logical and proportionate. The landlord still receives market-related value (term and reversion), excluding marriage and hope value. Less intrusive alternatives (e.g. limiting the reform to leases already below 80 years) were considered inadequate to deal with the problem.

Cost Recovery Reform

The High Court held that the Cost Recovery Reform was proportionate. The Court found that enfranchisement differs from typical compulsory purchase (where it is common for the purchaser to pay the sellers costs). Enfranchisement is in a meaningful sense involuntary for both parties; landlords must sell under the legislation, and tenants must enfranchise due to the wasting asset problem. Requiring each party to bear their own costs mirrors open market transactions and does not deprive landlords of market-related compensation.

Cumulative Effect

The Court rejected the argument that the combined effect of reforms rendered LAFRA incompatible. The measures were A1P1 compliant individually and collectively, and removing barriers to enfranchisement did not undermine compatibility.

Exceptions

Challenges by John Lyon’s Charity (seeking a charity exemption) and Portal Trust (seeking exclusion of investment leases) were dismissed. The Court found that the inherent unfairness in the leasehold system which LAFRA was seeking to address applied to all leaseholders, and the Parliament was not required to differentiate between landlord types.

Next steps

The Government may now proceed with secondary legislation to “switch on” LAFRA. A consultation on deferment and capitalisation rates is expected. This will be controversial, as landlords have long argued for a lower deferment rate, and even a small change will significantly impact the savings to leaseholders. Landlords are likely to seek appeal, but the judgment is comprehensive and well-reasoned, so permission is not guaranteed.

Leaseholders will welcome the decision, as perhaps will some landlords, who will hope that it will give the certainty required to reinvigorate the enfranchisement market.

Want to know more?

Speak to our enfranchisement team

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James Carpenter

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Pro Bono Week 2025: an interview with Natasha Rees and Connor Rutherford

3 November 2025
News

3-7 November is Pro Bono Week: a time to celebrate and reflect on the impact of free legal support for individuals and communities who need it most.

This year’s theme is Pro Bono in Action, with a focus on stories of impact, win-win for professional and business development, and getting involved.

To mark the occasion, Associate and Pro Bono Committee member Connor Rutherford sat down with our Senior Partner Natasha Rees to discuss the value of pro bono work at Forsters, her personal experiences, and why it matters.

Why is pro bono work important to you?

It allows people to access legal advice when they otherwise wouldn’t be able to afford it – quite often in relation to issues that are seriously affecting their day to day lives. It is therefore incredibly rewarding. In some cases, it can also involve very interesting legal issues that might not otherwise be tested.

Can you give a few highlights of pro bono matters that you have worked on during your career?

One of the first cases I was involved in as a trainee was a pro bono case for a council tenant. It concerned cockroach infestation in the tenant’s flat and whether the landlord was liable in nuisance or negligence for failing to carry out block treatment. The Court held in favour of the landlord and it became a landmark case, but despite this, it gave the tenants their day in Court and an opportunity to have their complaints heard. This captured the attention of the council so that they finally carried out the block treatment required in any event.  

I have also dealt with several pro bono cases concerning escalating ground rents. These are cases where leaseholders (often in towns outside London) have been poorly advised when buying their flat and are unaware that the lease contains an escalating ground rent. They find themselves trapped – unable to sell but unable to afford their increasing ground rent.  In most cases we have successfully claimed a lease extension which reduces the rent to a peppercorn rent and crystalises the loss. At the same time, we have issued a negligence claim against the leaseholder’s solicitor for failing to advise properly on the escalating ground rent provision in the lease. Ultimately, the insurers will at some point step in and settle the premium and costs. Any costs recovered on these claims has been paid to charity so doubly satisfying.

Tell me how your pro bono clients have benefitted.

As a landlord and tenant lawyer, many of the pro bono cases we deal with in the Real Estate Disputes team relate to possession/rent arrears claims. We are therefore often acting for tenants dealing with their homes and their financial situations. We can usually find a legal route to help them – whether it involves claims that will ultimately reduce their rental liability or finding ways to get out of difficult tenancy agreements or preventing possession claims by agreeing repayment terms. Ultimately, we are just applying the legal tools they need to help solve problems and sometimes it is just the mere assistance with communication that helps.

Do you feel involvement with pro bono work has had a positive impact on your career? Why?

Yes, because it gives you a wide variety of situations to deal with different legal implications and often you feel even more invested in the outcome. It also gives you a different perspective which helps see legal arguments from both sides.

On the basis of your experience, would you recommend pro bono work to other solicitors? Why?

Yes – for the reasons given above. It gives you a broader experience, lots of client contact and is extremely rewarding. It also in some cases might give you the opportunity to test certain legal principles.

Why do you think it is important for Forsters to support pro bono opportunities?

It promotes positivity for those in the firm who are involved in the work and at the same time benefits the wider community. These are central to our firm’s values and the reason why it is essential that we have a proper pro bono programme in place. It also allows us to act on a wide variety of cases, sometimes involving important legal issues.

Read more in our Responsible business review.

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Natasha Rees

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Connor Rutherford

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