July 2025 - Page 2 of 2

Loan notes: Flexible finance for business growth

Posted on 8 July 202513 July 2025 by Sarah O'Sullivan

Loan notes are a flexible and popular way for businesses in England to raise money. They are used in many situations, from day-to-day corporate financing to complex deals like mergers and acquisitions. In this guide, we explain what loan notes are, how they work, and how they could help your business.

What are loan notes?

Loan notes are a type of borrowing. They enable businesses to raise funds without relinquishing ownership or equity. In simple terms, your business borrows money and agrees to pay it back later, often with interest. Some loan notes can even be converted into shares in the company, allowing investors to benefit from its growth.

Key features of loan notes

• Interest payments: Loan notes usually include regular interest payments, giving investors a steady income.
• Repayment terms: Typically, there is a set date by which the loan must be repaid, although early repayment may be possible.
• Convertible or non-convertible: Some loan notes can be converted into shares, offering extra flexibility.
• Secured or unsecured: Loan notes may be backed by assets (secured) or not (unsecured), which affects the level of risk associated with them.

How businesses use loan notes

1. Raising capital without giving away control: Loan notes enable businesses to raise funds while maintaining full control. This can be useful for growth, buying equipment, or managing cash flow. We often help small and medium-sized businesses use loan notes as part of their funding strategy.

2. Mergers and acquisitions (M&A): Loan notes are commonly used in M&A deals. They can form part of the payment to sellers, allowing buyers to spread costs over time. Convertible loan notes can give sellers a chance to benefit from the future success of the business they are selling.

3. Private equity and start-up funding: Investors, including private equity firms and venture capitalists, often use loan notes to fund early-stage businesses. This approach can delay setting a business valuation until later, when the company is more established. Convertible loan notes are especially useful here.

4. Property and real estate development: Loan notes are also used to fund property developments. The loan is often secured against the property, which gives investors reassurance. This can help developers raise the money needed to complete projects.

5. Debt restructuring: Businesses facing financial challenges may use loan notes as part of a plan to manage or restructure their debts. Loan notes can help free up cash and give businesses time to recover.

What are the risks?

While loan notes offer flexibility, they also carry risks. Businesses need to be confident they can meet repayment terms. Investors must understand the financial health of the company they are lending to. Convertible loan notes also carry the risk of ownership dilution if converted into shares. Read our article – Advantages and disadvantages of loan notes

A modern approach to parental leave? Government launches landmark review in 2025

Posted on 3 July 20258 July 2025 by Sarah O'Sullivan

The UK Government has launched a review into parental leave and pay this week, marking what could become a defining moment for working families and forward-thinking employers. The review, part of the Government’s broader “Plan to Make Work Pay,” promises to reassess statutory maternity, paternity, and shared parental leave (SPL), with a clear aim: to modernise the UK’s leave system to reflect today’s workforce, families, and economic realities.

Why this matters

According to the Government, one in three eligible fathers are unable to take paternity leave due to low pay, and uptake of shared parental leave remains stagnant. This is more than a policy gap, it’s a missed opportunity for families and employers alike.

For businesses focused on equity, retention, and employee wellbeing, the current framework can be a barrier to progress. There is growing recognition that flexible, well-funded parental leave policies:

Promote gender equality at home and in the workplace
Improve child development and family wellbeing
Close the gender pay gap
Boost economic growth by keeping parents in the workforce

What the review covers

This is not just a tweak to existing rules. The Government’s review will:

Consult with parents, employers, experts and charities
Examine statutory pay levels, eligibility rules, and practical barriers to uptake
Explore how to make SPL more accessible and widely used
Set out a roadmap for reform, potentially reshaping the parental leave landscape for years to come

Practical implications for employers

This review is a signal to HR leaders and business owners to get ready for change. Even before reforms are implemented, there are steps employers can take:

Audit your family leave policies: Do they go beyond statutory minimums? Are they inclusive?
Promote uptake: Encourage parents of all genders to use their entitlement without stigma
Benchmark benefits: Competitive parental leave packages are increasingly vital for talent attraction and retention
Contribute to the consultation: This is your chance to help shape the future of UK family policy

Navigating surrogacy: Current laws, challenges, and future reforms

Posted on 2 July 202521 July 2025 by Sarah O'Sullivan

What are the current laws governing surrogacy in the UK?

In the UK, surrogacy is primarily governed by the Surrogacy Arrangements Act 1985 and certain provisions within the Human Fertilisation and Embryology Act 2008. Under these laws, the surrogate mother is legally considered the child’s parent at birth. Legal parenthood can then be transferred through a Parental Order after the child’s birth, typically taking anywhere from six months to a year. This process may take longer if the Court’s schedule is full.

To apply for a Parental Order, you or your partner must be genetically related to the child, the child must live with you, and you must permanently reside in the UK, Channel Islands, or the Isle of Man. If there is a dispute over who should be the child’s legal parents, the court will decide based on the best interests of the child. While surrogacy agreements can be made between the intended parents and the surrogate prior to birth, they are not legally enforceable in the UK, even if the intended parents and surrogate have signed an agreement and the intended parents have covered the surrogate’s expenses. It is also illegal for solicitors to advise on such agreements.

What problems does the current surrogacy law cause?

The current surrogacy laws in the UK are outdated. Most of these laws were established over 30 years ago, and have not kept up with changes in society and advancements in fertility treatments. These outdated laws do not fully support the diverse family structures that exist today, including same-sex couples, single parents, and blended families.

One of the main issues with the current system is the lengthy process to establish legal parenthood after the child is born. Since the surrogate mother is considered the legal parent, intended parents must wait until a Parental Order is granted, which can take months to a year. During this waiting period, intended parents have limited legal rights over the child, and in some cases, a surrogate could even decide to keep the child. This creates vulnerability for both the intended parents and surrogates and raises concerns about the best interests of the child.

Was a surrogacy bill not proposed?

For several years, campaigners, including the Law Commission of England and Wales, in collaboration with the Scottish Law Commission, have proposed a new framework to modernise surrogacy laws. This proposal was extended to include better protection for children, surrogates, and intended parents. The matter had reached the Bill stage in 2024, which then needed the Government to ratify this into an Act of Parliament. Key features of the proposed reforms included:

Immediate parental rights for intended parents from the moment of birth, eliminating the need to wait for a Parental Order.
Introduction of safeguards and screening processes, including criminal and medical background checks, and independent legal advice and counseling.
Regulation of surrogacy arrangements by Regulated Surrogacy Organisations (RSOs), which would be monitored by the Human Fertilisation and Embryology Authority (HFEA).
Reform of parental orders to allow courts to make decisions even if the surrogate does not consent, provided it is in the child’s best interest.
Enhanced rights for children born via surrogacy, better employment rights for intended parents, and more comprehensive guidance on nationality and immigration matters.

These reforms aim to ensure legal, physical, and emotional protection for all parties involved, bringing surrogacy laws in line with other areas of family law. It was also thought that it would ensure fewer international surrogacy arrangements by making the law clearer and easier for all involved.

What happened to the bill?

Sadly, in June 2025 it was announced by the Government that they were unable to prioritise this area of law and the legislative proposals. The law currently still rests in the hands of our Judiciary on their interpretation of the outdated Acts. They are fortunately taking a considered view on individual cases and the promotion of the family units surrogacy can build.

We wait to see what happens next but by modernizing surrogacy laws, England and Wales could create a more inclusive, supportive, and legally sound framework for all parties involved in surrogacy arrangements.

Avoiding a logistical nightmare: The importance of clear contract terms

Posted on 2 July 202515 July 2025 by Sarah O'Sullivan

In the fast moving world of logistics, timing, trust and accuracy matter. Yet, you would be surprised by how many logistics companies still rely on outdated, generic or even borrowed contracts often without fully understanding what those terms actually mean or how they apply. As corporate commercial lawyers working closely with logistics companies across the UK, we have seen it all: contracts lifted from Google, small-print clauses no one notices and legal jargon no one ever reads… until something goes wrong!

And when things do go wrong, whether it is a missed delivery, lost goods or a breakdown in the supply chain, these moments often expose the very real risk of working without a well-drafted commercial contract.

James Kemball Ltd v “K” Line (Europe) Ltd [2022] EWHC 2239 (Comm)

A recent High Court decision illustrates how robust contractual drafting and clear limitation clauses can effectively shield a business from significant liability.

The background:

James Kemball Ltd (Kemball), a logistics company, entered into a longstanding agreement with K Line (Europe) Ltd (K Line), a shipping company, to provide haulage services. Under the contract K Line was required to provide a minimum volume of business, failing which a surcharge would be payable expressly described as Kemball’s sole and exclusive remedy.

When K Line ceased operations and stopped providing jobs Kemball terminated the contract and brought a claim for substantial damages, including future loss of income. K Line relied on its standard terms arguing that liability was limited and did not extend to the types of losses claimed.

The verdict:

The court found in favour of K Line, confirming that:

- The termination clause did not support termination for an anticipatory breach, it required an actual breach which had not occurred.

- The parties had agreed an exclusive remedy, a surcharge for failure to meet the minimum job threshold. Kemball could not claim wider damages in addition to or instead of that remedy.

- Although common law rights of termination may have been available, Kemball failed to rely on them in its termination notice.

Why this matters?

This case served as a strong reminder for logistics and haulage businesses of the legal and commercial risks that arise from poorly drafted or narrowly interpreted contract terms. It reinforces the importance of clear, well- structured clauses and the need to carefully consider available options, particularly in contracts involving ongoing obligations and long-term commercial relationships.

Key contract considerations for logistics companies

Protecting your business: Three things your contract must do:

- Terms must be properly drafted: Having clear and precise terms is essential and can fully protect logistics companies from significant liability. If they are ambiguous or poorly drafted, they may be struck out.
- Terms must be properly incorporated: If your business relies on standard terms (such as BIFA) to protect itself in the event of disputes, those terms must be clearly and expressly incorporated into the contract.
- Terms must be visible: Terms hidden in small print or buried on the back of a receipt will not help in a dispute. Ensure your customers understand what they are signing up for, ideally before any work commences.

Common contract disputes in the logistics sector

Let’s examine the top legal issues we encounter in the logistics industry, all of which stem from poor or incomplete contractual agreements.

Delayed or failed deliveries: Goods not arriving on time are one of the most common triggers for contractual disputes. Whether caused by external disruptions (such as severe weather or traffic congestion) or internal issues (such as warehouse errors), such delays often result in customers seeking compensation. Clearly drafted commercial agreements including clauses that address delivery obligations, timelines and exceptions can help prevent unforeseen liability.

Damage or loss of goods in transit: Disputes often arise over who bears the risk when goods are lost or damaged. Contracts should clearly define the point at which risk transfers from the logistics provider to the customer or third party, as well as the standard of care required during handling and transportation.

Payment terms: Unclear or unenforced payment terms can lead to problems which typically arise where a contract is silent on matters such as payment deadlines, interest on late payments or credit limits. This can make debt recovery more complex and limit the company’s ability to take effective enforcement action, this is a key consideration in negotiating commercial contracts.

Limitation of liability: It is important to consider robust limitation of liability clauses. Businesses often include such clauses without considering whether they have been properly incorporated or whether they meet the fairness requirements. A poorly worded or hidden clause may not be enforceable leaving the business unexpectedly liable for substantial sums.

Termination: Termination rights must be clearly defined, if a contract includes exclusive remedies or narrowly drafted termination provisions, parties may find themselves without the ability to enforce their rights when things go wrong.

Final thoughts

As the logistics sector continues to evolve in response to operational pressures, technological developments and broader economic shifts, the value of precise drafting and negotiating commercial contracts is more imperative.

Regularly reviewing and updating your contractual framework ensures it reflects the realities of the operations and that key provisions remain enforceable, transparent, and commercially fair. With clearer drafting and proper incorporation of terms these so-called “logistical nightmares” can often be avoided altogether.

Put simply: in a world where the unexpected is inevitable, a strong contract is your best defence against a logistical nightmare.

If you are unsure whether your terms are fit for purpose, we are here to help. Tees’ commercial team are expert in drafting, reviewing or negotiating commercial contracts, ensuring they reflect how your business works and giving you solid protection when the unexpected hits.

Get in touch today and put your commercial contracts on a firmer footing.

Employment rights bill: What’s changing and when

Posted on 2 July 20259 July 2025 by Sarah O'Sullivan

An “Implementing the Employment Rights Bill Roadmap” has now been published by the Government.

This Roadmap sets out a timeline of the upcoming changes and shows how the Government is preparing for the implementation of the Employment Rights Bill. The changes are being phased in gradually over a period of time to allow for further consultation to take place on issues such as statutory probationary periods (that will accompany the day one right to claim unfair dismissal that is being introduced, abolishing the two years’ service required currently applicable) and how these will work and the planned changes to statutory sick pay.

Some of the changes are therefore not coming in until 2027 – this includes day one rights for workers against unfair dismissal and a ban on “exploitative zero hours contracts”.

The Government has said it will produce clear and comprehensive guidance to help businesses understand and adapt to the changes and the gradual introduction will also give businesses time to update policies and procedures along the way.

Key dates:

After the bill is passed:

Immediate repeal of the Strikes (Minimum Service Levels) Act 2023 and the majority of the Trade Union Act 2016
Protections against dismissal for taking industrial action

April 2026:

Collective redundancy protective award – doubling the maximum period of the protective award
‘Day one’ paternity leave and unpaid parental leave
Enhanced Public Interest Disclosure (“Whistleblowing”) protections
Fair work agency established
Statutory sick pay – removing the lower earnings limit and waiting period

October 2026:

Restricting fire and rehire practices
Regulations to establish the Fair Pay Agreement Adult Social Care Negotiating Body in England
Tightening tipping law to ensure fairer tip allocation
Requiring employers to take “all reasonable steps” to prevent sexual harassment of their employees, enhancing the current protections and obligations in place
Introducing an obligation on employers not to permit the harassment of their employees by third parties
New rights and protections for trade union representatives, extending protections against detriments for taking industrial action and strengthening trade unions’ right of access.

2027:

Gender pay gap and menopause action plans promoting gender equality and supporting women’s health at work
Enhanced dismissal protections for pregnant women and new mothersreturning from maternity leave
Further harassment protections – specifying reasonable steps which will help determine whether an employer has taken all reasonable steps to prevent sexual harassment
Bereavement leave
Ending the “exploitative use of zero hours contracts”
‘Day one ’ right for protection from unfair dismissal
Improving access to flexible working

If you need help to navigate these changes, please get in touch with our Employment Law team.