Skyros Maritime Corporation & Agios Minas Shipping Co v Hapag-Lloyd AG [2025] EWCA Civ 1529

The Court of Appeal has delivered an important judgment, reinstating an arbitral award (albeit on different grounds) in favour of shipowners and clarifying the principles governing damages for late redelivery of vessels.

Background

Two container vessels, Skyros and Agios Minas, were chartered to Hapag-Lloyd under NYPE charterparties. Both were redelivered late by two and seven days respectively and by that time the owners had already agreed to sell the vessels and could not re-charter them. In fact, under the terms of the MOAs for the sale of the vessels, the owners had agreed not to enter into any further charter fixtures before delivering the vessels to the buyers.

Arbitrators awarded damages based on the difference between the market rate and the charter rate during the overrun period. The Commercial Court overturned this, limiting damages to nominal sums on the basis that the owners would not have re chartered the ships.

The Court of Appeal’s decision

The Court of Appeal, with Lord Justice Males giving the leading judgment, overturned the first instance decision.

Lord Justice Males noted:

• The standard measure of damages for late redelivery is the difference between the market rate and the charter rate for the overrun period. None of the authorities reviewed suggested that the owner’s entitlement to recover damages under this measure has depended or should depend on whether the owner would, in fact, have entered the market to conclude a new fixture at the latest date when the vessel ought to have been redelivered.
• Accordingly, shipowners’ plans for the future employment of the vessel, whether drydock for repairs, periodic survey, positioning voyage at owners’ expense or sale should not affect the right to recover damages in accordance with the standard measure.
• The late redelivery means that the owner has lost the opportunity to conclude a new fixture at the market rate, which is the loss for which they should be compensated. Whether the owner would or could in fact have done so (or when) is res inter alios acta, a collateral matter disregarded by the law for the purpose of assessing damages.
• Commercial certainty requires a clear and predictable measure of damages.

Is the compensatory principle shaken?

Despite the particular context, Lord Justice Males’s dicta appear to have wider reaching consequences and might seem to challenge the well established compensatory principle of English law. At first glance, the judgment looks as if it undermines the principle because the owners received damages even though they had already sold the vessels and could not in fact re charter them. However, the Court of Appeal was careful to show that the principle is not shaken and is simply applied and confirmed.

This is not the first judgment to give that impression. For example, in The Doric Valour [2024] EWCA Civ 1312 (where Lord Justice Males also gave the leading judgment), a bill of lading holder was entitled to recover damages based on the difference between the sound arrived value and the actual value of damaged cargo despite the fact that it had received the full price for which it had sold the goods.

As a result, the bill of lading holder recovered damages for a loss which it had not in fact suffered because its arrangements with its buyer were treated as collateral, ie as independent of the contractual arrangement between the bill of lading holder and the defendant shipowner.

The court cited with approval a textbook extract dividing the assessment of damages into two stages:

• Stage A: what has the injured party lost?
• Stage B: for how much (if any part) of that loss can damages be recovered?

Res inter alios acta operates at stage A, excluding from the assessment aspects of the claimant’s actual financial position that are collateral and arise independently of the circumstances giving rise to the loss. This applies regardless of whether disregarding such matters increases or decreases the loss determined by law.

Remoteness operates at stage B, requiring examination of what was reasonably within the contemplation of the parties.

The compensatory principle requires damages to reflect the position the claimant would have been in had the contract been performed. However, certain matters such as the sale of the vessels in this case are simply not the wrongdoer’s concern. These collateral matters lie outside the nexus of the breach and must be disregarded, regardless of how this affects the claimant’s recovery.

As Lord Justice Males observed (referring to Lord Rodger’s dicta in The Achilleas [2008] UKHL 48): ‘This passage recognises that the normal measure may either over- or under-compensate the owner in some cases. However, that is not a reason for departing from it.’

In short, the decision does not undermine the compensatory principle. Instead, it clarifies that compensatory damages are assessed by reference to contractual entitlements and market conditions not by scrutinising collateral dealings, an approach which preserves commercial certainty and predictability.

Conclusion

This is an important decision with potentially wider implications for the assessment of damages in charterparty and carriage of goods contracts, where issues of quantification may be revisited under this clarified approach.

Claimants now have a more straightforward task in quantifying damages by reference to ordinary measures. Disclosure of collateral arrangements may no longer limit entitlement to damages, since such arrangements are disregarded. Instead, claimants may rely on expert evidence as to the state of the market at the time of loss without waiting for disclosure of actual dealings that might have improved or worsened their net financial position.

This approach may cut both ways, sometimes favouring claimants and sometimes not, but it assists in more informed decision making when handling claims. Remoteness and the compensatory principle remain intact and operate in the normal way to prevent overcompensation when inappropriate.

Lord Justice Males noted:

‘In my opinion this is a beneficial outcome which promotes certainty in commercial dealings, and enables accounts to be closed and disputes settled with a minimum of complication and expense. If it were otherwise, a charterer could never know the extent of its liability without investigating what the owner had arranged for the future use of the vessel, and there would be an incentive to take every case to an arbitration in the hope that something would turn up on disclosure.

‘If it is said that on the facts of the present case this results in something of a windfall for the owner, I would respond, with Lord Justice Scrutton in Slater v Hoyle & Smith Ltd [1920] 2 KB 11, 25, that ‘the rules of English law do not always give exact indemnity’; and with Lord Justice Greer in The London Corporation [1935] P 70, 78 (a case of damage to a ship in which the owner recovered the full cost of repair despite having sold the vessel to be broken up), that it is ‘desirable that there should be a measure of damage which can be easily and definitely found’.’

It remains to be seen whether this is the final word on the matter or whether the point will be addressed further.

Skyros Maritime Corporation & Agios Minas Shipping Co v Hapag-Lloyd AG [2025] EWCA Civ 1529

The Court of Appeal has delivered an important judgment, reinstating an arbitral award (albeit on different grounds) in favour of shipowners and clarifying the principles governing damages for late redelivery of vessels.

Background

Two container vessels, Skyros and Agios Minas, were chartered to Hapag-Lloyd under NYPE charterparties. Both were redelivered late by two and seven days respectively and by that time the owners had already agreed to sell the vessels and could not re-charter them. In fact, under the terms of the MOAs for the sale of the vessels, the owners had agreed not to enter into any further charter fixtures before delivering the vessels to the buyers.

Arbitrators awarded damages based on the difference between the market rate and the charter rate during the overrun period. The Commercial Court overturned this, limiting damages to nominal sums on the basis that the owners would not have re chartered the ships.

The Court of Appeal’s decision

The Court of Appeal, with Lord Justice Males giving the leading judgment, overturned the first instance decision.

Lord Justice Males noted:

• The standard measure of damages for late redelivery is the difference between the market rate and the charter rate for the overrun period. None of the authorities reviewed suggested that the owner’s entitlement to recover damages under this measure has depended or should depend on whether the owner would, in fact, have entered the market to conclude a new fixture at the latest date when the vessel ought to have been redelivered.
• Accordingly, shipowners’ plans for the future employment of the vessel, whether drydock for repairs, periodic survey, positioning voyage at owners’ expense or sale should not affect the right to recover damages in accordance with the standard measure.
• The late redelivery means that the owner has lost the opportunity to conclude a new fixture at the market rate, which is the loss for which they should be compensated. Whether the owner would or could in fact have done so (or when) is res inter alios acta, a collateral matter disregarded by the law for the purpose of assessing damages.
• Commercial certainty requires a clear and predictable measure of damages.

Is the compensatory principle shaken?

Despite the particular context, Lord Justice Males’s dicta appear to have wider reaching consequences and might seem to challenge the well established compensatory principle of English law. At first glance, the judgment looks as if it undermines the principle because the owners received damages even though they had already sold the vessels and could not in fact re charter them. However, the Court of Appeal was careful to show that the principle is not shaken and is simply applied and confirmed.

This is not the first judgment to give that impression. For example, in The Doric Valour [2024] EWCA Civ 1312 (where Lord Justice Males also gave the leading judgment), a bill of lading holder was entitled to recover damages based on the difference between the sound arrived value and the actual value of damaged cargo despite the fact that it had received the full price for which it had sold the goods.

As a result, the bill of lading holder recovered damages for a loss which it had not in fact suffered because its arrangements with its buyer were treated as collateral, ie as independent of the contractual arrangement between the bill of lading holder and the defendant shipowner.

The court cited with approval a textbook extract dividing the assessment of damages into two stages:

• Stage A: what has the injured party lost?
• Stage B: for how much (if any part) of that loss can damages be recovered?

Res inter alios acta operates at stage A, excluding from the assessment aspects of the claimant’s actual financial position that are collateral and arise independently of the circumstances giving rise to the loss. This applies regardless of whether disregarding such matters increases or decreases the loss determined by law.

Remoteness operates at stage B, requiring examination of what was reasonably within the contemplation of the parties.

The compensatory principle requires damages to reflect the position the claimant would have been in had the contract been performed. However, certain matters such as the sale of the vessels in this case are simply not the wrongdoer’s concern. These collateral matters lie outside the nexus of the breach and must be disregarded, regardless of how this affects the claimant’s recovery.

As Lord Justice Males observed (referring to Lord Rodger’s dicta in The Achilleas [2008] UKHL 48): ‘This passage recognises that the normal measure may either over- or under-compensate the owner in some cases. However, that is not a reason for departing from it.’

In short, the decision does not undermine the compensatory principle. Instead, it clarifies that compensatory damages are assessed by reference to contractual entitlements and market conditions not by scrutinising collateral dealings, an approach which preserves commercial certainty and predictability.

Conclusion

This is an important decision with potentially wider implications for the assessment of damages in charterparty and carriage of goods contracts, where issues of quantification may be revisited under this clarified approach.

Claimants now have a more straightforward task in quantifying damages by reference to ordinary measures. Disclosure of collateral arrangements may no longer limit entitlement to damages, since such arrangements are disregarded. Instead, claimants may rely on expert evidence as to the state of the market at the time of loss without waiting for disclosure of actual dealings that might have improved or worsened their net financial position.

This approach may cut both ways, sometimes favouring claimants and sometimes not, but it assists in more informed decision making when handling claims. Remoteness and the compensatory principle remain intact and operate in the normal way to prevent overcompensation when inappropriate.

Lord Justice Males noted:

‘In my opinion this is a beneficial outcome which promotes certainty in commercial dealings, and enables accounts to be closed and disputes settled with a minimum of complication and expense. If it were otherwise, a charterer could never know the extent of its liability without investigating what the owner had arranged for the future use of the vessel, and there would be an incentive to take every case to an arbitration in the hope that something would turn up on disclosure.

‘If it is said that on the facts of the present case this results in something of a windfall for the owner, I would respond, with Lord Justice Scrutton in Slater v Hoyle & Smith Ltd [1920] 2 KB 11, 25, that ‘the rules of English law do not always give exact indemnity’; and with Lord Justice Greer in The London Corporation [1935] P 70, 78 (a case of damage to a ship in which the owner recovered the full cost of repair despite having sold the vessel to be broken up), that it is ‘desirable that there should be a measure of damage which can be easily and definitely found’.’

It remains to be seen whether this is the final word on the matter or whether the point will be addressed further.

Penningtons Manches Cooper is proud to announce its continued sponsorship of International Garden Photographer of the Year (IGPOTY).

Currently in its 19th year, IGPOTY is recognised as one of the world’s most prestigious garden and nature photography competitions, showcasing striking works that capture the beauty, fragility and resilience of gardens, plants and wildlife across the globe. It attracts thousands of entries from both professional and amateur photographers across nine main categories.

A natural partnership

The firm first joined forces with IGPOTY earlier this year as headline sponsor of Competition 18. The partnership reflects the firm’s commitment to the natural environment and the importance of flora and fauna in biodiversity – an important area of focus in the firm’s approach to responsible business.

IGPOTY embraces the idea that ‘Earth is everyone’s Garden’: ‘garden’ can be interpreted in the broadest sense; entrants can take inspiration from balconies, parks, woods, meadows, forests and other natural landscapes, as well as more traditional domestic and formal gardens.

It was this philosophy that inspired the firm to hold its own ‘PMC Nature Photographer of the Year’ competition, with partners and staff from across its 12 offices encouraged to share their own work capturing the wonder of nature. IGPOTY’s Managing Director, Tyrone McGlinchey, FLS FRSA, chose the overall winner and runners up.

Celebrating and showcasing IGPOTY 2025 winners

The winning entries of the IGPOTY Competition 19 main categories (which ran  during 2025) will be announced on 13 February 2026 at a special event at the Royal Botanic Gardens, Kew, attended by representatives from Penningtons Manches Cooper’s board and responsible business committee. Entries for IGPOTY Competition 20 will open later in the year.

The tour exhibiting a curated selection of awarded images from Competition 19, will begin at Kew Gardens, and then take in a number of prestigious UK and international locations.

Penningtons Manches Cooper is also the sponsor of the PMC Plants & Planet category. To highlight the connection between photography and sustainable exploration – and encourage entrants to think about the impact of their journeys on the planet – the firm will also be providing a voucher prize for use with Byway Travel, the sustainable travel company.

Commenting on Penningtons Manches Cooper’s continued sponsorship, Tyrone McGlinchey FLS FRSA, said:

“IGPOTY is thrilled that Penningtons Manches Cooper will return as our headline sponsor for 2026. The firm’s championing of nature and biodiversity very much mirrors our own, and its continued patronage will enable us to grow the competition’s reach and impact, while reinforcing the vital connection with sustainability. The PMC Plants & Planet category is a meaningful space for photographers to explore environmental themes, and we’re excited to reveal the diverse set of results this coming February.”

Outstanding garden photography in the spotlight

The previous Overall Winner (IGPOTY 18) – chosen from the first place winners across nine main categories – was Max Rush, from London, England. His entry, ‘Spectacle of the Painted Storm’, was taken in Brockwell Park, Lambeth, London.

The wining image in the PMC Plants & Planet category was ‘Contrasts’ by Justin Minns, featuring a saltmarsh in Felixstowe, Suffolk, England.

The other main category winners were:

• Abstract Views – Honey J Walker: ‘Gardens of Jaipur’
• Breathing Spaces – Tamara Al Bahri: ‘Seiser Alm October Sunrise’
• The Beauty of Plants – Amy Duffy: ‘Amethyst Tears’
• The World of Fungi – Barry Webb: ‘Porcelain Mushroom from Below’
• Trees, Woods & Forests – Pawel Zygmunt: ‘The Alley’
• Wildflower Landscapes – Scott Macintyre: ‘The Purple Hour’
• Wildlife in the Garden – Amy Marques: ‘Great Horned Owlet in Paradise’

All of the winners can be viewed on the IGPOTY website, here.

The corporate team at Penningtons Manches Cooper has advised Navigator, an advanced digital marketing platform founded by Olympic rowing medallist Steve Rowbotham, on its £4 million investment from leading venture capital firm, IW Capital. 

Navigator utilises two billion exclusive first-party travel data to deliver precision-targeted digital advertising in the travel sector. The exclusive data points gathered by Navigator allows it to provide fully consented, first-party insights to brands allowing them to target consumers when they most need their products or services: a privacy compliant solution to changing consumer habits and attitudes towards cookie consent and the sharing of third-party data.

Navigator has offices in locations across the world such as London, Miami, Singapore and Kuala Lumpur and its unique service led IW Capital to invest £4 million to help it achieve further growth. The investment reflects IW Capital’s ongoing commitment to supporting ambitious, high-growth UK businesses. Remarkably, this Series A fundraising comes less than six months after Penningtons Manches Cooper advised Navigator on its MBO, highlighting the company’s rapid progress in that short time.

The team at Penningtons Manches Cooper was led by Richard Wrigley with support from corporate associate, Anoushka Gangji, IP partner Rachel Bradley, and head of employee options Kathy Potter.

Steve Rowbotham, CEO of Navigator, says: “We’re delighted to have IW Capital’s backing as we enter this next phase of growth. This £4 million investment will allow us to accelerate our mission to deliver privacy-first advertising solutions built on consented first-party travel data. With the industry moving beyond cookies, we’re focused on helping brands reach audiences in a privacy compliant and effective way. We look forward to shaping the future of targeted advertising together.”

Richard Wrigley says: “We’re thrilled to support Navigator with this £4 million investment. This funding will help accelerate the platform’s development and expand its commercial reach. We look forward to seeing how Navigator continues to redefine advertising across sectors worldwide.”

Charlie Lyon Carroll, investment director at IW Capital, says: ‘Navigator is solving one of the most urgent challenges in digital marketing – how to deliver effective advertising in a world where privacy is paramount. With exclusive access to rich data, a proven commercial model, and a leadership team with deep industry experience, Navigator is perfectly positioned to scale. We’re excited to support its next stage of growth.’

Skyros Maritime Corporation & Agios Minas Shipping Co v Hapag-Lloyd AG [2025] EWCA Civ 1529

The Court of Appeal has delivered an important judgment, reinstating an arbitral award (albeit on different grounds) in favour of shipowners and clarifying the principles governing damages for late redelivery of vessels.

Background

Two container vessels, Skyros and Agios Minas, were chartered to Hapag-Lloyd under NYPE charterparties. Both were redelivered late by two and seven days respectively and by that time the owners had already agreed to sell the vessels and could not re-charter them. In fact, under the terms of the MOAs for the sale of the vessels, the owners had agreed not to enter into any further charter fixtures before delivering the vessels to the buyers.

Arbitrators awarded damages based on the difference between the market rate and the charter rate during the overrun period. The Commercial Court overturned this, limiting damages to nominal sums on the basis that the owners would not have re chartered the ships.

The Court of Appeal’s decision

The Court of Appeal, with Lord Justice Males giving the leading judgment, overturned the first instance decision.

Lord Justice Males noted:

• The standard measure of damages for late redelivery is the difference between the market rate and the charter rate for the overrun period. None of the authorities reviewed suggested that the owner’s entitlement to recover damages under this measure has depended or should depend on whether the owner would, in fact, have entered the market to conclude a new fixture at the latest date when the vessel ought to have been redelivered.
• Accordingly, shipowners’ plans for the future employment of the vessel, whether drydock for repairs, periodic survey, positioning voyage at owners’ expense or sale should not affect the right to recover damages in accordance with the standard measure.
• The late redelivery means that the owner has lost the opportunity to conclude a new fixture at the market rate, which is the loss for which they should be compensated. Whether the owner would or could in fact have done so (or when) is res inter alios acta, a collateral matter disregarded by the law for the purpose of assessing damages.
• Commercial certainty requires a clear and predictable measure of damages.

Is the compensatory principle shaken?

Despite the particular context, Lord Justice Males’s dicta appear to have wider reaching consequences and might seem to challenge the well established compensatory principle of English law. At first glance, the judgment looks as if it undermines the principle because the owners received damages even though they had already sold the vessels and could not in fact re charter them. However, the Court of Appeal was careful to show that the principle is not shaken and is simply applied and confirmed.

This is not the first judgment to give that impression. For example, in The Doric Valour [2024] EWCA Civ 1312 (where Lord Justice Males also gave the leading judgment), a bill of lading holder was entitled to recover damages based on the difference between the sound arrived value and the actual value of damaged cargo despite the fact that it had received the full price for which it had sold the goods.

As a result, the bill of lading holder recovered damages for a loss which it had not in fact suffered because its arrangements with its buyer were treated as collateral, ie as independent of the contractual arrangement between the bill of lading holder and the defendant shipowner.

The court cited with approval a textbook extract dividing the assessment of damages into two stages:

• Stage A: what has the injured party lost?
• Stage B: for how much (if any part) of that loss can damages be recovered?

Res inter alios acta operates at stage A, excluding from the assessment aspects of the claimant’s actual financial position that are collateral and arise independently of the circumstances giving rise to the loss. This applies regardless of whether disregarding such matters increases or decreases the loss determined by law.

Remoteness operates at stage B, requiring examination of what was reasonably within the contemplation of the parties.

The compensatory principle requires damages to reflect the position the claimant would have been in had the contract been performed. However, certain matters such as the sale of the vessels in this case are simply not the wrongdoer’s concern. These collateral matters lie outside the nexus of the breach and must be disregarded, regardless of how this affects the claimant’s recovery.

As Lord Justice Males observed (referring to Lord Rodger’s dicta in The Achilleas [2008] UKHL 48): ‘This passage recognises that the normal measure may either over- or under-compensate the owner in some cases. However, that is not a reason for departing from it.’

In short, the decision does not undermine the compensatory principle. Instead, it clarifies that compensatory damages are assessed by reference to contractual entitlements and market conditions not by scrutinising collateral dealings, an approach which preserves commercial certainty and predictability.

Conclusion

This is an important decision with potentially wider implications for the assessment of damages in charterparty and carriage of goods contracts, where issues of quantification may be revisited under this clarified approach.

Claimants now have a more straightforward task in quantifying damages by reference to ordinary measures. Disclosure of collateral arrangements may no longer limit entitlement to damages, since such arrangements are disregarded. Instead, claimants may rely on expert evidence as to the state of the market at the time of loss without waiting for disclosure of actual dealings that might have improved or worsened their net financial position.

This approach may cut both ways, sometimes favouring claimants and sometimes not, but it assists in more informed decision making when handling claims. Remoteness and the compensatory principle remain intact and operate in the normal way to prevent overcompensation when inappropriate.

Lord Justice Males noted:

‘In my opinion this is a beneficial outcome which promotes certainty in commercial dealings, and enables accounts to be closed and disputes settled with a minimum of complication and expense. If it were otherwise, a charterer could never know the extent of its liability without investigating what the owner had arranged for the future use of the vessel, and there would be an incentive to take every case to an arbitration in the hope that something would turn up on disclosure.

‘If it is said that on the facts of the present case this results in something of a windfall for the owner, I would respond, with Lord Justice Scrutton in Slater v Hoyle & Smith Ltd [1920] 2 KB 11, 25, that ‘the rules of English law do not always give exact indemnity’; and with Lord Justice Greer in The London Corporation [1935] P 70, 78 (a case of damage to a ship in which the owner recovered the full cost of repair despite having sold the vessel to be broken up), that it is ‘desirable that there should be a measure of damage which can be easily and definitely found’.’

It remains to be seen whether this is the final word on the matter or whether the point will be addressed further.

Penningtons Manches Cooper personal injury partner Warren Collins has been named as the winner of the ‘Catastrophic Injury Lawyer of the Year’ category at the Personal Injury Awards 2025, for demonstrating impressive technical skill, an ethical approach to litigation, and exceptional client care over the course of the past 12 months.

Celebrating the spirit and application of high standards of practice, the Personal Injury Awards recognise professionals and service providers working in the field of personal injury. The awards are considered a benchmark of excellence in the community of lawyers and professionals supporting injured individuals, and the winners are chosen by an independent panel of industry experts representing claims, legal services, medical reporting, funding, rehabilitation and insurance.

Recognised as one of the UK’s leading catastrophic injury lawyers, Warren impressed the judges with his long-established career that includes both major domestic and international work, high-profile cases, and meaningful contributions to the field. He has spent more than three decades advocating for people whose lives have been completely altered in the most serious and devastating of circumstances, and his work focuses on guiding clients through multiple challenges to secure life-changing outcomes.

Warren’s significant experience has taken him beyond the UK, having pursued personal injury cases across Europe, Asia, Australia and the Caribbean, but his particular expertise is in the United States, where he is a leading member of the American Association for Justice (AAJ), in which he is immediate past co-chair of the International Practice Section. He is also the only UK solicitor to be admitted into the USA based Melvin Belli Society of pre-eminent personal injury lawyers, as well as the National Trial Lawyers Top 100.

His expertise is widely recognised by his peers, and he features in both the Legal 500 (where he is in the prestigious Lawyers’ Hall of Fame), and Chambers UK, where he has been ranked as a leading expert for 21 years consecutively. He is a Fellow of APIL (Association of Personal Injury Lawyers and has been Chief Assessor of the Law Society Personal Injury Accreditation Scheme for over a decade.  This award is the latest in a series Warren has received throughout his career, including ‘Eclipse Proclaim Catastrophic Injury Lawyer of the Year’, the ‘Spinal Injuries Association Rebuilding Lives Award in Legal Excellence’, ‘Claimant Injury Lawyer of the Year’, and the ‘UK Acquired Brain Injury Forum (UKABIF) Award for Inspiration in Brain Injury’.

See the full list of winners for the Personal Injury Awards 2025 here.

Fashion and luxury brands hit record valuations

Skims, the shapewear brand co-founded by Kim Kardashian, has achieved an eye watering $5 billion valuation after raising $225 million in new venture capital funding. Like many celebrity-driven brands, Skims has captured the attention of younger consumers and benefited from Kardashian’s large social media following. The brand intends to use this funding to expand its retail presence and international growth, with a 12,000 square foot flagship store set to open on Regent Street, London in summer 2026.

Meanwhile, Vinted, Europe’s leading marketplace for pre-owned fashion, is eyeing up an impressive €8 billion valuation through a secondary share sale anticipated in early 2026. The Lithuania-based company is planning to expand its market by testing transatlantic trading between London and New York to enter the US market.

In the luxury sector, Chanel has surpassed Louis Vuitton to claim the title of France’s most valuable luxury brand, with an estimated valuation of $38 billion. This remarkable rise is attributed to three key initiatives: the celebration of the 100th anniversary of its Chanel No.5 fragrance, the opening of a flagship jewellery boutique in New York, and the appointment of new creative director, Matthieu Blazy (formerly at Bottega Veneta).

From New York to London: Kith’s global expansion hits Soho

Kith, the New York-born streetwear and lifestyle retailer founded by Ronnie Fieg in 2011, has officially made its mark in London on 28 November. Known for its high-profile collaborations, with brands such as Nike, Adidas and New Balance, Kith has made a name for itself in streetwear. This news sees the brand pushing forward its international expansion strategy, following a recent opening in Japan.

The flagship store on Regent Street develops the brand’s scope by integrating Ronnie Fieg’s full lifestyle vision, incorporating his first independent restaurant ‘Ronnie’s’, alongside the retail offerings, which includes menswear, womenswear, children’s clothing, and a selection of multi-brand footwear and accessories. The space also hosts the brand’s soft-serve bar, Kith Treats. In an era of online shopping, fashion brands are looking towards unique experiences through experiential shopping, combining retail, dining and entertainment under one roof.

Kith is not the only US brand to target expansion in London in recent months. It was announced that Janie and Jack, the children’s fashion house, and HATCH, the maternity fashion and beauty brand, will open a new dual-concept retail store in Chelsea in February 2026. Mo Beig, president and chief financial officer of Matri Group, which is the parent company to both brands, says that the London opening is a symbol of their evolving vision.

Retailer reactions as Budget news shakes up consumer mood

With the nervously awaited Autumn Budget presented later than usual on 26 November, UK retailers entered the peak trading season facing a mix of falling consumer confidence, weakening sales, and rising operating costs.

Following the announcement, responses from the sector have been mixed, reflecting both cautious optimism and concern. Andrew Goodacre, chief executive of the British Independent Retailers Association, expressed concern about the timing of this year’s Budget, and criticised the delay for ‘disrupting the most important trading period of the year for retailers’. In fact, fashion retailers were already experiencing slow sales in 2025. Consumer sentiment slid in early November, hitting its lowest point since April, according to the British Retail Consortium (BRC). Earlier in the year, non-food sales grew only around 1%, with consumers holding back on fashion purchases as other essential costs rose. It was reported that higher household bills and continued economic uncertainty led shoppers to prioritise basics.

On the positive side, some industry leaders have welcomed certain measures. For example, CBRE head of ratings Tim Attridge praised the decision to permanently reduce business rates for 750,000 retail, hospitality and leisure businesses, calling it ‘welcome relief’ for small businesses in these sectors.

However, for larger businesses, the Budget brings new concerns. The planned increase in business rates for properties valued over £500,000 was seen as a ‘retrograde step‘ that could discourage investment and hiring, undermining long-term growth.

What the Budget could mean for retail: 

• More selective spending and a focus on essentials or value: Shoppers are expected to focus on essentials and value ranges rather than full price seasonal fashion. PwC’s survey finds that many households are increasingly focused on the ‘cost of everyday essentials’ and 35% of respondents said they plan to ‘choose cheaper items at the same stores’.
• Heavier reliance on discounts: KPMG’s Retail Think Tank report predicts ‘continued promotional behaviour… to trigger spending’ as retailers cope with rising costs and squeezed consumer budgets, which could see sales extend beyond Black Friday.
• Stronger performance for value retailers: Brands positioned in budget or value segments may fare better than premium ones under tight consumer budgets. EY’s 2025 Future Consumer Index found that 45% of UK consumers are opting for discount retailers, with value now ‘twice as important as brand’ in purchasing decisions.

The Budget has left retailers navigating a fragile landscape, where cautious consumer sentiment and rising costs collide with the crucial Christmas trading period. While rate relief offers some reassurance for smaller businesses, the broader sector faces rising pressure from tax hikes, wage increases, and inflation. As households tighten their spending, the coming months will be a challenge for some luxury retailers as consumers look towards promotions, discounts and a focus on value.

Closing 2025, opening 2026: key trends

A slow start to the golden quarter

Traditionally, the period between Black Friday and Christmas – the ‘golden quarter’ – is the most lucrative time of year for fashion retailers. However, 2025 is proving to be different. According to the ONS, retail sales volumes fell by 1.1% in October, with clothing, footwear, and textile stores posting a 3.3% month-on-month decline. BDO reports that the golden quarter started slowly, with fashion outperforming some categories but still facing headwinds as consumers delayed discretionary purchases ahead of the Budget announcement and Black Friday promotions. Prolonged discounting is expected as retailers seek to stimulate demand and clear inventory.

Black Friday strategies

Retailers are leaning heavily on Black Friday to offset sluggish October sales. Extended promotional periods, rather than single-day discounts, are being deployed to capture cautious shoppers over several weeks. AI-driven tools are being deployed to personalise offers and secure transactions during peak traffic, reflecting the broader trend of technology integration in retail operations.

Consumer confidence and the Autumn Budget

Despite these efforts, uncertainty surrounding the Autumn Budget continues to weigh on consumer sentiment. Rising prices and economic caution are prompting households to prioritise essentials over discretionary fashion purchases. Whilst some supermarkets such as Sainsbury’s and Marks & Spencer remain optimistic about Christmas trading, the overall outlook for fashion remains muted. The industry is bracing for a challenging end to 2025.

2026 outlook

Despite a somewhat stagnant end to 2025, some forecasts predict a rebound for the luxury market in 2026 with growth expected in all major regions and industry EBITDA projected to rise around 5%. This is, in part, due to improvements at some of the largest luxury groups as well as increased growth in China.

The Business of Fashion’s recent report highlights major consumer and industry shifts; in particular, the increasing use of tech including AI-powered shopping experiences and technologically integrated accessories such as smart frames. The convergence of fashion and technology is becoming increasingly evident. Swarovski has recently partnered with Loop to launch a limited-edition set of crystal-studded earplugs, commemorating Swarovski’s 130th anniversary, reflecting how luxury brands are embedding tech-driven lifestyle products into their offerings.

Overall, while there are some positive signs for the luxury market, challenges remain for both brands and investors navigating the current slowdown, as economic headwinds and cautious consumer sentiment mean brands must balance innovation with resilience in the new year.

As the year draws to a close and the legal awards season takes centre stage, three of Penningtons Manches Cooper’s senior lawyers – partners Warren Collins and James Stewart, and consultant David-Graham Smith – have recently achieved prestigious recognition for their respective expertise in the fields of personal injury, family, and real estate law.

To start, personal injury partner Warren Collins was named as the winner of the ‘Catastrophic Injury Lawyer of the Year’ category at the Personal Injury Awards in Manchester on 27 November, as a reflection of his outstanding skill, ethical approach, and exceptional client care, as demonstrated over the past 12 months.

Warren has spent more than 30 years advocating for people whose lives have been completely altered in the most serious and devastating of circumstances. His work, which frequently involves cross-border cases, focuses on guiding clients through multiple challenges to secure life-changing outcomes.

Meanwhile, family law partner and co-head of the firm’s private wealth group, James Stewart, was recognised as ‘Family Lawyer of the Year’ at the sixth edition of the European Legal Awards, which this year took place in Rome. The event aims to promote excellence, knowledge, and proactive networking by celebrating the achievements of a broad cross-section of European lawyers.

James was praised by the judges for how he has ‘redefined the practice of international family law with a rare blend of technical rigour, empathy, and strategic vision’, and described as ‘not only respected by his peers but also deeply valued by his clients, thanks to his interpersonal skills even in the most challenging situations’.

Finally, real estate consultant David Graham-Smith received the ‘Lifetime Achievement Award’ at the Surrey Property Awards. The awards ceremony is the largest and most prestigious property event of its kind outside London, bringing together businesses from across the sector to celebrate the best developments, services, and property professionals in the region.

David was recognised for his enduring dedication to the real estate sector, an area in which he has worked for several decades, as well as his sharp mind and warm approach: ‘A complete one-off who always sees the bright side, has unbounded energy, and has everyone else’s best interests at heart.’

These three individual awards are the latest additions to a series of successes for the firm and its lawyers, following on from excellent individual and collective rankings in the Legal 500 and Chambers UK legal directories, and being named in both The Times Best Law Firms 2026 and The Lawyer’s Litigation 50 Report – read more here.

A year on from the current government’s first Budget, the Chancellor of the Exchequer has returned to the despatch box with measures that continue to shape the UK’s fiscal landscape.

The announcements followed a period of unprecedented speculation around the chancellor’s intentions, which also rather unusually included an accidental leak by the Office of Budget Responsibility with details of their report on the changes a few hours in advance of the chancellor’s announcements.

From a private client perspective, the changes were not as significant as the important developments contained in last year’s Budget. The announcements included additional measures, taxes as well as some useful clarifications and reliefs in relation to last year’s announcements. Positively, the government has not introduced feared measures including an exit tax or wealth tax, which could be seen as an acknowledgment that it is important that the UK remain attractive to entrepreneurs and wealth creators. Many of the new measures introduced from a commercial perspective are intended to encourage business investment and innovation.

The effective dates for the new measures vary extensively from those coming into effect immediately, to those taking effect from 6 April 2026 and even from 6 April 2029. Some of these delayed changes could mean it is viewed as spend now pay later Budget. An IHT relief on last year’s changes to excluded property trusts has also been introduced with retrospective effect to 6 April 2025. Although additional detail and draft legislation is awaited, the headline proposals from the 2025 Budget are detailed below, with deeper analysis of the more significant reforms to follow.

Income tax

The Budget introduces several income tax changes which, though apparently modest individually, will cumulatively raise the burden on many taxpayers.

Freeze on thresholds

Personal income tax and National Insurance thresholds will remain frozen until April 2031, extending the current freeze by three years. This ‘fiscal drag’ means more earners will be drawn into higher tax bands as wages rise, increasing liabilities without headline rate rises. This is predicted to raise an additional £3.5 billion in revenue in 2028/29 rising to £12.7 billion by 2030/31. Middle-income households are more exposed to this, whilst the effect on high-net-worth individuals will be compounded when combined with frozen thresholds and potential future changes to other taxes. Proactive planning, such as restructuring income and using tax-efficient investments should all be considered to mitigate the gradual impact of stagnant tax bands.

Dividend income

The rate of income tax on dividends will increase by 2% for basic and higher rate bands (but not the additional rate band which will remain as 39.35%) with effect from 6 April 2026. For basic rate taxpayers this means that the rate will be 10.75% and for higher rate taxpayers it will be 35.75%. The dividend allowance remains unchanged. The increased rate of income tax on dividends is estimated to raise £2 billion annually and will particularly impact small business owners, entrepreneurs and investors who rely on distributions.

Savings income and ISAs

Income tax on savings interest will also rise by 2% from 6 April 2027, particularly affecting pensioners and cash-reliant savers. This 2% increase will take tax rates to 22%, 42% and 47% respectively depending on an individual’s marginal rate of tax.

The total annual ISA allowance remains unchanged at £20,000. However, from 6 April 2027 the cash allowance element will be capped at £12,000 (for the under-65s) with the remaining allowance restricted to stocks and shares ISAs. Whilst this change reduces flexibility it is designed to encourage diversification with investments.

Property rental income

From 6 April 2027, landlords will face an increase of 2% to the basic, higher and additional rate of income tax on rental income. This again will increase tax rates to 22%, 42% and 47% respectively. This is estimated to raise £0.5 billion a year for the Treasury.

Coupled with the rise in stamp duty land tax (SDLT) on the purchase of additional residential property from 3% to 5% in 2024’s Autumn Budget, the introduction of the Renters’ Rights Act and new energy efficiency requirements, this increase may further unsettle landlords who hold residential properties personally. This may be exacerbated in relation to high value rental properties given that the new surcharge, discussed below, will apply to landlords of high value properties and not occupiers in England.

This greater burden on individual landlords may lead some to consider either restructuring the way in which their property (or property portfolio) is held or to exit this sector, which may lead to a reduction in the supply of rental properties. This may, in turn, lead to a long-term rise in rental receipts if demand outstrips supply.

High Value Council Tax Surcharge (HVCTS) – ‘mansion tax’

One of the more anticipated changes introduced in the Budget is HVCTS, which is a new tax on owners of property in England worth £2 million or more in April 2026, and set to take effect from April 2028. It is property owners rather than occupiers who will be liable for the surcharge. There will be continued liability to pay the existing council tax in addition to HVCTS, both being administered by the local authority. The annual charges will be as follows for properties valued:

These charges are set to increase in line with CPI inflation each year from 2029/30 onwards. The Valuation Office will conduct a targeted valuation exercise to identify properties within scope of the charge. The Treasury say that HVCTS is calculated to raise £430 million each year from 2028/29. There is set to be a government consultation on the effect on more complicated property ownership structures including companies, funds, trusts and partnerships and, for example, where occupation of a property is a condition of employment. Further details on how and when properties will be valued and the mechanics of the HVCTS are not yet available.

Venture capital trusts (VCT) relief and the Enterprise Investment Scheme (EIS)

Income tax relief on VCTs will fall from 30% to 20% from 6 April 2026, reducing incentives for high-risk investment.

From 6 April 2026, the lifetime company investment limit under the EIS will increase to £24 million (£40 million for knowledge intensive companies (KICs) and the annual company investment limit will increase to £10 million (£20 million for KICs). The gross assets test will increase to £30 million before share issue and £35 million thereafter. This is a useful development meaning that relevant companies may continue to utilise the relief as they scale and grow.

Capital gains tax (CGT)

Whilst many feared CGT rate hikes to align the tax with income tax bands, the removal of the CGT uplift on death, or even the abolition of the CGT relief on the disposal of main residences, in the end none of these have been introduced. However, there were some changes introduced by the Chancellor. The key changes announced are set out below.

Reduction in CGT relief for employee ownership trusts (EOTs)  

Previously, subject to various conditions, disposals of company shares to an EOT were fully exempt from CGT. With effect from 26 November 2025, 50% of the gain will be subject to tax immediately on the disposal. The remaining 50% can be held over until a future disposal of the shares by the trustees of the EOT. This change takes immediate effect, so current or planned transactions will need to be reviewed.

Share reorganisations and share for share exchanges

The current anti-avoidance rule for share-for-share exchanges and schemes of reconstruction, which in some cases denied rollover relief to all the shareholders participating in the transaction, has been amended with immediate effect so that it only affects those shareholders benefiting from the tax avoidance. The quid pro quo of this limiting of the rule is that the previous 5% de minimis threshold has been repealed. Now, any shareholder who has benefited from the tax avoidance, however small their shareholding, will be denied rollover treatment.

Disposals of UK land by non-UK resident companies

Ordinarily, non-UK residents are usually subject to CGT in relation to disposals of UK land. Anti-avoidance provisions include charges that also charge to tax disposals of interests in property rich entities. Currently, property richness and substantial indirect interest tests apply to protected cell companies as a whole, which often means that disposals from within individual cells are not subject to tax. With immediate effect, the tests to determine ‘property richness’ and determining a substantial interest will apply to relevant protected cell companies at an individual cell level and not at a company level only.

Incorporation Relief

Additional conditions have been introduced in relation to Incorporation Relief. In particular, a claim for relief must be made by the transferor in their Self-Assessment return for the tax year in which the transfer took place. Details regarding the transaction, the tax computations and type of business transferred will need to be provided.

Enterprise management incentives (EMI)

EMI options are often a tax efficient means of incentivising employees. This has been further enhanced with increases to some of the limits relating to EMI schemes. The limits have been extended as follows:

• the value of unexercised options in a company from £3 million to £6 million;
• the gross assets of the company from £30 million to £120 million; and
• the number of employees by the company from 250 employees to 500 employees.

The changes will apply to EMI contracts granted on or after 6 April 2026 and can also apply retrospectively to existing EMI contracts which have not already expired or been exercised with the limit on the exercise period being increased from 10 years to 15 years. Existing contracts can be amended without losing the tax advantages the schemes offer, provided it is in line with the legislation.

While not strictly a CGT change, these increases will affect the calculation of the CGT liability for those offering such schemes.

Inheritance tax (IHT)

Although several changes were anticipated, the Autumn Budget 2025 has left the rules on lifetime gifting untouched, which is reassuring for clients looking to plan ahead. As a result, the existing IHT framework for lifetime gifts (including the seven-year rule for ‘potentially exempt transfers’) remains unchanged. The nil rate bands will remain fixed to April 2031, meaning more estates will become liable for IHT over time as asset values increase.

The government have announced some welcome tweaks to the significant changes introduced in the 2024 Autumn Budget. In particular, with regard to the previously announced changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) that will take effect from 6 April 2026, any unused £1 million allowance for the 100% rate of APR and BPR will now be transferable between spouses and civil partners (including if the first death was before 6 April 2026). Farming and business communities, however, will be disappointed that the government reconfirmed its commitment to the wider APR/BPR reforms in the Budget.

The previous Budget had also stated that with effect from 6 April 2027, most unused pension funds and death-benefit payments will be included as part of a deceased’s estate for IHT. This Budget provides that personal representatives (who will be responsible for the payment of IHT) will be able to direct pension scheme administrators to withhold 50% of taxable benefits for up to 15 months and pay IHT due in certain circumstances. Furthermore, personal representatives will be discharged from a liability for payment of IHT on pensions discovered after they have received clearance from HMRC. This is a useful update.

Payments made under the Infected Blood Compensation Scheme will now be exempt from IHT where an individual has died before the compensation is paid. In addition, first living recipients of compensation will have a two-year window in which they can gift some or all of the compensation without incurring an IHT charge.

International individuals (former non-doms)

Excluded property trusts (established prior to 30 October 2024)

There has been some indication that there will be minor roll-backs of last year’s major announcements on the changes to excluded property trusts, with a cap of £5 million applying to IHT due in relation to relevant property charges for trusts established before 30 October 2024 in each ten-year cycle. The cap will apply retrospectively to charges incurred from 6 April 2025. The majority of trusts are unlikely to benefit from this measure, but it will provide welcome relief to trusts holding significant value.

Temporary non-UK residence rules

The temporary non-residence rules subject an individual to income tax or CGT if the individual becomes UK resident again after a period of temporary non-UK residence. These rules have been extended to also apply to abolish relief that applied in relation to dividends declared by close companies where the dividend included ‘post-departure’ trading profits.

Temporary repatriation facility (TRF)

The government has released updated draft legislation on the changes that they announced in last year’s Budget in relation to the TRF. These offer much needed clarification on how these new rules operate and further analysis on the proposals will follow shortly.

Agricultural property held through non-UK entities

Additionally, non-UK entities holding UK agricultural property will be treated as UK situs assets. Again, the specifics of this will be provided in due course, but we anticipate this may mirror the existing rules for non-UK entities holding UK residential property.

Pension changes

Currently, both employee and employer pension contributions made through salary sacrifice arrangements are exempt from National Insurance contributions (NICs). From April 2029, this exemption will be restricted: only the first £2,000 of an employee’s contributions will remain free of NICs. Any contributions above this threshold will attract both employer and employee NICs. Employers will be responsible for ensuring the correct amounts are reported and paid to HMRC via PAYE. By contrast, employer contributions to salary sacrifice pension schemes will continue to be exempt from NICs. Importantly, these changes do not affect income tax relief on pension contributions, which will remain available.

Further announcements

In addition to the above headline tax announcements, the government confirmed several wider fiscal measures. Some of which are mentioned below.

The freeze on Fuel Duty will be further extended until September 2026, after which the 5p-per-litre cut introduced in 2022 is scheduled to be withdrawn in three stages.

The previously announced expansion of the Soft Drinks Industry Levy, otherwise known as the ‘sugar tax’, has been confirmed to include bottled milkshakes, flavoured milk and milk substitute drinks from 1 January 2028.

A significant restructuring of gambling taxation was announced. From April 2026, the rate of Remote Gaming Duty will increase from 21% to 40%, and, from April 2027, a new 25% rate for Remote Betting Duty will be introduced, excluding self-service betting terminals, spread betting, pool bets, and horseracing. As part of the same reform, Bingo Duty will be abolished from April 2026.

There will be additional investment for the digitisation of HMRC systems and the expansion of investigation and enforcement capacity. These measures are intended to support improved tax debt recovery, reduce non-compliance and enhance data-driven administration. The OBR estimate that these measures will raise £2.3 billion annually by 2029/30. This represents an increased focus on enforcement and operational efficiency. In practical terms, individuals and businesses can expect closer scrutiny of compliance, increased use of real-time data, and potentially more proactive intervention where liabilities are overdue or disputed.

This Budget is the start of the process and further detail and draft legislation over the next few months are expected.

If you would like to discuss the impact of these changes or have any other concerns as a result of this Budget, please contact us for further information. 

Regulations came into force today which bring some welcome clarity to charities wishing to make what are known as ‘ex gratia’ payments. This article covers examples of ex gratia payments and explains the new rules and the circumstances in which they do and do not apply.

What does this relate to?

Essentially, charities must only spend their money in ways which promote their charitable objectives. That may sound sensible, simple and straightforward, but this simplicity can cause problems in a sector that often has strong moral and ethical considerations which underpin its decision-making around expenditure.

What sort of problems can arise?

One example of a problem is when a charity receives a legacy in a will but, because of a quirk of events, the deceased person’s family is accidentally disinherited. This has formed the basis of the rules around when charities may make payments to individuals or other causes that are not in their charitable objects. It is not promoting a charity’s objects to pay the family of a deceased person when the charity has accidentally inherited most or all of their wealth, but there are strong moral and ethical points to consider.

Similarly, trustees of a museum which holds artefacts from another country that were obtained in dubious circumstances have recently been facing similar dilemmas. Trustees may feel a strong moral obligation to return those artefacts, let alone the strength of public opinion which could impact the charity’s reputation. This is a live consideration for many museums, galleries and other charities with collections of difficult provenances.

There are other charities which may reasonably regard their role within the communities they serve as conferring an obligation on them to make charitable donations for other reasons. This could include, say, the trustees of a prominent local charity wishing to make donations to a community group supporting the homeless. It may not be within their charitable objects to support the homeless and yet their position within their communities may mean there is a strong moral obligation to provide assistance, for example by providing financial support to a soup kitchen.

The new Charity Governance Code (in force from 3 November 2025) notes that it is an indication of good governance that trustees are sensitive to the ethical, social and environmental consequences of their decisions, but it is essential that this is not conflated with a sense that moral arguments take precedence over the need to comply with the charity’s objects. Trustees must tread carefully.

What are the new rules?

In summary, the amount a charity can pay ex gratia without the Charity Commission’s permission will now be set against the charity’s income in the previous financial year, as follows:

Legal tests must still be met, so the charity trustees must:

• have no legal power (other than under these provisions) to take action; and
• in all the circumstances be reasonably regarded as being under a moral obligation to take that action.

If these tests are met and the value of the payment or gift is within the new thresholds, then charity trustees will be empowered to make the payment without reference to the Charity Commission, the courts or the Attorney General. However, our advice remains that extreme caution must be exercised since the starting point must be that a charity should follow its objects. It must only stray outside those objects because the trustees feel a strong moral pressure to do so. It is not simply a sense that it would be good to be able to make a payment; it is a far higher bar.

The explanatory note to the regulations bringing these new provisions into force explains that the standard of decision-making is an objective one. This means that the decision as to whether there is a moral obligation to take action does not need to be a decision of the trustees themselves. This clarifies that decisions relating to ex gratia payments could be delegated to a committee or other group within the charity. Trustees should however note that they remain ultimately responsible for any decisions made and there should be appropriate oversight of any delegated decisions, especially as these changes are adopted.

Will this apply to all charities in all circumstances?

In short, no. There are several charities which have specific collections or property of national significance which are excluded from these provisions. This includes the British Library, British Museum, Tate Gallery, National Portrait Gallery and 12 others, so these provisions will not themselves enable the return of the Parthenon Marbles. Or, at least, not without scrutiny from the Charity Commission, the Attorney General or the courts, and, most likely, Parliament.

If you would like to discuss the rules around ex gratia payments, please contact Virginia Henley, Rachel Spruce or your usual Penningtons Manches Cooper charity contact.