Looking ahead: Ross Webb (pic: Terry Murden)
ROSS WEBB looks at some of the factors that are likely to give rise to the need for dispute avoidance, management and resolution over the next 12 months
The turbulence of the past few years has sorely tested businesses’ resilience in Scotland, and beyond. From the still-persisting impacts of the Covid pandemic to the global supply chain issues brought on by wars in Ukraine and the Middle East and the increasing instability of the international geo-political landscape, trading conditions have been, and continue to be, challenging.
Looking ahead to 2025, it would seem that this resilience will again be called into service, with a number of factors at play. There are, however, glimmers of optimism about what the coming months might bring.
Interest rates and inflation are both forecast to fall – though admittedly more slowly than had previously been predicted, and this will help create a more stable environment for businesses and begin to ease some pressure on cashflow.
However, and perhaps unsurprisingly, after such a demanding period, Scotland’s total insolvency rate has risen again in recent months, with fears about what Labour’s October Budget might hold, leading even to some solvent companies winding down before any tax changes were unveiled.
Sectors which employ large numbers of people, including professional services, retail and hospitality, are no doubt already grappling with how to mitigate the hike in employer National Insurance contributions due from April, which could put a squeeze on hiring and cashflow.
Fraud cases continue to rise, too, with many cases still being discovered and investigated post-Covid. There is an estimated £10.5 billion worth of fraud and error across the various government Covid schemes alone much of which is still to be recovered.
Cyber-fraud, meanwhile, shows no signs of abating and with an annual estimated £27 billion cost to the UK economy, this is a major risk area for Scottish businesses, especially around cybersecurity supply chain and ransomware issues.
We have seen an increase in cases with an international element, as Scottish businesses look to new markets post-Brexit, as well as increased activity among businesses from other countries seeking to build trading relationships here. And the incoming Trump administration in the US and the potential reintroduction of tariffs will be weighing on many exporters’ minds.
The reimagining of our town and city centres and major infrastructure, regeneration and energy transition projects present a wealth of opportunities across several sectors in Scotland’s economy. This will, of course, come with an increased need for dispute avoidance, management and resolution services.
A game-changing piece of legislation due to take effect this spring is the Moveable Transactions (Scotland) Act 2023, which through a new ‘statutory pledge’ will more easily enable lenders to take security over moveable assets and should streamline the current, complex process for the transfer of claims. As with all new legislation, the courts will play a vital role in helping shape the practical application of this Act, but it may be some time before these cases start to come before the courts.
Finally, while many larger businesses will have welcomed the recently announced rates relief recently announced by the Scottish government, thousands will miss out, making things even more challenging for business owners, especially small retailers and numerous businesses in the hospitality sector, where help was probably needed most.
Like a Christmas stocking filled with a variety of pleasant surprises, wished-for gifts and some less well-chosen items, 2025 will present business owners with a mix of challenges and growth opportunities alike.
By harnessing their capacity to adapt and evolve to meet new developments, and by seeking legal advice in ample time to achieve a desirable resolution to contentious matters, businesses can welcome and navigate the New Year with optimism.
Ross Webb is a partner in dispute resolution at Aberdein Considine
Leave a Reply