Avoiding turbulence: The Legal Landscape for Aerospace in 2025
Ahead of what is set to be a pivotal year for North West aerospace, a team from Brabners, including Partner Michael Winder and Legal Directors Christine Hart and Eleanore Beard, explores the key legal developments set to impact the sector in 2025.
2024 was an eventful year for North West aerospace, characterised by a crucial election, improving economic conditions and further emphasis on the transition to net zero.
2025 is shaping up to be another pivotal year in the sector’s evolution – particularly with the government set to publish its long-awaited Industrial Strategy and its Strategic Defence Review in the first half of the year. At the same time, confidence in the sector is on the up in the face of growing geopolitical tensions. BAE Systems’ recent £1bn investment in recruitment is indicative of the direction of travel.
As such, there are a number of key regulatory developments for management teams to be aware in order to make the most of the opportunities available to them in the months ahead.
Procurement Act
On 24 February 2025 the Procurement Act 2023 will come into force, after its initial implementation was delayed from October 2024. The planned implementation date was again confirmed for February by the Parliamentary Secretary for the Cabinet Office last week.
Chiefly, the Act intends to enable suppliers of all sizes to access public sector work more easily and maximise flexibility for public sector buyers, helping to deliver the services that the country needs. Those businesses that rely heavily on defence contracts will need to be prepared for the ways that the legislation will impact their business.
Perhaps the most crucial change for businesses to be aware of is that any tenders advertised or awarded before the 24 February will be subject to the current legislation for the term of the contract whereas procurements of contracts from the 25 February will be under the new legislation. This may result in two similar procurements, and then contracts, running side by side but subject to significantly different legal regimes.
Aside from being aware of this fact, companies in the aerospace industry should start setting the groundwork for tendering and contracting under the new Act if they haven’t already. This is an opportune moment to engage with a specialist procurement lawyer to consider the best approach to take during the transition period.
Cyber Resilience Act
Cybercrime remains one of the most pressing legal issues of our time, with 32% of all UK businesses experiencing a cybersecurity breach in 2023. As the geopolitical situation becomes more uncertain this figure is only likely to rise, with UK firms working with the Ministry of Defence or within the aerospace supply chain particularly vulnerable to attacks.
To help combat this, the government is continuing to progress the Cyber Security and Resilience Bill. This will seek to expand the remit of existing regulation, put regulators on a stronger footing and increase reporting requirements to build a better picture of the threats we face.
The Bill is set to be introduced to parliament in 2025, and although we’re awaiting confirmation on what exactly it will entail, there are a number of steps businesses can take to prepare. For example, it’s widely accepted that the final Bill will largely reflect the EU’s own Cyber Resilience Act (CRA), despite the UK’s position outside of the bloc.
Indeed, the CRA – which came into force in November – already applies to businesses that sell products within the EU, meaning that aerospace businesses operating in European markets will be impacted by the change. These businesses now have a 36-month grace period in which they need to adapt to the new requirements or face penalties.
In order to guarantee compliance with different legislation in various legal jurisdictions, we would advise all aerospace organisations to follow established standards relevant to the act devised by advisory bodies such as the International Society of Automation (ISA) and the International Electrotechnical Commission (IEC).
The key standard for aerospace businesses to consider is IEC/ISA 62443, which outlines best practices for the use of industrial control systems and provides a proven way to assess a factory’s level of security performance. The standard’s goal is to create a framework that’s widely applicable and accepted for improving security in critical infrastructure and industrial spaces.
Employment considerations
Also high amongst business concerns for 2025 is the planned increase to National Insurance Contributions (NIC) and the national minimum wage, which are set to come into force in April.
While these changes will inevitably have a real impact on the bottom line of many businesses, it’s important that management teams remain alive to other employment issues – most notably the progression of the Employment Rights Bill.
The Bill is not expected to become law until Autumn 2026, but provisions such as the introduction of day one right to unfair dismissal, an overhaul of how flexible labour is engaged and managed moving forward, and the granting of enhanced protection for pregnant and new mothers will have a significant impact on business operations once passed. The businesses that take steps to prepare for this now will feel less of an impact from the new legislation once it is introduced.
Data Use and Access Bill
Another key piece of legislation for businesses to be aware of is the proposed Data Use and Access Bill, which seeks to modernise the UK’s data protection and digital economy framework.
Although still very much in its development period, having only been introduced in the House of Lords in October, the Bill will likely have implications in the way businesses can harness the power of personal data and subsequently maximise the potential of technologies such as AI, automation and digitalisation – all of which will be key to the evolution of the aerospace sector.
As the Bill progresses through the legislative process, we’d encourage businesses to monitor the details and take steps to ensure that they remain compliant once it comes into force. Brabners’ Data Protection Team will be providing regular updates in the new year – look out for our blog on “Data Protection Day”, which arrives on the 28th January 2025.
Seatbelts on
Looking ahead, it’s clear that 2025 will present a host of exciting opportunities for the North West’s aerospace sector – and for those that fail to prepare, a number of potential pitfalls.
In the face of several proposed changes to legislation, proactively reviewing policies and processes will allow businesses to negate the pressure of compliance once they’re implemented, leaving them best placed to thrive under the new legal and regulatory landscape.
For more information on how our specialist team can support your business in navigating the evolving regulatory landscape, complete our contact form or email hello@brabners.com.
