Agricultural Law in the UK (England and Wales): Overview | Practical Law

Agricultural Law in the UK (England and Wales): Overview | Practical Law

A Q&A guide to agricultural law in the UK (England and Wales).

Agricultural Law in the UK (England and Wales): Overview

Practical Law Country Q&A 1-602-7125 (Approx. 24 pages)

Agricultural Law in the UK (England and Wales): Overview

by Practical Law Agriculture based on an original article by Burges Salmon LLP
Law stated as at 01 Nov 2022England, Wales
A Q&A guide to agricultural law in the UK (England and Wales).
The Q&A gives a high-level overview of agricultural law, including subsidies, environmental issues, agricultural companies and co-operatives, land ownership and usage rights, water controls, tax and financing, crop seed business, plant variety right protection, GM crops, animal welfare, livestock gene patentability, food standards, and product liability.
The UK left the EU on 31 January 2020. The Agriculture Act 2020 was enacted on 11 November 2020, which sets out plans to phase out Direct Payments in England by the end of the agricultural transition period, currently stated as end of 2027, and replace it with a new system of environmental land management (ELM) (see Practice note, Agriculture Act 2020).The Welsh Government introduced the Agriculture (Wales) Bill (AWB 2022) to the Senedd Cymru (Welsh Parliament) which provides a legislative framework for future agricultural policy in Wales, see Practice note, Agriculture (Wales) Bill. For more information about the future of agricultural policy post-Brexit, see Practice note, Post Brexit: timeline for UK agricultural policy.

Agricultural Policy

1. Briefly outline recent agricultural policy and main developments in your jurisdiction.
The UK is a member of the:
  • World Trade Organization (WTO).
  • Food and Agriculture Organization of the United Nations (FAO).
  • International Plant Protection Convention (IPPC).
  • Office International des Epizooties (IOE)/World Animal Health Organization.
The UK left the EU on 31 January 2020 and a transition period was in place until 31 December 2020. The UK intends to replace the EU's Common Agricultural Policy (CAP) with a new system of agricultural and environmental policy (see Question 2).
The Agriculture Act 2020 (AA 2020) provides the framework for the transition from the CAP to the new policy in England. The period for transition to the policies in the AA 2020 currently ends in 2027 but the Secretary of State for Environment, Food, and Rural Affairs has power to extend this period. The Agriculture (Wales) Bill 2022 (AWB 2022) establishes sustainable land management (SLM) as the legislative framework for future agricultural policy in Wales.
The UK has several strategies and councils to promote food security both in the UK and globally including:
  • The UK strategy for agricultural technologies (2013). The aim is for the UK to become a world leader in agricultural technology, innovation, and sustainability, increase productivity, and contribute to global food security and international development.
  • The Agri-food Technology Leadership Council. The Council is made up of senior figures from across academia and industry and its role is to implement the government's agri-tech strategy.
  • The Industrial Strategy Challenge Fund, to invest in research, development, and innovation to improve technology in the agriculture sector, particularly through artificial intelligence (AI), robotics, and earth observation to improve supply chain resilience.
  • The UK Surveillance Forum. The overall objective of the surveillance system is to protect animal and public health, support the rural economy, safeguard food security, and maintain national credibility with trading partners.

Subsidies

2. Is there a system for subsidies or other support for agriculture in your jurisdiction? Briefly outline its main provisions.
Agricultural policy is devolved within the UK (see the AA 2020).
In England, the AA 2020 provides that payments under the CAP will be replaced by the concept of public money for public goods, known generally as the environmental land management scheme (ELMS). ELMS is a group of three schemes: the Sustainable Farming Initiative, the Local Nature Recovery, and the Landscape Recovery. For more information about the future of agricultural policy post-Brexit, see Practice note, Post Brexit: timeline for UK agricultural policy. The ELMS is to be rolled out during the transition period.
The government published a policy statement on 14 September 2018 setting out the future agricultural policy for the next ten years (see Defra: Health and Harmony: the future for food, farming and the environment in a Green Brexit - policy statement). The statement sets out details of the proposed ELMS scheme. These contracts will be available to farmers and land managers to ensure environmental benefits.
The government has indicated the contracts could be several years long, with a simple application process that would operate throughout the year.
Funding from the government could comprise multi-annual payments, capital grants, and payments for collaboration and local engagement.
The AA 2020 lists a variety of purposes for which the Secretary of State can give financial assistance. In its current draft, these include:
  • Managing land or water in a way that protects or improves the environment.
  • Supporting public access to and enjoyment of the countryside, farmland, or woodland and better understanding of the environment.
  • Managing land or water in a way that maintains, restores, or enhances cultural or natural heritage.
  • Managing land, water or livestock in a way that mitigates or adapts to climate change.
  • Managing land or water in a way that prevents, reduces, or protects from environmental hazards.
  • Protecting or improving the health or welfare of livestock.
  • Conserving native livestock, native equines, or genetic resources relating to any such animal.
  • Protecting or improving the health of plants.
  • Conserving plants grown or used in carrying on an agricultural, horticultural, or forestry activity, their wild relatives, or genetic resources relating to any such plant.
  • Protecting or improving the quality of soil.
  • Starting, or improving the productivity of, an agricultural, horticultural, or forestry activity.
  • Supporting ancillary activities carried on, or to be carried on, by or for a producer.
The Secretary of State must regard the need to encourage production of food in an environmentally sustainable way.
In Wales, the Welsh Government's has published proposals for the new Sustainable Farming Scheme (SFS). The AA 2020 (Schedule 5) gives powers to Welsh Ministers to continue with the Common Agricultural Policy (CAP) based approach to agricultural support schemes, in the guise of direct payments and Glastir. Wales must introduce its own legislation to the Senedd by 31 December 2024 to establish its new agricultural support framework. This will be done via the Agriculture (Wales) Bill, see Practice note, Agriculture (Wales) Bill. This policy framework focuses on supporting farmers to produce food sustainably, alongside taking action to respond to the climate and nature emergencies.

Environmental Issues

3. Do environmental issues form part of government support for agriculture in your jurisdiction? If yes, please give brief details.
The new financial support system proposed under the AA 2020 (see Question 2) focuses on the concept of public goods and rewarding those working in the agricultural industry for positive action on environmental issues.
The AA 2020 also sets the 25-year environment plan on a statutory footing and introduces a broad range of environmental measures.
The main aim of the future ELMS is to reward farmers, foresters, and land managers to deliver environmental improvements with public money. ELMS will deliver on the government's policy document, A Green Future: Our 25 year plan to improve the environment, which applies principally to England, and support the government net zero targets.
In June 2019, the Climate Change Act 2008 was amended to include a commitment for the UK to eradicate its net contribution to climate change by 2050. The commitment was based on advice from the Committee on Climate Change, a group of independent climate change experts.
The Committee on Climate Change published a report in January 2020 on how land use must change to achieve the net zero target. The report outlined a range of recommendations including to plant more trees, change farming practice, increase peatland restoration, encourage bioenergy crops, and eat less meat and waste less food.
The report makes clear that land use will be a factor the government will focus on when looking to reach the net zero target. Accordingly, the environmental impact of the agricultural sector is likely to continue to be a focus of future government policy.
In Wales, the AWB 2022 current proposals follow environmental objectives to:
  • Produce food and other goods in a sustainable manner (section 1(2)).
  • Mitigate and adapt to climate change (section1(3)).
  • Maintain and enhance the resilience of ecosystems and the benefits they provide (section 1(4)).
  • Conserve and enhance the countryside and cultural resources and promote public access to and engagement with them, and to sustain the Welsh language and promote and facilitate its use (section 1(5)).

Regional Variations

4. Briefly outline how disadvantaged areas such as uplands are treated within agriculture.
In both England and Wales, the Basic Payment Scheme currently provides for direct payments to farmers with land within three entitled regions, including severely disadvantaged areas. The current Basic Payment Scheme will be phased out.
Both England and Wales are working on new policies but proposed schemes aim to promote environmental benefits and encourage farmers to farm in a sustainable way.
Environmental schemes, such as the Countryside Stewardship Scheme, can also be used to benefit disadvantaged areas by providing financial incentives for farmers, woodland owners, foresters, and land managers to look after and improve the environment, by providing various grants under the CAP. The Countryside Stewardship (England) Regulations 2020 (SI 2020/41) came into force on 11 February 2020 to govern new countryside stewardship agreements in England.
The AA 2020 (see Question 2) contains explicit reference to supporting uplands but plans to phase out direct payments by the end of the agricultural transition period and replace it with a new system of environmental land management. The Department for Environment, Food and Rural Affairs (Defra) has highlighted that upland farmers will be "well placed to benefit" from the new system. For more information, see the House of Commons Briefing paper on the Agriculture Bill.
In Wales, much of the agricultural land is designated as less favourable area land and sheep farming is common. It is likely that the SFS will provide some support via the Sustainable Land Management objectives, which include conserving and enhancing the countryside and cultural resources. For more information, see Practice note, Transition to Sustainable Farming Scheme (Wales).
5. Is agriculture governed at national and local level? Briefly outline any regional framework and variations if applicable.
Agriculture is a devolved matter in the UK on which devolved authorities can pass laws. Distribution of grants provided by the EU under the Basic Payment Scheme are administered by the national government and the devolved administrations for Scotland, Wales, and Northern Ireland, and therefore vary in approach.
The AA 2020 provides a domestic framework for when the UK reaches the end of the transition period (see Question 2). The AA 2020 contains provisions conferring delegated legislative powers on the Secretary of State, Welsh ministers, and the Department of Agriculture, Environment and Rural Affairs (DAERA) of Northern Ireland.
On 26 September 2022, the Welsh Government introduced the AWB 2022. The Welsh Government is planning for complete reform by 2025 and wants legislation in place to ensure a phased transition period can take effect.

Agricultural Business Vehicles

6. What business vehicles are typically used in the agriculture sector? Are specific forms such as co-operatives used and are they open to foreign investment?
The following business vehicles are typically used in the agricultural sector:
  • Farming partnerships.
  • Companies.
  • Share farming arrangements.
  • Co-operatives.
They are all open to foreign investment, including investment in carbon capture.
A good proportion of the farms in England and Wales are farmed by individuals/farming families.
Companies are regulated under the Companies Act 2006.
Partnerships are often used in a farming context. They are regulated by the Partnership Act 1890 and, less frequently in the agricultural sector, by the Limited Liability Partnership Act 2000.
Co-operatives must be registered as one of several legal forms, most often under the Industrial and Provident Society Acts or companies limited by guarantee under the Companies Act 2006.
7. Is the acquisition of domestic agricultural business vehicles by foreign investors subject to special prior government approval(s)? If yes, set out the approval procedures and authorities involved.
The acquisition of agricultural business vehicles by foreign investors is not currently subject to special prior government approvals.
8. Is there a specific competition (anti-trust) law regime for the agriculture sector? Briefly set out the aspects of the competition regime that are most relevant to agriculture (for example, restrictive agreements and practices and merger control).
Competition law in the UK derives from EU competition law. The Competition and Markets Authority (CMA) is the primary enforcer of competition law in the UK.
Chapter I of the Competition Act 1998 prohibits agreements, decisions by associations or concerted practices that restrict competition in the UK.
The key question when considering whether an agreement is likely to infringe competition law is what effect it will have on competition in the relevant market and on consumers. The CMA recognises that many forms of collaboration are beneficial, increasing efficiency and benefiting consumers.
The practices set out below almost certainly infringe competition law. These can be regarded as a blacklist of things to be avoided:
  • Anti-competitive agreements between companies where competitors fix prices or divide markets, which extends to concerted practices. A concerted practice may exist where there is informal co-operation between competitors, for example, where sensitive commercial information may be exchanged or conveyed. This includes, in particular, any information that may reveal a business's future commercial behaviour, such as its pricing or marketing strategy.
  • Abuse of a dominant position in a relevant market by a business, particularly if this leads to the exclusion of actual and/or potential entrants.
Businesses that infringe competition law can face significant financial penalties of up to 10% of worldwide turnover. They can also be exposed to damages claims by customers and/or competitors that have suffered loss as a result of anti-competitive behaviour. There are also criminal offences relating to prohibited cartel arrangements.
Most forms of collaboration between businesses in the farming sector will not raise any competition problems. The CMA is only likely to have concerns where co-operation could significantly affect the competitive process (for example, collaborating to fix prices, share markets or limit production), on the basis that consumers may be harmed.
Certain agreements between farmers or farmers' associations are excluded from consideration under competition law, for example, those concerning:
  • Production or sale of agricultural products (including livestock, dairy, meat, and fish products, as well as fruit and vegetables and other crops).
  • Use of joint facilities for the storage, treatment, and processing of agricultural products.
However, the exclusion only applies if an agreement meets certain conditions. The main conditions are set out below:
  • The agreement is only between farmers or an association of farmers (not, for example, between farmers and processors, or slaughterhouses).
  • The agreement must not involve an obligation on the farmers to charge identical prices for their products, although arrangements where farmers agree to sell through a co-operative and take whatever price the co-operative realises in the market should be acceptable.
Most marketing and sales agreements (often referred to as commercialisation agreements) will not raise competition concerns provided they do not involve price-fixing. The agricultural exclusion (see above) may also apply to marketing or sales agreements.
Farmers' co-operatives (for example, where farmers co-operate in the area of production, collection or processing of their products), joint production agreements, and joint agreements for bulk buying of inputs are generally recognised as pro-competitive structures, allowing farming businesses to compete more effectively against other suppliers. Accordingly, competition concerns are unlikely to arise unless the businesses involved have market power (such as a combined market share of more than 20%).
Certain sectors have been under scrutiny during the 2019 novel coronavirus disease (COVID-19) pandemic which has highlighted unfair practices in the supply chain. On 24 June 2020, Defra launched a consultation into contractual relations and unfair pricing practices in the UK dairy sector.
The provisions in AA 2020 Chapter 2 provide the Secretary of State with power to make regulations to introduce obligations that promote fair contractual relationships between primary producers, producer organisations, associations of producer organisations, produce aggregators, and the business purchasers of their products. Chapter 2 applies to the whole of the UK.

Acquiring and Holding Agricultural Land

Ownership

9. Are there restrictions on the acquisition of agricultural land? Consider any restrictions on local and foreign investors, and on legal entities and natural persons.
There are no legal restrictions on the acquisition of agricultural land. However, the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA 2022) relating to the registration of overseas entities came into force on 1 August 2022. For more information on the property implications of ECTEA 2022 which introduces a new register of overseas entities (ROE) and the impact for those dealing with overseas entities in real estate transactions, see Practice note, Economic Crime (Transparency and Enforcement) Act 2022: property implications.

Land Tenure and Usage Rights

10. Briefly outline the main ways that agricultural land is held. What usage rights are typically granted over agricultural land (for example, leases)? Are there restrictions (such as a maximum length of lease terms)? Consider any restrictions on local and foreign investors, and on legal entities and natural persons.
Agricultural land in the UK is held as either freehold or leasehold land. Other legal interests in land include an easement (a right over land) or a charge by way of legal mortgage. Virtually all other interests in land are equitable interests.
Land Registry entries provide details of ownership and rights and liabilities relating to the relevant land.

Agricultural Tenancies

There are two main types of agricultural tenancy in England and Wales, each governed by a different statutory regime:
Leases granted before 12 July 1984 carry potential succession rights, which may result in the right for up to two further generations of farmers to occupy an agricultural holding.
Under the ATA 1995 parties have significant freedom to negotiate the terms of the tenancy agreement. The tenant has no renewal rights and no security of tenure other than the restrictions on the time periods for termination notices. The tenant has flexibility to diversify away from agriculture to some degree (subject to the terms of their agreement) without endangering the status of their tenancy as an FBT.
Under the AHA 1986 the tenant of an agricultural holding has far greater statutory protection. The parties have little freedom of contract. The tenant has security of tenure through statutory restrictions on the operation of a landlord's notice to quit. It is more difficult for the landlord to obtain possession.
There are no specific restrictions on the acquisition of usage rights to agricultural land by foreign parties, save that they have to comply with national and local planning laws There is no maximum term applicable to the lease of agricultural land. Long leases are rare, but if occurring can have a term of up to 999 years. However, leases over 30 years are rare. New leases are normally granted for short terms, with the vast majority being for less than ten years but this may depend on the market at the time of grant
The agricultural tenancy law in England and Wales is beginning to diverge with the Welsh Government continuing to make minor changes to agricultural holdings legislation. The Renting Homes (Wales) Act 2016 (RHWA 2016) which came into force on 1 December 2022 significantly reforms the law relating to the occupation of residential property in Wales, by introducing a new regime of occupation contracts.

Special Acquisition Procedures

11. Are there any compulsory tendering or prior approval procedures required for a sale of agricultural land? Briefly set out these procedures and any approvals required. Are there mandatory minimum land prices if the government sells agricultural land?
There is no compulsory tendering or prior approval procedures required for a sale and purchase of agricultural land.
There are no mandatory minimum land prices if the government sells agricultural land.
12. In which circumstances can the government authorities expropriate agricultural land?
The government and certain bodies with statutory powers have rights to make compulsory purchase orders (CPOs). CPOs compel individuals to sell their land to the body making the order, so that it can carry out a function which parliament has decided is in the public interest. With agricultural land, this could be, for example, to build a new road, railway, housing development, or other infrastructure or facility. The price is determined on a full compensatory basis. The procedure for making and confirming CPOs is, in most cases, governed by the Acquisition of Land Act 1981 (ALA 1981), as amended by the Planning and Compulsory Purchase Act 2004.

Water Controls

13. Is the abstraction of water controlled by licence or quantities? Briefly set out the main provisions, legislation and regulatory authorities.

Legislation and Regulatory Authority

Applications for water licences in England and Wales are made to the Environment Agency.
The main legislation regulating water abstraction in England and Wales is the:
  • Water Resources Act 1991.
  • Water Act 2003.
  • Water Resources (Abstraction and Impounding) Regulations 2006.
  • Water Act 2014.

Water Licences

The type of licence required depends on the amount of water being abstracted. For abstractions of more than 20 cubic metres in 24 hours over a period of 28 days, a full licence is required. A temporary licence must be obtained when abstracting this amount of water in less than 28 consecutive days.
A transfer licence must be obtained to move over 20 cubic metres of water a day from one source to another and an impoundment licence is required to create an impoundment structure like a sluice or a dam.
A water abstraction licence gives the holder a right to a certain amount of water from a particular supply and protects the share of water allocated from being taken by anyone else. The licence is detailed and only allows abstraction from a particular source, using a particular method. The licence also specifies what the water can be used for.
Licences applied for after 2004 have a time limit, which is often 12 years. Any lasting longer than 12 years are subject to additional requirements.
The Environment Agency should be contacted before an application if it involves abstraction from a borehole or well. Separate consents may be required to construct the borehole or well and complete a test pumping of it.
The water abstraction regime is changing to an environmental permitting regime in 2023. Under the new regime, existing water abstraction licences will automatically become environmental permits (known as transitional permits). The government plans to adopt the Environmental Permitting (England and Wales) Regulations 2016 and has said that it intends to lay secondary legislation in Parliament for implementation in 2023 but exact dates are not yet known. For more information, see Practice Note, Water abstraction regime: Transition to Environmental Permitting.

Penalties for Non-Compliance

The Environment Agency enforces breaches of licence conditions or offences and can impose criminal or civil penalties. The penalty depends on the type of breach committed. If a breach is likely to cause significant environmental damage, the Environment Agency can issue an enforcement notice requiring a person to cease the breach or comply. The enforcement notice can also require particular works or operations to be carried out.
Criminal offences include abstracting water without a licence, carrying out works for abstracting water without a licence, and failing to comply with the conditions of a licence or an enforcement notice. The offences are punishable summarily or on indictment and convictions can lead to an unlimited fine. Other criminal sanctions include warnings and formal cautions.
In Wales, the Natural Resources Wales (NRW) is the body in charge of all natural resources, including abstraction licences.

Tax

14. Which taxes apply to the sale and transfer of land ownership or usage rights?

Stamp Duty Land Tax (SDLT)

SDLT is payable on the sale price of agricultural land and is paid by buyers and tenants. Land transaction tax (LTT) applies in Wales.
SDLT on land purchases is calculated on a "slab" basis, with the total price paid determining the rate payable on the whole, not just on the relevant slice.
SDLT must be paid to the UK tax authority, HMRC, within 30 days after completion (or substantial performance) of a land sale. Failure to do so incurs potential penalties and interest and prevents the land from being registered in the buyer's name at the Land Registry. The payment must accompany a return submitted to HMRC explaining the details of the transaction and the parties to it.
SDLT is difficult to legitimately avoid, and avoidance schemes are usually quickly closed down by anti-avoidance legislation. However, SDLT may be reduced by, for example, apportioning some of the purchase price to chattels in the property (on a reasonable basis), or by claiming various reliefs.

Capital Gains Tax (CGT)

CGT is payable on the gain made by individuals when they sell or dispose of an asset in England and Wales. It is charged at a rate of 10% or 20% for agricultural land and farming assets, depending on the amount of the person's total income and gains.
Various reliefs are available. One is Entrepreneurs' Relief (ER), which has the effect of CGT being charged at a rate of 10%. Broadly, ER is available on the disposal of businesses or shares in a business, for gains of up to GBP1 million. Availability is subject to certain other conditions depending on the nature of the disposal.
ER can apply to a business sale or assets used in a business if the seller is selling the business or ceasing to trade. For example, if a farmer sold the whole of their farm business, this would qualify for ER, but if they only sold some fields and continued to farm the rest of the land, this would not be eligible for the relief.

VAT

A sale of agricultural land in England and Wales can be subject to standard rated VAT at 20% if all the following apply:
  • The supplier is a taxable person, that is, their turnover in the previous 12 months exceeds GBP85,000 (for the year beginning 6 April 2019) or they have an expectation that the value of their supplies in the next 30 days alone will exceed that level.
  • The supply is made in the course of a business.
  • There is a taxable supply. Land sales are generally exempt from VAT but some supplies relating to agricultural land are standard rated, for example:
    • a grant of sporting rights;
    • a sale of a freehold interest in a non-residential building or civil engineering work completed less than three years before the sale.
In addition, a landowner registered for VAT can decide to opt to tax the property concerned (a seller may choose to do this if the seller incurs input tax in relation to the land, as input tax can be recovered from HMRC if it relates to a VAT taxable supply).
Residential property is exempt from VAT.

Inheritance Tax (IHT)

IHT is paid on an estate on a person's death in England and Wales. It is also sometimes payable on trusts or gifts made during an individual's lifetime. It is payable on estates valued at over GBP325,000, at a rate of 40% on the amount over this threshold or 36% if the estate qualifies for a reduced rate due to a charitable donation.
The main IHT reliefs that apply to farmers are:
  • Agricultural property relief (APR), which relieves the agricultural value of agricultural land, buildings, and houses.
  • Business property relief (BPR), which is available on all business assets (not just property) used in a trade.
Where APR is available it takes priority over BPR but both types of relief can apply to the same asset. For example, a field with development value may secure APR on its agricultural value, with BPR relieving any hope or development value on top. Development value is based on the value a developer would be prepared to pay for the land to develop it.
APR. This can apply to landlords and in-hand farmers. In the case of an owner/occupier, the agricultural property must have been used for the purposes of agriculture for the two years up to the date of death or lifetime transfer, or for seven years in the case of a farm landlord. 100% relief is available in all cases except where the land is subject to a tenancy that pre-dates 1 September 1995.
BPR. To qualify for BPR, the business must be more than 50% trading as opposed to holding investments. In addition:
  • BPR is available to sole trader businesses and interests in a partnership as well as for shares in unquoted trading companies. It is also available on land, buildings, and machinery used by a partnership of which the deceased was a partner or by a company of which they had control.
  • The rate of relief is either 100% or 50% of the value transferred, depending on the nature of the relevant business property and who owns it.

Taking Security

15. How is security over agricultural land typically created and perfected to raise finance?

Mortgages

Mortgages are security interests commonly granted over freehold or leasehold land and buildings, including agricultural land. They are the best form of security for a lender and will defeat subsequently created security interests. Mortgages must be registered at the Land Registry (and, if a company or limited liability partnership (LLP) is granting a mortgage, at Companies House).
Mortgages commonly contain a form of restriction which will prevent any dealings (including sales) with the land without the lender's consent.

Agricultural Charges

The Agricultural Credits Act 1928 allows sole traders and partnerships (but not corporate entities such as limited companies or LLPs) to create agricultural charges. Only a farmer (an owner or tenant of land who cultivates for profit) can create such charges, and only a deposit-taking bank can take them. In addition, they can only be given over farming stock and other agricultural assets (for example, machinery, certain livestock, and crops, but not a farmer's bank account, entitlement to agricultural subsidies, land, leased assets, or debts owed to the farmer).
All agricultural charges must be registered with the Agricultural Credits Department (Plymouth) within seven days of creation. If not registered it will be void against any third party but still enforceable by the bank against the farmer.

Debentures

A debenture is a composite document containing a combination of fixed and floating charges, usually over all the borrower's assets. It allows the lender to appoint an administrator over the borrower without the need for a court hearing. Debentures must be registered at Companies House and (if real estate is included in the charged assets) also at the Land Registry.

Crop Seed Business

16. State the approvals/licences that are required to import new plant species or varieties and crop growing technologies. Briefly outline the approval process, legislation, and regulatory authorities.
The crop seed industry and the import and export of plants are regulated by the Animal and Plant Health Agency (APHA), an executive agency sponsored by Defra.

Importing Plants from the EU to Great Britain

The UK left the EU on 31 January 2020. Great Britain (England, Scotland, and Wales) has adopted a phased approach to plant health controls for plants and plant products imported from the EU. This phased approach started in January 2021.
Plant health controls include:
  • Phytosanitary certificates (documents issued in the country of origin that prove the consignment is biosecure).
  • Pre-notification of imported regulated plants and plant products from the EU to Great Britain.
  • Document checks. An inspector examines official certifications and documents (these take place away from the border).
  • Identity checks. An inspector confirms that the content and labelling of the goods match the information provided in certifications and documents.
  • Physical checks.
To export plants to the EU from 1 January 2021, if there is no agreement otherwise, as a third country the UK will need to meet the EU's current third-party import requirements. This includes obtaining a phytosanitary certificate using the eDomero system if required by the destination country and carrying out laboratory testing on samples before exporting if needed. For more information, see Export plants and plant products from Great Britain and Northern Ireland.

Importing Plants from Outside the EU

A phytosanitary (health) certificate (PC) is required for almost all plants and living parts of plants, including all seeds for planting, entering Great Britain (England, Scotland, and Wales) from non-EU third countries. The restrictions and requirements relating to the import of plants and plant produce from non-EU countries are laid down in Regulation (EU) 2016/2031 on protective measures against plant pests (Plant Health Regulation). They are implemented in England by The Official Controls (Plant Health and Genetically Modified Organisms) (England) Regulations 2019/1517 and in Wales by The Official Controls (Plant Health and Genetically Modified Organisms) (Wales) Regulations 2020 (see Import plants and plant products from the EU to Great Britain and Northern Ireland).
Broadly, for plant health purposes, material falls into one of the following two categories, according to the risk of introducing pests and diseases.
Prohibited. These are referred to as high risk under Article 42 of the Plant Health Regulation and are prohibited from entering the EU until a full risk assessment is carried out. A list of these is in Commission Implementing Regulation (EU) 2018/2019.
Controlled. Plants, including the living parts of a plant, must have a phytosanitary certificate to enter the EU, unless the plant is exempt. A limited list of exempt plants is in Commission Implementing Regulation (EU) 2018/2019, including fruit such as pineapples, bananas, and dates. Typically, a phytosanitary certificate is issued by the plant protection service of the exporting country, which specifies that the plants are free of pests, diseases, and soil. In England and Wales, certificates are obtained online from Defra through the eDomero system.
All importers that import plant-health controlled material must be registered with Defra via PEACH. Importers must pre-notify each import of plant health restricted consignments on the electronic PEACH system before arrival. On entering the UK, the consignment is inspected and, if it meets plant health regulations, issued with a quarantine release certificate. This certificate is required by HMRC to secure the release of plant-health controlled consignments into free circulation.

IPPC Compliance

The UK works with the International Plant Protection Convention (IPPC) and EU member states in implementing international standards for phytosanitary measures (ISPMs), since the UK's plant health legislation largely derives from EU legislation.
Many ISPMs establish concepts for creating and managing a plant health service, and do not require specific implementation. Others, such as ISPM 15 on wood packaging material, have been implemented into EU legislation and transcribed into UK legislation.
All wood packaging material moving between the EU and UK will need to meet the requirements under ISPM 15, for more information, see Wood packaging goods for import and export.
17. Briefly outline any additional approvals/licences that are required for:
  • Setting up R&D centres and test plots for new crops.
  • Crop seed production.
  • Commercial crop production.
  • Distribution of seeds or crops (wholesale, retail and e-commerce).

R&D Centres and Test Plots for New Crops

There are no special approvals or licensing requirements for foreign parties to set-up R&D centres and test plots for new crops.
There are no specific approvals required for trials of new crops (species). Imports of seed or other planting material are regulated by the rules on importing plants (see Question 16).

Crop Seed Production

Seed production enterprises do not require a specific licence but they must comply with the laws on seed certification (see below, Distribution of Seeds or Crops). However, an enterprise must notify the National Institute of Agricultural Botany (NIAB) that it is growing crops to produce seeds, known as entering your crops.

Commercial Crop Production

Many aspects of commercial crop production are regulated (for example, in relation to fertilisers, pesticides, fungicides, herbicides, waste disposal, food safety, and labelling). Generally, a licence is not required for the production of most commercial crops.
One exception is that a licence from the Home Office is required to grow hemp for use as an industrial fibre. Hemp can also be used as a narcotic, so licensing is in place to distinguish between industrial hemp and illegal cannabis.

Distribution of Seeds or Crops

To certify and market seeds in the UK, a business must first have a licence from the APHA. To market seeds in the UK, the seed must be certified as meeting certain quality standards, under the Seeds Marketing Regulations 2011. To apply for seed to be certified, the applicant must register with Defra and complete the following stages.
Listing stage. The seed must be of a variety on the UK National Lists or the EU Common Catalogue.
Crop stage. The crops must be sown with seed of a known pedigree appropriate for the category of seed intended to be produced. Seed crops are then inspected by a qualified crop inspector, to ensure that the crops meet appropriate standards of varietal purity, freedom from weeds and, where appropriate, adequate isolation from potential sources of cross-pollination. Typically, the crop is propagated for one or more cycles to test stability. If the crop meets the standards, a crop inspection report is issued stating that it has met the crop standards.
Seed stage. A sample of the seed must be tested and a seed test report issued stating that it meets prescribed seed standards.
There is a category of vegetable seed termed standard seed. No official inspection or testing of this seed is required during production, though it must achieve the analytical, varietal purity, and germination standards defined in the Seed Marketing Regulations before marketing.

Plant Variety Rights

18. What are the legal conditions to obtain a plant variety right (PVR) and which legislation applies?

Requirements for Protection

To obtain a plant breeder's right (PBR), a plant variety must have all the following characteristics:
  • Distinctness. One or more major characteristics, which can be precisely described, that make it different from any other variety "in common knowledge" (that is, it is not the subject of a PBR in any country and is not entered in an official register of plant varieties in any country).
  • Uniformity. Sufficiently uniform in the characteristics which make it distinct, subject to normal and expected variation.
  • Stability. The characteristics which make it distinct must remain unchanged after repeated propagation.
  • Novelty. It must not have been sold or otherwise exploited with the applicant's consent:
    • in the UK, earlier than one year before the application date;
    • outside the UK, earlier than four years (six years, in the case of trees or vines) before the application date.
(Plant Varieties Act 1997.)
The UK has ratified the International Convention for the Protection of New Varieties of Plants 1961 (UPOV) and all its revisions.
19. How is a PVR obtained in your jurisdiction?
A breeder of a plant species, whether agricultural, horticultural or ornamental, can apply for a PBR. A PBR application is made to the Plant Variety Rights Office, with the following:
  • An application form.
  • A completed technical questionnaire for the correct species of the plant variety.
  • A colour photograph of the representative features of the variety (for ornamental species).
  • A sample of the plant material for testing at the later stages of the application process.
The variety will be tested and considered by experts to check that the requirements are met (see Question 18). Usually testing of ornamentals takes one year, herbage varieties four years, trees three years, and other species two years.
Proposed decisions are announced through the UK National Lists (see Question 17, Distribution of Seeds or Crops). Announcements of a proposal to grant rights are published in the Plant Varieties and Seeds Gazette. This gives any person who can show that they have an interest in the decision the right to make written representations or to request a hearing in person against the proposed decision.
A plant breeder can apply for a Community Plant Variety Right (CPVR) which gives protection throughout the EU. The Community Plant Variety Office, based in France, administers CPVRs. A breeder cannot hold both a CPVR and a PBR simultaneously. If a CPVR is granted for a variety which has a PBR, the PBR is suspended for the duration of the CPVR. Since 1 January 2021, UK businesses must apply separately for UK and EU protection.
20. How long does PVR protection last? Are there restrictions on the rights of the PVR holder or exemptions, such as farmer's privilege?

Extent of the Protection

A PBR is valid for 25 years, except for trees, vines or potato varieties which are protected for 30 years. Government ministers can, by regulations, extend the protection period for a species or group, for a maximum of five years.

Restrictions on the Rights of the Holder

A PBR holder has exclusive control of the variety. However, there is a research exemption allowing a breeder to use a protected variety as a source of initial variation to create new varieties.
A PBR is subject to the holder paying any fees during the term of the PBR and complying with the regulations, for example, regarding maintenance of the variety.
For the two-year period after a PBR is granted, the holder is free to decide who to grant licences to and any terms and conditions. After this time, compulsory licences can be granted.
A person who applies for a licence to use a protected variety and feels that the PBR holder has unreasonably refused to grant the licence or has imposed unreasonable terms can apply for a compulsory licence. This will be granted if the applicant can show both of the following:
  • A licence is necessary to ensure the variety is available to the public at a reasonable price, is widely distributed, or quality is maintained.
  • The applicant can and intends to exploit the variety in a professional way.

Farmer's Privilege

Farmers are allowed to use seed saved for their own use to grow and harvest a crop. Farmers must declare their use of farm-saved seed and pay royalty payments to the PBR holder for their use of a protected variety (section 9, Plant Varieties Act 1997). Sharing, selling, and exchanging farm saved seed is not permitted.
21. Which legal actions are available to owners of PVR in the event of PVR infringements?
A PBR entitles the holder to prevent anyone doing the following in relation to the protected variety or its propagating material without authorisation from the PBR holder:
  • Production or reproduction (multiplication).
  • Selling or other marketing.
  • Conditioning for the purpose of propagation.
  • Offering for sale.
  • Exporting/importing.
  • Stocking (for any of the above purposes).
A breeder can take action against an infringer in the civil courts. Relief is available by way of damages, injunction, interdict, account of profits, or otherwise. An account of profits is normally undertaken under the court's supervision by independent experts.
These provisions also apply to rights to dependent varieties.
A PBR can extend to harvested material obtained from unauthorised use of the variety's propagating material, if the holder has not had a reasonable opportunity to exercise rights. For example, unauthorised use of propagating material in a country with no PVR protection for the variety, followed by importing of its harvested material (such as cut flowers) into the UK. A court will decide what is a reasonable opportunity in each case.
A PBR holder can also request details of the source of suspected infringing material through an information notice, to establish whether harvested material (for example, pot plants) has been obtained through unauthorised propagation. If the information request is refused without reasonable excuse, in subsequent infringement proceedings the court will presume that the plants were obtained by illicit propagation, unless the defendant can prove otherwise.

Genetically Modified (GM) Crops

22. Set out the legislation and regulatory authorities in relation to genetically modified (GM) crops. Has your jurisdiction ratified the Cartagena Protocol on Biosafety 2002? What is your government's policy in relation to GM crops?
The Cartagena Protocol on Biosafety has been implemented through a number of biosafety laws, regulations and guidelines, at both national and EU level.
Currently, there are no GM crops grown commercially in the UK, but some are grown for research purposes.
Generally, the government will only allow the planting of GM crops, the release of other types of GM organism (GMOs), or marketing of GM food or feed products if a robust risk assessment states that it is safe for people and the environment (see Question 23). However, it recognises that GM technology can deliver benefits if it is used safely and responsibly.
GM foods that can be imported into the UK include varieties of oilseed rape, soybean, cotton-seed oil, maize, and sugar beet.
On 10 May 2022, the UK announced the Genetic Technology (Precision Breeding) Bill. This enables research into gene editing technology, by allowing the release and marketing of gene edited products under certain circumstances that has so far been prohibited by EU legislation. It allows UK scientists the power to develop plant varieties and animals with beneficial traits that could also occur through traditional breeding and natural processes, while providing safeguards in both marketing and authorisations via regulation. It will extend to England and Wales but apply to England only.
23. Set out the permit/licensing requirements and prohibitions in relation to GM related activity and the key legislation and regulatory authorities.

GM Marketing Authorisation

Current position. Authorisation must be obtained in advance to market a GM product. Applications for authorisation to market a GM product in the UK are currently assessed and decided at EU level.
A detailed safety assessment of the possible toxic, nutritional, and allergenic effects of the relevant GMO is carried out before any authorisation is granted. GM foods can only be authorised for sale if they are judged not to present a risk to health, not to mislead consumers, and not to be of less nutritional value than the foods they are intended to replace.
Currently, safety assessments are carried out by the European Food Safety Authority (EFSA), according to its published guidelines for the assessment of GM plants. The Food Standards Agency (FSA) is the UK competent authority under Regulation (EC) 1829/2003 on genetically modified food and feed (GM Food and Feed Regulation). Applications submitted in the UK are made to the FSA, which forwards the application and the dossier of information to the EFSA.
The FSA may be asked by the EFSA to review the food and feed aspects of the dossier on its behalf, in which case it will take advice from its scientific advisory committees, the Advisory Committee on Novel Foods and Processes (ACNFP) and the Advisory Committee on Animal Feeding stuffs (ACAF).
The EFSA publishes its opinion on the application. There is then a period for public comment before a final decision is taken by a vote of the EU member states.
The only GM crop grown in the EU is a pest-resistant maize variety produced by Monsanto (known as MON810). This is grown mainly in Spain and is not suitable for growing in the UK because the pests it is resistant to do not occur in the UK. There are therefore no GM crops currently grown in the UK.
There are 60 GM crops approved for use which are freely bought and sold across the EU. The EFSA is currently investigating eight of them to determine if they meet EU standards.
Position due to the UK leaving the EU. Regulations made on 17 January 2019 intend to ensure that the current regulatory framework will continue. They came into force at the end of the transition period on 31 December 2020.
The government published a notice on 21 October 2019 outlining how GMOs can be developed from 1 January 2021. It states that the current controls on environmental release of GMOs will continue to apply and be implemented by the competent UK authorities. In England, the competent authority is Defra (there is a separate authority for each country in the UK).
All EU GM marketing authorisations in force on 1 January 2021 continue to apply in the UK until they expire but GMOs are only able to be imported for release into the UK environment if they are approved for marketing in the UK. Separate authorisation is needed from each UK authority responsible for the country in which the GMO is to be marketed.
Companies based in the UK wishing to export GMO products for commercial release into the EU environment can only do so if they are approved for marketing in the EU. While the requirements under the legislation remain the same, approval to market in the UK is carried out separately from approval in the EU.

Release of GMOs for Research Purposes

To release GMOs into the environment for research purposes (for example, GM crop trials), authorisation must be obtained from Defra as follows:
  • An application for authorisation is submitted to the Secretary of State for Environment, Food and Rural Affairs, with relevant information such as details of the GMO and the potential impact of its release.
  • The Secretary of State refers the matter to a committee of independent experts, the Advisory Committee on Releases to the Environment (ACRE). ACRE considers the potential risks to human health or the environment, including factors such as toxicity, allergenicity, and the impact of any possible transfer of novel genes to other organisms.
  • ACRE publishes a report with a summary of its findings. This recommends that the government approves or denies the request, and may contain conditions or monitoring measures. The Secretary of State then decides to approve or deny the request.

GM Food Labelling

If food contains or consists of GMOs, or contains ingredients produced from GMOs, this must be indicated on the label. Products such as flour, oils, and glucose syrups must be labelled as GM if they are from a GM source. However, products produced with GM technology do not have to be labelled (for example, cheese produced with GM enzymes because the enzymes are not ingredients in the cheese).
Products such as meat, milk, and eggs from animals fed on GM feed do not need to be labelled.
For GM products sold loose, information must be displayed immediately next to the food to indicate that it is GM.
Labelling is not required where the presence of an authorised GMO is less than 0.9% of the food or feed ingredients considered individually, or of food consisting of a single ingredient, if the presence is accidental or technically unavoidable.
There is no provision for "non-GM" and "GM free" labelling, although this can lawfully be used voluntarily if appropriate to the product and not misleading to the customer.

Penalties for Infringement

Failure to comply with the GM food labelling regulations is an offence, which on conviction can lead to three months' imprisonment and/or a fine up to level five on the standard scale (currently GBP5,000).
It is a criminal offence to market a GM product without authorisation, or to breach the conditions of an authorisation. The penalty on summary conviction is imprisonment for a term up to six months or a fine up to level five on the standard scale, or on conviction on indictment to imprisonment for a term up to two years or a fine, or both.

Animal and Animal Welfare Issues

Importing Animals

24. Briefly outline the import/export control measures for animals and related genetic resources.

Importing and Exporting Animals Between EU Member States

To move live animals, animal products and genetic material from one EU member state to another, an exporter generally requires an intra trade animal health certificate (ITAHC) signed by a government approved official veterinarian, or commercial documentation for some animal products (see Guidance on importing live animals or animal products).
From 1 January 2021, certain imports into the UK from the EU require notification to the UK authorities. Exporters from the UK to the EU need to apply for an export health certificate (EHC) and get the goods checked at a border control post (BCP).

Imports from Non-EU Countries

To move live animals, animal products, and genetic material from outside the EU into an EU member state, an exporter generally requires an EHC and supporting documents to export a live animal, certifying that the products have been tested for disease.
Consignments are checked at a BCP and must be pre-notified to the BCP in question.
After 1 January 2021, consignments destined for non-EU countries that transit the EU need both an EU transit certificate held on the EHC and an EHC for the final non-EU destination.
To import an animal or animal product into the UK from outside the EU, the importer must provide the correct certification with the import and enter the EU through a BCP, where checks are carried out to make sure that the import conditions have been met. In some cases, an import licence or authorisation may be needed (see Check if you need a licence).
For animal genetic material, the import criteria vary depending on the type of animal and whether the genetic material is semen, embryos, or ova. For example, importing bovine semen from outside the EU is permitted, provided that it:
  • Comes from an approved third country or region.
  • Comes from an EU approved collection centre and from approved teams under specified hygiene conditions.
  • Is accompanied by agreed animal health certification signed by an official veterinarian of the veterinary authority in the country of origin.
Approvals of collection centres are carried out at EU level, but local authorities and the Animal Health and Veterinary Laboratories Agency are responsible for animal certification checks at national level.
The UK has adopted all IOE standards for animals contained in The Terrestrial Animal Health Code. Transporting animals is also subject to various animal welfare standards.

Animal Welfare

25. Briefly outline the regulatory regime for animal welfare.
Animal welfare is regulated by domestic legislation. The AA 2020 provides the legislative framework for replacement agricultural support schemes. It provides a range of powers to implement new approaches to farm payments and land management. In England, farmers will be paid to produce public goods which includes animal welfare improvements. In Wales, the AWB 2022 also confers a power on the Welsh Ministers to provide support for animal health.
The Treaty of Amsterdam contains a legally binding protocol recognising that animals are sentient beings. It requires full regard to be paid to their welfare when policies relating to agriculture, transport, research, and the internal market are formulated or implemented.
The Animal Welfare Act 2006 makes owners and keepers responsible for ensuring the welfare needs of their animals are met and contains general laws relating to animal welfare. The welfare of farmed animals is additionally protected by The Welfare of Farmed Animals (England) Regulations 2007 (as amended), made under the Animal Welfare Act.
The Animal Welfare (Sentencing) Act permits prison sentences of up to five years for abuse of animals.
The Welfare of Animals at Markets Order 1990 (WAMO) as amended by the Welfare of Animals at Market (Amendment) Order 1993 (SI 1993/3086) contains rules covering the treatment of animals in markets to ensure they are not caused injury or unnecessary suffering. They also set out detailed arrangements for penning, food and water, and the care of young animals. The WAMO is enforced by local councils.
Animal welfare is devolved to Wales but does not include hunting or animal experimentation. The AWB 2022 introduces controls on snares for capturing wild animals and builds on the launch of the Welsh Government's ten-year Wales Animal Health and Welfare Framework. This sets out its plans for improving standards of animal health and welfare for kept animals while helping to protect public health and contributing to the economy and the environment. Supplemental plans include:
26. Does the law of your jurisdiction allow for patentability of livestock genes on the grounds of isolating and purifying them? Is there legal protection for animal breeding know-how and a resulting animal nucleus?
This area is covered by EU law, specifically Directive 98/44/EC on the legal protection of biotechnological inventions (Biotech Directive). The UK has implemented the Biotech Directive through the Patents Regulations 2000. Following the UK's departure from the EU, the UK might no longer be required to keep implementing the Biotech Directive, but relevant provisions will ultimately remain effective in the UK through its position as a European Patent Convention (EPC) contracting state.
The simple discovery that a gene sequence exists in nature, or the raw sequence information, is not patentable. However, inventions concerning isolated genes identical to those found in nature can be patented, if they satisfy the three general conditions for patentability, that is, they are new, involve an inventive step, and are capable of industrial application. Both "animal varieties" and essentially biological processes for the production of animals are not eligible for patent protection.
Section 60(5) of the Patents Act 1977 sets out specific acts that do not infringe a patent, for example:
  • An act done for experimental purposes relating to the subject-matter of the invention. This is the UK's research exemption. Patent laws in most European countries include a research exception which permits use of a patented invention for experimental purposes without infringing the rights of the patent owner. This follows the Community Patent Convention 1975.
  • Private and non-commercial use.
  • Use of an animal or animal reproductive material by a farmer for an agricultural purpose following a sale to the farmer, by the patent owner or with their consent, of breeding stock or other animal reproductive material which constitutes or contains the patented invention.
A number of studies in the UK research and develop GM (transgenic) animals. For example, the Roslin institute in Edinburgh has successfully developed transgenic chickens that do not transmit avian influenza virus to other chickens they are in contact with. The Roslin institute publishes its genetic research and information and provides chickens and eggs to interested parties.
Animal breeding know-how and animal breed data is freely available from various organisations. For example, Holstein UK's website contains a large amount of data and guidance on dairy cattle breeding and breeds. In the EU, mutual recognition of member states' herd books all maintained to common standards is central to intra-Community trade in pedigree livestock such as bovines. Typically, herd books in the UK are set up and maintained by a body with charitable status, with the charitable objective of furthering the breed. Information held by the charity is held for the general good of the breed and generally available.
There is no specific legislation relating to the protection of nucleus herds, but the general law of private property offers protection in this respect.
The Genetic Technology (Precision Breeding) Bill 2022-23, currently going through parliament, looks to unlock new technologies, by introducing a more proportionate and science-based regulatory system for precision-bred plants and animals. This bill covers precision-bred plants and animals developed through techniques such as gene editing, where the genetic changes could have occurred naturally or through traditional breeding methods. This is different to genetic modification (GM), which produces organisms containing additional genes.
27. Are there legal or practical restrictions on the introduction of new breeds/species, the breeding of certain animal species, or certain breeding practices?
Some species of animals that are not native to the UK may have controls prohibiting their release and how they can be kept or used in the UK.
There are various restrictions and regulations on the import of animals and animal products (see Question 24).

Agricultural Safety and Product Liability

Standards

28. Summarise the system of food safety standard setting, the main regulator(s) and regulations. If industry input on the standards is possible, indicate how this is conducted.
The food and drink industry is heavily regulated in the UK in relation to all parts of the food production, distribution, and retail chain. A large amount of legislation and regulation, codes of practice, and guidance regulate food, drink, and animal feed.
All food businesses must comply with the food safety legislation. Food business is widely defined, covering large-scale food manufacturers, processers, retailers, and caterers, as well as farm shops and guest houses.
The principal aim of retained EU law Regulation (EC) 178/2002 (General Food Law Regulation) is to protect human health and consumer interests in relation to food. It applies to all stages of production, processing, and distribution of food and feed with some exceptions. The General Food Law Regulation was amended but retained under the General Food Law (Amendment etc.) (EU Exit) Regulations 2019/641. The General Food Law Regulation and the Food Safety Act 1990 provide the framework for food safety legislation.
The Food Safety Act 1990 and the General Food Law Regulation make it a criminal offence to place unsafe food on the market. Unsafe food means food which is either:
  • Injurious to health.
  • Unfit for human consumption.
Placing on the market can include not just selling food but simply holding food for the purpose of selling it and giving it away for free.
Criminal liability can be avoided if the food business can show:
  • The unsafe food was the fault of another party. In that case, the other party may be guilty of the offence.
  • It took all reasonable precautions and exercised all due diligence to avoid committing an offence.
Evidence of food safety management systems such as Hazard Analysis Critical Control Point Principles (HACCP) and product traceability systems can assist in establishing that reasonable precautions were taken.
The FSA is responsible for food safety and hygiene across the UK. It works with local authorities which are responsible for enforcing food safety regulations.
The FSA consults with industry and trade associations when developing and measuring the impact of policies before the policies go out to full public consultation.
Defra is the UK delegate for Codex. The UK has implemented the Codex standards.

Liability

29. Set out the legal requirements to establish the liability of producers and suppliers for defective or contaminated food ingredients that cause damage, in relation to tort and product liability.

Tort

A cause of action arises in negligence where a person has breached a duty to take reasonable care to another and the breach has resulted in damage to the claimant. The burden is generally on the claimant to prove these elements on the balance of probabilities (that is, more likely than not). Negligence claims are usually brought against the manufacturer but can also be brought against a supplier/retailer or anyone else who has breached a duty of care to the claimant.

Product Liability

Food businesses can face civil claims under the Consumer Protection Act 1987 (CPA). Under the CPA, a person who has suffered injury as a result of a defective product, including food and drink products, has a right to bring a claim for damages.
To succeed in a claim it must be shown that, on the balance of probabilities, a defect in the product caused damage. There is no need to prove negligence. A defective product is defined as one where the safety of the product is not such as persons are generally entitled to expect. Damage is deemed to be death, personal injury or damage to private property valued above GBP275.
Producers and importers into the EU can be liable under the act for the defective produce they produce or import.
Suppliers, such as wholesalers or retailers, are generally not liable, unless they put their own name on the product and give the impression that they are producers, or if they fail to identify the producer.
30. Which defences are available to the producer and/or supplier to avoid liability? For instance, is market-entry prior government approval a legal defence against product liability and under which conditions?
Liability can be avoided under the CPA by establishing any one of the following statutory defences:
  • The business/individual did not supply the product (for example, the product was stolen or is a fake copy of a product).
  • The state of scientific and technical knowledge at the time the product was supplied did not allow discovery of the defect.
  • The defect was not in the product when it was supplied by the business/individual.
  • The defect was an inevitable consequence of complying with the law. This defence applies to both UK law and any retained EU law. Market-entry prior government approval might be regarded as part of this defence. There is no precedent on this point.
  • The supplier is not in business.
  • The defect was due to the design of the finished product or to defective specifications provided by the manufacturer of the finished product.
31. Which types of damage are generally compensated by civil courts in food safety liability cases? For instance loss of value, reparation costs, loss of revenue, and personal injury. Are punitive damages available?
Under the CPA, a person can claim compensation for:
  • Death.
  • Personal injury.
  • Damage to private property (if the amount of loss or damage is at least GBP275).
Compensation may be reduced under the CPA if it can be shown that the claimant contributed to the damage.
In a negligence claim the court will aim to put the victim in the position they would have been in had the negligence not occurred. Damages can be claimed for all reasonably foreseeable losses flowing from the breach. Generally, in product liability negligence claims, no claim can be made for negligence causing pure economic loss, that is, financial loss that does not arise from physical injury or damage to property.
Punitive damages are not available.