So, one can only presume that it's BAe Systems, and not the CAA, that is pushing Mode-S /interoperability measures through currently.
What I've read somewhere else is that this has nothing to do with Mode S at all. Obviously the UAVs will be equipped with some sort of TCAS but Mode C is good enough for TCAS.
When they talk about the "safety measures" what they are referring to are things like optical and infrared cameras mounted to the airframe and downlinked to the operator on the ground who monitors them, computer assisted of course. And the article I read (can't remember where though) claims that initial research suggests that operators are able to pick up traffic using this setup that they never would have picked up in a manned aircraft with the Mk 1 eyeball.
So it looks like optical and infrared cameras are good enough for a human to spot traffic and initiate see-and-avoid. From that it's only a small step to let the computer come up with a solution advisory and initiate avoiding action.
And obviously computers never get distracted, can be configured so that there's no blind spots, and so forth.