Australia remained politically gridlocked, with September 2015 yielding the country’s fifth prime minster in five years. Then in July 2016, the country experienced its first double dissolution election since 1987, as a result of the inability of the House of Representatives and the Senate to agree over three bills relating to industrial relations. The final outcome of the 2016 Federal election saw the one-term incumbent government, led by Malcolm Turnbull, re-elected with a bare one-seat majority.
Economic uncertainty played its part in the political stalemate, as low prices for minerals, on which the economy is largely built, kept the Australian dollar low. Lawyers in Brisbane and Perth, where much of the nation’s resources are being mined, have noted an uptick in litigation, as the conclusion of the investment stage of major projects has left investors seeking recovery for poorly performing assets. Inevitably, a rush of insolvencies has also accompanied the contentious environment, most notably the collapse of Arrium, the South Australian steelmaker. Other casualties, in a busy time for insolvency practitioners, have included nickel refinery Queensland Nickel and retailer Dick Smith.
Aside from insolvency disputes, the litigation market continued to be dominated by class actions, particularly those following on from investigations commenced by regulators such as the Australian Competition and Consumer Commission (ACCC), the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO). More are likely to follow, with Australia’s version of Libor just getting underway and the ACCC threatening its first ever criminal cartel prosecution. Indeed, competition law is very much on a watching brief at the moment, as the Harper reforms, promised by the current government, are likely to be implemented in the near future. Lawyers are expecting the passage of new legislation in 2016/2017, re-writing Part IV of the Competition and Consumer Act 2011 and introducing new powers and processes for the ACCC.
Although 2015 heralded an increase in the scrutiny of foreign investment by the Foreign Investment Review Board, there was still plenty of corporate activity, particularly at the mid-market level. The biggest story related to an attempt by a consortium of Qube and Brookfield infrastructure to take over ports and transport operator Asciano – at the time of writing, this transaction is well on its way to completion. In other sectors, Chinese money continued to pour into agribusiness and health, while the Australian government’s attempts to free up its balance sheets through the privatisation of existing infrastructure, also provided a major source of work. On the capital markets side, ECM activity remained relatively strong, with IPOs in the technology, financial services and health sectors popular with investors. Technology remains an important space in the market, as Malcolm Turnbull’s appointment in September 2015 led to a renewed focus by the Australian government on technological innovation, including a range of new policy initiatives and continued regulatory reform. The deployment of the National Broadband Network remains the largest infrastructure project in Australian history and is the largest telecoms project in the world.
The real estate sector continued to flourish: major urban renewal projects, the channelling of foreign capital into and out of Australia and significant fund activity drove growth. New projects in Sydney included AMP’s A$1bn Circular Quay revamp, while in Melbourne, the thriving residential market kept real estate lawyers busy.
The perception that the country is over-lawyered was endorsed by the departure of US capital markets specialists, Skadden, Arps, Slate, Meagher & Flom LLP. However, on the flip side, Dentons signalled its Australian intentions by merging with domestic firm Gadens Lawyers. Newcomer Hogan Lovells also turned heads with a number of significant lateral recruits.