Legal Market Overview
Like many Western European nations, Belgium has seen a return to growth following a severe contraction in 2020 and early 2021 as a result of the Covid-19 pandemic, with GDP expected to expand by 4.7% in 2021 and 3.5% in 2022. A successful vaccination campaign has seen the majority of pandemic-related restrictions lifted, though continued economic measures are having an impact on the legal market.
The Belgian market remains sophisticated, with high-value transactions regularly passing through firms’ Brussels offices, and private equity funds increasingly focusing on Belgium as fertile ground for buyouts and investments. Deal activity has remained high since summer 2020, with firms reporting unprecedented demand from clients, as pre-pandemic trends in debt markets reassert themselves. Real estate, after a period of uncertainty, has once again become a sought-after asset, with central Brussels office space, logistics property, and data centres in particular proving attractive targets for international investors, REITs, and portfolio holders. Construction and development work is also active, with both public and private sector players investing into infrastructure and the redevelopment of existing property portfolios.
Similarly, the robust transactional market has contributed to an upsurge in banking, finance, and capital markets mandates across the board, with debt markets remaining highly active, equity-side work such as IPOs slowly returning to the fore, and all forms of bank lending up- acquisition financing, project financing, and syndicated lending all feature heavily on the deal sheets of major domestic and international firms.
The position of the European Commission in Brussels makes the jurisdiction a hub for cross-border competition work, with top international firms such as Cleary Gottlieb Steen & Hamilton, Latham & Watkins LLP, Clifford Chance and Skadden, Arps, Slate, Meagher & Flom LLP heavily involved in multi-jurisdictional merger clearances, European Commission investigations, and litigation before the ECJ. Areas of present focus include cartel activity in the retail and logistics spaces, ongoing scrutiny of Big Tech, and changes to the application of Article 22 in merger approval, which has seen more deals challenged early in the process.
Healthcare and life sciences is a major target for investors, particularly in the biotech start-up arena (lots of activity across the Flemish and Walloon regions). Many of the top-tier firms are assisting large clients with digital transformation initiatives. The social health sector is increasingly coming under pressure with respect to pricing and reimbursement issues. The premier firms in the market currently handle major litigation/class action related to the alleged breach of contract issues relating to delivery of the Covid vaccines, including AstraZeneca’s case against the EU.
Covid-19 impacts continue to be felt primarily in the restructuring and insolvency space, with many ‘zombie’ companies propped up by government subsidies and preventing the initiation of formal insolvency proceedings and judicial reorganisations. Practitioners have remained active, primarily handling longer-term cases such as the bankruptcy of Belgian airline Sabena, and a series of ongoing issues within the airline sector as a result of international travel being banned during the pandemic. Other notable cases include cross-border insolvencies and restructurings, most notably the ongoing restructuring of private equity-backed café chain Pain Quotidien.
In the field of dispute resolution, changes to the class action laws in late 2018 regarding the scope of the collective redress system meant that SMEs represented by non-profit organisations or public bodies could now institute actions. The top-tier firms continue to see lots of activity in this area as a consequence. Pre-litigation work – including potential trial prep, ADR, and mediation – is an increasingly popular option across the board.
The country is in the middle of its large-scale nuclear phase programme (to be completed by 2025), but is bridging the shift to renewable power by increasing its gas-fired capacity in the short term (projected to make up 46% of the total energy consumption). Several firms speak of the move from a highly-centralised to an increasingly decentralised energy system reliant upon distributed generation, energy storage, and consumer demand response level monitoring. The roll-out of EU-mandated Smart Energy metres has given rise to various payment disputes. Solar, hydropower projects, and green hydrogen projects are also key workflows for the leading firms in the market, especially a number of international projects in Western Europe and the DRC.
Belgium’s advanced legal market sees healthy competition between international firms, Benelux operations, and domestic firms. Magic Circle and US-based firms such as Allen & Overy LLP and Baker McKenzie CVBA/SCRL are prominent in the market, handling cross-border transactions and regulatory work, while Benelux-wide players such as NautaDutilh, Loyens & Loeff, and Stibbe are also active across a wide range of practice areas. Local firms also play a role in transactional work as well as more specialised areas of law such as environmental regulation, permitting, insurance, and leasing, with standout firms including Schoups, Lydian and Liedekerke Wolters Waelbroeck Kirkpatrick.