Legal Market Overview
The Netherlands was hit particularly hard at the beginning of the Covid-19 pandemic, however the economy was expected to grow by 2.7% in 2021 and 3.7% in 2022. As the country opens up, consumption will increase and boost many sectors; and it is expected that private investment will increase, albeit with some hesitancy. Insolvencies and restructurings are predicted, by some, to shoot up as government pandemic relief support comes to an end.
While Covid-19 affected the M&A market, 2021 saw an increase in activity from private equity funds, with the TMT, logistics and industrial sectors doing particularly well. There was significant initial public offering (IPO) activity on the Euronext Amsterdam stock exchange and The Netherlands is seen as something of a European hotspot for special purpose acquisition companies (SPACs). The retail sector continues to suffer as high streets were forced to shut, and commercial real estate saw a steep drop in investment in 2020. However, investment seems to be returning and the residential sector emerged relatively unscathed, likely due to the Dutch housing shortage.
On January 1st 2021, the draft bill on court-sanctioned private composition to avoid bankruptcy (wet homologatie onderhands akkoord – WHOA, also known as the Dutch scheme of arrangement) came into effect. The act will improve efficiency and flexibility in the restructuring arena and draws on inspiration from the English scheme of arrangement and Chapter 11 of the US Bankruptcy Code. The scheme will allow viable companies to avoid bankruptcy and it will likely affect a lot of businesses who find themselves in financial difficulty resulting from the pandemic.
Environmental, social and governance (ESG) matters are an increasingly hot topic in the Dutch market; this follows on from the Hague’s District Court decision in May 2021, which ordered Royal Dutch Shell to reduce its CO2 emissions by at least net 45% by the end of 2030, relative to 2019 levels. Dutch banks have been quick to offer ESG products to clients and many now have considerable experience in the field. An increase in green loans is emblematic of a shifting energy market, and with strong renewables credentials, the Netherlands is well placed to take advantage of these new opportunities.
The legal market continues to flourish and noteworthy domestic firms include De Brauw Blackstone Westbroek, Loyens & Loeff, NautaDutilh and Stibbe. The Hague-based Pels Rijcken & Droogleever Fortuijn NV is the key firm for government work and continues to handle a large number of high-profile cases. Van Doorne and Houthoff are further notable local firms. Strong international players include Allen & Overy LLP, Freshfields Bruckhaus Deringer, Clifford Chance, Norton Rose Fulbright, Dentons, Taylor Wessing, Greenberg Traurig LLP and DLA Piper.