Legal Market Overview
2021 has been all about recovery for the New Zealand economy, following the quarter-on-quarter drop seen in mid-2020 at the height of the national disruption caused by COVID-19, which greatly affected the retail trade, tourism, transport, logistics and construction sectors. New Zealand has rebounded strongly from a recession in 2020, largely due to its success in eliminating the coronavirus within its borders, government support and reopening its domestic economy well before other advanced nations.
During the latter part of 2021, the path to recovery is starting to manifest for key parts of the economy, for example in M&A and private equity, there is demand from overseas buyers snapping up local companies, particularly those operating in the technology, digital healthcare and agri-tech sectors, for example the sale of Christchurch-based software developer Seequent to US firm Bentley Systems for US$1.4bn.
The 2020 Rebuilding Together Budget’s significant allocation to infrastructure spending is also expected to give a huge boost to investment activity. In current development, it is planned to develop a mass transit link between Wellington city to Newtown along the waterfront quays, in addition to other strategic transport expansions in North Island, such as the Takitimu North Link project and Auckland Light Rail.
Elsewhere, Environmental, social and governance (ESG) issues are becoming a key feature in New Zealand deal making, particularly in private equity where, rather than seeing this as an area of risk, investors are seeing the value in ESG-led investment strategies such as the ‘buy dirty-sell clean’ sector.
Other key reforms include the introduction of the Privacy Act 2020, which strengthens privacy protections. The Trusts Act 2019 (take effect from 30 January 2021) which will introduce updates and improvement to the law governing trusts for the first time in more than 60 years. There are further discussions on proposals to amend current laws around incitement of hatred and discrimination.
The New Zealand Department for International Trade has reported that as part of the Free Trade Agreement with the UK, it wishes to improve business travel arrangements and allow professionals such as lawyers and architects to work abroad more easily. The agreement in principle states that the final deal will contain provisions aimed at driving collaboration between legal regulators to address current barriers to local practice. Authorities will be encouraged to operate ‘efficient and transparent’ routes to the recognition of professional qualifications.