2017 is bound to be a year of changes and the implication of these generally remains unknown. Irrespective of, or as a result of, such change there is a clear indication that the legal market will continue an ascending trend, with a corresponding increase of dispute resolution projects, both in terms of litigation and arbitration. Much like in previous years, the focus will remain on disputes deriving from white-collar crime, public procurement, including disputes related to the use of EU’s funding programs, fiscal and criminal law. There is also a growing number of insurance and energy-related disputes and general contractual ones.
The beginning of the year was marked by a positive outcome of the EU Commission's Mechanism for Cooperation and Verification (CVM), as the Commission’s Report confirmed a positive trend with a continued track record for the Romanian judicial institutions in a time of change in leadership and a strong impetus by the government to strengthen corruption prevention. The report could identify a very limited number of key recommendations, and the undertaking of these will eventually lead to the conclusion of the CVM process. Most of them focus on the responsibility and accountability required by the Romanian authorities and the internal safeguards needed to ensure the irreversibility of the results.
Businesswise, the revival of the economy and the increase in foreign investment are expected to leave their mark on the legal market also in 2017, as the strengthening of the retail, agriculture, real estate, healthcare & pharmaceuticals and IT sectors will naturally bring about an increasing demand for contentious advice. On the other hand, 2017 is expected to bring a dramatic decrease of projects in the renewable energy sector and the associated consultancy legal advice following the elimination of the green certificates aid scheme starting on 1 January 2017. However, related disputes are still pending before the national, international and arbitration courts, as well as an array of other energy-related disputes between the public regulators and/or other players on the market, which will tilt the balance in favour of litigation and arbitration when it comes to the energy sector.
Following the EU Commission’s recommendations, a new public procurement strategy and action plan was implemented in 2016. Thus, in May 2016, the new public procurement laws transposing the EU Directives entered into force and all necessary secondary legislation was adopted by the end of 2016. The previous fragmentation of the legal framework, which allowed space for corruption practices, was eliminated and replaced with a new more stable and predictable legal framework that is expected to limit the possibility for corruption. Since in some specific cases related to, inter alia, the amendment of the public procurement contract, the Romanian legislature chose a different solution than the one stated under the European Classic Directive (2014/24), 2017 is expected to be the year when these new provisions will be tested before the competent courts.
2017 opens up a new inspiring chapter for arbitration in Romania, as the main arbitration institution has announced its intention to review its rules with the purpose of aligning them to those of the most established international arbitral institutions. This counts as one step further in the endeavour to make this method of dispute settlement more appealing to corporate clients, an initiative thoroughly driven by the young team of professionals managing the Bucharest-based Court of International Commercial Arbitration in 2015. In the meantime, arbitration as a trend is growing steadily and it is expected to do so throughout this year.
In terms of litigation, a reorientation from restructuring, insolvency and debt recovery-related disputes towards contractual disputes is expected, these being specific to a development period. It should be noted that there is an increase of cases where companies leave the insolvency state to enter a recovery period. The tendency of the multidisciplinary approach to disputes is maintained, as a significant amount of cases bring together civil and criminal fields that require tailor-made legal project management and case strategy. The optimisation of legal resources requires the set up and training of multidisciplinary teams of lawyers, which remains the challenge of the moment in the business legal market.
In terms of fee policies, there seems to be a tentative ascending trend that is explained by the stabilisation of the economy, although the main players on the market remain open to various sorts of fee arrangements, depending on the budgetary constraints of their corporate clients.
Last but not least, one cannot ignore that recent political changes in Romania following the result of the elections at the end of 2016 may significantly impact the market, as the new majority now governing the country is more focused on social reforms, for example the reform of the criminal laws that is intended to alleviate criminal sanctions related to white-collar crime. At the same time, the change of regime in the US may severely influence the global macroeconomic climate and indirectly, the Romanian now stable and even growing market, which may result in an increase of litigation and arbitration.