Silvije Cipcic-Bragadin, Partner at Cipcic-Bragadin Mesic and Associates in Zagreb, says that “there is a significant amount of new legislation in Croatia, because it is one of the countries that somehow is always late in implementing EU regulations.”
“One of the new laws concerns road transportation,” he reports. “Like in many other countries, Croatian taxi-drivers fought a lot against Uber. It was a hotly-debated topic due to the pressure imposed by public lobbying groups and other market participants, supporting the liberalization of taxi-services. The new law not only makes Uber a legitimate business, but also forces regular cab drivers to use more transparent metering and paying systems, so traffic can be then calculated not just based on a fixed device implemented in the car.”
Another pending law, according to Cipcic-Bragadin, is connected to the regulation of Croatia's financial and capital market. “MIFID II still hasn’t been implemented into the local legislation, although market participants are eager to see the new Capital Markets Law entering into force. Furthermore, the Alternative Investment Funds Act came into force recently and we have seen a strong demand for financial regulatory work lately.”
“The energy sector is another area that soon might face changes in Croatia” he continues, adding that the country's newly adopted renewables law is still not in full force because the relevant by-laws haven’t been introduced yet. “The transition from a feed-in tariff model of subsidies to a market premium model is stalling a bit," Cipcic-Bragadin explains, "making many renewables investors nervous. On the other hand, there is a new LNG law which was recently enacted making projects easier to achieve."
He says that when it comes to the business market, Croatia's indebted Agrokor food group is still creating quite a buzz in the country. "The administration process’s deadline for finalizing the settlement with creditors is approaching. The proposed settlement was voted on some days ago, but the model of restructuring is just not good and fair enough and will leave many interested parties with empty pockets, so in my opinion many lawsuits will follow." Cipcic-Bragadin adds that reaching a settlement will trigger further M&A deals as well, since Agrokor’s non-core companies will be put on the market, which "will surely generate a new work flow for firms.”
Turning to the recent changes in legal services in his country, Cipcic-Bragadin notes that “the Croatian legal market is still mostly composed of solo practitioners,” and he says that he hopes that the recent merger of his firm with the independent legal practices of Marina Mesic and Ivan Juricic will trigger more local tie-ups.
“The reason behind our merger is obviously our will to grow and to serve our clients better, as our business has grown significantly in recent times," Silvije Cipcic-Bragadin explains. “Eighty to eighty-five percent of our work comes from foreign clients, and mainly through collaboration with other law firms that are following their clients here.”
The Croatian market is a small one, he says, with around 6500 lawyers — of whom some 5000 are solo practitioners — for a country of four million people.“When you think of it, there are only a handful of law firms here. We somehow looked at the market and realized that basically we could provide better service by merging with other firms.” Cipcic-Bragadin adds that he believes that the merger will make his firm more competitive, by allowing the team to serve clients in better ways and potentially offer better rates.
Cipcic-Bragadin says that the market is changing slowly, but there are some rumors that the Croatian Bar Association is considering loosening the rules concerning the right of law firms to advertise. “Right now we cannot market ourselves for clients based on our previous experience mentioning clients we’ve served in the past, while foreign firms can advertise their services in the country with almost no restraints. So, the Bar is exploring the possibility of creating better conditions for the marketing conditions of lawyers.”