8 December 2020

Next Normal Legal ‒ The Legal Situation in Germany after Covid-19

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Dr. Oliver Klöck

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Author

Dr. Oliver Klöck

Partner

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8 December 2020

Next Normal Legal ‒ The Legal Situation in Germany after Covid-19

Next Normal Legal

The Legal Situation in Germany after Covid-19

White paper: Download available here
White paper: Download available here

White paper on the economic and legal challenges for companies after the pandemic

As from 30 January 2020, when the World Health Organisation (WHO) spoke of an “emergency of international proportions within society”, the general uncertainty in politics and business began to spread as rapidly as the number of cases of Corona infections. With increasing frequency and urgency, companies sought the legal advice of experts on a variety of issues ranging from employment law to health law and commercial law, and by the middle of the year it was clear to see for all affected parties: The virus was about to change markets permanently and drastically. Corona not only reshuffles the cards, but also deals an unknown hand. With other players now at the table and new rules for winning, you must either keep up or drop out. The expression “next normal” sums this up succinctly and is more topical than ever. A “business-as-usual” approach is no longer a sustainable strategy.  

What does the "Next Normal Legal" scenario look like in Germany?

But what are the economic and legal challenges posed by these developments? Over the summer months and in keeping with the massive upheavals which were unfolding, our lawyers at Taylor Wessing conducted numerous in-depth discussions with their clients across many legal areas and industry sectors. Whether in retail, automotive or real estate, they researched and analysed the situation and exchanged views with their colleagues in order to pinpoint what requirements shape the “Next Normal Legal” scenario. We have consulted with them and compiled their industry-specific observations and overall assessments for you in the white paper “Next Normal Legal ‒ The Legal Situation in Germany after Covid-19”:

Next Normal Legal

The Corona pandemic accelerates digitalisation

The focused use of data by companies and the increasing demand for data-based services have gained further importance in the Corona pandemic. The increased use of data is the prerequisite for being able to leverage growth potential and market opportunities in the future. This applies in particular, but not exclusively, to e-commerce, IT, insurance, transport and logistics. It can be assumed that with this impetus, the expansion of digitalisation will also continue to move up the political agenda.

Read the full article in our white paper "Next Normal Legal".

The Coronavirus expedites the retail transformation from in-store to online sales

The stationary retail sector is the big loser in the Corona pandemic. Its financial losses are dramatic. However, its massive loss of importance in favour of online shopping is much more serious – a development that probably cannot be reversed. The character of inner-city centres will change. The falling demand for retail space is just the beginning of this development.

Read the full article in our white paper "Next Normal Legal".

New world of work after Corona: digitalisation, remote working, occupational health and safety, rights of co-determination, contracts for work and services

Working from home has proven itself in many companies and organisations. Even after the end of the pandemic, many of them will retain the “remote working” option. However, the move away from the presence workplace with the intertwining of professional and private life raises questions with numerous tax and employment law risks. In addition, the issue of contracts for work and services, triggered by inadequate hygiene conditions in the meat processing industry, is the subject of heated debate.

Read the full article in our white paper "Next Normal Legal".

Healthcare: life saving during the pandemic, crisis-proof investment after the pandemic

The pandemic has mercilessly exposed the weaknesses of the public health system. As a result, its crisis-proof equipment – financial, structural and human resources – has become a political mandate. At the same time, the tendencies towards national and international market consolidation in the pharmaceutical industry are intensifying. Investors are evaluating health and care properties as lucrative, and telemedicine and digital health applications are also profiting from the new overall situation.

Read the full article in our white paper "Next Normal Legal".

New mobility: the dawn of a new and uncertain age in the automotive and transport sector

Due to the sharp drop in global demand for automobiles, many manufacturers and suppliers in the automotive industry are reporting more and more losses from quarter to quarter. The Corona-related decline is all the more serious because manufacturers and their suppliers had already turned away from the combustion engine towards alternative drive technologies before the crisis and were already struggling with the consequences of this strategic step. This paradigm shift and the high susceptibility to failure of long delivery routes experienced during the crisis have triggered a dramatic change in production and market structures. The result: insolvencies, takeovers, but also de-investment. The civil aviation and shipbuilding industries have experienced a similar fate. They too are struggling with far-reaching changes.

Read the full article in our white paper "Next Normal Legal".

Financing and transactions after Corona: dealing with new and old risks and uncertainties

Markets are in turmoil: the Corona crisis is forcing many companies to reorganise, often with the support of state aid. At the same time, interest rates remain low and loans are therefore cheap – all in all, the best conditions for more takeovers. Private equity, investment and hedge funds as well as other investors are therefore cautiously conducting their transactions, unperturbed by the current turbulence of the pandemic. The conditions are shaped by the buyers, and their need for security in these uncertain times paves the way for many clauses in the drafting of purchase contracts. So much upheaval in volatile markets allows us to predict that an increasing number of legal disputes between transaction parties can be expected in the future.

Read the full article in our white paper "Next Normal Legal".

The new supply chain: Corona as a cause and trigger of diverse legal disputes

Corona has exposed the vulnerability of supply chains and, despite higher costs, solutions in favour of a secure supply of products and primary products are preferred. However, every change also means intervention in a complex network of contractual relationships. Legal disputes are inevitable. The insurance industry is also affected: the Corona pandemic has led to claims for damages, which are expected to result in a high number of disputes. The same is true elsewhere: many entrepreneurs have made decisions under great economic pressure which could result in the legal consequences of compliance violations, directors’ and officers’ liability issues etc. In times of crisis and tight budgets, the desire of the conflicting parties to secure their supposed rights increases, while at the same time the willingness to reach an amicable settlement decreases.

Read the full article in our white paper "Next Normal Legal".

The public sector and major projects: moderate impact of Corona

The public sector did not suffer significant losses during the Corona crisis. On the contrary: in the course of the fight against the pandemic and in order to support the crisis-stricken economy, public procurement tenders were and are expected to increase. However, these could quickly decline again if tax revenues are lost for a longer period of time due to the pandemic. Numerous new plant construction projects have been initiated, particularly in sectors that are experiencing increased demand due to Corona (including pharmaceuticals, logistics and digitalisation).

Read the full article in our white paper "Next Normal Legal".

Preventive measures: how companies should protect themselves against the risks presented by crises in the future

The reactions of states and corporations to the current challenges were often structural measures to strengthen their resilience to the crisis. Since the danger of crises is increasing and the consequences – as is currently being observed – can take on dramatic proportions, proactive action is recommended: As a matter of principle, entrepreneurs should systematically check their business model using a catalogue of questions in order to identify possible weaknesses and potential for optimisation.

Read the full article in our white paper "Next Normal Legal".

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