Having established one of the first ever commercial law firms in Croatia, Marijan Hanzekovic, Founder & Managing Partner of Law Firm Hanžeković & Partners Ltd., believes education and improvement are paramount to the successful development of law practitioners, and here details his thought leadership in the progress of hundreds of young professionals in the Croatian litigation arena. Marijan also discusses the challenges the firm faces, its accomplishments in the dispute resolution field, and touches on the need for deregulation, in particular regards to the Croatian Civil Procedure Act.
Have there been any recent regulatory developments to affect your work in Croatia? If so, please tell me about them.
The main developments I would single out are the amendments to the Croatian Income Tax Act. They introduced significant changes, amongst others, capital gains became subject to the income tax rate of 12%, plus city surtax, if applicable.
Tax on capital income is withheld at the source without the individual being entitled to claim expenses or personal allowances. An obligation to submit an annual personal income tax return does not arise. Therefore, it can be considered that constant changes in the tax system do not encourage a favourable entrepreneurial climate and investments in the domestic economy.
As a thought leader, are there particular procedures you would change to facilitate your work?
I believe that deregulation is extremely important. The Croatian Civil Procedure Act constantly reduces the rights of parties involved in the procedure. Also, there are too many municipal courts whose practice is not uniform.
Furthermore, the Supreme Court of the Republic of Croatia is not sufficiently efficient. The Supreme Court should be more active in areas such as discussing current issues regarding court practice, ensuring the uniform application of laws and declaring regular or extraordinary legal remedies if required by the law or separate by-laws.
As I see it, there is no reason for the practice of municipal courts to be different if there is a regulatory mechanism, and there is also no reason for the Supreme Court not to take a stand on important questions.
What is the biggest challenge you face as an Arbiter?
As an Arbiter at the Permanent Court of Arbitration of the Chamber of Commerce of Slovenia, of the European Court of Arbitration in Strasbourg and the International Chamber of Commerce in Paris I have participated in numerous arbitration proceedings.
Arbitration was intended to be an alternative to litigation in order to provide contracting parties with a more efficient and commercially fair system, however, I believe that it has not yet been accomplished.
In my experience, there is general dissatisfaction relating to the cost and inefficiency of arbitration and the significant lack of relevant case law.
What is the biggest difficulty you face when offering legal assistance to foreign enterprises?
When dealing with foreign clients it is always a challenge to introduce them to the intricacies of the national legal system and its regulations, especially when clients come from common law countries. A lot of work has to be invested in explaining national legislation and the differences between the systems, in order for the client to adapt its agreements and behaviour accordingly.
Your firm has participated in some of the largest and most significant transactions in Croatia. What were these transactions and what difficulties did they pose? How did you overcome that?
Our firm has participated in the biggest infrastructure project in Croatia, namely the granting of the concession for the construction and operation of the new passenger terminal of the Zagreb Airport. The firm has had a significant track record in infrastructural projects since 1995, when the Croatian Government granted the first motorway concession i.e. for the Istrian Y.
As the representative of the concession grantor we were engaged in the preparation of the tender documentation and concession agreement, as well as the negotiation of the direct agreement and the financial package.
Since the transaction took place immediately before the Croatian accession to the EU, we faced difficulties in adjusting the Croatian legislation to EU legislation and the practice of the European Court.
The difficulties were overcome through permanent cooperation of all the ministries and other competent authorities in the Croatia.
Our firm has also participated in the two most significant transactions in the banking sector. We represented BANKA INTESA in the acquisition of the 2nd largest bank on the Croatian market as well as ZAGREBAČKA BANKA d.d., the 1st bank on the market, when UniCredit Bank successfully entered the market. These transactions were challenging, as at that time Croatia had very restrictive foreign exchange legislation i.e. Croatian citizens could not deposit funds abroad nor acquire foreign shares.
What is the most rewarding aspect of your role?
I have always strived to provide the best possible services with a team of individuals with the best expertise, while ensuring a healthy work environment and fostering any and all further education and specialization of my employees.
I have never taken legal representation and the provision of legal services lightly and have always strived to provide my clients with full and comprehensive services.
In the end, one's success is measured by client satisfaction, whether it is a big or a small client, a natural person or a big corporation. I believe I have given my best in this regard, which I further believe has been recognized by my clients, whose trust I have enjoyed for many years.
What was the biggest challenge when assisting with preparation in the introduction of free legal aid and the biggest reward?
I was a member of the Assembly Working Committee when the Croatian legal aid act was passed in 2008. At the time, it was challenging to settle differences between NGOs and law firms/lawyers providing legal aid. A compromise was reached at the point that free legal aid can be offered by registered NGOs that employ qualified legal professionals. I believe that everybody is entitled to have access to quality legal assistance in any circumstances. Legal aid is a fundamental right of all people hence it is necessary that the state recognizes the importance of providing free legal aid.
What do you want to achieve in 2017?
I believe that it is extremely important to continually develop and follow global trends in order to maintain a successful business. Consequently, digitalization, as an important global trend, has been recognized as an imperative goal which needs to be accomplished. In our law firm, the aforementioned process is still ongoing and I hope it will be completed in 2017.
How do you measure your success?
I am more than proud to say that I have the privilege to work with more than a hundred young professionals, to see them grow professionally every day and become experts in the fields of their interests. I genuinely believe that young people are those who change the world and we should support them and give them the opportunity to succeed.
Do you have a mantra or motto you live by when it comes to helping clients?
Audiatur et altera pars. I truly believe that it is important to let the other side be heard as well, regardless of the situation. To run a successful business, amongst others, also means to adapt, to compromise etc. In order to do so, it is crucial to see a certain matter from a different angle and standing point and that is only possible if you let others speak and express their opinion. All things considered, it is crucial to listen to the other side.
