a prepublication draft of section for Financial Sector Assessment, A Handbook, World Bank and IMF 2005

1. The legal and judicial system must provide a method for resolving disputes, between private agents and also between private agents and the state. Courts are a way to resolve disputes justly. Courts must resolve disputes by judgments, based on independent fact-finding. These judgments can be enforced by the state. State enforcement distinguishes courts from alternative forms of dispute resolution. State enforcement also limits potential violence and can improve the business climate. But for courts to be effective, the other branches of government must follow the law too. The judicial system must also provide checks and balances on arbitrary state action. If the judiciary is to fulfill its role as the guardian of the nation, the judiciary and its work must be perceived as fair. Courts must work efficiently and they should be sufficiently accessible. <<<

2. The fairness of judicial decisions is determined firstly by the judges’ independence, real and perceived. There must be sufficient safeguards to ensure that judicial decisions are independent of political decisions and of the influence of powerful private parties, and that government can be made to obey the law. Other branches of government should not override or ignore judicial decisions, and when they do, they should be subject to legal action. Judges’ independence entails that their decisions are not determined by anything other than the facts in the case and the applicable law. <<<

4. Fairness of judicial decisions must be safeguarded by adequate procedural provisions. Hearings should be open to the public. Assignment of cases should follow standardized procedures. There must be sufficient procedural guarantees in the law governing civil procedure for party input, for instance oral proceedings, and independent fact-finding. Rules of evidence and standards for evaluating arguments should be in place, and be applied in a predictable fashion. Possibilities for review of decisions should be adequate, and they safeguard the quality of judicial decisions. There should be a 3-tier system in place: Courts of appeal which review cases as to the facts and with regard to the law, and cassation by a final instance court with regard to conformity to existing law. <<<

3. Judges’ independence must be supported by objective selection and career planning, and by training. Judges must be selected according to objective criteria. These criteria must be job relevant and merit based. The criteria must also be public. Selection must be done in a transparent manner. Judges should have life or fixed-term tenure. They should be sufficiently trained. Compulsive training at entry should be followed up with permanent education to guarantee judges’ independence and the quality of their decisions. Judicial salaries should meet living wage and some reasonable proportion of good wage in the private sector. Existing laws and the body of jurisprudence must be readily available to judges and their staff, and regularly updated. Another safeguard for judicial independence is the existence of an independent competent Bar.<<<

5. Governance of the judiciary should underpin independence. Existing institutional arrangements on this point vary considerably. Competences with regard to the budget of the judicial organization, the judicial career including matters of discipline, court management and other issues should be distributed between the judicial administration body such as a judicial council, the Supreme Court and the Ministry of Justice in such a way that judicial independence is not compromised. Changes in the budget for the judicial organization should be commensurate with the development of the national budget and also reflect changes in demand for judicial services. Court management should follow set rules and the management processes should be monitored and audited.

6. The courts’ efficiency is defined in terms of the speed, cost, and quality of the judicial decisions and the access that aggrieved citizens have to the court. These three factors are interdependent. Procedures for resolving a dispute must be proportionate to the value, importance and complexity of the dispute.<<<

7. Procedures and the way courts work should facilitate timely judicial decisions. Pre-trial settlement of disputes may be encouraged but not enforced. Procedures and procedural law should not be unnecessarily complicated. Procedures should be reasonably efficient and designed and reformulated in the interests of eliminating unnecessary steps and bottlenecks. Judges must have the power to move cases ahead and to punish of deny efforts to create additional delays. There should be adequate case management systems in place. Where there are small claims courts and other specialized courts, and where there is the possibility of oral proceedings procedures tend to go faster. A forum for provisional judgment can prevent the need for full proceedings which take more time. <<<

8. Cost is an important factor in the courts’ ability to provide adequate service. Courts should be managed in an economic manner. The funding for staffing, equipment and offices of the courts must be adequate to allow the performance of the courts’ duties. Internal resource distribution should be based on need and workload. Court fees are part of cost, but most of the cost for taking a case to court is in fees for legal assistance. Low value or simple disputes should be assigned to simpler and faster procedures consuming fewer court resources, for example, disputes over small amounts of money should be handled by small claims courts where parties can represent themselves. <<<

9. The judiciary and the courts must be sufficiently accessible. In order to provide access to justice, courts should be reasonably close to the citizens and not just concentrated in the capital. Courts must be managed in such a way that taking a case to court is not unnecessarily cumbersome. Cost should also not hinder citizens’ access to courts. The cost of taking a case to court should not be such that it prohibits access to justice. Most of the cost is in legal assistance fees. There should be sufficient possibilities for low-cost or free legal advice and assistance. Ways of providing legal aid in case of need should guarantee access to courts.