Judicial capacity

In the nearly 20 years of transition from a centrally planned system to a market economy, the legal frameworks in central and eastern Europe and in CIS countries have been substantially upgraded. 

The “laws on the books” in many of those countries have improved in quality, and some now show significant levels of compliance with international standards. However the implementation and enforcement of those laws in the courts is often fraught with uncertainties, deterring investors from participation in the countries’ markets for fear that their legal rights will not be protected.  

The EBRD’s judicial capacity work is directed at assessing and enhancing judicial capacity in the Bank’s countries of operations, with a view to improving the application and enforcement of commercial law.

A review of the current situation reveals that judiciaries are faced with numerous challenges. Some are common to judiciaries in developing countries, while others are linked to the transition from a planned to a market economy.

Lack of technical skills and commercial experience: Socialist legal systems did not recognise economic disputes between private parties; courts protected the interests of society, as represented by the party. 

Practical training in new commercial laws has been inconsistent. Further, commercial legal systems mature slowly, commensurately with economic development and demand for court services. As a result many local judges lack substantive knowledge and experience of commercial matters.

Scarce financial resources: The general budgetary constraints facing governments can adversely affect the possibility of attracting and retaining a sufficient number of well qualified applicants. 

Low salaries, dilapidated courthouses, insufficient resources and poor equipment adversely affect the court's ability to conduct work, and deter many lawyers from becoming judges.

Interference of the executive power: The judiciary is often subjected to political and other external pressures. Limited tenure, opaque appointment and disciplinary systems, and "telephone justice" prevail in many countries.

Corruption: The impecunious conditions in which some judges and court officials operate can make them susceptible to unethical practices and corruption.

Status of judges: Judges in EBRD countries are sometimes still regarded as civil servants and do not enjoy the same prestige as their counterparts in other countries; the judicial career is therefore not necessarily appealing to legal professionals.

Court management: Supervisory bodies are often ill-equipped to monitor judicial performance, conduct relevant training, foster judicial careers, deal with public complaints, organise registries, ensure case management or plan and implement budgets. This adversely affects court performance.

The focus of the EBRD's activity in judicial capacity is on commercial law as this is most directly relevant to the Bank’s own experience as the biggest investor in the region. It is also an area where the Bank’s legal department has accumulated a wealth of knowledge and expertise.