EBRD supports development of online courts for small claims

By Axel  Reiserer

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Addressing the need to safeguard a vital public service for businesses, the European Bank for Reconstruction and Development (EBRD) is launching a pilot project to assist countries in the development of online courts for small claims.

While the coronavirus pandemic has exacerbated the urgency of this issue, access to courts has been a longstanding concern in many economies where the EBRD invests. Frequently, the legal system is overburdened by caseloads and criticised for its limited accessibility due to significant costs, lengthy court proceedings and high levels of complexity.

In many cases, small and medium-sized enterprises (SMEs) find it difficult to effectively defend their rights and interests. According to a survey published in the EBRD’s Transition Report 2019-20, 17 per cent of SMEs reported that courts were a “major” or “very severe” obstacle to their operations. Costs associated with court proceedings are among the most significant barriers for SMEs.

The introduction of online courts in advanced economies such as Canada, the United Kingdom or the United States of America has produced impressive results, as a recent research paper shows. Online courts mean that a dispute resolution proceeding is conducted online by default, starting from claim submission and ending with the delivery of judgment. These courts are accessible directly to litigants and their representatives and augmented by services and tools to ease access to justice and litigant participation.

The EBRD pilot aims to develop a framework built on those experiences and to make it available to countries in the Western Balkans, eastern Europe, the Caucasus and Central Asia. A first trial is envisaged for Ukraine, where 49 per cent of firms in Kyiv reported in the abovementioned survey that courts were a major or very severe obstacle to their operations.

The focus on small claims (€5,000 to €10,000) has been chosen to ease access to justice for SMEs. In small claims, the disproportionate costs relative to the value of the claim and the delays in proceedings are unfair hurdles that online courts might help remove. According to World Bank data, the cost of resolving a commercial dispute through a local first-instance court in Serbia averages 39.6 per cent of the claim value, while in Ukraine, the figure is 46.3 per cent, and in the Kyrgyz Republic, 47 per cent.

As a first step, the EBRD is starting a comprehensive assessment of court performance indicators and standards based on international, European and national best practices, with a focus on commercial courts. The standards and indicators developed will provide guidance and set the performance targets included in an online-courts concept, which will be developed under the second component of the framework.

Accordingly, the second phase will focus on the concept and implementation plan for the development of online courts in Ukraine, highlighting legal, technical and budgetary prerequisites adapted to the Ukrainian setting. The concept and roadmap in Ukraine will be developed with a view to ensuring replicability in other economies where the EBRD invests.

The procurement notice for the technical assistance project for this regional court performance assessment is published on the EBRD’s electronic procurement platform, SMART by GEP (see procurement notice № PR001982, “Regional: Cross-Regional Court Performance Assessment” for more information and to make an application). Registration is required to view the procurement notice.

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