- Maintaining a specialized commercial court, division or judge
- Introducing small claims courts or simplified procedures for small claims
- Introducing or expanding case management system
- Court automation
- Computerization and court efficiency
- Using alternative means to resolve disputes
Over the years, common features of judicial reforms relating to commercial dispute resolution have included: maintaining specialized commercial courts or divisions; introducing small claims courts and simplified procedures for small claims; introducing or expanding existing case management systems; automating processes through the introduction of electronic filing of the initial complaint, electronic service of process or electronic fee payment; and using alternative means to resolve disputes.
MAINTAINING A SPECIALIZED COMMERCIAL COURT, DIVISION OR JUDGE
Dedicated systems for commercial cases can make a big difference in the effectiveness of a judiciary (1). Having specialized commercial courts or divisions reduces the number of cases pending before the main first-instance court and thus can lead to shorter resolution times within the main trial court—one reason why economies have sometimes introduced specialized courts as a case management tool. But the benefits do not end there. Commercial courts and divisions tend to promote consistency in the application of the law, increasing predictability for court users (2). And judges in such courts develop expertise in their field, which likely leads to faster and more qualitative dispute resolution (3).
The data show that 99 of the 190 economies covered by Doing Business have a specialized commercial jurisdiction — established by setting up a dedicated stand-alone court, a specialized commercial section within an existing court or specialized judges within a general civil court. Economies with stand-alone commercial courts include Austria, Belgium, Côte d'Ivoire, Mali and Sri Lanka. Those with a commercial division within their courts include Benin, Kenya, Nigeria – Lagos, Uganda, the United Kingdom and the United States – New York. Out of the 11 economies where two cities are measured, China, India and the Russian Federation are the only ones where commercial courts or divisions have been established in both cities. In the 17 Sub-Saharan African economies that have introduced commercial courts or sections since 2005—Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Ghana, Guinea-Bissau, Lesotho, Liberia, Malawi, Mauritius, Mozambique, Niger, Rwanda, Senegal, the Seychelles, Sierra Leone and Togo — the average time to resolve the standardized case measured by Doing Business was reduced by about 2 months. In Côte d’Ivoire, the reduction was more than 8 months. In 2011, resolving a commercial dispute in Abidjan took 770 days. In 2013, after the creation of a specialized commercial court, it took only 585 days. Today, it takes 525 days.
The creation of specialized sections or courts needs to be matched by a commitment of more resources as demand for their services expands. Take the case of Peru. The Lima commercial courts, in operation since April 2005, made headlines in 2006 for deciding cases in less than a year. In February 2007 however, the judiciary transferred 11,000 enforcement cases to the new courts. These cases, amounting to about 11 times their existing caseload, flooded the courts and increased average delays once again (4).
INTRODUCING SMALL CLAIMS COURTS OR SIMPLIFIED PROCEDURES FOR SMALL CLAIMS
Small claims courts or simplified procedures for small claims, as the form of justice most likely to be encountered by the general public, play a special part in building public trust and confidence in the judicial system (5). They help meet the modern objectives of efficiency and cost-effectiveness by providing a mechanism for quick and inexpensive resolution of legal disputes involving small sums of money (6). In addition, they tend to reduce backlogs and caseloads in higher courts. Small claims courts usually use informal hearings, simplified rules of evidence and more streamlined rules of civil procedure—and typically allow the parties to represent themselves (7).
Faster and less costly dispute resolution matters to small and medium-size enterprises, which may not have the resources to stay in business during long and costly litigation. If a claim could not be enforced because the relative cost is prohibitive, there would be a denial of justice (8). By providing a venue for resolving claims with costs and procedures that are realistic and proportionate to the size of the dispute, small claims courts and simplified procedures for small claims increase access to justice for businesses and individuals (9).
According to Doing Business data, 133 economies have either a stand-alone small claims court or a simplified procedure for small claims within the first-instance court (10). Of these 133 economies, 121 allow parties to represent themselves during the proceedings.
INTRODUCING OR EXPANDING CASE MANAGEMENT SYSTEMS
Case management refers to a set of principles and techniques intended to ensure the timely and organized flow of cases through the court from initial filing through disposition. Case management enhances processing efficiency and promotes early court control of cases (11). When well implemented, case management techniques can enhance record-keeping, reduce delays and case backlogs and provide information to support strategic allocation of time and resources—all of which encourage generally better services from courts (12). They can also improve the predictability of court events, which can ensure accountability, increase public trust, reduce opportunities for corruption and enhance the transparency of court administration (13).
While the case management principles adopted by courts vary depending on their needs and the local legal culture, some have been applied so consistently worldwide as to have evolved into a set of core principles. These include early court intervention, establishing meaningful events such as the filing of a plea or the submission of the final judgment, establishing time frames for these events and for disposition, creating realistic schedules and expectations that events will occur as scheduled, introducing early options for settlement, establishing firm and realistic appearance dates and developing mechanisms that control frivolous adjournments (14).
Doing Business collects data on three of the recognized core principles: the availability of regulations setting time standards for at least three key court events, the availability of regulations on adjournments and continuances, and the possibility of holding a pretrial conference—a hearing to narrow down contentious issues and evidentiary questions before the trial, explore the case’s complexity and the projected length of trial, create a schedule of the proceedings and check with the parties on the possibility of settlement. When collecting data relating to regulations on time standards and adjournments, Doing Business also surveys experts on whether these standards are respected in practice.
The data show that having a pretrial conference is a common case management tool, used in 91 economies. Laws or regulations setting time standards for at least three key court events exist in 92 economies, and these time standards are respected in practice in only 60 of these economies. Detailed rules regulating adjournments are available in only 37 economies.
Another way to support effective implementation of case management techniques is to use case management reports that compile and analyze case performance data (15). These can show whether case management goals have been met in individual cases or at the court level—such as through data on the number of cases pending before the court, the clearance rate, the average disposition time or the age of the pending caseload. Such reports can show court administrators where inefficiencies and bottlenecks lie and also help them track the progress of ongoing case management initiatives. And by breaking data down at the judge level, they can serve as a performance measurement tool—an important use, since research shows that a good amount of delays in litigation are attributable to lax case management by the judge (16). Data collected this year on the availability of four of the more common types of performance management reports show that at least two of these reports are publicly available in 71 economies (17).
Some economies have introduced electronic systems to support case management by automating many of its components (18). Features available through electronic case management systems may include access to laws, regulations and case law; access to forms to be submitted to the court; automatic generation of a hearing schedule; management of electronic notifications; tracking of the status of a case; management of case documents; electronic filing of briefs and motions; and access to court orders and decisions. Such systems may be available to a range of users, from judges to lawyers, court administrators and court users. Doing Business looks at their availability to judges and to lawyers. The data show that they are more commonly available to judges: an electronic case management system as defined by Doing Business is available to judges in 45 economies, while such a system is available to lawyers in only 39 economies (19).
Doing Business measures court automation in connection with the availability of electronic filing of the initial summons, electronic service of process and electronic payment of court fees. Doing Business tests only whether these features are in place, not whether they are used by the majority of court users. For all these features the court of reference is the one that would have jurisdiction to hear the Doing Business standardized case.
These features streamline and speed up the process of commencing a lawsuit. But they also have broader benefits. Electronic records tend to be more convenient and reliable. Reducing in-person interactions with court officers minimizes the chances for corruption and results in speedier trials, better access to courts and more reliable service of process. These features also reduce the cost to enforce a contract—court users save in reproduction costs and courthouse visits, while courts save in storage costs, archiving costs and court officers’ costs. And studies show that after electronic filing is introduced in courts, the accessibility of information increases and access to and delivery of justice improve considerably (20).
In the past six years Doing Business recorded 18 reforms focused on introducing an electronic filing system for commercial cases and allowing attorneys to submit the initial complaint online. Today electronic filing of the initial complaint is allowed in 31 economies. Similarly, electronic service of process, i.e. the initial summons can be served by e-mail, fax or text messaging, is available in 30 economies. Electronic payment of court fees is the most commonly available feature of court automation measured by Doing Business—allowed in 55 economies. Even so, these three features, along with electronic case management, remain the least common of the good practices covered by the quality of judicial processes index.
Doing Business also explores two dimensions that are closely intertwined with court automation and, ultimately, with judicial transparency. The first relates to how cases are assigned to judges within the competent court. A credible system for random assignment of cases minimizes the chances for corruption (21). While almost all economies (172) provide for random assignment of cases, only 45 have a fully automated process.
The second relates to whether judgments rendered in commercial cases at all levels are made publicly available (22). Publishing judgments contributes to transparency and predictability, allowing litigants to rely on existing case law and judges to consistently build on it. Access to the results of commercial cases benefits companies that invest in a particular jurisdiction, clarifying the scope of their rights and duties (23). Making judgments available does not necessarily require substantial resources, but it does require internal organization. Case decisions must be accessible and catalogued efficiently so that they can be easily searched.
In 44 economies, courts publish virtually all recent judgments in commercial cases either online or through publicly available gazettes. Sub-Saharan Africa accounts for only four of these economies; South Asia for only two, and the Middle East and North Africa for one (Malta).
COMPUTERIZATION AND COURT EFFICIENCY
Sophisticated court automation can support effective case management. Courts that have automated processes for actions such as serving documents or submitting a claim can more easily implement electronic case management systems. Even where case management is not fully automated, some court automation can be an effective tool for court administrators, enabling them to more easily monitor the movement of cases through the court. Economies in the OECD high-income group and Europe and Central Asia tend to have both greater court automation and more developed case management than those in any other region. Together, these two regions account for 21 of the 31 economies worldwide that make electronic filing available and for 20 of the 36 economies that offer an electronic case management system for both judges and lawyers. Outside these regions, court automation remains limited: 76 economies score a 0 on the court automation index worldwide, 71 of which are outside these regions.
The Republic of Korea and Singapore are two of only five economies worldwide that receive full points on the court automation index; they also score points for the availability of electronic case management systems for both judges and lawyers. Unsurprisingly, both these economies introduced improvements in this area in the past few years. Korea launched an electronic case filing system in 2010 that allows electronic document submission, registration, service notification and access to court documents (box). Singapore introduced a new electronic litigation system in 2014. The system allows litigants to file cases online—and it enables courts to keep litigants and lawyers informed about their cases through e-mail, text alerts and text messages; to manage hearing dates; and even to hold certain hearings by video conference.
The data suggest a striking relationship between court automation and case management on the one hand and the time and cost for dispute resolution on the other. Singapore has the shortest resolution time worldwide — 164 days for the standardized commercial dispute. Korea is a short step away, with a resolution time of 290 days. Korea also has among the lowest costs worldwide to resolve a commercial dispute, at about 12.7% of the value of the claim. And both Korea and Singapore are among the economies that have been promoting judicial transparency and the development of consistent case law through the online publication of judgments rendered at all levels.
USING ALTERNATIVE MEANS TO RESOLVE DISPUTES
While the Doing Business indicators on enforcing contracts have traditionally measured dispute resolution through the local court system, in later years the focus has broadened to also cover mechanisms of alternative dispute resolution (ADR) — in particular, arbitration, voluntary mediation and conciliation. In commercial arbitration the parties agree to submit their dispute to an independent arbitrator or arbitral tribunal, which issues a final and binding arbitral award. In a mediation or conciliation process the parties ask a third person to assist them in reaching an amicable settlement of their dispute.
ADR should be seen not as something that can replace traditional litigation but as a tool that can assist courts in resolving disputes in a timely, cost-effective and transparent way. ADR mechanisms can improve efficiency in the court system as a whole by helping to reduce case backlogs and bottlenecks (24). They can reduce delays where these are caused by complex formal procedures or inadequate court resources—and reduce high costs where these are driven by formal procedures, high filing fees and court delays. Economies with an integrated system of courts and ADR tend to have a more reliable judiciary, benefiting the courts, the parties involved and the economy as a whole (25).
When used as an alternative to the judicial process, ADR has its own set of benefits. It gives the parties more control over the resolution of disputes and in most cases increases their satisfaction with outcomes. A study in the Canadian province of Quebec has even shown that a form of ADR known as judge-presided settlement conference promotes access to justice (26).
Effective systems of domestic commercial arbitration and mediation or conciliation matter to investors (27). Lawyers and business owners know that high litigation costs and long delays make resolving commercial disputes in court difficult and expensive and may look elsewhere for dispute resolution—and businesses may pass the costs on to consumers or abstain from investing in a jurisdiction (28). Especially in smaller cases, having a neutral mediator or arbitrator saves businesses time and money in resolving commercial disputes and provides greater control over outcomes and confidentiality (29). It also reduces the instances in which a dispute leads to the termination of a commercial relationship (30). And with today’s increasingly complex business dealings, specialized ADR programs focusing on particular types of technical or complex disputes can be more effective and produce better settlements than courts, increasing litigants’ satisfaction with outcomes.
Almost all the economies surveyed (185) recognize arbitration in one way or another as a mechanism for dispute resolution. Most (173) also recognize voluntary mediation or conciliation.
Economies worldwide have consistently focused on promoting and regulating arbitration and mediation. Three economies — Armenia, Brazil and Moldova — have made such issues a priority over the past year, introducing new laws that regulate mediation.
1. Djankov, Simeon, Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Juan Botero. 2003. “The Regulation of Labor.” NBER Working Paper 9756, National Bureau of Economic Research, Cambridge, MA.
2. Zimmer, Markus. 2009. “Overview of Specialized Courts.” International Journal for Court Administration 2 (1): 46–60.
3. Zimmer, Markus. 2009. “Overview of Specialized Courts.” International Journal for Court Administration 2 (1): 46–60.
4. World Bank. 2007. Doing Business 2008. Washington, DC: World Bank Group, p. 52.
5.Ramsay, Iain. 1996. “Small claims courts: A review. In Rethinking civil justice: Research studies for the Civil Justice Review.” Toronto, ON: Ontario Law Reform Commission: 491-541.
6. Axworthy, Christopher S. 1976. “Controlling the Abuse of Small Claims Courts.” McGill Law Journal 22: 480–95; Ramsay, Iain. 1998. “Review: Lowered Horizons and Broadened Vistas: the Small-Claims Court and Access to Justice.” Justice of Law and Society, 25: 438-442.
7. Help Abolish Legal Tyranny (HALT). 2007. HALT’s Small Claims Court Best Practices. http://www.lawreformsoapbox.com/2007/11/halts-small-claims-court-best.html; World Bank. 2000. “Access to Justice: the English Experience with Small Claims.” PREM Notes, n. 40. Development Economics Vice Presidency. Washington, DC: World Bank.
8. Axworthy, Christopher S. 1976. “Controlling the Abuse of Small Claims Courts.” McGill Law Journal 22: 480–95
9. World Bank. 2000. “Access to Justice: the English Experience with Small Claims.” PREM Notes, n. 40. Development Economics Vice Presidency. Washington, DC: World Bank.
10. Any economy for which Doing Business covers two cities is included in the count of economies with a particular feature as long as the feature is available in at least one of the two cities.
11. State Court Administrative Office. 2004. Case Flow Management Guide. Lansing, MI, United States; Gramckow, Heike P., and Valerie Nussenblatt. 2013. “Caseflow Management: Key Principles and the Systems to Support Them.” Justice & Development Working Paper 23/2013, Legal Vice Presidency, World Bank, Washington, DC.
12. State Court Administrative Office. 2004. Case Flow Management Guide. Lansing, MI, United States; Gramckow, Heike P., and Valerie Nussenblatt. 2013. “Caseflow Management: Key Principles and the Systems to Support Them.” Justice & Development Working Paper 23/2013, Legal Vice Presidency, World Bank, Washington, DC.; Rooze, Erwin. 2010. “Differentiated Use of Electronic Case Management Systems.” International Journal for Court Administration 3 (1): 50–60.; Steelman, David, John Goerdt and James McMillan. 2004. Caseflow Management: The Heart of Court Management in the New Millennium. Williamsburg, VA: National Center for State Courts.
13. USAID (U.S. Agency for International Development), Center for Democracy and Governance. 2001. “Case Tracking and Management Guide.” Technical Publication Series, USAID, Washington, DC.; Gramckow, Heike P., and Valerie Nussenblatt. 2013. “Caseflow Management: Key Principles and the Systems to Support Them.” Justice & Development Working Paper 23/2013, Legal Vice Presidency, World Bank, Washington, DC.; Rooze, Erwin. 2010. “Differentiated Use of Electronic Case Management Systems.” International Journal for Court Administration 3 (1): 50–60.: Steelman, David, John Goerdt and James McMillan. 2004. Caseflow Management: The Heart of Court Management in the New Millennium. Williamsburg, VA: National Center for State Courts.
14. State Court Administrative Office. 2004. Case Flow Management Guide. Lansing, MI, United States; Gramckow, Heike P., and Valerie Nussenblatt. 2013. “Caseflow Management: Key Principles and the Systems to Support Them.” Justice & Development Working Paper 23/2013, Legal Vice Presidency, World Bank, Washington, DC.; Rooze, Erwin. 2010. “Differentiated Use of Electronic Case Management Systems.” International Journal for Court Administration 3 (1): 50–60.; Steelman, David, John Goerdt and James McMillan. 2004. Caseflow Management: The Heart of Court Management in the New Millennium. Williamsburg, VA: National Center for State Courts.
15. Gramckow, Heike P., and Valerie Nussenblatt. 2013. “Caseflow Management: Key Principles and the Systems to Support Them.” Justice & Development Working Paper 23/2013, Legal Vice Presidency, World Bank, Washington, DC; Steelman, David, John Goerdt and James McMillan. 2004. Caseflow Management: The Heart of Court Management in the New Millennium. Williamsburg, VA: National Center for State Courts.
16. Steelman, David. 2008. Improving Caseflow Management: A Brief Guide. Williamsburg, VA: National Center for State Courts.
17. The four types of reports are time to disposition report, clearance rate report, age of pending caseload report and single case progress report.
18. Rooze, Erwin. 2010. “Differentiated Use of Electronic Case Management Systems.” International Journal for Court Administration 3 (1): 50–60.
19. Under the Doing Business methodology, an economy is considered to have an electronic case management system available to judges if judges in the relevant court can use such a system for at least four of the following eight purposes: to access laws, regulations and case law; to automatically generate a hearing schedule for all cases on their docket; to send notifications (for example, e-mails) to lawyers; to track the status of a case on their docket; to view and manage case documents (briefs, motions); to assist in writing judgments; to semiautomatically generate court orders; and to view court orders and judgments in a particular case. Similarly, an economy is considered to have an electronic case management system available to lawyers if lawyers can use such a system for at least four of the following eight purposes: to access laws, regulations and case law; to access forms to be submitted to the court; to receive notifications (for example, e-mails); to track the status of a case; to view and manage case documents (briefs, motions); to file briefs and documents with the court; and to view court orders and decisions in a particular case.
20. Berkman Center for Internet & Society at Harvard University. 2010. “Best Practices in the Use of Technology to Facilitate Access to Justice Initiatives.” Preliminary report prepared for Dina E. Fein, First Justice, Housing Court Department, Western Division of Massachusetts, and Special Advisor to the Trial Court for Access to Justice Initiatives. Cambridge, MA.; Zorza, Richard. 2013. “Principles and Best Practices for Access-Friendly Court Electronic Filing.” Electronic Filing and Access to Justice Best Practices Project, Legal Services Corporation, Washington, DC.
21. USAID (U.S. Agency for International Development). 2009. “Reducing Corruption in the Judiciary.” Report prepared by DPK Consulting. USAID Program Brief, Office for Democracy and Governance, USAID, Washington, DC.
22. An exclusion is made for very small cases and cases in which privacy may be an issue.
23. Byfield, Paul. 2011. “The Publication of Commercial Court Decisions in the Western Commonwealth of Independent States.” In Law in Transition 2011: Towards Better Courts. London: European Bank for Reconstruction and Development.
24. Love, Inessa. 2011. “Settling out of court.” Financial and Private Sector Development Vice Presidency, World Bank, Washington, DC.
25. World Bank Group, Investment Climate Advisory Services. 2011. Alternative Dispute Resolution Guidelines. Washington, DC: World Bank Group.
26. Roberge, Jean-François. 2014. “The Sense of Access to Justice Following a Settlement Conference.” Available at: http://www.tribunaux.qc.ca/mjq_en/c-superieure/pdf/rech_exp_justiciables_cs_cq-a.pdf
27. Pouget, Sophie. 2013. “Arbitrating and Mediating Disputes: Benchmarking Arbitration and Mediation Regimes for Commercial Disputes Related to Foreign Direct Investment.” Policy Research Working Paper 6632, World Bank, Washington, DC.
28. National Arbitration Forum. 2005. “Business-to-Business Mediation/Arbitration vs. Litigation”. http://cdm16064.contentdm.oclc.org/cdm/ref/collection/p266901coll4/id/2834
29. Pouget, Sophie. 2013. “Arbitrating and Mediating Disputes: Benchmarking Arbitration and Mediation Regimes for Commercial Disputes Related to Foreign Direct Investment.” Policy Research Working Paper 6632, World Bank, Washington, DC.; Stipanowich, Thomas. 2004. “ADR and the ‘Vanishing Trial’: The Growth and Impact of Alternative Dispute Resolution.” Journal of Empirical Legal Studies 1 (3): 843–912.; Love, Inessa. 2011. “Settling out of court.” Financial and Private Sector Development Vice Presidency, World Bank, Washington, DC.
30. UNCITRAL (United Nations Commission on International Trade Law). 2004. Model Law on International Commercial Conciliation with Guide to Enactment and Use 2002. New York: United Nations.