Cyprus has a poor record in delivering swift justice with an ineffective legal system deterring foreign investors from doing business on the island as they feel their rights aren’t adequately protected.
The island’s unwanted reputation for painfully slow grind-to-a-halt justice ranks it among those countries where democratic principles are a sideshow.
Economists like Marios Clerides argue why should investors bother with Cyprus when it take seven years (2,500 days) to complete a case in Cypriot courts when the European average is eight months.
Nobody wants to be ensnared in a web of legal delays and costly time wasting.
He said there was both a financial and social cost for a dysfunctional justice system.
If Cyprus wants to attract more serious investors it needs to reform its justice system and the way legal or civil disputes are arbitrated, experts argue.
Clerides believes there is a perception that every case is referred to the Supreme Court rather than the body first deciding whether there are grounds for an appeal.
He says another way is needed to resolve differences especially when it comes to company, or business disputes or firms being allowed to drag cases through the courts to avoid paying fines.
Delays in delivering Cyprus justice, its consequences and what changes are needed, was the topic of a roundtable discussion this week at the Central Bank involving governor Chrystalla Georgadji and leading economists.
Georgadji said when it came to certain types of legal cases the delay in Cyprus was a world-beater and among the slowest in delivering justice.
She said a typical commercial case takes on average 1,100 days to close, a situation that deters investors and tarnishes the country’s reputation.
“Today, the way a case is handled is directly linked to the development and economic dimension of how justice functions. In European and international assessments available to potential investors, how justice functions is an important factor determining their decision on whether or not to invest in a country,” Georgadji said.
“Delays in justice are a deterrent to investors,” she added.
The World Economic Forum 2018 report, ranks Cyprus 44 in the administration of justice and 73 for the effectiveness of its legal framework for dispute settlement, placing it below Uganda, Kazakhstan, Egypt and Pakistan while being on par with Cameroon and Jamaica.
Unsurprisingly, Cyprus is among the lowest spenders in Europe on running its justice system, amounting to €25 per head with only 0.12% of GDP allocated for operation of the courts, nearly three times lower than the EU average (0.32% of GDP).
When it comes to judges per 100,000 inhabitants again Cyprus scores a lower-than-acceptable average with 12 compared to the EU average of 20. Another reason why Cyprus is usually at the bottom end of the EU’s delivering justice scoreboard.
Of the 18 projects the government has planned to improve the justice system only four have been completed, the discussion heard.
These include a training school for judges, implementing expert advice on how the courts should be run and recruiting more judges to reduce the backlog of unheard cases.
Economist Andreas Stylianou said lengthy delays in delivering justice undermines the credibility of Cyprus as an international business centre which is why it ranks low in international evaluations.
As part of its 2013 bailout agreement, Cyprus had pledged to reduce delays in the courts while, more recently, it committed to reforming the justice system before the European Commission.
Former judge George Erotokritos said the creation of a secondary appeals court was a "very serious" undertaking, with the court expected to be housed temporarily in the old building of the Philoxenia Hotel with a possible start date of 2020.
Commercial arbitration courts could also be established in Nicosia and Limassol next year.
Introduction of e-Justice, which would radically change court proceedings, is being held up due to difficulties in launching a tender procedure for the project, said Erotokritos.
