Cyprus' justice system is under the spotlight once again after an EU scoreboard shows the country hitting rock bottom when it comes to efficiency as the time required to complete court cases is the longest by far.
Although this is not the first time Cyprus lags bottom on various reports and indices regarding EU member states’ performance in awarding justice, economists are calling for the authorities to take action and reform the country’s judicial system in an effort to reverse a negative image impacting society and the economy.
Focusing on the three key elements for an effective justice system, effectiveness, quality and independence, the EU Scoreboard finds Cyprus at the bottom as the time needed for cases to be tried far exceeds the EU average.
According to the survey's findings, the time needed in Cyprus to resolve civil, commercial, administrative and other similar cases is the longest in the EU. The Cyprus judiciary system needs an average of 1000 days, with delays seeing a significant increase in recent years.
Administrative cases can take up to 2500 days to be resolved, which is the longest in the EU.
The time required to resolve civil and commercial cases exceeds 500 days while only Malta has longer delays. Cyprus has also one of the largest numbers of outstanding civil, commercial and also administrative cases.
While not referring directly to Cyprus, Vera Jourova, European Commissioner for Justice said: "Challenges to the rule of law are growing in some parts of Europe. I am pleased to note that many countries are still working on improving their judicial system. Unfortunately, others are reversing this positive trend."
While the survey's findings are increasing pressure on authorities to resolve the chronic problems faced by Cyprus' justice system, economists are warning that Cyprus will soon pay a hefty price for its failing justice system.
Fiscal Council President Demetris Georgiades reminded that this is not the first time Cyprus has been found at the bottom of such league tables.
“The challenges facing Cyprus are recorded by international organizations dealing with competitiveness. In the Global Competitiveness Report 2017-2018, under the chapter "Justice", Cyprus scores 4.74, ranking it 40 out of 137 countries for independence. Cyprus scored 3.30 and ranked 85 for ‘the effectiveness of the legal institutional framework in the settlement of disputes’," Georgiades said.
“Cyprus is already paying the price for its poor judicial system. This may not be apparent as it is not something you can measure in absolute numbers as we could in the case of the haircut in 2013 when we could estimate the damage,” he added.
He explained that safeguarding rights is at the heart of how modern capitalist societies work. “An investor interested to invest in Cyprus will definitely be put off, by the ineffective, and as one could rightly to some extent assume corrupt justice system”.
Dubious Investors
As a result, said Georgiades, Cyprus is not attracting the number of investors it should, and in new areas where it is not currently active. He added that on top of that Cyprus may be attracting dubious investors who find that our ineffective justice system may fit their investing tactics.
Georgiades argued that weaknesses in the safeguarding of property rights due to the lack of an effective justice system and the long delays in resolving property-related cases have a negative impact on the value of real estate.
The head of the Fiscal Council suggested that the government will need to implement reforms to reverse this negative image.
“The government will have to find ways to rebuild trust in the judicial system. Dispute resolving mechanisms are needed, as is speeding up cases in courts, while judges and lawyers will need to receive more specialised training.”
Echoing calls for reform in the justice system, CIIM professor George Theocharides said that the judicial system is working at the same pace and mentality as it was 30 years ago.
“There is a huge backlog of cases waiting to find their way to court, while the judicial system is working at the same capacity it had decades ago,” said Theocharides.
He said that because of huge delays in resolving cases regarding repossessions and non-performing loans, the banking system is under strain, while the real estate sector is also negatively affected as properties get stuck in the market.
“Furthermore, this causes reputational damage to the country. Nothing that happens on the island remains a secret with investors being informed of the state of our judicial system through online publications but also indices prepared by international bodies,” said the CIIM professor.
He explained that an investor will definitely be put off from investing in the banking system seeing the huge delays in resolving cases such as repossessions which in turn will affect a bank’s balance sheet.
He said the justice system is not only limited to the courts.
“Authorities are still out on what caused the collapse of the banking system in 2013. We are still waiting for the results of probes and enquiries into the 2013 collapse,” said Theocharides.
He said that getting to the bottom of who and what caused the collapse would send out a message that we have learned from our mistakes.
At the same time, cases of business and family ties between Cyprus’ judges and big law firms representing banks in key cases, has damaged society’s trust towards the judicial system, which is also recorded in reports.
Theocharides sent out a call for authorities to step up plans for reforming the justice system, taking into consideration that the bulk of financial cases have significantly increased in recent years.
“More specialisation is needed, while judges should receive training and guidelines on handling such cases”.
Serious catching up
Economist Ioannis Tirkides added that Cyprus does not rank very well in the corruption perceptions index of the public sector, compiled by Transparency International.
“How a county is perceived from outside for purposes of doing business and investing depends on a wide variety of factors including economic, social, political, legal and regulatory, cultural and physical. These factors together determine the degree of riskiness of a country and conversely the attractiveness for doing business and investing,” said Tirkides.
“In terms of its attractiveness for doing business according to the World Bank index, Cyprus is ranked a little better than average with very low ratings regarding particular pillars of the index primarily legal aspects such as the enforceability of contracts,” he added.
Quantitative indicators do not convey a total picture, especially when qualitative indicators such as those referred to above are added to the picture.
“There is a lot that we can do to improve our ranking like safeguarding the independence of institutions, empowering them and improving their accountability. Cyprus has some serious catching up to do.”
Acknowledging the gravity of the situation, government spokesperson Prodromos Prodromou, said that the planned reform of the justice system is being fast-forwarded.
Prodromou was commenting on the resignation of Justice Minister Ionas Nicolaou over the ‘serial killings’, saying the President has asked the minister to stay on a few more days in order for him to present key legislation to parliament.
“It is well known that, unfortunately, our country is ranked last in the EU, and in an international ranking it is 73rd in terms of justice,” commented Prodromou.
