Trust in the judicial system remains low

04/ 04/ 2019

Every year we ask in-house lawyers of the European Business Association member companies and the representatives of law firms a number of questions concerning the current situation in the administrative and commercial courts of Ukraine. At the beginning of the current year we have conducted our survey and asked the respondents to evaluate the judiciary system’s performance in 2018.

Overall, 70 lawyers have participated in the Court Index survey. In addition to the law professionals we also asked top managers (128 in the first half of the year and 115 in the second half), within the Investment Attractiveness Index of Ukraine, a set of questions regarding their evaluation of the Ukrainian judiciary system.

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The overall Court Index of the Association, according to the 2018 results, is 2,48 points on a scale from 1 to 5. The result of the previous survey was slightly lower – 2,4 points. This year the Index has reached the highest mark in the history of the survey, starting from 2013, however, the Index still remains in the negative area. We should, however, remark the improvement in the evaluation of the level of trust company leaders have towards the judiciary system – 2,01 points, compared to 1,85 over the previous period.

The values of the two other Index components – the general evaluation of the impartiality and objectivity and the average evaluation of the organizational and operational factors of the judiciary system – also demonstrate a slight positive trend (a growth of 0.08 and 0.03 points accordingly). However, this is clearly insufficient to say that a noticeable improvement in the process of the judiciary system reforms has taken place.

How do the EBA member companies comment upon the Index survey’s results?

Andriy Stelmaschiuk Managing Partner, “Vasil Kisil and Partners”
The overall Index of trust towards the judiciary system is improving, yet still has not surpassed the neutral value. The judiciary system is rather mistrusted than trusted.

«Even though institutionally the judiciary reform is on the right track, it is still too early to judge its overall success. The latest changes will bring about results in the next two or three years. Until then, the Ukrainian jurisdiction as a forum for solving conflicts will be at a disadvantage in comparison with foreign and alternative platforms».

Leonid Cherniavskiy Head of the Legal Department, Sanofi in Ukraine
Judging from the results of the survey, the judiciary system has received the best evaluation since 2013 – the best in the survey’s history.

«In my opinion, this is largely due to the progressive reform of the procedural legislation that has given all the parties in the court procedure an opportunity to use effective additional tools of combating misuse by unscrupulous plaintiffs or defendants. The Supreme Court reform has also played a certain role, which is criticized for being flawed, yet seems to have brought about certain improvements in comparison with the previous state of affairs.

All that aside, the overall result remains very low due to the main problem of the Ukrainian judicature that is worrisome to foreign investors – the widespread illegal influences on the process and the decisions made by the judges. For example, in the courts of the first instance and appellate courts in certain processes misuses in the form of manipulation of the automated system of case distribution, surpassing the regulated deadlines of case reviews, extremely controversial and overtly unlawful decisions made by certain judges etc. All this leads to serious infringements upon the rights of the disputing parties made by the judiciary system that is supposed to do the opposite – protect those essential rights. The procedure of holding the judges responsible for such misconduct remains extremely ineffective: the review of cases concerning their unlawful actions drags on for years.

That way, the low level of trust towards the judiciary system that is reflected by the survey’s results is, unfortunately, one of the main factors that worry businesses and turn off foreign investors from investing or expanding their investments in Ukraine. There is no doubt that further reforms of the judiciary system have to be the main talking point in the conversations concerning the necessary reforms in Ukraine, in the form of institutional capacity, independence and responsibility for misdemeanor».

Oleg Kyryievskyi Partner, Head of the Dispute Resolution Practice, Advice Group
2018 has brought about a “neutral value” for the performance of the judiciary system. This means that negative attitudes of businesses towards settling cases in court have weakened and the level of trust has slightly increased.

«The positive trend is seen in the sphere of commercial law, which is due to a few different factors. Firstly, the compensation of expenses for professional help in case of a positive outcome of the court process gives businesses the ability to recruit high-quality legal aid and get back the money spent on paid legal services. Secondly, the compliance with the terms of trial, compared with the other branches of law, allows for strategic planning of the parties’ stance in the process, in a definite timeframe. Another positive change is the improvement of the quality of court decisions. One example of that is the decisions of the Supreme Court, the structure and content of which is taken as an example by the courts of lower instances».

Yaroslava Savastieieva Head of the Compliance Department, European Business Association
The important thing is that the Court Index has slowly started to improve again, judging from the 2018 results. Even though the overall value of the index is still negative, there is a hope that the beginnings of the revival of the judiciary system will show the quality results in the short-term perspective.

«The ability to defend one’s rights and interests in court is one of the factors that influences the decisions of business representatives concerning entering the Ukrainian market, expanding the existing capacity or waiting. Hence, “cosmetic” reforms are insufficient. The powerful judiciary branch of power can become the foundation of fighting corruption efficiently».

Survey Partner

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