Effects of the economic crisis on the functioning of the judicial system in the Czech Republic

The economic crisis expresses itself first of all by cutting down the judicial budget and savings in the judicial sphere.

In the budget for 2010 the expenses of 22,067,742,000 CZK* for the whole justice system were approved (of which 13,882,239,000 CZK for justice and 8,185,503,000 CZK for prison service). It is about 185,069,000 CZK less than in 2009.  * [Exchange rate on 01/01/2010: 1 EUR = 26,300 CZK]  

During this year under the government decrees the amount of 1,023,264,000 CZK (4,67% of the approved expenses) from the approved budget were tied. At the end of the year the government – depending on the economic situation – will decide whether at least part of these tied resources will be released. The Ministry of Justice searches in reserves but these measures have an unfavourable impact on the management of the whole budget chapter. 

The Ministry of Finance has determined expenses in the amount of 18,536,000,000 CZK for 2011. After negotiation between the Minister of Justice and the Minister of Finance the amount was gradually increased up to 20,058,532,000 CZK. Compared to the approved 2010 budget the total expenses of the sector are reduced by 9.10% (2,009,210,000 CZK). The government approved the 2011 budget on 22nd September 2010.

The comparison of the proposed budget for 2011, the approved budget for 2010 and real expenses in 2009 is shown in the following table:

Management in terms of savings is quite difficult. It is necessary to maintain the operation of 115 structural units of the state and continuous operation of 35 state prisons. In 2011, insufficient allowance for expenses will mean to stop any bigger investments and to postpone some important projects, for example the implementation of the monitoring system of persons convicted to house arrest.

Another governmental saving provision is for a decrease in salaries of the civil servants by 10%. This provision will touch also the judicial personnel.

Due to the economic crisis an increasing workload of courts should be expected, especially in the field of enforcement and personal bankruptcy. People solve their personal situation by taking loans but afterwards they are not able to pay the money back.

The following tables show the increasing numbers of enforcement of judgments proceedings (execution) and personal bankruptcies from 2008 to the first half of 2010 (to 30th June 2010):

Execution – number of orders of the enforcement of the judgments by courts (bailiffs):

Execution – number of orders of the execution by private executors:   

Insolvency – number of personal bankruptcies:   

The Ministry of Justice has prepared several bills with the aim to save and bring more finances to this sector.

After almost 10 years the Ministry of Justice prepares the significant amendment of the Court Fees Act. The minimum fee will increase (from 600 CZK to 1,000 CZK) and also other fees for non monetary performance (including for example divorce) will increase (from 1,000 CZK to 2,000 CZK). On the other hand the number of cases exempt from court fees will decrease. In general, court fees will increase by 30-50%. The Ministry of Justice expects a reduction of so called vexatious applications and increase of responsibility of claimants for the initiation of a dispute. But the possibility to be released from court fees will be preserved for socially weaker classes.

Another provision concerns the reduction of lawyer´s fees. On the basis of the amendment of the law the payment for ex-offo lawyers in criminal and civil proceedings will decrease by 30%. Although it is only a temporary provision till the end of 2011, it may save more than 180 million CZK.

Ivana BORZOVÁ
Ministry of Justice
Czech Republic
CEPEJ Member

The effects of the economic crises on the Spanish judicial system*

The current economic crisis has affected all aspects of Spanish society, including Justice. The quarterly collection of statistical data on court performance by the Spanish Council of the Judiciary (CGPJ) shows that the most immediate consequence of the crisis has been a sustained increase in the number of incoming court cases (9,048,852 in 2009 up by 5,7% from 2008, which already saw an increase of 6,7% from 2007). The court system has been most affected in the civil/commercial and labour areas, while criminal justice remained more stable. Incoming civil cases increased by 18,5% in 2009, on top of an 17,8% increase in 2008. Similarly, labour justice also suffered increases for 2 consecutive years. The impact was specially marked in 1st Instance Social Courts, where incoming cases increased by 17,4% in 2009 and 32% in 2008. For the period 2008-2009, there has therefore been a 15,23% and 13,4% increase in the workload of civil and labour magistrates respectively.

Looking at specific types of cases, proceedings for the enforcement of mortgage obligations more than doubled in 2008 and further increased by 59% in 2009, reaching 93.319. The number of bankruptcy proceedings grew exponentially from 1,589 cases in 2007, to 4,813 in 2008 and 7,768 in 2009, which finally saw a certain slowdown. Dismissal proceedings increased by 55,4% in 2008 and by 31,5% in 2009.

Justice professionals have stood up to the crisis. In 2009 magistrates rendered 1,623,122 judgments, (6,7% more than in 2008, of which 17,2% more in civil matters and 15,3% more in labour matters), whilst the rate of rulings upheld in appeal remained very high (94% in all areas). However, this has not been enough to avoid a deterioration in the civil and labour courts, with higher backlogs and lower clearance rates. Nor has the justice system been spared from “social unrest” with a prolonged 4 month strike of court staff in 2008 and 2 days of unprecedented judicial strike supported by 35,7% and 23,57% of magistrates in 2009.

As from the end of 2009, the CGPJ, the Ministry of Justice and the Autonomous Communities have made joint efforts to adopt reinforcement measures in the most affected areas, including the appointment of support judges and the setting-up of new, specialized first instance courts. Preliminary data for 2010 seem to show a certain improvement, with a general stabilization of incoming cases (except civil and enforcement cases) and important reductions in dismissal and bankruptcy proceedings.

However it seems that wider structural reform will still be necessary. In this sense, notwithstanding a salary cut of up 10% for civil servants (including judges and prosecutors) in mid-2010, the Ministry has up to now maintained investments in judicial recruitment, infrastructure and IT in order to ensure implementation of the 2009-2012 Strategic Plan for the modernization of the justice administration. This includes the setting up of the new “judicial office”. Hopefully, the positive results of these investments will be reflected in the 2012 CEPEJ report.

* The statistical information referred to in this article can be found in the Annual Reports 2008/2009 of the Spanish Council of the Judiciary (CGPJ), as well as in the Statistical Bulletins “Justice Data” Nos. 15, 17, 18, and 22 published in the CGPJ site: www.poderjudicial.es

Elsa García-Maltrás
Senior Public Prosecutor
Spanish member of CEPEJ

To face the crises in the Netherlands

On 30 September 2010 the new coalition government Rutte-Verhagen presented its strategic action programme Freedom and Responsibility. It announced a budget cut in public expenditures of 18 billion Euros to be carried out between 2011 and 2015. This is nearly 10 % of the total budget of Dutch national government. In 2011, the budget for the judiciary was 935 million Euros and for legal aid, it amounted to 482 million Euros. These budgets have continued to rise in the last decades. Several measures are introduced to keep the budget in control as well as to improve and innovate within the Dutch judicial system.

1. Cost-covering court fees
The strategic programme states: “The judicial organisation will in 2013 be funded by those who use them. People with low incomes will be compensated.” This measure applies to administrative and civil litigation. It does not concern child, asylum and penal cases. Cost-covering court fees break new ground in the judicial system. Courts will be encouraged to introduce simple and efficient proceedings. It is presumed that citizens will be more critical before deciding to initiate court proceedings and will consider alternatives for achieving Justice. It is estimated that cost-covering fees will reduce the number of cases by 10 to 20 percent, which, in fact, will lead to a cost reduction of 115 million Euros. The additional income drawn from court fees are equivalent to approximately 225 million Euros. This will lead ultimately to a surplus of 340 million Euros compared to the current budget. To prevent people with low incomes from being restricted access to the judiciary, the legal aid budget will be raised by 100 million Euros.

2. Revising the judicial map
The judicial map of the Netherlands in the near future will in essence contain only ten districts, four courts of appeal and the Supreme Court. The courts will adjudicate in over 30 locations throughout the Netherlands. An administrative and organizational scale-up and not budgetary targets was the purpose of revising the judicial map. Thus, better opportunities for specialization and a more customer-oriented differentiation will be created for the courts. The revision is not restricted to the judiciary only. As a matter of fact, the prosecution will be organised in ten districts and the current 25 police districts will also scale up to 10. In the near future, police and prosecution will be congruent within all the regional districts of the judiciary. The central aim of the programme on courts is to guarantee a certain minimum quality of justice in all the regions of the Netherlands.

3. E-Justice
The e-Justice program will focus on the following themes: increasing implementation of video conferencing, encouraging the introduction of the digital criminal file - including setting up facilities for identification and authentication -, validating and archiving documents, electronic litigation in civil and administrative law - including the introduction of a simple procedure for simple cases -, improving the accessibility of files through the Internet, promoting the establishment of a European e-Justice. These measures will stimulate more efficient and effective interactions between the numerous organisations which shape together the judicial system.

4. Adjusting legal aid
The importance of maintaining expenditures under control underlies the way the legal aid system is assessed. Every effort must be encouraged for the system to withstand periods when the court-load increases, concurrently with the need to save on public expenditure. In the short run, the rates for lawyers will be lowered and, in a divorce case, representation by a lawyer will not be compulsory anymore. This will lead to a budget cut of 50 million Euros. As the cost-covering fees should not lead to reduced access to legal aid, people with lower incomes will be compensated, thus leading to extra expenditures of 100 million Euros. The net result is an increase of 50 million Euros of the legal aid budget.

5. Simplifying procedural law
Civil, administrative and criminal proceedings measures will be designed to better match the needs of litigants and efficient proceedings (for example, a simple procedure for simple civil affairs, a final dispute resolution in administrative law, etc.). In administrative and civil cases, this will, consequently, lower the court fees for the citizens.

The following table summarizes the overall impact of the measures on the budget of the judiciary and legal aid (in million Euros)

Frans van der DOELEN

Programme Manager, Department of the Justice System

Ministry of Justice, The Netherlands

Dutch Member of the CEPEJ

Justice in the United Kingdom hardly affected by the crisis

Among the largest member states the UK is probably one of the hardest hit by the economic crisis. Following the recent general election an emergency budget was introduced where it was announced that public spending would be dramatically reduced. The cuts would be applied across nearly all Government Departments and the Ministry of Justice has been asked to reduce its costs by 23% over four years which amounts to £500 million each year for the next four years.

The Ministry of Justice has just produced a plan to achieve these savings which fall into five areas:

1. Introducing a rehabilitation revolution
Create a system introducing greater involvement of the private and voluntary sectors in the rehabilitation of offenders, including use of payment by results, to cut reoffending.
 

2. Reforming of sentences and penalties
Ensure that the justice system reduces reoffending by introducing more effective sentencing policies and considering the use of restorative justice for adult and youth crimes.
 

3. Reforming courts, tribunals, legal aid and work with others in the delivery of criminal justice
Reform the legal aid system to make it work more efficiently, while ensuring that support is provided for those who need it most and for those cases that require it. Develop court reforms to improve the resolution of disputes, maximise efficiency and improve services and work with other stakeholders to make delivery of criminal justice more effective and efficient.

 
4. Assuring better law
Assure that law-making is transparent and accountable, safeguarding civil liberties and enabling citizens to receive the proper protection of the law.

5. Reforming how we deliver our services
Reform the way the Ministry of Justice works. Reassess ways of working to develop more efficient shared services, match the provision of services more closely to demand, reduce duplication and streamline functions wherever possible.
 

In reality what will be the impact of the changes? In terms of prisons it is accepted that the prison population is too high and continues to increase at an alarming rate. To combat this, a review will be undertaken of the sentencing policy to make great use of non-custodial sentences e.g. community based penalties together with the introduction of schemes to reduce the re-offending rate. It is also proposed that over 150 courts should close of which many are only part- time courts.
 

The provision of Legal Aid and a review of costs generally will be undertaken to ensure that those that need assistance will get at and that justice remains affordable. The number of staff working for the Ministry of Justice will be reduced and is expected that 15,000 staff will go, hopefully by natural wastage and voluntary redundancy. The number is made up of 10,000 from the National Offender Management Service and Prison Service. Court staff will be reduced by 3,000 and a further 2,000 from Headquarters and associated bodies.
 

Although this all sounds like bad news it should be seen as an opportunity to think the unthinkable and drive through radical reforms that would otherwise be opposed and rejected. The overall aim is to make the savings required but still ensure that access to justice is preserved for those who need it and that the community is protected from the effects of crime. Once the changes have all taken effect the Ministry of Justice will be a leaner and effective place better equipped to meet the challenges of the future.
 

John STACEY
Head of international Development of justice administration
International Directorate
Ministry of Justice of the United Kingdom
Vice-President of the CEPEJ