Focus on…
Building a justice system fit for the future!
Background
Since gaining independence from the UK in 1960 Cyprus has transformed itself into a successful, modern international business centre. A Member State of the European Union (‘EU’) since 2004, it provides a gateway for investment into and from Europe and, due to its geographic location, it enjoys strong commercial ties with Eastern Europe, the Middle East, Asia and Africa. A consequence of this is that commercial disputes frequently involve international parties at corporate and individual level. Additionally, where main court or arbitration proceedings take place in another EU Member State or in a third country with which Cyprus has a bi-lateral agreement, it is common where a link exists, for the parties to look for provisional measures in Cyprus in support of the foreign court proceedings. The commercial disputes arising are varied and may be linked to issues such as negligence, fraud, contractual disputes, corporate disputes etc. The dominant means of settling large commercial disputes in Cyprus is via litigation. There is often negotiation before and during court proceedings but no legal obligation on or expectation that the parties will engage in such discussions unless they have specifically agreed to do so. Alternative dispute resolution methods (“ADR”) are a relatively new concept, other than in the construction and co-operative institutions sectors, but they do exist. Cyprus is primarily a common law jurisdiction with a justice system which is based on the adversarial model. This is a legacy from its period as a British colony. Much of Cypriot legislation is based on the UK laws in force at the time Cyprus ceased to be a colony. It is updated and amended regularly to ensure alignment with all relevant EU Guidelines and Directives. Where there is no applicable Cypriot legislation, English common law and equity are applicable, and English authorities have persuasive force. The courts are bound by the doctrine of precedent according to which where the common law has been interpreted by the Supreme Court of Cyprus in a particular way, the subordinate courts will be bound by that interpretation. This offers the parties to a commercial action the advantages of consistency, predictability and efficiency.Problems
Despite the apparent attractiveness of the Cypriot legal system to national and international business it has, since the 2003 financial crash, been heavily criticized as an obstacle to the commercial growth of the island. It should be stressed that this criticism does not stem from a real or perceived lack of integrity or independence on the part of the judges. Rather, it is directed at the enormous backlog of cases pending before the courts and the average time it takes to get a final judicial decision in any given case. Whilst the courts are generally efficient in determining applications for interim relief, final adjudication in a case can commonly take between three and six years to obtain. A functional review of the justice system in 2017/18 supported by the EU Structural Reform Support Service (SRSS)[1] found that the length of court proceedings was among the longest in the EU, and the level of backlogs in litigious civil and commercial cases among the highest. Such delays run contrary to the democratic nature of the EU which, along with the Cypriot government, citizens, and businesses adopts the view that ‘justice delayed’ is ‘justice denied’. Working with the EU and its representative bodies Cyprus determined that problems in the justice system were primarily caused by:- A large increase in cases and appeals being brought before the courts as a consequence of events linked to the financial crash.
- A lack of support resource within the system. The use of legal officers to support judges in the research and drafting of judgements was very limited.
- An increase in the complexities of the cases brought before the courts.
- An unrestricted right of appeal.
- Reliance on a paper based system with very minimal use of ICT for internal or external communication resulting in significant inefficiencies and, inter alia, a management information deficit.
Next steps
The reaction of the Cyprus government to the findings of the SSRS was twofold. Firstly It determined that there was an urgent need to begin addressing the backlog of existing cases. Secondly, it realised that the entire justice system was in need of radical reform. Case Backlog To help facilitate a reduction in the backlog the first step taken was a decision to increase the overall capacity of the justice system by increasing the number of judges. The House of Representatives passed a 2019 budget which included the creation of 32 new judges. Following on from this a pilot project was introduced in the Paphos District Court. The project involved the assignment of seven experienced judges to a ‘task force’ dedicated to reducing the case backlog. The theory was that the experience level of the judges would allow them to assess the cases with relative speed. The pilot was deemed to be beneficial and was expanded in September 2021 to cover all districts. In addition, an amendment was made to Civil Procedure Rules which established a ‘small track’ procedure. This allowed for the introduction of a simplified process for claims under €3,000. This increased the case management options available to judges by allowing them to give summary judgments on the lower value cases and thereby accelerating the speed with which they could be dealt with. Reform of Justice System It was clear from a series of EU backed reviews that a wholesale redesign of the system was required. This required detailed planning and necessitated the involvement and ‘buy in’ of all stakeholders in the system. Consequently, and with the support of the European Commission for Democracy through Law, a period of comprehensive consultation and review took place with the cooperation of all stakeholders. The result of this exercise was the production, in 2021 of a coherent plan (the Plan) to reform the Cypriot justice system with the object of building a modern, accessible and efficient system. The key pillars of the plan are:-
- New Civil Procedures Rules
- Training for judges
- Reform of the court structure
- Introduction of technology
New Civil Procedures Rules
The Civil Procedures Rules (the ‘CPR’) currently in use are substantially in the form of the Civil Procedures Rules that operated in England and Wales in 1958! The revision of the CPR is one of the most significant reforms included in the Plan. The project was undertaken by a team of international experts who worked in collaboration with a Rules Committee established by the Supreme Court. A revised set of rules drafted by them was then subject to consultation with the Cyprus Bar Association and the Judge’s Association. Following this, on 19 May 2021 the new CPR were approved by the Supreme Court. Within the framework of the RRP the Supreme Court has committed to the implementation of the new CPR for new cases submitted to the courts from 1 September 2023 onwards. This is expected to have a material impact on the efficiency of the courts.Training for Judges
Obviously, the introduction of the new CPR and the adoption of new technologies will only be successful if judges are adequately trained in their use. Consequently, following the enactment of the relevant law 14 August 2020 a training school for judges was established. This formalises training for the new justice system and will also support ongoing training of judges. It is envisaged that, in line with many other professions, judges will be required to engage in continual education for their period of tenure. This move to a higher level of professionalism follows on from a decision taken by the Supreme Court in 2019 to publish the criteria for the recruitment of judges and for the promotion of judges. Said criteria were set following a study undertaken by the DG Reform of the European commission. Within the framework of the RRP a commitment was made to ensure that at least 110 judges had completed annual training on the new CPR and various other agreed topics and skill by quarter 4 of 2025. According to the Ministry of Justice and Public Order this target had already been surpassed by 31 January 2023.Reform of Court Structure
Prior to the proposed reforms, the Supreme Court sat at the apex of the court system in Cyprus. The Supreme Court consisted of 13 members, and it exercised both original and appellate civil and criminal jurisdictions. It was vested with authority as:-
- Supreme Constitutional Court.
- Supreme Administrative Court.
- Admiralty Court.
- Appellate Court.
- A court with exclusive jurisdiction to hear and determine petitions concerning the interpretation and application of the electoral laws.
- A court with exclusive jurisdiction to issue prerogative writs (e.g. habeas corpus, mandamus, prohibition, quo warranto, and certiorari).
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- The separation of the Supreme Court into two Supreme Courts: one Supreme Constitutional Court with 9 judges and one Supreme Court with up to 7 judges.
- The creation of a new Second Instance Court, i.e. the Court of Appeal (Appellate Court). The Appellate Court will hear appeals from the First Instance Courts (administrative, civil and criminal) and will be comprised of up to 16 judges. The new Supreme Court will act as a third level appellate court hearing cases referred to it by the Appellate Court.
Introduction of Technology
Widespread introduction of technology into the justice system is essential if the system is to become and remain efficient and effective. The failure to engage with technology led to a catastrophic situation during the Covid 19 lockdowns where the courts were forced to close because they lacked both equipment and expertise to function remotely. The Plan therefore incorporated the introduction of an i-justice platform as an interim step towards full engagement in the EU wide e-justice project. The platform was launched on 21 July 2021 as a pilot version with the objective of streamlining legal processes. The pilot was judged to be a success and use of the platform for commercial cases became obligatory from 1 February 2021. The full implementation of the system was preceded by thorough training and a sufficient period to allow users to build familiarity with the system. Additionally, the Cyprus Bar Association (CBA), organized training points in the local bar associations, so that any difficulties of a technical nature could be resolved immediately and effectively. The I-Justice platform aimed to bring together litigants, advocates, law firms, court staff and clerks, judges, the police and relevant governmental authorities so that justice is administered in an effective and practical digital environment. The platform allows lawyers to:-
- Submit claims remotely.
- Access electronic case files
- Pay fees and commissions remotely.
- Access up to date information about the progress of ongoing cases.
Mission accomplished?
There can be no doubt that important progress has been made in the march to deliver a new justice system that will be fit for future generations. The President of the Supreme Court and the President of the House of Representatives have both publicly stated that they expect the backlog of cases to be cleared within a 5-year period[2]. Within the RRP framework a commitment has been given by the Supreme Court to meet specific targets in the reduction of cases and appeals which have been pending for more than two years. An ex-President of the Supreme Court has been appointed to co-ordinate and monitor progress. Some protests by members of the Cyprus were recorded at the introduction of the possibility of summary judgements of small claims but these have not been sustained. The passage of the legislation introducing a new court structure was a significant milestone. Whilst some disappointment has been expressed at the delay in the implementation of the new courts, criticism has been muted. The general perception appears to be that it is better to ensure that all necessary resources are in place from the outset than to risk creating new problems to resolve. It is, however, important for the economic future of Cyprus that the delay does not become a lengthy one. The introduction of formal training requirements for judges can only prove to be beneficial for all stakeholders in the system. The same is true for the use of technology which finally allows the courts to move out of the 20th century. January 2023 saw the delivery of a report following completion of a project related to the establishment of a modern, efficient Court Service to support the management and administration of the courts. It produced recommendations on re-engineering of procedures, organisational and governance structures and staffing requirements. These recommendations are now under consideration by the Supreme Court and the relevant Ministries and effectively form the final part of the ‘jigsaw’. Overall then, provided momentum can be maintained, the signs are favourable for the creation of a justice system which is fit for Cyprus in the 21st century and which will be capable of adapting to future requirements. Given that the EU has stressed that lack of reform is deterring investment in the country it seems unlikely that the desire for change will dissipate any time soon.Footnotes: [1] http://www.supremecourt.gov.cy/Judicial/SC.nsf/All/EBD26B775C1A627DC225843F0041884A/$file/Functional%20Review%20of%20Courts%20System%20of%20Cyprus%20(IPA%20Ireland)%20-%20Final%20Report%20March%202018.pdf [2] https://knews.kathimerini.com.cy/en/news/the-backlog-in-court-cases-will-be-alleviated-in-4-to-5-years https://knews.kathimerini.com.cy/en/news/the-backlog-in-court-cases-will-be-alleviated-in-4-to-5-years