Slow judicial reforms worry businesses: World Bank

Slow and spotty judicial reforms in many European and Central Asian countries are worrying businesses and could undermine wider economic transformations, the World Bank said on Monday.
In its report "Judicial Systems in Transition Economies," the development lender said judges, courts and legal bodies play an integral but often overlooked role in regulating markets and easing business transactions like bankruptcies and the collection of debts.
It said so-called transition countries like Russia, Poland, Ukraine and Croatia needed to overhaul their legal systems to improve enforcement, tackle corruption and reduce backlogs.
"Judicial reform has not kept pace with the tremendous strides ... made in many market-oriented reforms," said Cheryl Gray, director of the World Bank's poverty reduction and economic management unit for Europe and Central Asia.
Public perceptions of the courts seem to have worsened since the mid-1990s in many former Soviet states and other areas, the World Bank said, citing complaints about slow and costly transactions and worries about the honesty of judges.
The bank estimated that in most transition countries it took more than 200 days to collect on an unsecured debt through the courts last year - nearly double the time needed in higher-income Western countries. In Poland, Slovenia and Serbia and Montenegro, it said collecting such debts could take nearly three years.
The bank said pressure from the private sector may be a key driver of legal system change in the region in coming years.
"The demand for judicial reforms has strengthened, which both puts the spotlight on problems of judicial capacity and suggests that further reforms and capacity building are worth the effort and may be sustainable," it said in the report.
"The opportunities for judicial strengthening are greatest ... where demand from the business community is strong."
To address these concerns, the development institution recommended countries create merit-based incentives for judges, ensure court cases are randomly assigned, and publish decisions widely with more openness to the media and general public.