Enforcing Contracts Around the World: Court Efficiency and Access to

Justice in 189 Economies

Melissa Johns Advisor, Global IndicatorsDevelopment Economics, World Bank Group

Doing Business – Women, Business and the Law – FDI Regulations Database

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies 2

Provides objective measures of business regulations and their enforcement across 189 economies and selected cities at the subnational and regional level.

Analyzes laws and institutions that impact women entrepreneurs and employees globally.

Presents indicators on countries’ laws, regulations and practices affecting how foreign companies invest across sectors and arbitrate commercial disputes, among others.

Doing Business – What does Enforcing Contracts measure?

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies 3

To resolve a commercial dispute in the local courts, how long will it take, how much will it cost and what steps are required?

Doing Business – Where is it easy to resolve a commercial dispute?

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1. Luxembourg

2. Korea, Rep.

3. Iceland

4. Norway

5. Germany

6. Austria

7. France

8. Finland

9. Hong Kong SAR, China

10. Russian Federation

Top 10 Performers

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

Doing Business – Where is it more difficult to enforce a contract through the local courts?

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189. Timor-Leste

188. Myanmar

187. Angola

186. India

185. Bangladesh

184. Suriname

183. São Tomé and Príncipe

182. Honduras

181. Benin

180. Central African Republic

Bottom 10 Performers

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

Doing Business – Reforms in Malaysia

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• Implementation of a case management system

• Reorganization of the Commercial Division of the Kuala Lumpur high court and training of judges

• Expansion of an “e-court” project - Queue management system using text

messaging to notify lawyers of hearing dates- Digital planners enabling registrars to schedule

hearings on the basis of which judge is available earliest

- Court recording and transcription system provides video and audio recordings of proceedings

- Introduction of electronic filing

Reduction of backlogs by more than 50% between 2009 and 2011

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

Improvements in Malaysia since 2009

Doing Business – Reforms in Cote d’Ivoire

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Côte d’Ivoire introduced a commercial court and cut the time to enforce contracts by 185 days

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

Why does it matter?

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Studies link efficient contract enforcement with

Decreased informality

Improved access to credit

Increase in trade

• Long resolution times render litigation irrelevant• High litigation costs influence the parties’ decision on whether or not to go

to courtDabla-Norris, Gradstein and Inchauste, 2008; Safavian, Mehnaz, and Siddharth Sharma, 2007; Duval and Utoktham, 2009.

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

FDI Regulations Database - Arbitrating and Mediating Disputes

9Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

The strength of the legal and institutional framework and practice related to alternative dispute resolution (with a focus on commercial arbitration, but also covering mediation and conciliation),

The ease of initiating and resolving commercial disputes involving foreign-owned companies through alternative dispute resolution, and

The extent of judicial assistance during arbitration proceedings as well as at the stage of the recognition and enforcement of foreign arbitral award.

Average length of arbitration proceedings , by region

Eastern Europe and Central Asia 36 weeks

East Asia and the Pacific 41 weeks

Latin America and the Caribbean 41 weeks

High-Income OECD 48 weeks

Middle East and North Africa 58 weeks

South Asia 63 weeks

Sub Saharan Africa 65 weeks

FDI Regulations Database 2012

Recognition/enforcement proceedings for foreign arbitral awards can also vary, note Latin America and the Caribbean (average 90 weeks), Sub-Saharan Africa (average 65 weeks), and East Asia and the Pacific (average 39 weeks).

The project measures:

Women, Business and the Law – Small claims courts and access to justice

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In a 11 economies, women’s testimony carries less

evidentiary weight than a man’s. In Democratic Rep. of Congo, married women need

the permission of their husband to initiate a suit.

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

Small claims courts are of extreme importance for

women, since studies have shown that businesses owned by women tend to be smaller than those owned by men.

Doing Business – Upcoming research on courts

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o Quality of the judicial infrastructure• Publication of judgments, availability of voluntary mediation

o Mechanics of the process • Case management, e-filing, automation of court processes

o Mechanisms available to workers and firms to resolve labor disputes

• Availability of specialized jurisdictions dealing exclusively with labor issues

• Types of sanctions that could be imposed on the employer for wrongful dismissal (compensation, reassignment, etc.)

• Length of the dispute

Enforcing Contracts Around the World: Court Efficiency and Access to Justice in 189 Economies

Enforcing Contracts indicators

Measures of labor courts

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