Chicago International Dispute Resolution Association

Mediation in Bosnia and Herzegovina: A Second Application

The BiH judiciary faces myriad problems. Education and training of judges is substandard.37 Court contempt, subpoena, and enforcement powers are underutilized or insufficient.38 Outside of Sarajevo and Brcko, funding levels are “woefully inadequate.”39 Courtrooms and other facilities are “dilapidated and in need of repair.”40 Many of the courts carry substantial debts.41 But, perhaps the two most significant issues are inefficiency and corruption.

The BiH court system simply moves too slowly.42 A recent World Bank study43 indicates that it takes almost two hundred days, on average, to enforce a judgment and only about twelve percent of local firms characterize the courts as “quick.”44 These scores were lower than for many neighboring transition countries like Macedonia.45 One commentator noted that the courts are generally distrusted by business leaders.46 One reason for court inefficiency is that judges have to work within an environment where substantive and procedural laws are constantly changing.47 Because they cannot access new legislation easily and there is no effective system for identifying and organizing changes,48 judges are understandably overwhelmed. Another reason for the inefficiency is that courts have no effective case filing and tracking systems.49 And finally, the system allows for excessive postponements of hearings.50 As a result of these inefficiencies, the BiH High Judicial and Prosecutorial Council (HJPC) recently reported that significant case backlogs have accumulated in many courts.51

Another serious issue is corruption, or at least the perception thereof. The ABA/CEELI Judicial Reform Index survey found that “[i]mproper influences on judicial decisions are a significant problem, and they include bribes, requests for specific outcomes by friends and colleagues of judges, ex parte communications, and political pressure, most of which is exerted indirectly.”52 In addition, while ethics codes are in place, they are not “widely understood or followed.”53 In the World Bank’s surveys of fairness and honesty, the BiH courts ranked in the bottom half of the region, with only around a quarter of respondents assessing the courts as either fair or honest.54 The most compelling finding was that in 2002 BiH ranked number one in all of Europe and Eurasia for the frequency of unofficial payments and gifts made when dealing with courts.55 This was in spite of the fact that BiH had tripled the wages of judges.56 Transparency International found that BiH citizens rank the judiciary as the fourth most corrupt institution in the country (ahead of, inter alia, the customs, medical, and education systems)57 and an alarming fifty-four percent think most or almost all of the judges are involved in corruption.58

The consequences of a dysfunctional court system cannot be overstated. Individuals and businesses cannot effectively enforce their contractual rights and as a result, economic activity suffers. One study commissioned by the European Bank for Reconstruction and Development (EBRD) found that legal institutions’ effectiveness in enforcing laws is more important for foreign investment in transition economies than is the establishment of modern, pro-business laws on the books.59 In BiH, the perception and reality of weak enforcement of property and other rights has hurt economic development.60 The World Bank survey ranked the BiH judiciary second in the Europe and Eurasia region for being an impediment to doing business.61

37. Id. at 6, 9. However, the Judicial and Prosecutorial Training Centers recently mandated that all BiH judges receive four days of continuing education each year. This is a good start. In addition, there are a number of programs funded by CIDA (Canadian Intl. Dev. Agency), USAID, Council of Europe, the European Union, and others that focus on helping the Entity Judicial and Prosecutorial Training Centers develop greater capacity for future
programming. back
38. Id. at 15. back
39. Id. at 16. ABA/CEELI considered this to be a “significant impediment to judicial efficiency.” Id. Most courts also lack appropriate office equipment and computers. Id. at 32. The European Commission found that “[w]ith some very limited exceptions, the level of funding for the courts is inadequate and a significant impediment to judicial efficiency. Some courts do not have sufficient funding to pay for basic services such as electricity, heating, telephones or postage, and these services are frequently cut off for failure to pay the bills.” EUROPEAN COMMISSION, FUNCTIONAL REVIEW OF THE BIH JUSTICE SECTOR 63 (March 2005), available at http://www.delbih.cec.eu.int/en/reviews/MoJ_report_PDF/Justicereview.pdf [hereinafter European Commission]. back
40. ABA/CEELI JRI, supra note 27, at 18. At the trial level courts, “most judges hold hearings in their cramped offices. . . [i]t is not uncommon for two or three judges to share a single office.” Id. The High Judicial and Prosecutorial Council of BiH stated that “most courts and prosecutors’ offices are in quite a bad state of disrepair, with no investment having been made in them since their construction some 20 to 30 years ago.” HJPC, supra note 3, ch. 1.3. Moreover, the courts are funded in a very unequal fashion. The European Commission observed that “[b]y travelling only a few kilometres, a citizen of BiH can go from a (relatively) modern and adequately maintained court, where cases are able to be processed in a reasonable amount of time, to a court without heat or electricity, where cases can wait years to be heard and where there are no funds to pay for delivery of documents or for court appointed defense counsel or expert witnesses.” European Commission, supra note 39, at 73. back
41. HJPC, supra note 3, ch. 6.2.1. The HJPC calculated a total of over twenty-two million KM (fifteen million dollars) in accumulated court debts as of the start of 2004, which was twenty-seven percent of the courts’ total annual budgets. One reason for the large debts is that the courts had to pay for large increases in judge and prosecutor salaries. Because their budgets did not increase, the courts paid these salaries from other budget line items for operational expenses, and these other expenses then went unpaid. European Commission, supra note 39, at 63. back
42. The official case filing and tracking systems are not very useful. ABA/CEELI JRI, supra note 27, at 31. However, this dearth of quantitative data on judicial efficiency is common for a developing judicial system. See Maria Dakolias, Court Performance Around the World: A Comparative Perspective, 2 YALE HUM. RTS. & DEV. L.J. 87, 89 (1999). back
43. JAMES ANDERSON ET AL., JUDICIAL SYSTEMS IN TRANSITION ECONOMIES, ASSESSING THE PAST, LOOKING TO THE FUTURE, World Bank (2005), available at
http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&
menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000090341_20050711102518
[hereinafter World Bank Survey]. (Note: if the above link isn't clickable for you, you'll need to cut and paste the entire address into your browser with no spaces - Webmaster). The survey draws upon various sources, including a joint EBRD-World Bank Business Environment and Enterprise Performance Survey, the ABA/CEELI Judicial Reform Index surveys, an EBRD Legal Indicator Survey, the World Bank Doing Business database, the World Economic Forum’s Executive Opinion Survey, a World Values Survey, and The Centre for the Study of Public Policy’s Public Opinion surveys. back
44. Id. at 31-33 (referencing 2002 figures). back
45. Id. back
46. Natalie Rougeux, Comment, Legal Legitimacy and the Promotion of Small Business in Sarajevo, 37 TEX. INT’L. L.J. 177, 179 (2002). back
47. An example of the massive legal changes can be seen in the 2005 OHR Mission Implementation Plan. There, OHR identifies the following legal changes for 2005:
“Establish modern civil, commercial, and criminal codes and procedures, measures for the security of judges and witnesses, regulations for administrative disputes, plus laws governing obligation and enforcement of civil judgments. Additionally, proper appellate procedures and addressing complex trans-border or cross-Entity criminal matters, such as illegal immigration and money laundering, will be put in place.”
Office of the High Representative, OHR Mission Implementation Plan, task 1.1 (Mar. 7, 2005), available at http://www.ohr.int/ohr-info/ohr-mip/default.asp?content_id=34144. back
48. In most courts, only the presidents and department heads receive copies of the official gazettes, which is the only place the text of the laws are published. ABA/CEELI JRI, supra note 27, at 32-33. back
49. Id. at 31-32. back
50. See Rougeux, supra note 46, at 185-87. back
51. HJPC, supra note 3, ch. 1.1. back
52. ABA/CEELI JRI, supra note 27, at 24. back
53. Id. at 25. back
54. World Bank Survey, supra note 43, at 37-38. back
55. Id. at 41. back
56. Amazingly, the survey found that after the tripling of judges’ salaries, the prevalence of unofficial payments at courts increased by roughly sixty percent. Id. at 40-41. See also Rougeux, supra note 46, at 185-89. back
57. Transparency International, Global Corruption Barometer 2005, annex 1, tbl. 9 (2005), available at http://www.transparency.org/policy_and_research/surveys_indices/gcb. back
58. Transparency International, Corruption Perception Study, Bosnia And Herzegovina, at 73- 77 (2004), available at http://www.transparency.org/policy_research/surveys_indices/cpi/2004. back
59. Katharina Pistor et al., Law and Finance in Transition Economies, 8 ECON. TRANSITION 325, 326 (2000), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=214648. back
60. See, e.g., Rougeux, supra note 46, at 179, 185-90. The BiH courts’ inefficiency may actually contribute to their corruption by increasing incentives to “speed up the process through extrajudicial methods.” Id. at 188. For a general discussion on the relationship between property rights and economic development, see HERNANDO DE SOTO, THE MYSTERY OF CAPITAL: WHY CAPITALISM TRIUMPHS IN THE WEST AND FAILS EVERYWHERE ELSE (Basic Books 2000). back
61. World Bank Survey, supra note 43, at 48-49. back

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