Transcript Law Reform - Justice Kiryabwire

ADR-A CATALTST IN COMMERCIAL
DEVELOPMENT
(A CASE STUDY FROM UGANDA)
BY JUSTICE GEOFFREY KIRYABWIRE
Introduction
• Vibrant commercial sector is critical to
overall development of a nation
• There is need for an effective commercial
legal system to enforce contracts
• Uganda economic indicators
-average annual growth in GDP 6.9%
-overall private investment as a share of
GDP 76.8%
Poor contract enforcement
mechanisms as a disincentive to
commercial development
1. Few judicial officers to handle disputes
- Delays
- Case backlog
- Self help techniques by disputants
2. Bureaucratic Judicial Procedures
Poor contract enforcement
mechanisms as a disincentive to
commercial development
Table 1
70
60
58
55
Procedures
50
40
30
20
14
11
10
0
Sierra Leone
Egypt
Norway
Australia
Countries
(Source doing business in 2005)
Poor contract enforcement
mechanisms as a disincentive to
commercial development
3. Delays/Time
Table 2
421
Poor countries
417
Middle Income countries
280
Rich countries
Days from filing case to enforcement
(Source doing business in 2005)
Poor contract enforcement mechanisms
as a disincentive to commercial
development
Table 3
1999 UJSS Study
Respondents with
Those who rated delay as
experiences of
a serious problem
commercial cases in Court
Business
62
66%
30
50%
- Magistrates Courts
40
53%
- Commercial Court
37
46%
- Magistrates Courts
- Commercial Court
Professional
(Source
DFID
Study 1999)
Uganda
Commercial
Sector
Poor contract enforcement mechanisms
as a disincentive to commercial
development
4. Lack of awareness of commercial law
and practice by Judges and Magistrates
5. Problems of enforcement of Judgments.
6. corruption/corrupt Practices.
7. High Costs.
Poor contract enforcement mechanisms
as a disincentive to commercial
development
Table 4
Country
Debt
Cost of Court and Attorney
US$
fees US$
Venezuela
5,000
2,500
Philippines
2,000
1,000
Indonesia
2,000
2,000 (plus)
(Source doing business in 2005)
Effects of poor enforcement and
dispute resolution mechanisms
• Leads to fewer investment and business
transactions resulting in
- loss of confidence in the system
- Escalation of under hand business practices
- Retardation of county’s growth and
development
Effects of poor enforcement and
dispute resolution mechanisms
Table
5
Investment as a percent of GDP
23.5
23
22.5
22
21.5
21
20.5
20
19.5
19
Shortest
Longest
Countries ranked by days to enforce a contract, quintiles (Source: Doing business in
2005)
Effects of poor enforcement and
dispute resolution mechanisms
Table 6
Trade as a percent of GDP
100
92.5
90
84
80
82
72
70
60
53.2
50
40
30
20
10
0
Least
Most
Countries ranked by days to enforce a contract, quintiles (Source Doing Business in 2005)
Traditional approach to dispute
resolution
• The traditional approach is to resolve a dispute
by going to court and suing
• However private sector perceptions of suing in
the courts have not always been good though
they have now greatly improved
(review two studies in Uganda one in 1999 and the other in 2004)
Traditional approach to dispute
resolution
Table 7
Private Sector Perceptions of accessibility to Commercial
Justice Institutions
Commercial
No. of
Perceptions of Accessibility
Perception of
Dispute
Institutions in
Nationwide
Accessibility
Resolution
Uganda
(Kampala)
Informal
Formal Sector
Informal
Formal
Sector %
%=488
Sector
Sector
%N=314
%=264
N=607
LC Court
Mag. Courts
4000
67
59
69
55
508
43
59
56
76
Comm.Court
1
19
27
44
52
High Court
1
18
23
36
44
Court of Appeal
8
17
22
52
67
Supreme Court
1
15
17
30
49
Industrial Court
1
9
14
27
42
Tax Appeals
1
9
17
26
31
1
8
12
19
26
Tribunal
CADER
What possible solutions
exist?
• There is need to develop other dispute
resolution mechanisms that are
- efficient and accessible
- Faster
- cheaper
What possible solutions
exist?
1. This where ADR comes in
ADR can be defined as
“That ADR is a structured negotiation
process whereby the parties to a dispute
themselves negotiate their own
settlement with the help of help of an
independent intermediary who is a neutral
and trained in the techniques of ADR”
What possible solutions
exist?
There are various types of ADR i.e.
-
Negotiation
Conciliation
Mediation
Mini-trial/early neutral evaluation
Court annexed ADR
Arbitration
What possible solutions
exist?
2. Enactment of a comprehensive and
modern legal framework for the use of
ADR outside court.
- The Arbitration and Conciliation Act (Cap
4)
. Based on the UNCITRAL MODEL LAW
. Centre for Arbitration and Dispute
Resolution (CADER)
What possible solutions
exist?
3. The enactment of a legal framework to
allow for Court annexed ADR.
- The Constitutional Commercial Division
(Mediation Pilot Project Rules) Practice
Direction legal Notice 7 of 2003.
- The Commercial Court Division
(Mediation Pilot Project) Rules Statutory
Instrument No 71 Of 2003
What possible solutions
exist?
Characteristics of the mediation pilot project
i. It makes mediation compulsory before
litigation (with strict time frames)
ii. Mediation is managed by CADER under
a strict code of conduct
iii. Has CADER staff mediators who are
free
iv. Allows for enforcement as a consent
judgment of the court.
Results of using ADR
1. Of cases that go straight to court
- 80% were settled by the Judges through
ADR techniques leading to consent
Judgments
- Shows increased willingness of parties
to settle disputes out of court even after
filling a case.
2. Of cases that go to The pilot project
Results of using ADR
Table 8
CADER Mediation Case Settlement Rate
Media cases settled
Mediation cases
(Part settled cases
complete but
included)
unsuccessful
% Success Rate
Oct-03 to Dec 03
17
12
58%
Jan-04 to Dec 04
88
149
37%
Jan-05 to June 05
47
67
41%
TOTAL
152
228
(Source CADER)
Results of using ADR
Table 9
Mediation
Cases
Settlement
Settlements
Judgments
cases
discontin
recorded by
recorded by
recorded by
complete but
ued
Court from
Court from
Court
MUS cases
DC cases
MUC
DC
unsuccessful
(MUS)
(DC)
Oct-03 to Dec 03
12
22
0
Jan-04 to Dec 04
149
114
82
3
29
1
Jan-05 to June 05
67
86
40
1
6
1
228
222
TOTAL
(Source CADER)
Results of using ADR
3. Of Cases that go to CADER as a Private
ADR provider
Table 10
Private cases filed in CADER
Year
2001
Completed
Pending
99
99
0
2002
293
293
0
2003
140
240
0
(up
August)
Cases filed
to
(Source: CADER)
Existing challenges and
possible solutions.
1. Strong perceptions that Litigation is better
than ADR
Verner V Gen and Commercial invest. Trust
(1894) 2 CH 239 at 264
Lord Justice Lindley
“A proceeding may be perfectly legal and yet
opposed to sound commercial principles”
Existing challenges and
possible solutions.
2. ADR used as a time wasting fishing
expedition.
- Dunnett V Rail Track [2002] 2 All ER 850
3. Inadequate ADR training
4. Sustainability and self-Funding
Conclusion
With appropriate training and a good legal
framework ADR can be a catalyst for
commercial development by providing an
efficient, expeditious and cost effective
alternative mode of dispute resolution
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