18 Oct Cyprus Judicial Reform adds momentum to the economy
On Wednesday, 16th October 2019, the Government of the Republic of Cyprus, introduced several bills on crucial reforms in the island’s notoriously slow justice system. The EU expects that these reforms will have a positive impact on the economy (https://cyprus-mail.com/2019/10/16/mps-urged-to-pass-justice-reform-bills-as-soon-as-possible/).
Justice Minister of the Republic of Cyprus, Mr. Giorgos Savvides, stated, “It is a huge effort that is already underway for some time now, aiming at improving the court’s speed because we believe therein lies our justice’s problem”.
Cyprus ranks among the slowest countries in the world, in terms of delivering swift justice, as the EU average required to complete a case is eight months, Cyprus needs more than 2,500 days (https://ec.europa.eu/info/sites/info/files/justice_scoreboard_2019_en.pdf).
These reforms will be able to attract more investors to Cyprus, which in turn, will significantly impact the economy.
This is exemplified by the fact that Fiscal Council President, Mr. Demetris Georgiades, argued, earlier in the year, that weaknesses in the safeguarding of property rights, due to the lack of an effective justice system and the long delays in resolving property-related cases, have a negative impact on the value of real estate. These reforms will reverse this negative image (https://www.financialmirror.com/news-details.php?nid=36905).
The developments in the judicial system will also repair the reputational damage to the country. This is because, as things stand, due to the huge delays in resolving cases regarding repossessions and non-performing loans, the banking system is under strain, domestically and internationally, while the real estate sector is also negatively affected as properties get stuck in the market.
Also, the investor will no longer be put off from investing in the banking system, due to the delays in resolving cases such as repossessions, which will affect a bank’s balance sheet.
These reforms include splitting the Supreme Court into a Supreme Constitutional Court and an Appellate Court to handle tertiary appeals, as well as creating an Admiralty, a Commercial Court and a Small Claims Court.
The bills also define the criteria for recruiting, evaluating and promoting judges, and a school for judges.
The President of the Republic of Cyprus, Mr. Anastassiades, declared on Tuesday, 15th October 2019, during the swearing in of new Supreme Court Judge, Mr. Harris Malachtos, at the Presidential Palace, that “We are fully aware of the problems that persist in the judicial system and that is why we are rapidly implementing our radical reform programme” (https://cyprus-mail.com/2019/10/15/anastasiades-says-government-implementing-radical-justice-reforms/).
He also stated that “fundamental reforms are under way and the appointment of new judges will help us put a stop to delays when dealing with long and complex cases”.
Lastly, the significance of these judicial reforms to the Cyprus economy, is suitably depicted by Economist, Mr. Ioannis Tirkides, when he stated, earlier in the year, “How a county is perceived from outside for purposes of doing business and investing depends on a wide variety of factors including economic, social, political, legal and regulatory, cultural and physical. These factors together determine the degree of riskiness of a country and conversely the attractiveness for doing business and investing” (https://www.financialmirror.com/news-details.php?nid=36905).