Initial Project Information Document (PID) Report No: AB139 Project Name RUSSIAN FEDERATION -Judicial Reform Support Project Region Europe and Central Asia Region Public Disclosure Authorized Sector Law and justice (100%) Theme Judicial and other dispute resolution mechanisms (P); Legal institutions for a market economy (S); Access to law and justice (S) Project P076826 Borrower(s) GOVERNMENT OF RUSSIAN FEDERATION Implementing Agency(ies) RUSSIAN FOUNDATION FOR LEGAL REFORM (RFLR) Address: 6 Admirala Makarova Street, Second Floor, Moscow 125217, Russia Contact Person: Olga Schwartz Tel: 7 095 150 1472, 150 1116, 150 3269 Fax: 7 095 150 0555 Email: The Judicial Department of the Supreme Court Address: Contact Person: Anatoly Yakovlevich Perepechionov Public Disclosure Authorized Tel: 7 095 281 1240 Fax: 284 8227 Email: Environment Category C (Not Required) Date PID Prepared June 25, 2003 Auth Appr/Negs Date April 22, 2004 Bank Approval Date June 29, 2004 1. Country and Sector Background The Russian system for dispute resolution relies on the courts. Alternative dispute resolution is evolving but still has a very limited application. The court system has two main branches: the courts of general Public Disclosure Authorized jurisdiction and the arbitrazh courts, whose jurisdiction is mainly limited to commercial disputes between firms. Although the courts of general jurisdiction and the arbitrazh courts have their own supreme courts, the Council of Judges, which enjoys significant authority in court management issues, integrates representatives from both branches. The courts of general jurisdiction represent a by far larger part of the Russian court system. They consist of the justices of the peace whose number is planned to reach 10,000, some 2,500 district courts, 89 second instance courts and the Supreme Court. The courts of general jurisdiction have 16,700 judicial positions of which about 8 percent are currently vacant. According to the latest available court statistics, the annual caseload of the courts of general jurisdiction includes 3,916,839 civil, 1,057,000 criminal and 1,879,540 administrative cases. The caseload is quickly growing. The Judicial Department of the Supreme Court of Russia provides administrative support to the courts and has offices in each region. The arbitrazh court system consists of 81 first instance courts, 10 circuit courts and the Supreme Public Disclosure Authorized Arbitrazh Court. They have 2,209 judicial positions. In 2001 745,626 cases were filed in the arbitrazh courts of which 352,146 were civil, 330,583 administrative, 6,973 legal fact and 55,934 insolvency cases. That year 638,287 cases were completed. The Supreme Arbitrazh Court provides administrative support to the arbitrazh courts. 2 PID The Government is strongly committed to strengthening the mechanisms for dispute resolution. Following the creation of a legal framework for an independent and accountable judiciary, the Government is rising to the challenge of strengthening the capacity of the judicial system to administer justice fairly and efficiently. On November 20, 2001 the Cabinet adopted a federal targeted program “Development of the Russian Judicial System” for 2002-2006 (the Program). The Program's goals are: implementation of judicial reform; raising the effectiveness of the Judiciary; and creating a viable legal, organizational and technological infrastructure for the Judiciary. The Program also specifies its main objectives, which are: (i) strengthening the authority of the Judiciary, independence and autonomy of courts and judges and improvement of the legal framework; (ii) strengthening the cadres of the judiciary; and (iii) strengthening the research potential of the Judiciary, creating the system of training and retraining for judges and other court staff. The Program provides for investing about 44.9 billion rubles (some USD 1.5 billion) into the modernization of the Russian court system in five annual installments. The Program emphasizes the importance of the Judiciary’s ability to function efficiently as an independent and autonomous branch of government for strengthening the rule of law and economic development. The program targets the judicial infrastructure, including court premises, which are characterized as so unsatisfactory that they compromise administration of justice. The Program also points to the delays in administering justice and links them to outdated case management processes that do not take advantage of modern information and communication technology. The Program is a framework document, which identifies some systemic issues in the operation of the Judiciary, and presents approaches to addressing them. Although the Program specifies resources for addressing specific issues, it leaves the technical detail up to the implementing agencies that include the Ministry of Economy, the Supreme Court, the Supreme Arbitrazh Court, the Judicial Department and the Ministry of Finance. The issues on which the Program is focused have been echoed by the Bank's diagnostic review of the courts system in Russia. The review was carried out by West European, American and Russian experts. The review identified a number of areas where the processing of cases and organization of the court operations need improvement. In particular, the review revealed: overburdening the judges with tasks that could otherwise be delegated to non-judicial staff; deficiencies in calendaring of court hearings and service of process; dismissal proceedings and default judgements; case allocation criteria; and utilization of information and communication technology. These deficiencies lead to an excessive number of frustrated hearings, case processing delays and uneven quality of judgements. The Government has implemented a number of practical steps aimed at strengthening the Judiciary as an institution and improving its performance. In 2001, a package of four laws sponsored by the President was adopted. The package included amendments to the laws “On the Status of Judges”, “On the Judicial System”, “On the Constitutional Court of the Russian Federation” and a new law “On the Bar and the Lawyer’s Activities”. The highlights of the laws include strengthening the independence and accountability of judges and attorneys through, among other things, reforming the Qualification Commissions through inclusion of non-judicial representatives, setting the time limits for holding the Court Chair’s position, introducing the mechanisms for the execution of the Constitutional Court’s decisions, and setting unified standards for attorney’s qualifications and ethics. Steps have been taken to professionalize the administrative and logistical functions in the courts and to help the judges to concentrate on the tasks that only they can perform. The positions of court 3 PID administrators and judges’ assistance were recently introduced. The scope of the court administrators’ authority is, however, very limited and poorly defined. A new Criminal Procedures Code came into force in July 2002. Among other features, this Code has transferred the authority for arrest from the investigative bodies to the courts and provides opportunities for the court appeal of decisions taken by the investigating bodies. The ongoing nation-wide introduction of trial by jury is raising the quality of trial preparation on both sides of the increasingly adversarial proceedings, and has had a positive spill-over effect on the non-jury trials. The Federal Law “On Arbitration Panels in the RF” (adopted in the summer of 2002), obliges courts to consider alternate dispute resolution as an alternative to court adjudication. In the long run, this measure should contribute to streamlining and institutionalization of alternative dispute resolution. In addition to strengthening the Judiciary, the Government made progress in modernizing other segments of the justice system including the legislative and regulatory drafting mechanisms; improving legal awareness and education; and improving access to legal services. The State Duma has reactivated its work on two draft laws concerned with legislative development mechanisms. The first one “On the Procedure of Enactment and Coming into Force of Federal and Federal Constitutional Laws” and “On Normative Legal Acts”. As of today the legislative development mechanisms are not regulated by any law and are guided exclusively by the internal regulations of the State Duma. The introduction of these two laws is likely to make the procedures for development of laws and implementing regulations of the Executive more transparent and enforceable. These laws will apply to all institutions involved in legislative and regulatory development including the President, the Executive, and the subjects of the Federation. NGOs, including the Russian Union of Industrialists and Entrepreneurs (RUIE) and the Russian Foundation for the Development of Parliamentarism, have intensified their efforts aimed at compensating for the lack of the regulatory impact assessment capacity within the Government and are providing analytical support to policy development and legislative drafting. They contract out studies, sponsor public discussions and lobby the Government for legislative changes in open fora. While the lack of the regulatory impact assessment capacity within the Government is alarming, the rising role of civil society in shaping public policy is an encouraging sign. Legal education programs in the Russian secondary schools are rapidly expanding. The Government developed