The government of Hoss and the first and second governments of Hariri listed judicial reform as one of their top priorities. The rest is history. I want to add my voice to those who are calling for judicial reform. Not only is an independent and well-functioning judiciary one of the prerequisites of democracy and civil liberty, but also it is a vital component of the functioning of a market economy.
A well-functioning judicial system contributes to a country’s wealth and economic growth. First, it protects property rights, the basis of a market economy: It gives the owners of firms, capital and assets the right to use, sell and generate income as they wish and prohibits the government from expropriating their assets. Secondly, it enforces contracts and resolves disputes between two parties. With a fair and efficient judiciary, firms would be able to undergo complex interactions with the confidence that a second party will not renege on the agreement. Otherwise, firms will avoid such dealings and lose investment opportunities or face the difficulties of solving conflicts outside the court. And third, it can hold the executive and legislative branches accountable for their decisions and maintain the credibility of the business environment.
The last two hurt the Lebanese economy in a way that cannot be easily measured. The judiciary’s ability to enforce contracts and resolve disputes is slow and costly. This is expected since only 359 positions for judges are actually filled out of 515. Of course, this has resulted in the accumulation of unresolved cases. The average case takes three to four years to clear compared to 100 days in France. Although the government recently appointed judges, the situation is not likely to improve due to misuse of the procedural code. The system allows the defendant to postpone a case by abusing the process of hearing and notification. Along with the snail-pace of court cases, the cost of filing lawsuit fees, fiscal stamps, and lawyer fees make for a hefty bill. So it’s no surprise that resorting to the courts is the least favorite option of firms to revolve disputes.
The costs in terms of time and money are harmful to the economy. Small firms, which comprise the majority of enterprises in Lebanon, can’t afford to go to court and avoid it completely. They deal with people they trust, which limits their economic activities to their surroundings. Even if these deals aren’t the most economical, firms are willing to pay the extra price to guarantee the fulfillment of a contract. Bank lending to the private sector is also affected. Banks are inclined to lend to firms that are trustworthy, because the court procedures are complex. This, however, may deprive emerging firms of credit. Although there are other ways to solve disputes, such as arbitration and reputation, an efficient judicial system is irreplaceable.
The ability of the judiciary to hold the executive and legislative branches accountable is also questionable. Lebanon has decent laws and decrees, albeit in need of modernization, to govern the issue of competition and anti-dumping, but it has no resources to enforce them. In some instances, its rulings are ignored or subject to political pressure. The judiciary has often reported abuse by government officials of the public procurement process; however, nothing has been done about the problem. Its lack of power to check government action is problematic, especially if privatization is to be realized. Otherwise, the privatization process may become the pie that everyone tries to snatch. It is high time to bring the judicial reform file off the shelf. The call for an independent judiciary is needed more than ever.
