Italian Minister of Justice Washington D.C., World Bankpubdocs.worldbank.org/en/945411461601789807/... · 2 years and 10 months. 2 years and 5 months: 2 years and 3 months. Total

Reform of the Italian Civil Justice System Recent measures and achievements

Andrea Orlando Italian Minister of Justice

Washington D.C., World BankApril 22, 2016

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Meeting between Andrea Orlando & Jyrki Katainen

Content of the presentation

Starting situation and progress achieved

Recent reforms

Organizational measures and projects

1

2

3

2

1) Challenges to be tackled

2) Review of the Judicial Map

3) Average length of civil cases and backlog

4) Ranking in the Doing Business Report

The starting situation and progress achieved

3


1) Challenges to be tackled

Old judicial map that counted more than 2,000 officesover the national territory

Civil justice with the highest number of pending cases inEurope: almost 6M pending civil cases as of end of2009

Very high per capita litigation in internationalcomparison

Civil justice performance indicators (trial length inparticular) which placed us towards the low end ofinternational benchmarks

Lack of specialised tribunals for specific subject matters

IT infrastructures and management systems out ofkeeping with the times and uneven throughout Italy

4

Access to justice in terms of courtproximity for citizens

Optimal size of courts as to secure thepresence of different skills andfunctions

Cost saving on the assumption thatpublic sector resources cannot andmust not be wasted but ratheroptimized

Maximize quality and an adequatedelivery of the service provided

Accessibility Costs/Efficiency

Quality/Performance


Objectives (to be balanced)

5

After reformPrior to reform

Justices of the Peace From 846 to almost

380*

«Local divisions»

From 220 to 0

First-instance

Courts and Public

Prosecutors Offices

From 166 to 136

From 1,398 offices (in the scope of the law) to almost 650, i.e. almost 750 offices have been closed down

(*) Ongoing procedure


Progress achieved

6

I procedimenti civili pendenti sono calati dal 2009 del 15% (quasi 800.000 pratiche) con un tasso di riduzione più marcato per il contenzioso di Tribunale

3) Average length of civil cases and backlog:

CAGR = -3,9%

CAGR = -3,7%

CAGR= -4,7%

Historical data on pending civil cases shows a downward trend:from almost 6M at the end of 2009 to less than 4.5M as at 31 December2015, civil justice has shown some improvement over the past few years

7


The downward trend of pending cases has started to positively impact onthe disposal times for civil cases in first-instance Courts and in Courts ofAppeal.

2012 2014 2015

Total Court of Appeal 2 years and 10 months

2 years and 5 months


Total civil cases in first-instance courts

1 year and 6 months

1 year and 4 months

1 year and 2 months

Trade disputes (first-instance courts)



3 years

Labor disputes 1 year and 9 months

1 year and 9 months

1 year and 9 months

=

3) Average length of civil cases and backlog

An exception to the above table is given by enforcement and bankruptcyactions whose average length has been on the increase in recent years,also due to the severe economic crisis of last years. Signs ofimprovements are expected in 2016.

8


Reduction of disposal times together with simplification of civil lawprocedures due to the reforms implemented over these years haveenabled Italy to move up in the “Enforcing contracts” ranking, anindicator measured by the World Bank in the Doing Business 2016Report.

4) Ranking in the Doing Business Report

160th ranking in DB2013

111th ranking in DB2016

Italy moved up 49

places in three years!

9

1. Launch and implementation of the Digital Civil Trial

2. Reform of the civil trial with a view to introducing streamlining measures

3. Measures to speed up enforcement proceedings

4. Specialized Divisions on Business and Family matters

5. Reform of Insolvency proceedings

6. Introduction of legislative measures on ADR

Recent reforms

10

ResultsFeatures

The Digital Civil Trial

15,922,102 digital notices delivered over the last 12 months

Moving from paper to digital files

Access to the file with a smart card on the nation justice services portal

On line filing by lawyers and professionals

Better organisation of clerk offices

€ 55M estimated savings

Savings in terms of costs and efficiency

Information transparency and on line round the clock accessibility to digital files

Fewer queues at the office for users, clerks more focused on back office work

Adoption of more efficient work processes

11


The Digital Civil Trial

District

Average of days for issuance

November 2015

Comparison with the 12 previous

months

Catania 30 -29%Milan 28 -41%Naples 31 -38%Rome 23 -51%

The DCT has enormously speeded up the issuing of digital payment orders

12

164,507

566,411

Marzo 2014 - Febbraio 2015 Marzo 2015 - Febbraio 2016

Digital IT filing by lawyers and professionals

+ 401.904 = +244%

Monthly averages comparison

13

Bill on the reform of Civil Trials

The organizational and legislative measures already undertaken require an extraordinary and systematic update of civil procedural laws. The aim of these interventions is:

Specialisation for family and personal matters

Increased competence of Business Courts

Speeding up civil proceedings

The principle of conciseness of documents

The streamlining of proceedings and appeal system

Speedier enforcement due to the enlargement of immediate enforceability of judgments

Adjusting the procedural provisions to the Digital Civil Trial

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1. Ancona2. L'Aquila3. Bari 4. Bologna 5. Bolzano6. Brescia7. Cagliari 8. Campobasso9. Catania10.Catanzaro11.Florence

12.Genoa 13.Milan14.Naples15.Palermo16.Perugia 17.Potenza18.Rome 19.Turin 20.Trento21.Trieste22. Venice

Business courts competent for international firms

Business CourtsThe Specialized Divisions on Business matters were introduced by Law no. 27/2012. These Divisions are distributed throughout the whole national territory, mainly on a regional basis.

15

The overall disposal rate of the business Court remains high showing high percentages inthe class within 12 months of filing. In the period 2012 to 2014, 80% of filed cases weredisposed of within 1 year.

2012 2013 2014 I sem 2015

Disposed cases

Length in Days

Disposed cases

Length in Days

Disposedcases

Length in Days

Disposedcases

Length in Days

Disposed by judgments 53 1.155 126 952 482 776 452 836

Disposed otherwise 351 206 2.825 163 3.590 224 2.142 263

TOTAL 404 331 2,951 196 4,072 290 2,594 363Dati estratti dal DWGC - Ultimo aggiornamento del sistema avvenuto il 3/8/2015

1,155952

776836

206 163 224263

0

200

400

600

800

1,000

1,200

1,400

Durata in GG Durata in GG Durata in GG Durata in GG

2012 2013 2014 I sem 2015

National length of disposed cases in Business courts

Disposed by judgment Disposed otherwise

Business Courts

80%

20%

2012-2014

< 1 year > 1 year

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New elements introduced in this field (Decree-Law 83/2015)

Insolvency proceedings

Remedy for the excessive recourse to the composition with creditorsrecorded in the previous years;

Financial restructuring agreements and standstill agreements may beconcluded with banks and financial intermediaries representing atleast 75% of the company's financial exposure (on the basis of theFrench sauvegarde financière accélérée).

Possibility of benefiting from the priority payment [pre-deduzione] inrelation to loans to companies in distress applying for thecomposition with creditors procedure.

Improving the competitiveness of the company in distress for thegreatest realization for creditors through the new institutions ofcompeting proposals of composition with creditors and competingoffers (also in this case drawing on the French experience).

17

Innovations proposed by the Rordorf Commission

Insolvency proceedings

Comprehensive reform of insolvency procedures enabling the overall reshaping of the present law (dating back to 1942)

Deep change in culture and terminology, promoting the fresh-start Introduction of a warning procedure in order to avoid starting proceedings when it is

too late (on the basis of the French model) Providing for a discharge three years after the filing for insolvency Creation of a national electronic marketplace to promote the sale of stranded assets

to a larger population of potential buyers Revision of the composition with creditors’ procedure, basically limited to cases of

corporate restructuring Introduction of non-possessory securities to renew and update the security

instruments following the international model Measures for the transposition of international innovations in cross-border insolvency,

also in relation to the 2015 EU Regulation. Review of the map of the competent courts to hear insolvency cases according to

concentration and efficiency criteria. Review and coordination of the extraordinary administration procedure of large

companies in distress.

18

Enhancement of ADR

Scope of Action of the Reform Leg. Decree 132/2014on dejudicialization

With the aim of tackling pending civil cases, the recent legislative chanes affected demand introducing and investing in some forms of out-of-court dispute settlement:

1) Referral to arbitration: arbitration possible also forpending cases, arbitration award is an enforceabletitle.

2) Negotiation assisted by legal counsel: out-of-courtsettlement procedure, the agreement reached is anenforceable title. Mandatory in some cases (notably,payment of sums under 50,000 euros), alwaysoptional

3) Mediation: the Government keeps focussing on thismeasure together with the newly introduced ones:always possible, the judge may delegate it. In somecases it is mandatory (notably condominiumlitigation, leases, rights in rem and neighbourdisputes). 19

The data show a great use of the new instruments, in particular in relation to separation anddivorce agreements which are possible without going to court or in the presence of theparties’ lawyers, or even without lawyers, at the City Hall, before the registrar.

0100200300400500600700800900

Janu

ray

Febr

uary

Mar

ch

April

May

June July

Augu

st

Sept

embe

r

Oct

ober

Nov

embe

r

Dece

mbe

r

2015

Separation and Divorce Agreements

TOTAL assisted negotiations (under Art.6)

TOTAL registrations before the registrar(under Art. 12)

Estimate of the national total = 10.000 agreements

2%

13%

7%

42%

34%

2%

Assisted negotiations Circulation of vehicles and boats

Sums up to € 50,000

Other cases

Termination of the effects of marriage

Change in the conditions of separation

Separation and Divorce agreements

Enhancement of ADR

20

The over 200.000 mediation procedures started in 2015 place us at the European leading positions by amounts of processed requests

154.879

41.604

0

50000

100000

150000

200000

250000

2011 2012 2013 2014 2015

Requests for Mediation

60.810 Period of non mandatory mediation

179.587

204.894

Enhancement of ADR

21

Actuals show that the numberof civil incoming cases inItalian courts decreased bysome 200,000 compared to2015 (a 10% decrease).

Also appeals decreased by10% in the same period.

1,947,538

1,851,029

1,748,384

1,600,000

1,650,000

1,700,000

1,750,000

1,800,000

1,850,000

1,900,000

1,950,000

2,000,000

2013 2014 2015

Incoming civil cases in courts(excluding tutelary, insolvency

and enforcement actions)

123,580

111,890111,967

106,000

108,000

110,000

112,000

114,000

116,000

118,000

120,000

122,000

124,000

126,000

2013 2014 2015

Incoming civil cases in Courts of Appeal

Effectiveness of the Reform process

22

The Italian per capita litigation rate (first-instance civil litigation) is now in linewith the European average and, in particular, together with the French one, it isthe lowest rate among Latin countries.

2,6132,575

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Cepej (data 2012) Incoming cases/100.000 inhabitants

Effectiveness of the Reform process

Average in surveyed countries2.602

23


Easy switch from ordinary to summaryproceedings (simpler instrument for noncomplex cases)

Streamlining and speeding up enforcementproceedings (mandatory IT entry in the registerof cases thus speeding up the procedure, digitalsearch of assets, monitoring enforcement andinsolvency procedures)

Changing the setting-off system of costs:(the losing party shall pay back the trial costs)

Penalizing overdue payments (considerableincrease in the interest rate for those who do notpay their debts)

Digital search of assets to be attached

Use of the digital payment order for fasterrecovery of claims

Other measures of the «Orlando» reform

24

1. The datawarehouse of civil justice and the Strasbourg Program

2. Office for Trials

3. Common and Marketplace Project

Organizational measures and projects

25


The datawarehouse of civil justice and the Strasbourg Program

• The Ministry of Justice - DGStatistics – has implemented adatawarehouse system that cancollect a huge number of dataand events pertaining to millionsof civil cases heard every year inItalian courts and tribunals.

• The new DWGC system shallsupport legislative reforms andother decision-making processes.

Univocal criteria for extraction of data and univocal calculation measures

Integrated vision of data

Data traceability

Data history

Automatic generation of statistical reports

Creation of a dynamic and controlled environment for the generation of new reports

The datawarehouse system of civil justice (DWGC)

26

In-depth and detailed analysis ofpending civil case.

List of all Italian first-instance andappellate Courts analyzed through20 structure and performanceindicators.

Selective statistical reports (byyear and matters) of all the judicialOffices, mentioning the age ofpending civil cases.

www.giustizia.it

The datawarehouse of civil justice and the Strasbourg Program

The Strasbourg Program

27

Office for Trials

Skilled staff to support the work of judges and prosecutors to:

Assist them in the drafting of measures Support the technology innovation processes

Expected results:

Increased productivity of the judiciary Greater efficiency in the management of

hearings Improvement of the overall quality of hearings

In the offices where testing is under way, pending cases have decreased by almost 15%

The Minister assured scholarships for skilled staff.

28

Comprehensive reform of Civil Trials

The organizational and legislative measures already undertaken require an extraordinary and systematic update of civil procedural laws. The aim of these interventions is:

Greater specialisation for family and personal matters

Increased competence of Business Courts

Streamlining of proceedings and appeal system

Introducing approaches to simplify the drafting of measures by judges and prosecutors and of documents by lawyers

Speedier enforcement due to the enlargement of immediate enforceability of judgments

29

The problem

Demand crisis: lack of liquidity and difficulties in accessing credit (credit crunch)

Difficulties in the sale of movable and immovable property especially within bankruptcy procedure

Lengthening procedures and progressive decrease realizations (actual and expected)

A series of insolvencies

3) Common & Marketplace Project

30


COMMON&

MARKETPLACE

• The project was developed by a commission of study called “Com.mon”, transformation ofdoubtful loans into purchasing power immediately spendable in insolvency sales,established at the Cabinet Office in August 2014.

• The Common Project intends to optimise supply conditions and support demand inbankruptcy sales.

• On the supply side, a single national digital market of all the assets sold in insolvencyprocedures is to be set up (Marketplace).

• The Marketplace will also function as a platform for the pricing of assets that can be paid intwo ways: in Euros and in Commons, the latter being a targeted currency that is convertibleunder the rules laid down by the project.

3) Common & Marketplace Project

The identified solution

31

Thanks!

Documents

Italian Minister of Justice Washington D.C., World Bankpubdocs.worldbank.org/en/945411461601789807/... · 2 years and 10 months. 2 years and 5 months: 2 years and 3 months. Total