Justice denied?

FOR a small firm just breaking into foreign markets, it was a big deal: one of Italy’s cities wanted a new leisure facility. Then political power shifted and the new council scrapped the project, without any compensation for losses running to around €100,000 ($140,000). The firm’s bosses turned to their Italian lawyer, who advised them to do nothing.

Why? Because it would take years to come to a judgment and, even if they won, it would not be worth it. The sluggishness of civil justice is a big reason why the Italian economy is still not growing. On July 14th Mario Draghi, president of the European Central Bank, said that speeding up the courts would be one of the most effective, and least expensive, reforms that Italy could undertake. According to the World Bank’s “Doing Business” survey, it is harder to enforce a contract in Italy than in Haiti and over 100 other countries.

“There are defence companies that export all over Europe, but not to Italy, because they believe that what they make will be counterfeited and that to get redress will take many years,” says a commercial diplomat. The difficulty of debt recovery is a bar to foreign direct investment (FDI), costing jobs and know-how (Italy’s stock of FDI as a share of GDP is the lowest of any big European economy). Court delays also stop firms growing: many prefer to do business only with a circle of trusted customers. A study by the OECD, a rich-country think-tank, finds the average length of a civil suit through all its stages is eight years, far higher than elsewhere (see chart).

When Mario Barbuto became president of the main civil court in Turin 12 years ago, he found the oldest case had been initiated 43 years earlier. By 2009, when he left, he had cut the average length of a civil case in the city from seven years to three. His secret? The deployment of basic managerial techniques. One was to impose a FIFO (“First in, first out”) principle to cases instead of the LIFO (“Last in, first out”) one he found many fellow judges followed. Mr Barbuto has now joined the justice ministry in Rome as head of judicial organisation. Matteo Renzi, the energetic centre-left prime minister, has announced plans to halve Italy’s backlog of 5.2m cases and ensure that all trial stages are completed within 12 months. This is welcome news to reformers: for a decade Silvio Berlusconi’s legal problems meant an exclusive focus on the criminal-justice system.

If Mr Renzi is good at setting ambitious targets, he is not always so good at meeting them. But Rodolfo Sabelli, president of the association of Italy’s judges and prosecutors, believes his hopes for the civil-justice system can be fulfilled. He notes that the government has brought in a measure to give judges more support for ancillary tasks. It is encouraging the digitisation of proceedings and the settlement of disputes outside court (one cause of Italy’s vast backlog is that Italians are so litigious).

The idea that justice delayed might be justice denied has cut little ice until now. Apart from a lack of encouragement to prioritise, Mr Barbuto says, judges have long been “accustomed to think in terms of jurisprudence rather than management”. Traditionally, they have won prestige and, to a limited extent, promotion by delivering long, wordy but intellectually sophisticated written judgments. That is changing, says Mr Sabelli. “The law calls for written reasoning. But judgments are becoming progressively shorter and more compatible with greater speed.”

Roger Abravanel, a former management consultant who brought Mr Barbuto’s achievements to public notice in 2008 in his book, “Meritocrazia”, is more sceptical. He notes that the justice ministry’s power to make reforms is limited since judges are answerable only to the self-governing Superior Council of Magistrates. He says the government needs to find ways to exert indirect pressure on them, such as devising and publishing performance indicators. “The only solution,” he says, “is to create transparency, peer pressure and citizen pressure.”