Shkl­yar: Ukraine looks for pri­vate sec­tor help in en­forc­ing court or­ders, judge­ments

Ukraine’s poor record in en­forc­ing court or­ders is a ma­jor de­ter­rent to in­vestors, but the Jus­tice Min­istry says it has so­lu­tions.

Kyiv Post Legal Quarterly - - Contents - By Mariana Antonovych antonovych@kyivpost.com

Sergiy Shkl­yar was ap­pointed deputy min­is­ter of jus­tice on March 24 to over­haul Ukraine’s poorly func­tion­ing ser­vice for en­forc­ing court rul­ings and judge­ments. Shkl­yar needs to make quick progress in or­der to im­prove the na­tion's low rank­ing in the World Bank’s Ease of Do­ing Busi­ness sur­vey – in which Ukraine has set a goal of mov­ing up 20 places next year.

Be­cause of the ridicu­lously small salaries and the enor­mous caseload, the en­force­ment ser­vice isn't do­ing its job, mean­ing most court or­ders don't get en­forced.

“Of course, it breeds cor­rup­tion,” Shkl­yar told the Kyiv Post in an in­ter­view.

In 2014, Ukraine’s State En­force­ment Ser­vice en­forced only 1.3 mil­lion of ex­e­cu­tion writs, or 20.5 per­cent of the caseload. The amount of money re­cov­ered was a mea­ger Hr 18.8 bil­lion ($890 mil­lion), or just 4.3 per­cent of the amount that could be col­lected. In 2014, 42 per­cent of ex­e­cu­tion writs were re­turned to cred­i­tors be­cause the debtors had no money to en­force col­lec­tion.

Back in 2009, the Euro­pean Court of Hu­man Rights is­sued a judge­ment against Ukraine for sys­tem­atic non-ex­e­cu­tion of fi­nal do­mes­tic court de­ci­sions, cit­ing 1,400 ap­pli­ca­tions that had been filed against Ukraine from in­di­vid­u­als seek­ing en­force­ment of court or­ders.

The Euro­pean court called upon Ukraine’s gov­ern­ment to “in­tro­duce in its le­gal sys­tem, within one year ... an ef­fec­tive rem­edy, which se­cured ad­e­quate and suf­fi­cient re­dress for non-en­force­ment of do­mes­tic judge­ments.” That never hap­pened. But Ukraine's Min­istry of Jus­tice has found a way to make progress by hir­ing pri­vate en­force­ment agents to sup­ple­ment the public en­force­ment ser­vice.

Shkl­yar said Ukraine should have had such a sys­tem a long time ago.

Par­lia­ment needs to ap­prove two laws to make this hap­pen: one on en­force­ment pro­ceed­ings and sec­ond – on en­force­ment agents with public and pri­vate sta­tus.

“If ev­ery­thing goes smoothly, Par­lia­ment will ap­prove both bills be­fore the sum­mer hol­i­days … and in four months, first pri­vate en­force­ment agents will get to work,” Shkl­yar said. “How­ever, fi­nal es­ti­mates re­gard­ing the vi­a­bil­ity of a mixed en­force­ment sys­tem could be done only in two-three years, at the ear­li­est.”

Af­ter the new laws come into ef­fect, at least three months are needed for adop­tion of sec­ondary leg­is­la­tion and train­ing of pri­vate en­force­ment agents. Sim­i­lar to no­taries, fu­ture pri­vate en­force­ment agents will be obliged to in­sure their busi­ness and meet se­cu­rity re­quire­ments.

Lawyers, bank­ruptcy com­mis­sion­ers and state en­force­ment agents are ex­pected to find this side­line at­trac­tive, although Shky­lar said it is hard to es­ti­mate de­mand for this job.

The Jus­tice Min­istry plans to strengthen the col­lec­tion process in other ways, in­clud­ing clear dead­lines for each pro­ce­dural step, le­gal re­spon­si­bil­ity for non-en­force­ment and a reg­u­la­tory body to en­force stan­dards.

En­force­ment agents will also “be given ac­cess to all reg­is­ters… They will get a right to seize or at­tach prop­erty… and send cer­tain rul­ings by e-mail in­stead of post mail,” Shkl­yar said.

A public register of debtors will be cre­ated and pub­lished by the Jus­tice Min­istry as an in­cen­tive to pay debts. “It will con­tain in­for­ma­tion on the name of the debtor and the sum of the debt,” Shkl­yar said.

Shkl­yar is a for­mer part­ner at Arzinger law firm where he was in charge of dis­pute res­o­lu­tion and an­titrust & com­pe­ti­tion prac­tices. In Oc­to­ber, he was ap­pointed a mem­ber of the coun­cil on ju­di­cial re­form.

A court rul­ing that isn’t en­forced is es­sen­tially worth­less to the ben­e­fi­ciary.

I am a judge and is­sue rul­ings all the time. But no­body obeys them. Would you be so kind as

to en­force my or­ders? In 2014, public en­force­ment agents re­cov­ered only $866 mil­lion out of $20.1 bil­lion in court judge­ments. The over­worked staff makes only Hr 1,218, or $57 a month.

Sta­tis­tics demon­strate how poor en­force­ment of court or­ders is cost­ing the state and pri­vate busi­nesses lots of money.

Newspapers in English

Newspapers from Ukraine

© PressReader. All rights reserved.