A piece of wisdom from the ancestors of the anglophile world lost in a cliche still rings true: justice delayed is justice denied, and best explains Sri Lankans’ distrust of their justice system.
A robust judiciary is critical to economic performance, fostering private sector growth, a fluid credit market, and international investment. At a granular level, our economic freedoms depend on solid institutional structures that enforce the rule of law equally.
According to the IMF Technical Assistance Report: Governance Diagnostic Assessment published in 2023, Sri Lanka is beset with several systemic challenges within its judicial structures, affecting its ability to support these economic goals effectively, including clogged courts and muddled contractual and property rights that lead to significant vulnerabilities to corruption.
The Assessment
The IMF’s governance diagnostic is brutal.
Sri Lanka’s rule of law has seen limited progress over the past decade, as evidenced by various international governance indices. In 2019, the World Bank’s Country Policy and Institutional Assessment (CPIA) rated Sri Lanka 3.0 for rules-based governance and property rights, fluctuating between 3.0 and 3.5 over the past decade (on a scale from 1 to 6). The World Justice Project’s regulatory enforcement indicator declined slightly from 0.49 in 2019 to 0.48 in 2022.
Among the many constraints and challenges within the judicial system are inadequate resources, outdated processes, and an administrative burden on judges. These inefficiencies undermine the protection of contractual and property rights, creating a challenging environment for economic activities.
The constitutional dynamics could be more helpful too, according to the IMF. Sri Lanka’s constitutional framework has undergone numerous changes, impacting legal stability and the rule of law. It says the 18th Amendment (2010) reduced the independence of key institutions, including the judiciary. The 19th Amendment restored many provisions of the 17th Amendment, enabling the Constitutional Council to establish independent commissions. The 20th Amendment (2020) eroded constitutional constraints on executive power. The 22nd Amendment (2022) reintroduced the Constitutional Council. These frequent amendments have led to legal uncertainty and weakened the rule of law, complicating economic and social development.
Legislation in Sri Lanka often undergoes multiple revisions, highlighting issues with planning, review, and public consultation, leading to fragmentation, inconsistencies, and inefficiencies with dire consequences to the rule of law. This ad-hoc approach risks creating legal uncertainty and undermines the stability necessary for economic activities.
Rickety Halls of Justice
The backlog in Sri Lanka’s court system is one of the most pressing issues. The District Court of Colombo, handling many financial cases, had 45,000 pending cases involving contract enforcement as of 2022. The backlog stems from an inability to process cases promptly, leading to delays that discourage reliance on the court system for enforcing credit agreements.
As of September 2022, the total number of pending cases in the Sri Lankan court system was over a million, including 227,606 civil cases, 34,602 land cases, 778,827 criminal cases, 1,800 tax cases, and 8,229 commercial cases. In the same period, new cases filed totalled 579,228 and 565,025 cases reached their resolution.
High caseloads and inefficient judicial administration are the cause of the court delays. The ratio of judges to population is approximately 15 per million, leading to heavy workloads, with district judges presiding over 2,000 cases and magistrates over 5,000 annually. Administrative duties further burden judges, giving them little time for case adjudication.
The Commercial High Court handles significant litigation related to intellectual property, commercial, and company matters, as well as arbitration. However, the court is understaffed and overwhelmed with a heavy backlog, with most cases older than five years. English language competency is essential for handling commercial litigation, but currently, there are only three research assistants for four judges.
As of March 31, 2023, the Commercial High Court had had 159 pending trials and 283 calling matters in Court No. 1, 341 pending trials and 733 calling matters in Court No. 2, 439 pending trials and 441 calling matters in Court No. 3, and 12 pending trials and 6,057 calling matters (mainly arbitration) in Court No. 4.
Weak case management and disregard for procedural standards further exacerbate delays, and existing guidelines on time limits for filing and processes are ignored. Lawyers frequently request adjournments, causing additional delays and compounding the backlog. Pre-trial conferencing, though introduced, has not been comprehensively administered, limiting its intended efficiency benefits.
These impediments are bad for business. It takes 6-7 years to enforce a contract in Sri Lanka, with severe delays being the norm. The Bar Association of Sri Lanka (BASL) in a 2014 survey cited court delays, procedural issues, and corruption as “extremely serious” problems impacting the country’s attractiveness to foreign direct investment.
Although there are moves towards court specialization, further development is needed to realize efficiency gains from specialized expertise and procedures. The “Enforcing Contract Task Force” has outlined an ambitious action plan to enhance the business-enabling environment, with the Presidential Secretariat leading efforts to monitor this roadmap, the IMF notes.
The IMF suggests an alternative: dispute resolution (ADR) mechanisms could significantly alleviate pressure on the courts, particularly for credit recovery cases. Systematic use of ADR for the estimated 70% of cases involving interest payments and calculation modes could expedite resolutions. Mandating initial ADR referral for simple credit recovery cases, with court involvement only if unresolved, could improve efficiency. Implementing such reforms would require amending the civil procedure code to establish an ADR panel.
Another solution to mitigate the backlog is to set up specialized courts to resolve older cases. This court would handle cases predating a specific date, utilizing ADR mechanisms like mediation and arbitration. Current cases could be managed within the existing system, allowing for timely standards and guidelines for disposal.
Improving judicial administration could involve delegating administrative tasks. Judges could delegate court administration duties to specialized personnel, allowing them to concentrate on adjudication while increasing the number of judges and supporting staff would help manage the caseload more effectively. Implementing technology for case management could streamline processes and reduce delays further.
The IMF has recommended the following steps to enhance the legislative and regulatory framework: improving public consultation for one. Ensuring meaningful stakeholder participation in law-making can minimize the need for subsequent amendments. Another suggestion is to develop an official legal reform strategy to define core policy priorities and ensure alignment of efforts.
Muddy Property
The IMF’s governance diagnostics also scrutinizes Sri Lanka’s property rights enforcement mechanisms, shedding light on significant challenges plaguing the country’s land administration system.
One of the primary concerns highlighted in the report is the complex and opaque nature of Sri Lanka’s land titling and registration system. The existence of a dual system creates confusion and uncertainty, opening avenues for land grabbing and corruption. Moreover, the cumbersome legal and institutional framework governing land approvals – taking an average of 18 months – further dampens investor confidence.
Fragmentation within the land administration sector exacerbates the problem, with multiple agencies overseeing various aspects of land management. This lack of coordination hampers enforcement efforts and contributes to inefficiencies. Additionally, the absence of a clear land policy framework adds to the confusion, with responsibilities dispersed among different authorities. The report also highlights the prolonged and inefficient resolution of land disputes in Sri Lanka with cases often taking 10 to 20 years to resolve.
Data fragmentation and sharing issues further compound the challenges. Land data repositories are scattered across different agencies, hindering effective integration and transparency. This fragmented approach facilitates rent-seeking behaviour and undermines public trust in the system.
In response to these findings, the IMF proposes several recommendations to strengthen property rights enforcement in Sri Lanka. These include clarifying the land policy framework, integrating land data into a central database, simplifying and harmonizing land-related legislation, establishing specialized courts and mediation boards to expedite dispute resolution, and investing in judicial resources to enhance capacity.
Not a Minute More
Sri Lanka grapples with formidable hurdles within its legal and institutional framework, ranging from a notable backlog in the judiciary to outdated procedures and frequent constitutional revisions that have spawned rent-seeking, accentuated legal uncertainty, and intensifying disillusions about the very concept of justice and an inherent suspicion of our legal structures. Sri Lanka can chart a course towards a more robust legal structure that safeguards property rights and fosters economic prosperity for its entire populace. It can start by not denying justice, not by another minute more.