Panama: Modernizing the Judicial System

Panama's economy grew by a historical 11.2% in 2007 (according to the Economist Intelligence Unit). This is mainly due to a boost in the financial and construction sectors, tourism and the commercial expectations put in the ongoing expansion of the Canal. The institutional framework, nonetheless, still lacks efficiency. It takes 686 days to solve a simple commercial dispute in court in Panama, in line with the backlog observed in the Latin America & Caribbean region. One might think that, with strong economic activity, the number of disputes would increase in Panama, leading to an even longer delay in the judicial system.

But Law 15 of 2008 might easily reverse this assumption. It all started 2 years ago with a devastating fire in the Maritime Courts in Panama City, where thousands of files were destroyed. Since every cloud has a silver lining, a discussion started to install a more efficient and secure judicial system. The result is Law 15, which introduces several important developments.

The Unique Entrance Registry will assign procedures to the judges in an automatic, random and equitable way. The documents for the trial will be scanned and managed electronically and non-digital proofs will be converted into photographs, eliminating the need for physical files. Everyone will be able to start proceedings online and, if the defendant voluntarily adheres to the system, the whole process will be driven electronically.

In terms of transparency and accountability, there are some notable improvements as well. Parties and lawyers will have unique passwords to enter the system, so individuals and companies will be able to monitor their providers of legal services. Besides, similarly to an email, a “read” notification will be automatically tracked as “received”, avoiding traditional dilatory tactics.

Hopefully, the reform will be successful and the process will be faster and more efficient. But there are still some challenges ahead. The first one is to provide judges, judicial personnel and lawyers with the appropriate training. The second is to offer incentives to “traditional lawyers” to join the voluntary online system. These incentives include the possibility for midnight submission of documents in the last day of a given legal period. (Some might ask if this is fair for a counterpart not having internet facilities, obliged to go to the Registry before 5 pm.)

The judicial system in Panama will likely improve with the new Law. But the first steps will not be free of obstacles. Last Wednesday (April 30), the Maritime and Competition Courts became the first test cases.