Italy minister promises to speed up justice system

Reuters News
Posted: May 14, 2012 8:32 PM
Italy minister promises to speed up justice system

By Philip Pullella and Roberto Landucci

ROME (Reuters) - Her family name means "little severe one", and Paola Severino means to live up to it in her crusade against judicial inefficiency which is helping to stifle Italy's chronically weak economy.

Seemingly endless legal delays such as in settling commercial disputes are estimated to cost up to one percentage point in Italian GDP growth - not that the economy is growing at all now - and the justice minister wants to tell hesitant investors that she is serious about solving the problem.

"There is much to be done and we will forge ahead," Severino, the first woman to hold the justice portfolio, told Reuters in an interview.

Severino is already setting up specialist business tribunals and wants to crack down on the huge number of appeals which are clogging up the legal system.

With this message she is heading to the United States as part of an international "road show" to convince foreign companies considering investing in Italy that the government of Prime Minister Mario Monti will speed up the snail-paced system of civil justice.

This week 63-year-old Severino, who was a top lawyer and legal scholar before Monti recruited her for his technocrat government, takes her pitch that Italy can be trusted to the United Nations and to investors at the New York Stock Exchange.

"If a company has certainty about how laws will be interpreted by judges and if it can count on shorter times for court cases ... it will invest more and launch more long-term projects, helping the economy," she said.

Studies by the World Bank show that it takes 1,210 days - or more than three years - to recover a claim in Italy compared with 394 days in Germany. The average costs paid by businesses in Italy usually amount to about 30 percent of the value of the dispute, compared with 17 percent in France.

In 2010 the European Court of Human rights ruled against Italy 53 times for violating the European Convention's article protecting the right to a fair trial, and 44 of the those condemnations were for the excessive length of proceedings.

Severino often cites a Bank of Italy estimate that judicial inefficiency in civil cases cuts as much as one percentage point a year from economic growth. The country is currently in recession.


Under Severino, business tribunals around the country will start work in September, hearing only cases involving companies in the hope of speeding up resolution of disputes.

"The business tribunal is not a hypothesis and not a dream but a reality that we will fully support," she said, adding that she received favorable comments when she briefed German business leaders about the project.

"It is made up of specialized judges who have been expressly trained to deal with business issues, therefore they will be able to convey greater certainty about the interpretation of law (concerning businesses investing in Italy) and the will also hand down better sentences," she said.

She hopes the tribunals could shorten such judicial processes by at least 25 percent at the start of the project. "This goes hand in hand with competition. Being competitive concerns the lengths of court cases. They have to be in line with those of our European and international competitors," she said.

The Monti government took office in November to try to transform the economy and avert a Greek-style debt crisis following the collapse of Silvio Berlusconi's coalition and has pressed ahead with a series of reforms and liberalizations.

Severino believes Italy's entire legal culture needs to change. "Italians today go into litigation too much and it lasts too long," she said in the interview, conducted on Saturday in her frescoed office with high ceilings in the centre of Rome.

Italy is the fourth most litigious of 38 European countries, with 4,768 disputes per 100,000 inhabitants. About 2.8 million new cases were brought last year alone.

"We want to convince people that it is useful to have short trials, quick settlements and immediate results," she said, pointing to studies that show than an efficient justice system is closely related to a country's overall economic performance.

Italian areas with speedier civil justice have a higher per capita GDP. According to the employers' lobby Confindustria every reduction of 10 percent in the length of civil proceedings involving companies can lead to a 0.3 percent increase in company growth and long-term investment.

Italy has a backlog of 5.5 million civil cases, which Severino says will have to be tackled by "an enormous shovel".

A simple dispute among neighbors about who is responsible for the maintenance of a dividing wall, for example, can take years to settle. The average time to settle a civil case is more than seven years and a criminal case nearly five.


Severino said the Italian justice system needs "a filter" to cut the number of cases allowed to move on to the appeals level after the court of first instance.

"The whole process is slowed up at the appeals level, it is an enormous bottleneck," she said. "We have to get to the point where some cases are not permitted to enter the appeals process in the first place," she said.

She said the government is considering legislation to reform the civil code to block appeals in cases that are very similar to those already adjudicated on in the past, and to introduce rigid limitations on which cases can be appealed.

Another deterrent to foreign investment in Italy is organized crime, especially in the south, home to groups such as the Sicilian Mafia, the Calabrian 'Ndrangheta, and the Neapolitan Camorra.

Severino said a growing number of companies in the south are now refusing to pay protection money to organized crime and government programs that have confiscated properties from mob groups have greatly weakened their influence.

"If you asked people in Sicily 50 years ago if the Mafia existed, most people would have said 'no' (out of fear). Today Sicilians would say 'yes, and it is something we have to rid ourselves of,'" she said. "Culturally speaking this is a great step forward."

But she acknowledged with a easy laugh that changing Italy's legal system will not come quickly. "I am no miracle worker," she said.

(Writing by Philip Pullella; editing by David Stamp)