June 2016 - On 2 June 2016, the Ukrainian parliament launched a major and long-anticipated reform of the country’s judiciary and system of enforcement administration. As part of its package of reforms, parliament has introduced three laws into Ukrainian legislation:
- On the Judicial System and the Status of Judges (New Law on the Judicial System);
- On Bodies and Individuals that Carry out Enforcement of Judgements and Decisions of Other Bodies (New Law on Enforcement);
- On amendments to the Constitution of Ukraine (regarding justice) (Law on Amendments to the Constitution).
These changes, which are expected to begin being implemented from September 2016, are aimed at increasing the independence of the judicial system, combatting corruption, and, generally, increasing the transparency and effectiveness of the judiciary in Ukraine. If implemented properly, this reform may significantly increase the attractiveness of Ukraine to investors.
Reform of the judicial system
The New Law on the Judicial System is a major overhaul of Ukraine’s judiciary. It replaces the current four-tier court system with a three-tier system, introduces major changes to the structure and jurisdiction of the Supreme Court of Ukraine, and calls for the creation of new, specialised courts focused on corruption and the protection of intellectual property rights.
The New Law on the Judicial System is the first step of judicial reform in Ukraine and is intended to put an end to corruption within the judicial system. In addition to the reform of the system of courts, the new law establishes limits of judicial immunity, additional eligibility requirements for potential judges, and other changes aimed at improving the professional and ethical standards for judges. It is expected that as the result of this reform, approximately 70% of current judges will be replaced by new judges.
Changes to the system and jurisdiction of courts
Currently, Ukraine’s judicial system consists of a four-tier system of courts of general jurisdiction and the Constitutional Court of Ukraine, as follows:
- courts of first instance (general, commercial, and administrative);
- courts of appeal (general, commercial, and administrative);
- courts of cassation appeal (the High Specialized Court on Civil and Criminal Cases of Ukraine, the High Commercial Court of Ukraine, the High Administrative Court of Ukraine); and
- the Supreme Court of Ukraine, which is the highest court within the system of courts of general jurisdiction, and conducts reviews regarding:
- different application of the substantive or procedural law by the cassation courts;
- cases when an international judicial institution (recognised by Ukraine) has established a violation of international obligations by Ukraine;
- inconsistency between the judgments of the cassation courts and conclusions of the Supreme Court of Ukraine regarding the application of the substantive law.
The New Law on the Judicial System introduces a new three-tier system, as follows:
- circuit courts of first instance (general, commercial, and administrative);
- circuit courts of appeal (general, commercial, and administrative); and
- the Supreme Court of Ukraine, which is a court of cassation appeal. However, in particular cases, the Supreme Court of Ukraine acts as a court of first instance or court of appeal.
The New Law on the Judicial System also provides for the establishment of two specialised courts:
- the High Court on Intellectual Property and
- the High Anti-Corruption Court.
These two courts are courts of first instance for certain categories of cases.
The High Specialized Court on Civil and Criminal Cases, the High Commercial Court of Ukraine, the High Administrative Court of Ukraine, and the Supreme Court of Ukraine (as part of current four-tier system of courts) will act upon the development of the new three-tier system of courts and the re-establishment of the Supreme Court of Ukraine in accordance with the New Law on the Judicial System.
Re-establishment of the Supreme Court of Ukraine
Under the New Law on the Judicial System, the Supreme Court of Ukraine will be reorganised and shall consist of:
- Major Chamber of the Supreme Court of Ukraine;
- Cassation Administrative Court;
- Cassation Commercial Court;
- Cassation Criminal Court; and
- Cassation Civil Court.
Each of the cassation courts consists of certain chambers considering different categories of disputes. According to the New Law on the Judicial System, separate chambers shall be established within the Cassation Administrative Court for consideration of the cases related to:
- protection of social rights; and
- elections, referendums, and protection of political rights.
In addition, separate chambers shall be established within the Cassation Commercial Court for consideration of the cases related to:
- protection of intellectual property as well as cases related to antitrust and competition legislation; and
- corporate disputes, protection of corporate rights, and securities.
The Supreme Court of Ukraine shall be re-established in accordance with the new regulation within six months from the date that the New Law on the Judicial System comes into force, which is expected to come into force from the date the Law on Amendments to the Constitution comes into force. According to the preliminary estimates of experts, the Law on Amendments to the Constitution will come into force no earlier than September 2016.
Reform of the system of enforcement bodies
The ineffective system of enforcement bodies became one of the factors causing a lack of confidence in Ukraine’s judicial system. Just a minimum percentage (approximately 30%) of judgments are actually enforced in Ukraine each year.
One of the most significant achievements of the reform of the system of enforcement bodies is the establishment of the institute of "private enforcement officers" ("private bailiffs"). Parties to the proceedings will have a right to choose "private enforcement officers" from the unified registry of "private enforcement officers".
In addition, the New Law on Enforcement stipulates the mechanism of judicial control over the enforcement of judgments. Parties to the proceedings as well as third parties will have the right to file a complaint to the court that issued the writ of enforcement against the decisions, activity and inactivity of the state enforcement officers (bailiffs) and other officials of the State Enforcement Office, as well as "private enforcement officers" in connection with the enforcement of court judgments.
Law on Amendments to the Constitution
The Law on Amendments to the Constitution also introduces a number of significant changes. Most of these correspond with the relevant provisions of the New Law on the Judicial System.
Additionally, the Law on Amendments to the Constitution has settled one of the more contentious issues regarding the court system in Ukraine – attorneys' monopoly. It stipulates that only attorneys (members of the bar) are permitted to represent client interests at Ukrainian courts. According to the Transitional Provisions of the Law on Amendments to the Constitution, this rule comes into force in relation to representation of client interests at:
- the Supreme Court of Ukraine from 1 January 2017;
- the courts of appeal from 1 January 2018; and
- the courts of first instance from 1 January 2019.
In addition, the Law on Amendments to the Constitution stipulates that the law may establish a compulsory pre-judicial procedure of dispute settlement.
The Law on Amendments to the Constitution also regulates certain issues related to self-governance of the judicial system by virtue of the establishment of the High Council of Justice.