Juries in Russian Commercial Courts: details of the initiative
Sergei Feklyunin, RAPSI
Anton Ivanov, Chairman of the Supreme Commercial Court, wants elements of a jury trial introduced into the commercial litigation process. The initiative was announced at an Expert Council meeting held by Boris Titov, the Commissioner for Entrepreneurs’ Rights. The response of the experts at the meeting led Ivanov to conclude that an appropriate law should be drafted.
However, although the initiative’s strategic aim is to increase trust in the judiciary and in commercial courts by increasing the public’s role in rulings, experts voiced skepticism about the idea in a conversation with RAPSI.
Question of concern
The cases that Anton Ivanov said could be heard by juries are, above all, corporate disputes. Courts face difficulties when examining such cases – “two different directors, three shareholder registers, the same shares sold to three, five or seven buyers,” he said. In such situations, it is important to look into the facts with the support of independent people, he said.
The court chairman also mentioned two other categories of cases that could benefit from being examined by jurors – “anti-monopoly cases that are connected with domination or cartel deals” and “damage compensation cases that deal with the assessment of losses and evidence submitted by the parties.”
Ivanov said the implementation of his proposal will call for “serious changes” to the Commercial Procedure Code. However, he spoke in broad strokes about these changes, mentioning only “the further development of the adversarial nature of the judicial process,” the more detailed “structuring of the process,” and making “changes to the approach toward the evidence system.” In Ivanov’s view, these new features – if implemented – could promote commercial litigation.
Unlike general jurisdiction courts, a panel of jurors in commercial litigation would consist of six – not 12 – individuals. As in general jurisdiction courts, a commercial court can invite a jury to examine a case only after receiving a petition from the parties involved. Furthermore, Ivanov said this costly tool would only concern disputes involving high-value claims, or claims that involve large sums.
As regards organizational issues, Ivanov said it is necessary, first, to use a jury as an experiment to consider one or two categories of commercial cases and, then, to consider taking advantage of the existing commercial assessor system.
He does not want to separate commercial assessors from jurors, he said.
The Commercial Procedure Code of 1995 provides for commercial assessor panels to be established in courts. These panels include individuals over the age of 25 who have targeted knowledge and experience concerning entrepreneurial and other economic activities. In especially involved cases, a party may ask the court to invite commercial assessors to take part. If the court grants the request, the plaintiff and the respondent nominate one assessor each from a list of those accredited by the court. The assessors take part in issuing rulings on the same footing as the judge.
Ivanov said how a court assesses evidence is the most frequent complaint that arises as far as court rulings are concerned. The introduction of a jury in commercial justice could increase trust in the judicial system, he said, as factual matters “would be dealt with by jurors and the public, not by the judge alone.”
“There is no doubt that a judge’s decision based on a civil verdict issued by a jury would be more substantive and improve the administration of justice,” he said.
Jurors, mediation and state duty
Meanwhile, Government Envoy for the Constitutional, Supreme and Supreme Commercial Courts Mikhail Barshchevsky has supported the idea, noting that it makes sense as part of a “more comprehensive program” to reduce the number of lawsuits in commercial courts and to introduce trial by jury for the entire judiciary.
According to Barshchevsky, jury trials are a costly luxury, and disputes should only be taken to a commercial court “when it is impossible to go anywhere else.” He specified that this “anywhere else” above all means mediation. Moreover he believes it is necessary to reinstate the procedure for economic disputes that existed during the Soviet era – the settlement of disputes through claims.
“I think 20% to 30 % of cases would be resolved out of court,” he said.
A claim-based procedure for settling disputes is a special conciliation procedure done in writing when the action is settled by the contending parties upon their own by receiving and sending an answer to a claim.
In laymen’s terms, the respondent is served a demand notice referring to the existence of any claims against his party before the plaintiff turns to a commercial court to protect his rights. The procedure safeguards the respondent’s interests since it allows him to voluntarily meet the necessary requirements and to avoid extra costs should the dispute ultimately be referred to a commercial court.
Barshchevsky has also pinned hope on an increased state duty for appealing to courts. Far from prohibitive, today the duty is not burdensome to say the least, he said, while it should be “alarmingly large.” He noted that an increased state duty in courts will push parties toward mediation, while the remaining cases will be handled by a jury that can address commercial and criminal cases against businesspeople.
Barshchevsky stressed that the Chamber of Commerce and Industry and public organizations uniting businesspeople could help to set up jury pools across Russia to address criminal and commercial cases involving entrepreneurs.
The major advantage of a jury in commercial litigation, he underscored, is its effectiveness in countering the seizure of enterprises by raiders and in combating corruption among judges, which he claims manifests itself in “telephone justice.”
Telephone justice is the exertion of pressure on a judge when his immediate superior or a high-placed functionary from another branch of administration calls the judge and asks him to resolve the dispute in a certain way.
However, the biggest issue is the criteria for selecting cases for jury examination, he said.
Experts: Costly and unpredictable
Experts questioned by RAPSI were unanimous in their assessment of the new initiative. Unlike those at the Expert Council meeting, no one was wholly for the initiative.
The experts fear that the jurors taking part in commercial courts would delay proceedings as opposed to increase trust in commercial courts.
“The advisability of introducing the institution of jurors in commercial courts will largely depend on the competence granted to these jurors,” attorney Sergei Gorbachev of the Legis Group said. On the one hand, jurors can help assess such procedural steps as witness questioning, while, on the other hand, one should not forget that a commercial trial is largely one concerned with documents.
“I am of two minds as to whether or not jurors will be able to assess the legal relations stemming from documents as professionally as a judge,” Gorbachev said.
Anna Arutyunyan, a legal expert from the Moscow office of Astapov Lawyers, said Ivanov’s proposal cuts across the latest changes in commercial proceedings that are designed to speed up hearings and increase judge and court specialization.
“A jury trial is a more complicated procedure anyway,” the expert said. She also drew attention to the fact that the competence of the jury in criminal justice is constantly being reduced. “Without going into detail, we still note that we have another discrepancy here between general jurisdiction and commercial courts,” Arutyunyan said.
Lastly, any form of citizen involvement in the administration of justice is theoretically beneficial to the judiciary, as it increases citizens’ confidence in court proceedings. However, in practical terms, a jury trial calls for higher costs, and there will also constantly be the problem of forming a jury pool, the expert said.
Oleg Kuznetsov of Alliance/Tessitore, Kuznetsov and Petrova, agreed that the proposal to invite jurors to assess witness evidence leaves him with mixed feelings. On the one hand, the idea “has some rationale – let a jury decide whether or not to believe witness statements.” But on the other hand, he said, this will require drastic changes to the Commercial Procedure Code. To evaluate and compare a testimony with other materials, the concept of an eye-witness cross examination will have to be introduced, he said.
Judges will also have to alter their mentality, he noted.
“Ask any legal expert working in commercial courts and he will tell you that the percent of petitions granted to summon eye-witnesses is at an all-time low today. Judges just will not listen to witness evidence,” the lawyer said.
Meanwhile, Anton Sonichev, an attorney at Nalogovik, said commercial trials differ from criminal trials. Documents play the most important role in these cases, he said.
“The assessment of documents often depends on the proper application of legislation (especially tax legislation), which is the prerogative of legal experts,” he said. He is not sure that non-professional jurors will be able to accurately assess these issues and they may even contribute to wrongful rulings, he said.
In his opinion, the commercial court system was established to allow disputes between entrepreneurs to be resolved professionally.
“The idea of commercial assessors – representing the public and having the experience of entrepreneurship – would be more successful,” Sonichev said.
However, Roman Shcherbinin, a senior partner at the Moscow-based Lex Collegium Bar, said that although Ivanov’s initiative is interesting in theory, it is likely to “cause much dispute and inconvenience” in practice. He is not sure that the suggestion will achieve the goals that it sets out to accomplish, he said.
Shcherbinin predicts “mistakes, a neglect of duty, and the emotional involvement of unprepared citizens when examining disputes between legal entities.”