MR Justice Colman's report on the Czech Judicial System 2000

Executive Summary

Report on an investigation into the organisation of the administration of commercial law in the Czech Republic by Mr. Justice Colman

Executive Summary

1. This Report results from a visit to the Czech Republic for a period of three weeks in October 2000 at the request of the Lord Chancellor arising out of his discussions with the Deputy Prime Minister, Mr Rychetsky, and the former Minister of Justice, Dr Motejl in April 2000.

2. The purpose of my visit was to investigate whether the justice system in the Czech Republic, in so far as it affected commercial litigation, was sufficiently effective by modern European standards and, if not, to make recommendations as to changes that ought to be made before entry of the Czech Republic into the EU. It was planned and agreed that, following my report, I should return to Prague to discuss with the Ministry of Justice how my recommendations could be implemented, this exercise to be completed this year.

3.This Report concludes that the existing justice system suffers from major defects which, taken together, render it well below the standard reasonably to be expected in a modern European state.

4.The major defects in the present system are:

(i) excessive delay in the hearing and determination of claims due to lack of pre-planning of evidence and the consequent need for successive adjournments

(ii) excessive delays caused by the facility of re-trial on the hearing of an appeal with additional evidence

(iii) excessive delay in the enforcement of foreign judgments and arbitration awards

(iv) excessive delays and corruption in the Commercial Registry

(v) inconsistency of decisions of different courts on matters of commercial law

(vi) unavailability of pre-trial orders freezing a defendants' assets

(vii) unavailability of sanctions for breach of a pre-trial or permanent injunction

(viii) lack of awareness on the part of judges of the needs and structure of national and international commerce

(ix) lack of a procedure for obtaining judgment without hearing evidence where the defence has no substance

 5. Reforms have recently been introduced aimed in part at speeding up the trial process and making the justice system more efficient. This Report concludes that:

(i)  they do not go anything like far enough            

(iii) it is very much open to doubt whether the absorption of the work of the Commercial Courts into the general court system will in itself improve the position as to delay

(iv) the restriction on the introduction of further evidence on appeal is well-advised and should improve the efficiency of the appeal system

6. The main recommendations made by this Report are:

(i) Each Regional Court should have a "Commercial Division" staffed by specialist commercial judges who would be available to hear commercial disputes in priority to non-commercial cases

(ii) An enhanced system of case management should be introduced in the Regional Courts, involving a preliminary hearing for scheduling purposes and a main hearing at which all the evidence could be heard. Written witness statements should be exchanged before the main hearing.

(iii) Freezing orders should be readily and speedily available and should be the subject of a separate provision in the Code of Civil Procedure.

(iv) The Code of Civil Procedure should provide for a system of sanctions for breach of the court's orders including injunctions

(v) There should be introduced a procedure for obtaining judgment without hearing evidence where the defence has no substance

(vi) The Commercial Registry should be re-organised to provide a speedier service free of corruption.

(vii) There should be provided by the Institute for the Further Training of Judges, special courses for commercial judges in the principles applicable to the enforcement of foreign judgments and arbitration awards. There should be laid down a maximum period of time between filing an application for enforcement and the court making its order.

(vii) Steps should be taken to encourage the publication by private publishers in hard copy or on the Internet of reports of judgments of the Supreme Court and the Regional Courts with a subject matter index.

(viii) These reports or Internet facilities should be provided to each of the judges 

(ix) The Institute for the Further Training of Judges should ensure that its course include instruction on the practical problems and disputes of the commercial world.

(x) The Commercial Division of each Regional Court should set up a users' liaison committee on which there would be representatives of the commercial judges, local commercial organisations, the local advocates involved in commercial litigation and which would meet several times a year with the object of bring home to the judges the needs of the commercial community in relation to the justice system.

(xi) The judges should be relieved of many of their administrative duties. They should cease to be responsible for making a summary of the evidence of each witness. Oral evidence should be recorded on tape recorders and only translated if needed on appeal. Direct contact between judges and witnesses in the absence of the parties or their representatives should cease.

(xii) A special training programme for judges in case management should be put into effect before further case management reforms come into force.

7. The implementation discussion and the final phase of my mission should commence at the end of November 2000 with a view to completion this year. For this purpose the Minister of Justice is to set up a small departmental working group in which JUDr Baxa, the Deputy Minister of Justice will participate. It would assist the group's work if he could pay a short visit to London immediately before it starts in order to observe case management in action.

1. Introduction           

1.1 At the request of the Lord Chancellor, the Rt Hon Lord Irvine of Lairg, I visited the Czech Republic ("CR") for a period of three weeks in October 2000. The purpose of my visit, as agreed with the Lord Chancellor, was to ascertain whether and, if so, to what extent the administration of commercial law by the court system in CR was deficient and required to be modernized to bring it up to the standards to be expected of a potential member of the European Union.

1.2 In the course of my visit I interviewed in depth seven members of the Czech Bar, eleven judges, including the Presidents of the Supreme Courts, the Constitutional Court and the High Court in Prague, both Deputy Ministers of Justice, five Ministry of Justice officials, three University and Judicial Training College teachers, eight British and United States lawyers resident in Prague, as well as numerous members of the local British and American Chambers of Commerce and three representatives of the European Commission

1.3 These interviews demonstrated a remarkable degree of agreement as to the defects in the present system in CR and very sharply divided views as to how these defects could be remedied and the extent to which amendments to the Code of Civil Procedure coming into force on 1st January 2001 were likely to provide a cure.

In this Report I set out:

(i) outline of the organisation of the civil courts and the historical background       

(ii) an outline of the existing procedural system and its operation by the judges         

(iii) the defects in the administration of commercial law           

(iv) the procedural reforms due to take effect on 1st January 2001 and the extent to which they may be expected to cure the defects

(v) my recommendations for further procedural reforms and other remedial measures

2. Outline of the present organisation of the Courts and the Historical Background

2.1 The primary general courts of first instance are the 88 district courts (Okresni Soudy). Their jurisdiction is, however, very low, being limited to disputes involving sums of 50,000 Czech crowns, increased to 100,000 from January 2001. This latter sum is equivalent to about GBP 1,870.

2.2 The courts of first instance having general jurisdiction above this ceiling are the 8 Regional Courts (Krajske soudy) located in eight different cities. Except in the cities of Prague, Brno and Ostrava, the Regional Courts hear commercial disputes. They also have jurisdiction in relation to the registration of companies, including the maintenance of the commercial register, and in all matters of bankruptcy and the insolvency of companies

2.3 In the cities of Prague, Brno and Ostrava there have existed since 1991 three Regional Commercial Courts (Krajske Obchodni Soudy) of first instance. These courts hear all commercial litigation emanating from those three regions and also have the bankruptcy and companies registration jurisdiction

2.4 First instance hearings in the Regional Commercial Courts ("KOSs") are before a single judge. Judgments include findings of fact and reasons for decisions. They are not reported. Administration of the commercial register is mainly conducted by the judges themselves

2.5 In the Regional Courts outside Prague, Brno and Ostrava there is much less commercial litigation than in those three cities. Such as there is generally comes before judges who are informally identified as specialised in commercial law

2.6 Appeals from the Regional Courts and the three KOSs go to the High Court (Vrchni Soud). In that court, commercial appeals come before judges drawn from those with specialist experience of commercial law. Specialist groups of members of the High Court are organised and called "senats" with the object of matching the experience of the members of the court to the subject-matter of the dispute.

2.7 The appeal is in the form of a retrial.

2.8 An appellant or respondent to an appeal can therefore introduce new evidence notwithstanding that it might have been reasonably available before the court of first instance

2.9 A further appeal lies without leave from a decision of the High Court to the Supreme Court in Brno

2.10 Decisions of the High Court are not reported or made available to members of the legal profession..

2.11 Decisions of the Supreme Court are put on to the Internet in order of publication if the Court so directs. There is no hard copy report nor is there any subject-matter index of Supreme Court decisions. The average output of the Supreme Court is 300 decisions per month of which astonishingly 80 per cent relate to procedural issues

2.12 There is a career judiciary. Five years studying for a law degree at the University are followed by two years as a judicial trainee. Examinations at all university law schools are conducted by oral interview only unless the student elects to sit a written examination and that is only permitted in respect of optional subjects which form a relatively small part of the whole course. Teaching is by means of lectures. There are no tutorials or Harvard-style socratic group teaching

2.13 Prior to the communist era the court system and civil procedure were those of the Austro-Hungarian Empire, based on Civil Law. The features of that system which are particularly material for the purposes of this Report include the following

(i) The judge was in charge of the admission of evidence in the sense that he had the responsibility of the decision what evidence and which witnesses the litigants should be permitted to put before the court. The advocates would propose to the judge to put forward a witness on a general topic and the judge would decide whether to call that witness. Arrangements for the attendance of witnesses would be handled by the judge, often by direct contact with the witnesses

(ii) The parties' representatives had little contact with any of the witnesses other than their clients, prior to the hearing

(iii) There was little pre-planning of the evidence and no developed concept that all the evidence must be adduced at one continuous hearing. Multiple adjournments for further evidence to be called were acceptable

(iv) An appeal could be in the form of a re-trial with additional evidence being adduced even if it would have been available at the time of the first instance trial

(v) There being no doctrine of binding precedents based on lower courts being bound to follow the decisions of higher courts on such matters as the meaning and application of the Commercial Code, the judges adopted their own personal interpretation of the Codes of Commercial Law, sometimes based on commentaries written by academic lawyers

(vi) At first instance the judge was responsible for preparing a formal record of the oral evidence as well as of the court's orders. Summaries of the evidence would be prepared after the witness had finished and would be agreed between the judge, the witness and the advocates.

2.14 With the arrival in 1948 of the Communist era and the end of the free economy, commercial disputes were confined to those between state trading entities and were resolved by a state-operated arbitration regime. The arbitral tribunals were manned by lawyers. They developed working procedures significantly more flexible than those of the ordinary court system. The arbitrators generally operated fairly and were not open to state interference

2.15 When the communist regime was replaced by the free market economy in 1990 not only was there a great increase in the incidence of trade and therefore of commercial disputes, there was also the need to provide for a system of dispute resolution within the court system. The only lawyers in the state service with any relevant experience were the commercial arbitrators from the previous regime. In 1991 the three Regional Commercial Courts were created and they were manned by former commercial arbitrators

2.16 Although these judges had derived experience of commercial disputes from the arbitration system, the KOSs were unable to cope with the deluge of commercial disputes which developed with the free economy. In the event an immense back-log of cases built up. The delays in litigation became very considerable. Defendants particularly, were able to exploit the system in order to avoid paying their debts. The court delays were in the Prague KOS. The judges who had previously operated a very informal arbitral procedure were often unfamiliar with the requirements of the Code of Procedure and with the rules of commercial law applicable in a free economy

2.17 The procedures applied in all the Regional Courts, including the three KOSs, were those laid down in the Code of Civil Procedure

2.18 Code of Civil Procedure

Many of the former arbitrators went into the private sector and newly trained judges had to be deployed in the KOSs. These judges were usually unfamiliar with commerce

2.19 The ordinary Regional Courts outside the three cities were not inundated with commercial cases to anything like the same extent as the three KOSs. They managed to avoid long delays in the resolution of commercial disputes

3. Outline of existing Procedure and its Operation by the Judges   

3.1 The Code of Civil Procedure in essence sets out a system similar to the Austro-Hungarian regime. As described, this leaves the judge in control of the admission of evidence

3.2 The claimant commences the proceedings by filing his claim document setting out the basis of the claim and the evidence to be relied upon and identifying the witnesses. The filing of a defence is not mandatory unless a counterclaim is raised, but in practice it is usually done. The court calls the parties to appear at the first hearing. It is up to the judge to organise the appearance of independent witnesses or the appointment of court experts. The objective is to dispose of the case in the course of a single hearing at which the judge examines the witnesses after which the advocates may ask questions. The advocates then make final submissions. The judge must prepare a formal summary record of the evidence of each witness. Factual witness statements are not exchanged between the parties. Experts are normally appointed by the court.

3.3 The judge issues a written judgment, including findings of fact and reasons

3.4 Dates for hearings are allotted generally on a first-come, first-served basis, regardless of any consideration of the commercial need for an urgent decision

3.5 The Commercial Registry is operated by some of the judges of the three KOSs and outside those areas by the judges of the Regional courts. Entries into and changes in the Register are handled on a first-come, first- served basis

3.6 There is currently no procedure for obtaining judgment without going to trial where a defendant challenges a claim by filing a defence which is on the face of it hopeless in the sense of raising no triable issue. Only if the defendant neglects to raise any objection to the claim within a specified period (15 days) can the claimant obtain a judgment without a trial

3.7 There was, surprisingly, a difference of opinion between those interviewed, including Supreme Court judges, as to whether the Regional or any other courts had jurisdiction to issue orders freezing the assets of a defendant in order to prevent evasion of execution of any future judgment in cases where the claimant did not claim to have ownership in the assets in question, but merely claimed general damages, for example for breach of contract. What does seem clear is that, if such jurisdiction exists it is hardly ever exercised even in the KOSs. There is no jurisdiction to order a defendant to disclose the whereabouts of his assets

3.8 There is apparently either no jurisdiction to punish breaches of injunctions or, if there is such jurisdiction, it is hardly ever exercised

3.9 CR is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards, 1958. Applications for enforcement take their place in the lists of the District Court of enforcement without any priority over ordinary first instance claims and are therefore subject to the same exposure to delay. If issues arise on enforcement, they must be tried like an ordinary first instance trial. This can create considerable delay in enforcement

3.10 CR is not a party to the Brussels or Lugano Conventions on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters. Applications for enforcement are made to the District Courts. Recognition of foreign judgments depends on whether there is a bilateral recognition treaty or whether there is substantive reciprocity in enforcement with the country of the foreign judgment. There were twenty-two bilateral recognition treaties in 1996: see Encyclopedia of International Commercial Litigation, Czech Republic, para B9.4. There is no such treaty with the United Kingdom, so far as is known, nor with any of the other members of the European Union except France, Italy, Greece and Spain.

3.11 Applications to enforce foreign arbitration awards and foreign judgments are not usually handled by judges with experience in these fields. The evidence suggests that judges who handle such applications take an extremely formalistic and technical view of compliance by applicants with the requirements for enforcement and appear often looking to be for excuses to send back applications on the grounds of alleged deficiencies of information, so as to avoid making orders of enforcement

4. Defects in the Administration of Commercial Law   

4.1 Excessive Delay in the Hearing of Claims

The evidence from Czech advocates and foreign lawyers and businessmen was uniform in condemning the present system for commercial litigation as giving rise to completely unacceptable periods of delay. For example, the experience was that it took six to eight months in Prague to obtain a judgment in an unopposed debt collection claim and then a further one to two years to enforce it. For an opposed claim it was normal for there to be one and a half to two years from the first hearing of evidence to the judgment. There are many unresolved cases in the system which are five to six years old

4.2 There can be no doubt that one of the main reasons for the delays affecting claims is the lack of pre-planning and the disorganised manner in which evidence is adduced. Thus, whereas the claimant is obliged at the outset to identify his evidence by serving the documents on which he relies and naming witnesses whom he wishes the court to hear, there is nothing to prevent him tendering additional witnesses at the first or subsequent hearings thereby making it necessary for the hearing to be adjourned. The defendant does not necessarily have to identify his witnesses at the outset before the first hearing and it is common practice for defendants to propose additional witnesses, thereby causing a succession of adjournments. The unplanned insertion of additional evidence makes it impossible for judges to estimate the length of time likely to be required to complete the trial. It is normal for there to be several successive adjournments for additional evidence. An example was given of one contract case started in April 1998 where the first hearing took place in January 2000 and which since then has been adjourned five times to accommodate further evidence. There is very strong evidence that the younger judges in particular do not appreciate the needs of the commercial world for speedy justice and are unduly formalistic in their handling of trials.

4.3 The hearing of oral evidence in court takes an unnecessarily long time. Particularly if the witness is independent of the parties, it is not unusual for neither party to have any clear idea what evidence the witness will give. Witness statements not having been exchanged beforehand, there is plenty of room for unexpected evidence and consequently disorganised trials. It often becomes necessary for parties to tender additional witnesses. Defendants are given the opportunity of exploiting this undisciplined procedure to procure delay in sustaining an adverse judgment

4.4 The requirement that the trial judge should make a formal record of the evidence given by each witness can be extremely time-consuming. For example, I observed that in one KOS it took two hours and fifteen minutes for one witness to complete his evidence, of which forty minutes was taken up by the judge dictating and agreeing with the witness and the advocates a summary of what the witness had said. Their record would have no further part to play unless there were an appeal against the judge's findings of fact and that witness's evidence was relied upon. A further fifteen minutes was occupied in discussion about the date to which the uncompleted trial should be adjourned

4.5 Excessive Delay caused by the Appeal system

The facility to introduce on appeal new evidence, whether from new witnesses or from witnesses who have already given evidence and whether or not that evidence could reasonably have been available at the trial at first instance, is a serious cause of delay in the path towards a final judgment. Like the unheralded injection of evidence at first instance it enables a defendant to spin out hearings of appeals and so postpone a final decision in the dispute

4.6 Enforcement of Foreign Judgments and Foreign Arbitration Awards

The delays in obtaining orders for enforcement are unacceptably long. Unless there are serious defects in the evidence supporting the application or the respondent challenges enforcement, applicants should not have to wait more than twenty-eight days for an order for enforcement. There are two main reasons why they presently have to wait for several months

4.7 Firstly, no priority is given to such applications over ordinary claims before the courts. This is unacceptable given that the successful party has already been put to the trouble and delay of obtaining an arbitration award or a judgment in a foreign court

4.8 Secondly, the long delays experienced are contributed to by the judges' ignorance of the principles of enforcement of foreign judgments and awards and by their lack of appreciation of the need for speedy enforcement in a free market economy. Decisions on enforcement are too readily postponed

5. Excessive Delay and Corruption in the Commercial Registry  

5.1  There was strong evidence of unacceptably long delays both in the initial registration of new corporations and in changes to corporate particulars which have to be entered on to the register, such as changes in the directors and increases in capital. This situation is worst in Prague where it often takes six to twelve months to have an entry changed. Until the register has been changed, business will not accept mere evidence of a board resolution as sufficient to satisfy them of, for example, the powers of a new director. Accordingly, the operation of a corporation can be seriously restricted by the delays involved

5.2 The local lawyers consider that the judges who work in this Registry are of low calibre

5.3 There is very strong evidence that lawyers and others involved in corporate registration pay modest bribes to judges or office officials to obtain priority for their applications and thereby avoid delay

5.4 If, for example, minority shareholders wish to intervene to prevent capital increases, their applications are not given priority over less urgent matters. Such applications are determined in the Regional courts or KOSs. Due to lack of prioritisation, corporations can be prevented for long periods from expanding their capital bases

6. Inconsistency of Decisions of Matters on Commercial Law   

Nearly all the advocates and foreign lawyers interviewed complained of lack of consistency in the decisions of the courts at all levels in matters of commercial law. There is, of course, no doctrine of binding precedents. For that reason, one would not expect the level of consistency and legal certainty to be found in Common Law systems. However, the divergent views of the Czech judges on matters of interpretation of the Commercial Code is a feature encouraged by the lack of any system of reported decisions of the High Court and the Supreme Court. Even now when many of the Supreme Court decisions are being put on the Internet, it is extremely difficult for the local lawyers to find relevant cases because there is no subject-matter index of these decisions. Accordingly, it is often very difficult to advise clients as to the outcome of disputes in commercial matters

7. Orders Freezing a Defendant's Assets   

7.1 I have already referred to the surprising divergence of opinion between both judges and advocates as to whether the courts have jurisdiction to grant orders at or before the commencement of proceedings freezing a defendants' assets in order to prevent evasion of execution of a future judgment for damages. Some take the view that such orders are not available except to prevent disposal before judgment of assets to which the claimant claims title.

7.2 The wording of section 74(1) of the Code of Civil Procedure which covers interlocutory injunctions appears to be wide enough to include the making of freezing orders even if there is no claim to ownership of the assets. However, the evidence strongly suggests that such orders are hardly ever made in the Czech courts

7.3 If there is no jurisdiction, as some judges and lawyers seem to believe, this is a serious deficiency in the Procedural Code. In most, if not all, member states of the EU there is available some kind of freezing order to protect a claimant against a defendant's evasion of execution of any future judgment

7.4 If there is such jurisdiction, which I consider to be the correct view, the ignorance of this by many judges and advocates is a serious defect which needs to be cured

7.5 Whether or not such jurisdiction exists, there is certainly no power in the Czech courts to force a defendant to disclose what assets he has and their whereabouts so as to enable a claimant to give notice of the court's freezing order to banks and other third parties who may be holding such assets. Such a power is desirable because it makes freezing orders much more effective than if the claimant has no facility for tracing the assets. The English courts have such a power and it is almost invariably used for freezing orders issued in cases where the amount of the claim exceeds the known assets. However, not all EU members have a similar facility.

8. Enforcement of Interlocutory and other Injunctions   

8.1 Many of the Czech advocates and foreign lawyers interviewed considered that the judges either had no power to punish parties who failed to comply with injunctions or, if they did have such a power, they never exercised it. The course which judges were said to adopt was to leave the party seeking to enforce the injunction to his remedy in damages. This in effect deprives the court's order of all, except persuasive, force and is a serious deficiency either in the Code of Civil Procedure or in the application of the law by the judges

8.2 If the Court is seen not to exact any punishment for breach of injunctions, its authority will be diminished and parties will feel free to ignore injunctions. This deficiency is important not only in the field of protection of rights such as intellectual property rights, but also in the context of pre-trial freezing orders

9. Judicial Awareness of the Needs and Structure of national and international Commerce   

9.1 It was the universal opinion of local and foreign lawyers and local and foreign businessmen that most judges, even in the KOSs, had little or no appreciation of the needs of national and international commerce for disputes to be resolved quickly. As it was put by one person interviewed, "judges have no idea how money functions: the cost of not having a solution to a dispute is not understood"

9.2 The judges who have received their training since the end of the Communist era are particularly accused of adopting an unduly formalistic approach, especially in the fields of the administration of bankruptcy law, enforcement of foreign arbitration awards and foreign judgments and in commercial litigation generally. This formalistic approach was variously attributed by those interviewed to the judges' deep-seated distrust of businessmen, to indecisiveness and a need to find excuses to delay decisions and to ignorance of the needs of commercial institutions

10.Lack of Summary Judgment Procedure 

10.1 There is no procedural facility for getting judgment without a full trial in a case where a defendant asserts that he wishes to defend the claim and puts in a defence but where his defence manifestly has no real substance. This is distinct from judgment which can be obtained in a case where a defendant simply ignores the claim. This is the expedited procedure known as Platebni Roskaz. It does not involve the court in any evaluation of the defendant's case

10.2 This is a serious procedural deficiency, particularly in view of the slowness of the full trial procedure. It enables defendants who have no substantial defence to gain time before a judgment is given against them by putting up a bogus defence and sitting back while the trial procedure slowly pursues its course

11. Current Reforms to the Justice System

11.1 In the course of this year there was introduced to the Czech Parliament a bill containing a package of judicial and procedural reforms, including many detailed amendments to the Code of Civil Procedure as well as a fundamental re-organisation of the court system. The purpose was to attempt to improve the efficiency of the system and to reduce delays in dealing with civil and commercial litigation generally. Much of the bill was rejected by Parliament, but some of it was passed

11.2 Systém odvolání je omezen na jedno odvolání k nejvyššímu soudu. Vrchní soud byl zrušen. Došlo také k několika dalším podstatným změnám, které jsou pro tuto zprávu relevantní.
The appeal system has been confined to one appeal to the Supreme Court. The High Court has been abolished. There are other significant changes relevant to this Report

11.3 Abolition of the three Commercial Courts
The most striking change, and certainly the most controversial, has been the abolition of the three KOSs. This takes effect from 1st January 2001. Thereafter all existing and future commercial litigation and other matters previously dealt with by the three KOSs will be transferred to or commenced in the Regional courts of Prague, or Brno or Ostrava, depending on the location of the defendant. The jurisdiction of the District Courts will be raised from 50,000 crowns to disputes involving up 100,000 crowns. Certain specified types of dispute are reserved to the Regional courts

11.5 The three KOSs were seen by the Ministry of Justice to have built up an immense backlog of cases as a result in part of the case load inherited from the arbitration tribunals under the Communist regime. Further, some 80 per cent of the cases coming before those courts were simple debt- collecting claims involving relatively small sums. The KOSs, being staffed by specialist judges many of whom had experience of the arbitration system under the Communist regime, were regarded as having created a separate and somewhat isolated group which was viewed as an anomaly creating a "lack of symmetry" within the court system. The judges were seen to be spending most of their time handling debt-collecting cases involving small amounts while the more important and more complex specialist cases suffered serious delays. It was observed that the five non-specialist Regional courts in places other than Prague, Brno and Ostrava had coped with commercial matters without developing a backlog of cases anything like as large as that of the KOSs. Commercial matters in those courts were normally dealt with by judges from small groups of specialist commercial judges known as "senats".

11.6 It was therefore considered by the Ministry of Justice that if the jurisdictional ceiling of the District courts in debt-collecting actions were increased to 100,000 crowns, that would considerably reduce the number of commercial cases at Regional court level and would enable the Prague, Brno and Ostrava Regional courts to concentrate on the more substantial commercial cases. Thus, section 9 of the amended Code of Civil Procedure designated the Regional courts as courts of first instance for claims relating to a very wide range of commercial matters, including disputes relating to commercial contracts, copyright, company winding-up, internal company disputes, unfair competition, trade names, bills of exchange and cheques, commodity trade disputes, commercial leases and bankruptcy

11.7 While the amendments to the Code of Civil Procedure have the effect of transferring the whole ambit of commercial litigation to the three Regional courts and abolishing the three KOSs, they contain nothing to guarantee that in the three Regional courts such commercial cases will necessarily be heard by specialist commercial judges

11.8 Quite obviously the 157 judges who previously sat in the KOSs have to be re-located. Because of the increased work-load in the District courts throughout the country due to the increased ceiling in debt claims, it is intended that a large number of the 157 KOS judges will sit in the District courts. And because of the injection of commercial matters into the three Regional courts there will have to be more judges in those courts drawn presumably from those who sat in the KOSs

11.9 Further, the three KOSs had developed working administrative practices which differed in matters of detail from the Regional courts. They also had their own compatible computer system and data base. Their abolition will therefore at least initially involve considerable disruption of judges and administration which will at least temporarily aggravate delays

11.10 What has not been explained to me is why the abolition of the KOSs was seen as a means of improving the efficiency of the justice system in relation to commercial matters. One would have thought that, once the small debt-collecting claims had been transferred to the District courts, the judges of the KOSs would have had more time to deal with more substantial commercial matters and could therefore have provided a significantly better service. There would seem to have been little additional justification for the abolition of the KOS's save for the "lack of symmetry" in the court system. The English experience of court organisation suggests that what matters is not the aesthetics of the structure of the courts but whether the whole of it provides an efficient justice service

11.11  Case Management
There is no doubt that the Ministry of Justice recognised the inefficiencies in the trial system arising from lack of early definition of issues and early identification of evidence. It was seen that defendants were able to exploit this lack of trial discipline in order to delay judgment and gain time by means of multiple adjournments of the trial

11.12 In order to cure these problems a system of what is called in translation "concentration of proceedings management" has been introduced with effect from January 2001. This procedure is contained in sections 118a, 118b and 118c of the Code of Civil Procedure as amended and arises in two distinct circumstances

11.13 In certain specified types of claim under section 118b, including bankruptcy, proceedings in respect of the protection of economic competition, in respect of unfair competition and breach of rights to business secrets, the parties must identify the facts on which they rely and define their evidence no later than at the first hearing. If and to the extent that they fail to do so, facts and evidence presented later will not be taken into account unless facts or evidence occurred after the first hearing which may disprove the previous evidence or which could not be adduced at the first hearing without the fault of the party

11.14 Secondly, under section 118c, if in any case one of the parties is delaying in disclosing all its evidence or to identify witnesses within time limits previously laid down, the court can, upon application by the other party, order that the information is to be provided by a certain date, failing which any additional evidence presented later will not be taken into account. However, under section 118c(2) even after expiration of the time for filing evidence laid down by the court the parties may still provide other facts or evidence but only if that evidence could put in question the authenticity of evidence already presented or if they occurred after expiration of the court's time limit or if the party could not have disclosed them earlier due to no fault on his part

11.15 It is to be observed that it is only in certain specified types of case that this stricter procedure applies automatically. There is no general application to all commercial claims, such as, for example, claims for breach of contract or claims about corporate organisation or management. Secondly, the imposition of time limits under section 118c only occurs after the party has already caused delay or has failed to obey an order by the court to disclose his evidence: there is no previously specified time limit which the parties must obey on pain of having evidence excluded.

11.16 The introduction of these limited powers to impose discipline on the parties in the interests of the efficient progress of the trial may bring about some improvement in the present situation, but these additional powers do not go anything like far enough. It is not clear why the automatic procedure under section 118b applies only to such a small number of types of claim and not to the vast majority of commercial claims. Secondly, it is unclear why the power to make mandatory orders which exclude evidence under section 118c only arises where there has already been delay or breach of the court's order. The extent to which these limited powers do improve efficiency will depend heavily on the attitude of the judges. If they are too faint-hearted to act decisively to prevent delay, these powers will have little or no effect.

11.17 Appeals

Section 205a of the Code as amended will have the effect in most cases of confining the evidence before the appeal court to that which was before the court of first instance. This is a most significant improvement which should considerably reduce the time required for appeals and discourage the abuse of the appeals procedure by parties who wish to delay judgment for as long as possible

11.18 Overview of Reforms

The overall effect of the reforms on the efficiency of the civil litigation system in so far as it affects commercial matters is not easy to evaluate. As already indicated (see para 11.15 above), the provisions relating to concentration of proceedings described above are very limited in scope and depend heavily on the attitude of the judges. Those who have not traditionally been accustomed to imposing a disciplinary regime on the parties to a trial may not find it easy to adopt the new stricter approach. In this connection, there must be a real danger that the courts will still allow in additional evidence under the exceptions set out in section 118a(2) even after they have exercised their powers under that section to set time limits on the disclosure of evidence

11.19 The effect of the abolition of the KOSs will lead, in the view of every commercial judge whom I interviewed and of several others interviewed, to considerable disruption in commercial litigation in Prague, Brno and Ostrava. How long it will take for the redistribution of cases into the Regional Courts to settle down is difficult to predict. What can be said with reasonable confidence is that consequent administrative disruption in the first three to six months of 2001 will not assist the delay problems already described

11.20 The raising of the jurisdictional ceiling of the District courts in debt claims will certainly reduce the case load of the Regional Courts in cities other than Prague, Brno and Ostrava and will limit the number of small claims which will go to the Regional Courts in those three cities in consequence of the abolition of the three KOSs. Whether the effect will be to improve the efficient handling of commercial litigation in Prague, Brno and Ostrava depends on whether the number of KOS judges transferred to the Regional Courts in those three cities is adequate to absorb the inflow of commercial work from the KOS. It will also depend on whether those judges are assigned to the handling of commercial work or whether that work is done by non-specialist commercial judges. Unless (i) the commercial work is assigned exclusively to specialist commercial judges and (ii) those judges are permitted to give it priority over non-commercial work, the delay situation in relation to commercial cases will deteriorate.

11.21 These reforms do not address the following problems identified in this Report

(i) Delays in the granting of orders permitting enforcement of foreign judgments and foreign arbitration awards

(ii) Delays in the Corporations Registry in respect of entries on the register

(iii) Inconsistency of decisions in commercial cases

(iv) Unavailability of or extreme reluctance to make orders freezing a defendant's assets

(v) Unavailability of or extreme reluctance to make orders punishing breach of interlocutory and other injunctions

(vi) Judicial ignorance of the needs of the commercial world

(vii) Lack of summary judgment procedure 

11.22 These reforms may help to reduce overall delays in commercial litigation but they are most unlikely to reduce delays to acceptable limits. They do little to reduce indiscipline and disorganisation in trial preparation. Although the concentration of proceedings management concept is a step in the right direction, it does not go far enough. Further, they do little to reduce the burden of administrative responsibilities on judges of first instance courts and thereby to release more judge hours for judging and so reduce delays

11.23 The net effect of these reforms is therefore likely to leave in place a justice system which retains serious defects from the point of view of commercial litigation and other matters. These defects cannot be regarded as marginal or insignificant. Taken together they amount to a substantial shortfall in the justice system of the CR. Whereas it is not suggested that this country must have a system with the quality of a world-leader in commercial litigation, such as the English Commercial Court, before it can be regarded as sufficiently equipped to deal with commercial disputes as a member of the EU, its courts must at least have a reasonable level of efficiency and judicial expertise by comparison with those of other member states

11.24 Apart from the fact that its justice system is deficient by reference to average modern European standards, the very deficiencies are well-known to local lawyers and will therefore be made apparent to potential investors in the CR. The existence of those defects will tend to discourage foreign investment in CR

12. Recommendations

12.1 The Courts

As already indicated, the abolition of the three KOSs will inevitably send to the commercial world the message that the Czech Government does not recognise the need for specialist commercial courts. Since that message is totally at variance with present-day European and American thinking, it is urgently necessary to correct the message. It is, however, clearly politically impossible to restore the KOSs. For this purpose, there should be established within each Regional court an entity publicly known as a "Commercial Division" to which would be assigned all the specialist commercial judges sitting in that court and all the administrative staff necessary to handle the commercial matters, including both litigation and corporate registration

12.2 Consistently with 12.1, it should be provided as a matter of law that all commercial claims must be commenced in the "Commercial Division" of the relevant Regional court and all claims documents and other court documents should be so entitled

12.3 It should be provided as a matter of law that all claims commenced in the Commercial Division of a Regional court will be heard by a judge assigned to that Division. Judges assigned to the Commercial Division should be available to hear non-commercial cases, but subject to the priority of commercial cases

13. Case Management

13.1 The Code of Civil Procedure should be further amended to provide that

13.2 (i) Following the filing of the claim and accompanying documents, the defendant must file his statement of defence, identification of evidence and of witnesses, as well as his documents, within a period of time to be specified in the Code (perhaps 28 days) and before any hearing

13.3  (ii) Following the defendant's filing his statement of defence the court will within a number of weeks to be specified in the Code convene a hearing for the purpose of scheduling what the parties are to do up to and including the main hearing. This hearing would be similar to the case management conference in English procedure or the Fruher erster Termin in German procedure

The judge would discuss with the advocates what remained to be done by way of evidence collection before the case was ready for trial and he would require them to estimate how much time the main hearing would require. He would make an order specifying by what date each party had to take any further necessary steps and by when the expert evidence was to be ready and would fix a provisional date for the main hearing, specifying how long it was to last

13.4 (iii) If one party failed to comply with the schedule laid down by the judge at the first hearing, the judge would be given a number of sanctions which he could apply in his discretion, depending on the seriousness of the consequences of the party's failure to comply with the schedule. These sanctions might include the power to decline to admit further evidence or documents, the power to give judgment for the claim or to dismiss the claim, the power to refix the main hearing date and the power to make the guilty party pay the opposite party's costs incurred as a result of the failure to comply with the order

13.5 (iv) The Code should further be amended to provide that a party who wished a witness to be called would be responsible for providing to the court and to the opposite party by no later than a date to be laid down by the judge at the first hearing a statement prepared by the witness of the evidence which he would be prepared to give at the main hearing. Such a statement should not be prepared by the lawyers, but should consist of the witness's answers to questions put to him in writing by the lawyer or the party. The answers would not be evidence until at the main hearing the judge asked the witness whether he could confirm that the statement was true and the witness then gave his oral confirmation. The witness could then be asked additional questions by the judge and the advocates. The party presenting that witness would not normally be entitled to suggest to the witness that his statement was incorrect. That party would in effect be bound by the witness's confirmation of the truth of the statement. No party would be obliged to present a witness at the main hearing if, after all, that party did not wish to rely on that witness's evidence. In that case the contents of the statement would not be evidence in the case unless the opposite party or the court required the witness to give evidence. Notice of an intention not to rely on the evidence of a witness must be given to the court, the witness and the opposite party a specified minimum time before the date of the main hearing. If the opposite party or the court nevertheless wish the witness to give evidence, notice must be given a specified minimum time before that date

13.6 A party who had not previously disclosed the statement of witness would not normally be entitled to present that witness at the hearing

13.7 The advantage of such statements is that they reduce very substantially the time needed for the hearing and they avoid surprise at the hearing and therefore create a much more orderly trial within a period of time much easier to predict. The asking of unnecessary questions by the parties' representatives is very considerably reduced

13.8 It has been suggested by some that the use of such statements would violate the requirement in the Constitution of the CR that evidence should be given orally. This is unconvincing. The witness orally states in court that the statement is true. Until that time its contents are not evidence. The principle of an oral trial would therefore appear to be fully preserved

14. Freezing Orders 

14.1 The Code of Civil Procedure should be amended to treat this remedy as a procedural device distinct from ordinary interim injunctions under Article 74. The Code should state the circumstances which would justify the granting of such orders, for example that there is on the face of it a valid claim, that the defendant has assets (to be identified as precisely as possible) within the jurisdiction of the courts of the CR and that there is shown to be a real risk that he may dispose of these assets before judgment in order to avoid execution of any such judgment

14.2 The Code should provide that the court should be able to freeze such part of the defendant's assets as are sufficient to cover the claim and for a limited period of time

14.3 The Code should provide that, at the end of the period of the freezing order or earlier if necessary, the defendant would be entitled to a hearing for the purpose of persuading the court to discharge the order. The present requirement that a defendant can get the order discharged only by appealing it to a court of appellate jurisdiction should be abolished

14.4 In view of the potentially serious impact of such orders on the business of a defendant, the Code should specifically provide that applications to discharge such orders must if possible be given priority over other court business

14.5 Such orders would be similar to English freezing injunctions and the German Arrest

14.6 In order to enhance the effect of such freezing orders the Code should provide that upon the order first being made, the judge should have the power to make an order requiring the defendant to disclose in a written statement to be filed in court and sent to the claimant within a very short time to be specified the nature and whereabouts of all his assets within the jurisdiction of the CR. This is essential for the effective working of the freezing order in a case where the claimant knows of the existence of insufficient assets to cover the value of the claim. Such a statement enables the claimant to give notice of the court's order to additional banks and other third parties who may be holding the defendant's additional assets and to discover whether the defendant subsequently disobeys the court's order by disposing of them.

15. Power to punish Breach of Injunctions

15.1 Unavailability of sanctions for breach of injunctions or the failure of judges to exercise such powers as they have is an extremely serious defect in the present justice system. If litigants are not made to respect the court's orders they will be all too ready to ignore them. Those interviewed generally believed that in the event of a breach of an injunction the judges would simply react by suggesting that a claim for damages could be made against the party in breach. Since, in many cases, the whole purpose of an injunction is to provide a remedy where damages would not be an adequate remedy, the reaction of the courts to breach of an injunction is unsatisfactory

15.2 It is fundamental to the rule of law that the orders of the court must be completely obeyed. If breaches of such orders are known to attract no punishment but merely to attract additional liability in damages, those subject to injunctions will be bound to ignore them, particularly in cases where damages cannot be an adequate remedy. The obvious example is a freezing order. Once the defendant has removed his assets, no amount of damages can be an adequate remedy for there would be nothing against which to enforce any judgment

15.3 In order to make it clear that the courts will not tolerate such disobedience, the Code of Civil Procedure should be amended to provide for an express punishment procedure. In England the court which has made the order that has been breached has the power to investigate the conduct of the party in breach in order to ascertain whether the breach has been wilful, negligent or innocent and to hear evidence from that party or its representatives. Depending on the gravity of the breach the court, notwithstanding it is a civil court, has power to sentence an individual to a term of imprisonment or to fine him. If the party is a corporation, its assets can be sequestrated. There may be cases where it is possible for the party in breach of the injunction to cure his breach by taking certain steps to comply with the injunction. In such cases, the court may decide not to exercise its discretion to impose punishment unless it appears that the party in breach, when given a last chance to comply, has failed to do so

15.4 Because such a punishment jurisdiction is closely related to criminal procedures, the precise procedural machinery available for this purpose will need to be more fully discussed in the light of the Constitution of the CR. A procedure different from that in use in England may be more appropriate for the Czech Civil Law environment. Thus, the German procedure operates in the following manner. As regards freezing orders, their effect is to create a charge on moveables known as Pfandrecht. If the party subject to the order acts in breach of the charge by disposing of assets, he commits a criminal offence known as Pfandkehr under the German Criminal Code. For that breach he can be punished in the Criminal courts by a fine or imprisonment. Where a charge on assets is not involved, the injunction may include a penal provision to the effect that each breach of the injunction will be punishable by a fine of a specified maximum sum (Zwangsgeld). The court has a discretion to impose a fine of a reduced amount depending on the gravity of the breach

16. Summary Judgment Procedure

16.1 As already indicated, the amendments now made to the Code of Civil Procedure provide a power in certain circumstances to give judgment against a defendant who fails to comply with the court's order to provide evidence within the time specified (Article 118c).

16.2 It is, however, highly desirable that the court should have power to evaluate the defendant's written defence in order to see whether it is merely a smokescreen having no substance in fact or law. Such a procedure would fit in very effectively with the proposed case management procedure (see para 13 above).

16.3 The Code of Civil Procedure should be amended to include a facility for the claimant to give notice a minimum time before the first hearing that he intends to submit at the first hearing that the defendant has no substantial defence to the whole or part of the claim and that at that first hearing judgment should be given for the claimant for the whole or part of the amount claimed or as to the liability of the defendant, leaving the amount of damages to be assessed. The Code should be further amended to confer on the judge a power to give judgment immediately and without a main evidence hearing if he considers, on the written material then before him, that the defendant will have no realistic prospect of raising a good defence at the main hearing.

16.4 A similar provision for obtaining a judgment without oral evidence has long existed in English civil procedure. In the German courts the judge, having read the statements of claim and of defence can, if he takes the view that there is no substance in the defence, inform the parties that the matter can come on for a hearing before him without witnesses when he may decide that the claim can succeed. There is further an extremely valuable facility in German procedure known as the Urkunden und Wechselprozess. This enables a claimant who sues for a debt on a cheque or other security or a sale of goods document, where there is a strong case, to obtain an order for payment of the amount claimed subject to the defendant being entitled to defend by calling evidence at a full trial

16.5 The Code of Civil Procedure should further be amended to provide a facility for the defendant to give notice a minimum time before the first hearing that he intends to submit that on the material contained in the claimant's statement of case and documents, the claim is bound to fail and ought to be dismissed without a main evidence hearing. This is really the obverse of the procedure recommended in paragraph 16.3 above. English procedure contains such a facility. In the German courts the procedure is similar to that described in para 16.4

17. The Commercial Registry

17.1 Steps should be taken as a matter of great urgency to improve the time within which the Registry sends out confirmation of initial registration of corporations and of subsequent changes in, for example, capital or directors. The target should be 21 days

17.2 For this objective the quality of the administrative staff and of the judges will have to be improved and their numbers increased. A study should be commissioned to ascertain how far, if at all, it is desirable to employ computerised information for the purpose of entries on the register. When this has been completed a decision should be taken as to the maximum time which practicably ought to be allowed for Register entries and damages and that maximum ought to be specified as such in the Code of Civil Procedure

18. Orders for Enforcement of Foreign Judgments and Foreign Arbitration Awards

18.1 The solution to the delay problem lies primarily in the better education of judges who are dealing with these applications. If they were adequately aware of the relevant principles they would be less inclined to prevaricate and to find excuses for not making a final decision

18.2 It is recommended that this procedure should be entrusted to a small number of selected judges who have been specially trained in this field and are familiar with, for example, the Brussels and Lugano Conventions. The Institute for Further Training of Judges should provide intensive and detailed courses in this field which would be based on practical exercises involving the problems likely to be encountered in the field by a judge in the face of such applications. This work should be allocated exclusively to judges who have received training from the Institute

18.3 The Code of Civil Procedure should be amended to provide for a maximum period of time between the making of the application for enforcement and the making of the court's order. A target period should be 28 days

19. Inconsistency of Decisions

19.1 Nobody expects the wholesale importation into the CR of the Anglo- American doctrine of binding precedent. However, in order to encourage consistency of decision, it is important that previous decisions, at least of the Supreme Court, should be published, reported and indexed according to subject-matter. It is understood that a number of private enterprises are considering publishing reported decisions of the Supreme Court and providing a subject-matter index. It is desirable that these reports should be widely available to judges and to the legal profession. The Ministry of Justice should take all necessary steps to fund the provision to all members of the judiciary of copies of the Supreme Court decisions and of any subject- matter index. If, as at present, this information is available only on the Internet, the judges should all be put on the Internet

19.2 The Supreme Court should give guidance to the judges of the lower courts, particularly the Regional courts to the effect that it will normally expect that, if there is a previous decision of the Supreme Court which is indistinguishable from the facts of the case before the court, the judge of the lower court will follow the Supreme Court decision

19.3 In order further to encourage consistency of decisions judgments of the Regional courts in commercial cases should be publicly reported. The ideal solution would be to put this in the hands of a private publishing house which would sell hard copy reports and CD Roms to the legal profession. Subject-matter indexing would obviously be essential. The judges would have to be provided with hard copies or CD Roms

19.4 In view of the widespread and strong complaints of lack of consistency and unpredictability of decisions in commercial matters, this matter should be given urgent attention. The Ministry of Justice should set up a committee, including representatives from commercial law specialist judges in the Supreme Court and the Regional Courts, the Czech Bar Association, the Institute for Further Training of Judges and the teachers of Commercial Law at Karlova and Brno Universities. The function of the committee would be to advise the Ministry on how the need for published law reports could most effectively be met with regard to the needs of the judges and the educational bodies

20. Judicial knowledge of the Needs of the Commercial World

20.1 In order to remedy the lack of confidence of those who use the courts in the judges and their understanding of how the commercial world works, steps should urgently be taken both at the judicial training level and at the court organisation level.

20.2 At the judicial training level, the Institute should examine their courses in commercial law to see whether they emphasise the practical application of the Commercial Code to real-life commercial factual situations, as distinct from the mere theoretical principles set out in the Commercial Code. The course should include talks by practising commercial lawyers, including in- house legal advisers to commercial organisations, so that the judicial trainees and qualified judges are brought into contact with the needs of commerce and industry. Judges who do not fully appreciate that in modern commercial life cash-flow is crucial will never have the respect of the commercial community

20.3 At the court organisation level it is important that commercial judges should become aware of the views of those who rely on the service provided by the courts. It is recommended that, in order to keep the commercial judges in touch with the courts' users, there should be set up by the senior commercial judge in each Regional court a users' liaison committee consisting of representatives of local trade and industry, representatives of the local advocates who mainly represent commercial clients and representatives of the specialist commercial judges. Each committee would meet in the courts, perhaps 2 or 3 times a year and at each meeting the users would be encouraged to raise questions about the court service, such as delays, procedural problems or administrative details, while the senior judge would formally report to the meeting on the work of the commercial judges, such as the number of trials conducted, the average time taken to obtain a date for a hearing, case management problems, etc. The overall purpose should be to develop a good working relationship and mutual understanding between the judges, the advocates and the clients

21. Administrative Duties of the Judges

21.1Judges are highly trained lawyers. They spend five years at the University and two years as judicial trainees. They are relatively highly renumerated by comparison with others in the public service. Their time is therefore costly to the state and therefore ought to be used as efficiently as possible. The demand for specialised commercial judges is likely to increase with the expansion of commerce. In the Regional courts in particular the amount of commercial litigation is likely to expand

21.2 In order therefore to maximise the availability of the judges for judging, it is necessary to reduce the immense demands currently made on them for the performance of administrative duties. One such duty has a serious impact on the efficiency of the conduct of the trial. That is the requirement that they should, in the course of the hearing, prepare a summary of the oral evidence given by each witness. This exercise seriously delays the hearing. Such summaries become part of the court's record, but do not appear to have any substantial function which could not be satisfied by other means. The obvious alternative method is to record all the oral evidence on a tape recorder. If either party or the judge needed to refer to the exact words spoken by the witness the tape could be transcribed. If the parties requested a transcript they would pay for it. Quite clearly transcripts would only be needed if there were an appeal against the judge's findings of fact in his judgment. Only a maximum of thirty per cent of all first instance decisions go on appeal. It is not known what proportion raise issues as to findings of fact

21.3 It is accepted that, if the judges ceased to be responsible for making a summary of the evidence and tape recordings were substituted, the courts would have to be provided with tape recorders, which would have to be operated, and the tapes would then have to be stored and catalogued and, if a transcript were required, retrieved and transcribed. However, the capital cost of the recorders would be far less over the life of a machine than the cost of the judge's time saved through not having to make summaries. It is estimated that the saving of court time during the hearing of evidence would be at least 25 per cent if summaries were abolished. The switching on and off of the recorder could be done by the judge and the storage and retrieval of tapes by court staff at secretarial level

21.4  As regards the administrative duties of the judges generally outside the court, these are estimated to occupy at least fifty per cent of the judge's working time. This raises the question whether judges are being required to carry out functions that could be perfectly well carried out by lower-paid and less qualified staff. For example, it is extremely surprising and indeed unsatisfactory that a judge should have to involve himself in the availability of a witness by discussing matters directly with the witness. Direct contact between a judge and a potential witness in the absence of the parties' representatives is wrong in principle, as well as time-consuming. If the parties were made responsible for deploying their own witnesses at their own expense, much judicial time and public money would be saved

 21.5 It is therefore recommended that the Ministry of Justice should make plans to equip all Regional courts with tape recorders and tape storage and cataloguing facilities and should introduce amendments to the Code of Procedure to abolish the requirement that the judge should make a summary of the oral evidence

21.6 It is further recommended that the Ministry of Justice should set up a working party to investigate by what means and to what extent the judges could be relieved of their present administrative duties by lower-paid secretarial staff

22. Educating the Judges in Case Management

22.1 Experience suggests that, in the field of case management, amendments to procedural rules which provide judges with completely new and unfamiliar management machinery, are unlikely to prove effective unless there is a complete change in the judges' thinking. Judges who are trained to be reactive do not readily become pro-active. They need to be trained to adopt a more robust and inventive manner of dealing with obstructive advocates, irrelevant evidence and matters likely to cause delay

22.2 In view of the nature of the procedure presently in place in CR, none of the present judges will have had direct experience of the operation of a case management regime. In order that at least some judges could gain direct experience of such a regime so that they could be used as the core teachers in a judicial training scheme organised by the Institute for Further Training of Judges it is recommended that a small group of English-speaking judges from the Regional and District courts should be sent to London to observe case management in practice in the Commercial Court and other courts, with the opportunity of discussing the cases which they watch with the English judges. By this means the CR judges would assimilate case management technique sufficiently to be able to pass it on to other judges in the course of a planned seminar programme at the Institute

23. Implementation of the Recommendations in this Report

23.1 It has been further agreed that I should return to Prague on about 26th November 2000 for the purpose of reviewing this Report with the Minister of Justice and of discussing the implementation of the recommendations. For this purpose it has further been agreed to set up a small departmental working group, including the Deputy Minister of Justice, JUDr Josef Baxa. The group should include at least one member with experience as a specialist commercial judge

23.2  The work of the group would be directed to composing a memorandum to the Minister of Justice as to implementation of the recommendations put forward in this Report. This work should be completed before the end of the year

It would be a distinct advantage in relation to the work of the working group if arrangements could be made for Dr Baxa to pay a short visit to London immediately before the working group begins work in order for him to witness case management in operation in the Commercial Court in London

The Hon Mr Justice Colman - 6th November 2000, Great Britan