Exercising financial independence – Analysis of Court Arrears

The 2014 Judicial Functional Review identified that courts are generating massive and growing arrears. The main reason for accumulating arrears is poor planning in the budget preparation process and the legislative reform process. Arrears are increasingly impacting service delivery by courts, including by causing delays in hearings. The number of lawyers and expert witnesses refuse to work unless they are paid in advance causing delays and adjournments in the scheduling of hearings. Arrears also generate a significant amount of work, as court presidents and financial departments operate in a continuous crisis management mode, including the management of litigation against service providers.

The MDTF JSS team prepared draft Analysis of Arrears in Courts in Serbia on a sample of five courts: Higher Court in Belgrade, Higher Court in Valjevo, Basic Court in Smederevo, Basic Court in Prokuplje and Basic Court in Novi Sad. The Analysis represents an effort to analyze the level and structure of arrears accumulated by Serbian courts and assess the reasons underlying their excessive generation in past several years. On one hand it is motivated by the growing issue of overdue payments across the system which are reflecting adversely on the financial health of the courts through the enforced collection of liabilities initiated by the debtors. One the other, the arrears possess strong potential to hurt court performance in multiple ways.

Draft Analysis, including main findings and recommendations was discussed with the HJC Financial Sector. Results of the discussion are incorporated in the final report that is available here.