Greece’s judicial system efficiency is among the lowest in the EU, negatively impacting its economic performance. The crisis period led to a massive increase in demand for judiciary services due to significant business and personal insolvencies, limited alternative dispute resolutions, and relatively low court fees. However, the supply of judiciary services did not match the demand due to inadequate deployment of human and financial resources and a low level of digitalization.
Key drivers of judicial efficiency include:
- Demand-side factors: The crisis period saw a surge in litigation, driven by business and personal insolvencies. Low court fees and legal aid, which is at courts' discretion, further contributed to higher litigation rates. Alternative dispute resolutions only recently became an important factor.
- Supply-side factors: Since the crisis, the supply of judiciary services has been on a downward trend. Inadequate deployment of human and financial resources, coupled with a low level of digitalization, have led to low court resolution rates.
The inefficiency of the judicial system significantly impacts debt enforcement and insolvency proceedings. Lengthy court proceedings and rigidities in the Code of Civil Procedure hinder creditors from obtaining court orders, while also delaying insolvency proceedings. This, in turn, affects economic performance by discouraging investment and productivity.
International evidence suggests that judicial reforms can have positive impacts on investment and productivity. Portugal and Slovakia, which implemented judicial reforms, experienced declines in disposition times and increases in clearance rates, leading to growth in investment and productivity.
Policy simulations for Greece indicate potential gains from judicial reforms in terms of investment and productivity. To enhance judicial efficiency, Greece could consider:
- Establishing commercial courts to allow judges to specialize in commercial matters on a permanent basis.
- Improving judicial statistics to support effective management of the court system.
- Revising and simplifying the Code of Civil Procedure to improve procedural efficiency.
- Further developing, regulating, and supervising insolvency professionals to strengthen institutional capacity.
Addressing the efficiency challenges requires bold and swift policy actions to create conditions for higher growth and greater economic resilience in the future.
