The World Bank’s Doing Business division, just published a fascinating report on the ease (or difficulty) of enforcing contracts around the world.
As a result of the global financial crisis, it really comes as no surprise that business are more concerned than ever about recovering losses fast.
Contract Enforcement Actions Up Sharply
In the past two years, more disputes involving property, supply contracts and banking transactions ended up in courts all over the world, increasing caseloads and backlogs.
I see it in the courts here I Miami. It seems every time I check-in for motion calendar, the dockets keep getting longer and longer. Sure enough, most of the cases on the dockets are contract enforcement actions.
The rest of the world is also feeling the pressure. In China, the number of contracts dispute rose by 8.6%. Denmark and Ireland also saw significant increase in the amount of contract enforcement actions. Not to be outdone, the number of contract disputes in Serbia and Belgrade grew by 22% and 40%, respectively.
Despite the seemingly endless amount of contract enforcement actions clogging the dockets of world courts, many countries have risen to the challenge by instituting efficient court reforms designed to move cases along faster.
Court Systems Becoming Faster, Cheaper, Less Cumbersome
Hong Kong, for example, increased procedural efficiency at its main trial court by imposing limits on certain appeals, limiting the time for witness examination and extending discovery procedures. Dubai has responded to burdens on its legal system by creating specialized courts. This has resulted in the resolution of 58% more contract enforcement actions in 2009 than in the previous year.
In fact, thirteen economies made it faster, cheaper or less cumbersome to enforce a contract through the courts in 2009/2010. That’s great news in today’s global business environment where business need to recover their losses as quickly as possible.
Here’s the ranking of the Easiest and Most Difficult Countries to enforce contracts:
Where is Enforcing Contracts Easiest—and Most Difficult?
Easiest |
Rank |
Most Difficult |
Rank |
Luxembourg |
1 |
Central African Rep. |
174 |
Hong Kong |
2 |
Honduras |
175 |
Iceland |
3 |
Syrian Arab Rep. |
176 |
Norway |
4 |
Benin |
177 |
Korea, Rep. |
5 |
Suriname |
178 |
Germany |
6 |
Bangladesh |
179 |
France |
7 |
Sao Tome & Principe |
180 |
United States |
8 |
Angola |
181 |
Austria |
9 |
India |
182 |
New Zealand |
10 |
Timor-Leste |
183 |
(Source: Doing Business database)
Interesting, the U.S. ranks No. 8.—what do you think?
-Santiago