Around the world, governments have been implementing various financial rescue packages to protect small businesses from the disruptive impact of the COVID-19 pandemic. However, in solving one set of problems, these unprecedented measures pose an entirely new set of risks and challenges – of a legal nature.
This is a global issue, Courts around the world are facing unprecedented strain from potential COVID-related disputes across the entire spectrum of economic activity, as businesses and individuals find themselves unable to meet their contractual obligations. The inevitable spike in claims coupled with the fact that courts are already operating below capacity due to social distancing measures means a bottleneck that the already lengthy and costly processes of litigation and arbitration can only exacerbate.
These global paradigm shifts matter for the Middle East, where even before the pandemic, governments were going to great lengths to diversify their hydrocarbon-reliant economies. The Kingdom of Bahrain is a case in point. Over the past three years we've undertaken a major and comprehensive programme of reforms. Particular attention has been given to our commercial judicial system, with a focus on streamlining processes and enhancing transparency through digitalisation, and generally creating an improved and more efficient experience for corporate and commercial litigants as well as encouraging alternative means of dispute resolution.
During this period, Courts had two option, either shutting down or continuing to operate below capacity, while Courts in Bahrain chose to thrive and not just survive.
Over the last three years Bahrain's commercial judicial system has undergone significant reform that includes speeding up court procedures, digitising services while maintaining court transparency. Some of these reforms have been expedited as a response to COVID-19, but on the whole, a number of these were already underway as the online services initiated in 2015 to manage and file execution orders in relation to execution courts and gradually to obtain updates on court hearing and issuing verdicts.
Now, you may be able to finalize the litigation process without appearing before court by filing the case, obtaining your verdict and appeal up to the stage of cassation court.
The court system has been completely digitised. Claims can now be filed online, payments received electronically and all parties can view cases virtually and at the same time. This allows evidence and other key information to be shared more quickly. This has significantly reduced the time to resolve commercial disputes and has also increased the efficiency to resolving corporate insolvency. Those measures have reduced the physical court visits to 90% of the needed urgent matters.
Increasingly, legal commentators are turning their attention to the cheaper and more efficient mediation as an attractive alternative during these unprecedented times. According to leading Ireland-based financial and corporate law firm Dillon Eustace, mediation, while not a panacea, “has the potential to unlock and resolve even the most intractable disputes in a highly efficient and often mutually satisfactory manner”. Moreover, as it bypasses the winner/loser outcomes delivered by litigation and arbitration, “business relationships may be preserved and even enhanced.”
Perhaps a key reform of Bahrain’s legal reforms is the new mediation law, introduced in October 2019 which allows for mediation as an alternative means of dispute resolution. Mediation is often a more cost-effective and less antagonistic means of resolving commercial disputes. In unprecedented times like COVID-19, companies are understandably seeking to protect their bottom line and few laws around the world have been written with the possible impact of a global pandemic in mind, leaving scope for lack of clarity and a need to be able to resolve disputes in a cost-effective and amicable manner wherever possible.
Bahrain Courts took a brave action in mid of the pandemic by assigning arbitrators and mediators which was done smoothly during this period to ensure that the Judicial System will run smoothly while maintaining efficiency during this period.
Another major reform that was made earlier is the Private Notary service which initiated in 2018 when assigning Private Notaries took place to expedite the process of notarising while maintaining efficiency and delegating more authorisations to Private Notaries gradually, and while in 2019, Private Notaries started relying entirely in the process of registering the notarised transactions online, the process of notarisation for prisoners was taking a step ahead by electronic signature and live video interaction between the Public Notary and the prisoners to ensure a fast process accompanied with safety procedures and efficiency.
Since then, the number of Private Notaries has been increasing even during the pandemic to ensure continuous sustainability and efficiency.
A promising feature that is taking over is Electronic Signatures that has been implemented in more documents and transactions gradually and will have more impact in the few coming months.
Moreover, the introduction of a small claims court in March this year with simplified fast track electronic procedures and short case management schedules (limited to 10-30 days). Similarly, since March 2020, limits on adjournments for commercial cases have been introduced with extraordinary circumstances now required to justify adjournments of commercial cases formalising existing practice across the nation’s commercial court system. Another reform that was implemented earlier is limiting the hearing adjournment period to 20 days which limited and expedited the trial period.
To enhance transparency, court performance indicators are published on a regular basis, and the outcomes of all commercial cases are published on the Supreme Judicial Council (SJC) online portal. From our reading of the latest official statistics from the SJC already, we’re seeing results. 56 per cent of commercial cases are now resolved in less than three months. The courts saw a year on year decrease of 56 per cent in the backlog of cases between January 2019 and January 2020.
The Ministry of Justice and the Supreme Judicial Council continued providing regular training sessions online to lawyers, legal advisers, notaries and other legal sectors throughout this period to update and ensure the level and quality of services provided.
Social Media played a great role during this period and was fully utilized by the MoJ and the SJC to keep us updated with the new changes and online services provided. The MoJ and the SJC took a further step by using their social media accounts to update the public via publishing infographic pictures and tutorial videos of the new legal services and ways of exploiting those services.
As a Lawyer and a Private Notary, we continued to work during those unprecedented times via video conferences and other electronic means. We are providing notary services for those requesting faster service and flexibility in timing and mobility. And yet, we continue to receive and deliver online training sessions in the legal field. We would not be able to work at the same pace without the rapid changes to online services provided by the MoJ that we are grateful for.
This kind of efficiency now matters more than ever. Moreover, it is testament to what a region of agile, late adopters can achieve above and beyond larger, more established economies. Few laws around the world have been written with the possible impact of a global pandemic in mind. However, countries like ours, shaped by decades of economic diversification, have been able to legislate and regulate more agilely, flexibly and rapidly than most, leapfrogging the cumbersome legacy processes of more established economies. Many of Bahrain’s reforms were already underway, but a number have been expedited by the pandemic. In this way the pandemic has served as a catalyst for positive change and highlighted the need for responsiveness and adaptability in times of crisis. Yet, many more changes and developments are coming in the foreseen future.