28 March 2009

Legal System in Ukraine

I am often asked by business visitors if I can recommend a 'good' law firm that they can use in Ukraine. The BBCU has many law firms who are reliable and I have no problem in making introductions.

There is an interesting article this week in the Kyiv Post written by a young lawyer - Warwick McDonald from Salans law firm. "Establishing confidence in Judiciary will be a key barometer".

The BBCU is involved in a project with the EU-Ukraine Business Council - 'The Rule of Law in Ukraine". If the project moves forward, and I am sure it will, it will require a tremendous amount of work in helping Ukraine to improve how judges are trained, selected and monitored etc.

The former Lord Mayor of London, Sir Gavin Arthur gave an excellent speech back in February at the British-Ukraine Law Society meeting about how the lack of 'the rule of law' is holding back investment into Ukraine. See: http://bula.org.uk/20090205.htm

The EU is funding a project to also help increase the legal system in Ukraine. The project has a budget of Euro 6m. See: http://www.jp.coe.int/CEAD/JP/Default.asp?TransID=146

However, most expats here use a popular phrase to answer just about every problem. "This is Ukraine". Lets be honest, we all know its going to be a huge mountain to climb when it comes to tackling the problem of corruption in the legal system in Ukraine. Judges are poorly paid and 'financial incentives' are still very much a part of life in this part of the former soviet union. Moreover, judges are still used to the system of poltical interference in cases (Is there any other way they may think?).

If western politicians/lawyers/investors are expecting the system in Ukraine to change quickly, they are wrong. (I wish I could say otherwise). I think the system will only change when work begins at university level and later the training of lawyers and judges. Judges in Ukraine are NOT like judges in the EU or indeed the UK. Many of the judges here are not even trained as lawyers. Some of them are former policemen or civil servants.

If western investors are waiting for the legal system in Ukraine to change, they will be waiting a long time. It therefore follows that those investors who are prepared to 'take the chance', will probably succeed and learn how the system works in Ukraine.

On the positive side, things are changing because most of the leading western law firms have established an office in Kyiv. For investors, the process of due dilligence in Ukraine can take a long time and be frustrating. But there are no 100% guarantees.

This is Ukraine.

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