Major overhaul of the Cypriot legal system

There are a number of monumental (as far as the Cypriot legal system is concerned) changes afoot in relation to the modus operandi of the courts in Cyprus, with most of them coming into effect in the coming year. These sorely needed changes, some of which are remedies for longstanding ills, are meant to usher the Cypriot legal system into a new age of speedy, effective justice and ultimately enhance Cyprus’ reputation as a regional business centre. 

Below I will provide a brief overview of three major changes, which in my opinion are the ones that will have a profoundly positive effect on litigants, lawyers and the country’s economy.   

Re-introduction of English as a litigation language

Last month the Cypriot House of Representatives amended the constitution to allow for English to be used as a legal language in the Cypriot Courts. This is actually quite a development. English was used in the Cypriot Courts, due to Cyprus’ colonial heritage, up to the late 80s. Then, based on some misplaced sense of nationalism we ushered it out. Some thirty years later the House of Representatives has, to my mind, seen sense, and has brought back English as a language to litigate in. The benefit of litigating in one of the “world” languages in a common law jurisdiction is plainly evident. It makes Cyprus much more “litigation friendly” for both foreign parties and foreign lawyers.

The newly formed Commercial Court

The re-introduction of English is only part of the plan. The second part of the plan is the formation of a dedicated Commercial Court and a dedicated Admiralty (Maritime) Court. Previously there was no Commercial Court and admiralty actions were dealt with by Supreme Court judges sitting alone. This of course ate in to the time of the Supreme Court and elongated appeal times in both the Criminal and Civil divisions. It was a situation that was in dire need of remedial action.

The newly formed Commercial Court will be a court of first instance and will:

a) hear cases of the highest scale (€2.000.000 and above), which is the highest Court scale in the Cypriot Court system. In short it will try the most important civil cases.

b) hear “Commercial disputes”, which are deemed to be disputes in relation to:
(i) a business document or contract,
(ii) purchase, sale, import and export of goods,
(iii) transport of goods by land, sea and air,
(iv) natural resources,
(v) insurance and reinsurance,
(vi) financial markets, stocks, shares and other financial instruments and investment instruments,
(vii) contracts of service, excluding contracts for the provision of medical services and any contract in which service is rendered through an employment contract,
(viii) automotive production,
(ix) contracts of agency,
(x) Competition law,
(xi) entities regulated by the Republic of Cyprus,
(xii) intellectual property and patents,
(xiii) arbitration.

c) be staffed by the most senior District Court Judges, namely Presidents of the District Courts. Presidents usually have about 20 or so years of experience since it takes about that long to get promoted to the level of President (which is the level before becoming a Supreme Court Judge),

d) try cases in English if a party to an action requests it. This means that the pleadings, testimony and judgment will be in English,

e) allow the parties in an action now before the District Courts to apply to have their case heard by the Commercial Court if the value of the claim is €2.000.000 and above,

f) shorten trial times drastically. Some early statistical speculations suggest that the Commercial Court will have the ability to issue judgments within a year to a year and a half.

New Civil procedure rules

Third on this list is the adoption of a totally new set of civil procedure rules which will come into force on the 1.9.2023. When Cyprus achieved independence in 1960 the newly formed Republic of Cyprus adopted the English civil procedure rules as they had been formulated in the White Book of 1958. Almost 70 years later this antiquated set of rules had remained largely unchanged. They were a cumbersome product of a bygone age with serious deficiencies, primarily because they were drafted at a time when technology was absent from the courts and then subsequently, they were not amended to cater to resolving disputes in the modern age.

About four years ago the Republic of Cyprus set about the task of essentially rewriting the civil procedure rules. Lord Dyson, Cypriot judges and advocates, academics and other experts all contributed to the endeavor through their involvement in the relevant committees and the cumulative result of their efforts is a new set of civil procedure rules which will drastically reduce trial times once they come into force.

The new rules are heavily modelled on the English civil procedure rules and in fact share the same pillar, the so called “overriding objective”. In short, the overriding objective, means that the purpose of the rules and what the Court seeks to achieve in applying them is the fair resolution of a dispute in a timely and cost-efficient manner.

Factors such as ensuring that the parties are on an equal footing, saving costs, trying a case with regard to the value of the claim, the seriousness of the case, the complexity of the issues to be decided and the financial ability of the parties are all factors the Court must now take into account when applying the “overriding objective” to the new rules.

Furthermore, a number of pre-trial protocols will be put in place, whereby a prospective claimant, before lodging an action for a debt will be required to demand payment in writing and at the same time furnish the prospective defendant with proof in relation to the debt itself.    

The new rules are also much more detailed. As far as rulemaking in concerned, more detail translates to fewer disputes over how the rules should be applied. This in turn creates a streamlined process, with less interim applications and therefore a case is helped along to trial much faster.  Finally, there is a sense of reserved optimism about these “modifications” in the circles of the legal practitioners on the island but I am confident that once this changes take effect the domestic legal landscape will change for the better.