Tea and Sympathy

Yesterday afternoon I attended a tea time meting with Poland’s minister of justice Jarosław Gowin at the British embassy organised in conjunction with British Polish Chamber of Commerce (of which I am secretary). Intended as a follow on from the meeting with the World Bank in April (recorded here in The Bank Job ) the theme of the meeting was the ministry of justice’s efforts to cut bureaucracy and make life easier for business.

Robin Barnett, Her Majesty’s Ambassador, set the scene and commented that the UK had much expertise in this area to share. As an admirer of the reforming zeal of Margaret Thatcher, the minister acknowledged that there is much to be done to ease the bureaucratic burdens on business and his ministry is brimming with ideas. There is a need to reduce the number of regulated professions – Poland currently has well over 300 compared with the EU average of 150 and it is hoped to introduce a draft law to the Sejm next year. Generally, the ministry is looking at a systemic solution and hopes to be able to adopt the new UK approach to regulation of “one in, one out” by the end of the current parliamentary term. There are at present some sixty penal regulations potentially affecting business which are not contained in the penal code. It is hoped to get rid of many of them to encourage more risk taking in business, to remove provisions which duplicate those in the penal code and to define offences more precisely with clear penalties: fines or imprisonment. There will be a new pro-business programme “Justice for growth” launched later in the year.

Of course, it is not sufficient that the de-regulation approach be the work of a single ministry although the minster said that this, the third attempt at major de-regulation is a battle than can be won. There is parliamentary pressure to overcome and the closer the ministry comes to success the more work the minster said he felt needed to be done. Not the least of the problems is the prevalence of red tape in daily life in Poland and so all ministries need to play a part. Welcoming the ambassador’s offer of British expertise, the minister said he wanted to start a grass roots movement in Polish society to fight bureaucracy. Business associations must be part of this process and the minister said he would welcome criticism if it was felt the ministry was not doing enough quickly enough.

Turning to the World Bank’s ease of doing business ranking, and the particular indices that the World Bank measures, it is clear that the ministry took the criticism very seriously and is working hard to try to improve the position. On establishing a company work is continuing to allow much more to be done electronically; reforms have been made to improve the speed of registration of title to real estate which is now down to two weeks in Warsaw; a working party has been established to look at improvements to the insolvency regime, especially to improve the position of non-secured creditors and the possibilities for recovery procedures akin to the US chapter11 procedure; the commercial code will be reviewed to consider how to protect minority shareholders; and, when it comes to enforcing contracts, the ministry sees a mixed picture but some reforms have started including the appointment of more bailiffs (although it took five years to appoint the first 10) and more judges in Warsaw.

One very welcome change relates to court time-tabling. The ministry is working on a plan to introduce the practice of courts setting down consecutive days to hear an individual case to avoid the interminable delays caused by the current habit of hearing a case one day at a time with each day being separated by many months with the result that when witnesses (or judges) are ill, hearing dates are postponed and cases last years instead of months.  The ministry is trying to overcome the low culture of case management in Polish courts. New IT is being introduced, and the ministry is trying to overcome judicial resistance to such ideas as merging smaller courts, removing some administrative tasks from judges as well as simplifying the complicated court procedure. With per capita spending on the system the second highest in the EU and with the second highest number of judges but the longest average length of proceedings there is clearly much room for improvement.

It is refreshing to meet a government minister who is so open to discussing the issues that concern business and, more importantly, who both welcomes criticism and is actively working to make improvements. Perhaps it is because, in his own words, as a non-lawyer, he tackles legal problems not with a scalpel like his predecessors but with a pneumatic drill. Whatever the reason, by being open to business the minister is ensuring Poland will be open for business.

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