1 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO MID-TERM EVALUATION FINAL REPORT SEPTEMBER 2011 This publication was produced for review by the United States Agency for International Development. It was prepared by Democracy International, Inc. KOSOVO This publication was produced for review by the United States Agency for International Development by Democracy International, Inc., through Task Order No. AID-167-TO-11-00004 under the Analytical Services III Indefinite Quantity Contract (USAID Contract No. AID-OAA-I-10-00004). Prepared by: Keith Henderson, J.D., LL.M. Jon Leeth Contractor: Democracy International, Inc. 4802 Montgomery Lane Bethesda, MD 20814 Tel: 301-961-1660 www.democracyinternational.com SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO MID-TERM EVALUATION FINAL REPORT SEPTEMBER 2011 DISCLAIMER The authors' views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government ii SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION iii TABLE OF CONTENTS ACRONYMS .................................................................................................................... V EXECUTIVE SUMMARY .............................................................................................. 1 1. BACKGROUND ......................................................................................................... 11 1.1 CONTEXTUAL OVERVIEW OF THE SEAD PROGRAM .................................. 11 1.2 KEY GOALS, OBJECTIVES, AND COMPONENTS OF SEAD ......................... 12 2.PROGRAM COMPONENTS ..................................................................................... 13 2.1. ENFORCEMENT/BRI COMPONENT ........................................................ 13 2.2 ARBITRATION, MEDIATION AND CONTRACT LAW/LLM COMPONENTS .... 18 2.3 OUTREACH AND MEDIA COMPONENT ...................................................... 19 3. KEY FINDINGS AND CONCLUSIONS ................................................................. 21 3.1 ENFORCEMENT FINDINGS ....................................................................... 21 3.2 ARBITRATION AND MEDIATION FINDINGS .............................................. 25 3.4 CONTRACT LAW/LLM DEGREE FINDINGS ................................................ 26 3.5 KEY FINDINGS.......................................................................................... 27 4. RECOMMENDATIONS ............................................................................................ 29 4.1 ENFORCEMENT RECOMMENDATIONS ...................................................... 29 4.2 ARBITRATION, MEDIATION AND CONTRACTS/LL.M. RECOMMENDATIONS……………………………………………………30 4.3 KEY RECOMMENDATIONS ........................................................................ 30 APPENDIX 1: KEY GLOBAL AND REGIONAL ENFORCEMENT ISSUES ...... 32 APPENDIX 2: LIST OF SEAD OUTPUTS ................................................................. 35 APPENDIX 3: EVALUATION QUESTIONNAIRE................................................... 37 APPENDIX 4: PERSONS INTERVIEWED ................................................................ 39 APPENDIX 5: DOCUMENTS REVIEWED ............................................................... 42 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION v ACRONYMS ADR: Alternative Dispute Resolution BERP: Balkans Enforcement Reform Project BRI: the Backlog Reduction Initiative CEPEJ: European Commission for the Efficiency of Justice COE: Council of Europe EU: European Union EROL: Effective Rule of Law Program GoK: Government of Kosovo JSP: Judicial Support Program KCC: Kosovo Chamber of Commerce KEK: Kosovo Energy Corporation KJC: Kosovo Judicial Council MOU: Memorandum of Understanding NCSC: National Center for State Courts PTK: Post and Telecom of Kosovo SEAD: Systems for Enforcing Agreements and Decisions SEU: Special Enforcement Units SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 1 EXECUTIVE SUMMARY EVALUATION OF PROGRAM GOALS, OBJECTIVES AND ACTIVITIES The main objective of this mid-term evaluation, as stated in Section III of the Statement of work, is ―to provide USAID/Kosovo with an objective, external assessment of the effectiveness and strengths and weaknesses of the SEAD program. This includes a review of the current and planned activities of USAID’s Systems for Enforcing Agreements and Decisions (SEAD) program that is being implemented by Checchi and Company Consulting in order to determine what impact the program has had to date and to offer USAID suggestions on how the program may benefit from possible adjustments. SEAD’s overarching objective is to improve the rule of law foundational structures that provide a basis for increased foreign and domestic investment and those that generally lead to an improved business￾friendly environment. SEAD’s three (3) core programming components are: (i) to provide support for institutions that use and enforce contracts with the goal of promoting a culture of contracts in Kosovo (the contracts component) and support systematic reform; (ii) to improve processes to enforce court judgments and reduce the backlog of unenforced judgments, including case management, legal, regulatory and policy reforms (the Backlog Reduction Initiative (BRI) or the enforcement component); and (iii) to provide support to institutions capable of resolving contract disputes through alternative dispute resolution mechanisms (the ADR component), including through the establishment of Arbitration Centers and Court-Referred Mediation Centers. The evaluation team (the team) assessed all major components of the SEAD program, including looking at the impact, relevance, efficiency, and sustainability of the program activities. At USAID’s suggestion, the team placed primary focus on issues and activities related to the enforcement component of the SEAD program. PROGRAM CONTEXT From a historical and developmental perspective, it might be said that Kosovo’s judiciary is now in a real state of transition distinct from the political and institutional turmoil of the last two years. Over the years USAID and multiple donors have promoted a myriad of activities to modernize and strengthen the independence of the judiciary. The SEAD program is now geared towards promoting both judicial independence and judicial accountability, in that it is primarily focused on the efficient, fair and effective enforcement of court judgments. This would seem to be a natural follow-on activity to previous reform programs. In the last two to three years Kosovo’s parliament passed important and fundamental court reform legislation. At the same time, judges have finally received raises and undergone an unprecedented reappointment vetting process that has resulted in many new faces on the judicial bench. There is also a new and engaged Judicial Council and a functioning, well-run institute to train both judges and court personnel. All of these institutional, structural and legal reforms present both implementation challenges and new opportunities to promote justice in Kosovo. EVALUATION METHODOLOGY The methodology for this mid-term evaluation included: (i) independent research/ and anonymous interviews; (ii) a full review of documents provided by USAID; (iii) key stakeholder semi-structured interviews; (iv) structured anonymous stakeholder surveys; and (v) informal open-ended group discussions with key stakeholders in four regional pilot courts in Pristina, Gjakova, Gjilan and Lipjan. With the goal of measuring performance, the team aimed to gauge impact through the prism of five interrelated evaluation principles: (i) results-based performance; (ii) reform relevance; (iii) program efficiency; (iv) program sustainability/demand driven and (v) consensus/country stakeholder buy-in. 2 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION KEY FINDINGS The SEAD program has fully achieved or exceeded its targeted outputs in two out of four core project components (technically the program has three main components but it was generally described to the Evaluation Team by both SEAD and USAID as having four main focal points, including public education and outreach). The first was support for local institutions to improve the means and mechanisms for the enforcement of obligations and contracts. The second was to develop and implement an appropriate and effective alternative dispute resolution system (ADR). As will be discussed below, it is too early to evaluate the impact of SEAD’s public education, outreach and media relations component, or what we are calling the fourth focal point, as it was not formally scheduled to begin until after the Evaluators’ field visit and the submission of this report. Nevertheless, SEAD’s outreach and media efforts related to its on￾going work on a number of specific reform-oriented activities, such as workshops and conferences, have been significant as described in more detail later in this report. And finally, with respect to the other component, support to local institutions to improve the means and mechanisms for the enforcement of judgments, SEAD has achieved some but not all of its targeted outputs. These four components will all be discussed in more detail below. Through the first component, the contracts component, it has successfully supported the analysis and drafting of significant amendments to Kosovo’s core law on contracts and obligations, through a well￾executed consensus-building process. If this law passes this fall, as expected, it will bring Kosovo’s contract laws and procedures into harmony with streamlined regional and international best practices and the European Union (EU) Acquis, which should promote economic growth over the long-term. Through the second component, developing and promoting ADR, SEAD has successfully supported the legal and institutional development of two ADR mechanisms, one through the American Chamber of Commerce, one through the Kosovo Chamber of Commerce (KCC), one through the Mediation Commission, and one pilot program in Gjilan and Peja. New secondary laws, regulations and policies have been developed and scores of lawyers, judges and court personnel have been trained. Kosovo now has a private sector oriented arbitration tribunal and two pilot mediation centers that will also accept court referrals. Stakeholders also have how-to guidebooks, fee schedules and oversight mechanisms that were developed in a timely, efficient, home-grown user-friendly way. These are important alternative dispute resolution developments, and if utilized in practice by businesses, should collectively help set the foundational stage and legal climate for increased use of and respect for contracts. From everything the Evaluators heard, SEAD’s successful efforts to help establish a new Masters in Contract Law at the University of Pristina School of Law Work also has the potential to make a substantial contribution towards this project goal. Success on SEAD’s Enforcement of Judgments component is more mixed, although everyone we interviewed believes the full results on this component can only be achieved over the long term. This component has two main focal points or elements, the Backlog Reduction Initiative and institutional and legal reform. The first element, which SEAD calls the Backlog Reduction Initiative (BRI), is focused on developing systems, mechanisms and processes to reduce the backlog of outstanding court judgments related to the non-payment of utility bills by individuals and businesses. This group of judgments, which have been accumulating since the year 2000, accounts for more than half of the total number of unenforced court judgments. The team concluded that the BRI, as conceived and as being implemented in practice by SEAD, as well as by both the courts and the program’s two utility company partners, Post and Telecom of Kosovo (PTK) and Kosovo Energy Corporation (KEK), has several serious monitoring and reporting problems that need attention. The Evaluators also believe the second element of this component, which is focused on legal, regulatory, policy and institutional reforms, particularly the legislative reform designed to create a private bailiff service, which would require a number of other legal and regulatory reforms over a number of years, has sustainability issues that need to be addressed. These two sets of issues are discussed in more detail below. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 3 As for the public education, outreach and media component, it is premature to attempt to measure progress for purposes of this evaluation because SEAD told us in several meetings that the main elements of SEAD’s work plan related to this activity were not planned until October 2011 (after the Evaluator’s field trip). That said, the Team fully acknowledges that a healthy mix of media and stakeholder oriented education activities related to specific SEAD events have been undertaken throughout the life of the program. However, SEAD noted during the very first meeting that the formal public outreach and media program and strategy was only finalized during our visit. The Team also acknowledges that the media and stakeholder activities already undertaken have helped set the stage for SEAD’s soon-to-be-launched formal media campaign. They may have also helped promote a number of proposed legal reforms, new regulations and the MOU’s, but the quarterly reports do not have enough evidence to fully substantiate that claim. Hopefully, the new formal media campaign will serve to promote further consensus and the actual implementation of many of the activities and reforms outlined in SEAD’s work plan, but the Team has no way to judge that element of SEAD’s future efforts in that area at the time of this evaluation, especially since we were not given a copy of SEAD’s last and final Workplan. With respect to the BRI, the main problems appear to be four-fold: (i) the lack of good faith efforts on the part of SEAD’s partners, PTK and KEK, to implement the partnership agreement with SEAD and the Kosovo Judicial Council (KJC) -- particularly with respect to the dismissal of as many small, very old or uncollectable judgments as possible; (ii) the KJC’s, the Supreme Court’s and the Municipal Court’s failure to be proactive and use its court management legal powers to reduce the backlog by purging uncollectable judgments -- including those that the utilities have told the courts they can dismiss; (iii) SEAD’s failure to systematically monitor and report on PTK’s and KEK’s compliance with their partnership agreement and its lack of follow-up with the KJC, the Supreme Court and the pilot Municipal Courts and (iv) SEAD’s use of a reporting indicator that does not measure impact and does not comply with USAID’s Performance Management Plan. Even though the MOU states that there must be three attempts to collect or execute before a case can be dismissed, the Team was told by KEK that they were ready to dismiss a number of older, uncollectable cases against individuals without going through the MOU process. While some may disagree on the impact of dismissing old, small or uncollectable judgments, few we interviewed disputed the fact that dismissing a large number of older uncollectable cases would help reduce the backlog. They believed this would no doubt positively impact the court’s overall ability to enforce priority cases and collectable judgments. Although SEAD is to be commended for securing an additional manpower commitment from the KJC to work on the enforcement of court judgments, and public/private partnership agreement, the Memorandum of Understanding (MOU) between the KJC, the PTK and KEK, it does not appear to the Evaluators that without on-going SEAD follow-up and close oversight, including systematic monitoring and reporting to USAID, that the agreements and commitments in the MOU are going to be implemented as planned or in practice. In the Evaluation Team’s view, this is not just a manpower, capacity or resource issue, although those issues loom large. Another and perhaps larger problem relates to the unwillingness of any of the PTK and KEK to follow-through on their respective commitments, and the courts’ enforcement practices, policies and lack of initiative and action. Indeed, from everything we heard and saw, PTK, KEK, the courts and SEAD do not appear to be seriously focused on actually reducing the backlog in a timely or efficient manner. The Evaluators are of the opinion that as long as SEAD’s main focus is just on the courts’ performance in attempting field executions, as opposed to the courts’ performance in obtaining tangible monetary enforcements that eventually reduce the backlog and promote trust in the courts, it is difficult for the Evaluators to see significant sustainable progress or impact on this program element. The Evaluators also believe that as long as the PTK and KEK are unwilling to proactively dismiss uncollectable cases, as well as those it has deemed not to be worth the cost of trying to collect, including judgments over 5 years old and those for relatively small amounts of money, that their good faith intention to help reduce the court 4 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION backlog is in serious doubt. The Evaluators would note that it appears as the SEAD program was beginning to have some success with KEK judgments, at least with regard to the amount of money being collected during the last quarter. Though it was difficult for the Evaluators to obtain exact amounts that had been collected, or to match the amount collected the age of the judgments, KEK provided us documentation that evidenced over 500,000 Euros had been collected in about 100 cases over the last few months. KEK noted they were quite happy with this result and that they were ready to provide the courts more assistance if asked. We did not receive this kind of information or a suggestion of more support from PTK, but we believe it would be worth approaching both to see what more is possible. KEK new policy and focus on larger, more recent judgments against businesses and not individuals appears to be one of the main reasons why it and the SEAD program are now having some success. The Evaluators were only able to see some recent progress being made on the BRI initiative during our visit. While the BRI had been underway for eight (8) months, SEAD’s reporting and our interviews confirmed that a relatively small number of judgments had actually been enforced as opposed to executed (attempts to enforce). While it appears the SEAD BRI component may be able to make more progress on enforcing judgments during the next quarter and year 3 of the work plan, particularly with enhanced assistance and cooperation from PTK and KEK, at the time of this evaluation we cannot say that SEAD has met its enforcement target of 5,000 during year two (2). Indeed, based on the limited amount of information we were given by SEAD, as well as that provided in its quarterly reports, it appears SEAD has actually only enforced a few hundred judgments, although we were informed after our August visit that data through September 30 showed that over 2800 judgments had been enforced. While the Evaluators have not had the opportunity to fully analyze the most recent data, the best data and information we have is that the 2800 number also includes “other kinds of civil judgments‖ (as noted by USAID). In any case, as noted earlier, the Evaluators were frustrated during the entire trip because we received conflicting data in various forms from various stakeholders, including SEAD. Thus, it is almost impossible for us to confirm any firm number or to analyze the exact nature of the reported judgments. What we do know is that the 2800 number does not match any of the numbers given us by KEK and PTK and we can not find that number in any of the quarterly reports or documents we have been given or been able to access on our own. Our best guess is that that number includes cases that have also been executed (attempted enforcement) as opposed to enforced. In any case, even if the number is 2800 or so the Team is unable to conclude that that number has had impact or met SEAD’s target reporting goals. Moreover, the Evaluators continue to believe that enhanced monitoring and reporting of the MOU will help ensure that at least some of SEAD’s work plan activities and objectives are achieved in this and other areas outlined in the work plan and MOU. At the same time, the Evaluators are also of the opinion that until the courts have the capacity and the willingness to assume more responsibility for enforcing judgments on behalf of PTK and KEK, in lieu of other judgments it has always deemed to be of higher priority, that court enforcement policy, practice and mindset is unlikely to change very much. The courts’ and the enforcement agents made it very clear that enforcing judgments against KEK and PTK has never been and still does not appear to be an enforcement priority. The Evaluators would note that USAID actually asked the National Center for State Courts (NCSC) in 1996 to work with the municipal courts on reducing the enforcement backlog, but that effort, which mainly involved PTK, was largely unsuccessful. In that multi-year project NCSC was also tasked with working on court-annexed mediation, but had little success on that front either. NCSC noted then that before further work was done on mediation that the KJC should develop a strategic analysis and long￾term plan (see Evaluation of the Justice Reform Activity, p.35, July 19, 2006). SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 5 From the Evaluators’ perspective, reporting on enforcement action rather than executions is far more than just an administrative or housekeeping detail. Indeed, actually developing and implementing a plan to actually reduce the backlog through real action would give the whole project and the courts more credibility, particularly to PTK, KEK and the business community. Perhaps more systematic monitoring and reporting and information sharing meetings among all concerned would help remedy this implementation problem. At a minimum it might reveal whether there is genuine interest in making the partnership work and in reducing the backlog as much and as quickly as possible. The fourth problem referenced concerns the indicators that SEAD wants to use for purposes of reporting to USAID on BRI progress and success. After many discussions with SEAD and USAID, the Evaluators believe that SEAD either came to the conclusion over time that reporting on the number of judgments actually enforced, dismissed or collected was not the best measure of progress, or that it misinterpreted the reporting requirements in the PMP from the beginning (although 2.2.2. defines enforcement -- not execution – as ―the point when a final decision is actually executed (money paid, property seized, etc.). SEAD takes the position that the indicator agreed upon was one that tracked and reported on the number of times a court ATTEMPTS to enforce or EXECUTE on a PTK or KEK judgment. However, the Evaluators cannot find any evidence that USAID intended to use an execution indicator versus an enforcement indicator (as defined in the PMP itself). Indeed, a review of the terms of the MOU and SEAD’s Draft Program Proposal of September 29, 2010, clearly reveals an agreement and work plan that contemplates enforcement action. The Draft Proposal lists 5 key elements of the BRI. The fifth is: ―Encourage dismissals or suspensions (p.4).‖ It also clearly contemplates a categorization process that leads to, among other things, the enforcement of ―collectable‖ cases and ―dismissals (p.6).‖ The Evaluators must therefore conclude that SEAD has and is using an improper reporting indicator. (It should also be noted that the data needed to regularly report on ―enforcement‖ and ―execution‖ is readily available from both PTK and KEK) and the number of cases actually dismissed from the backlog by the courts should be available from the courts and/or the KJC when dismissals actually occur.) Although the Evaluators believe that attempts to enforce a judgment may well be a sub-indicator worth adding to the PMP, it is clear from a thorough review of all of the documents and from virtually all of the interviews, that measuring the impact of the BRI was originally contemplated and can be best done by measuring the degree to which systems and mechanisms have been institutionalized that will actually reduce the backlog by significant amounts over a reasonable length of time Measuring the number of times a court clerk or enforcement agent attempts to interact with a debtor is but the first step in actually developing a sustainable backlog reduction system that is realistically measureable and has impact over time. This important reporting issue was brought to both SEAD’s and USAID’s attention at least twice during the Evaluator’s field trip, In short, merely reporting and focusing on the number of executions does not appear to be the best way or the agreed upon manner in which to achieve, one of the main goals of the enforcement component – to develop systems to reduce the backlog and to make the enforcement process more efficient, although we would defer to USAID’s final judgment on that question, since it knows Kosovo better than the Evaluators, USAID may also decide to amend the reporting requirements to only require reports on executions and not enforcements. However, USAID has not taken such action to-date. The Evaluators would also like to point out, for future programming design purposes, that however we calculate the numbers, it appears that the current backlog will not be significantly reduced, even after several years, because of insufficient capacity, the influx of new judgments entering the system every year and because of the inefficient manner in which the MOU with the utility companies is being implemented and monitored by key stakeholders. These problems are also compounded by the fact that the capacity of the newly expanded BRI team (including 30 new KJC funded enforcement agents) is still not sufficient to significantly reduce the backlogged numbers over time, although SEAD should be given due credit for having obtained even this 6 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION commitment. It is at least a start and it represents at least an effort by the KJC to address a serious problem. However, it is clear that there is more the KJC and the court presidents could do much more on their own to reduce the backlog without a huge amount of additional resources. In addition, the 30 additional enforcement agents the KJC has brought on board could also be much more effective and efficient if they were given the tools and assistance promised in the MOU, including prioritized collectable judgments. The Evaluators have no doubt that the BRI has clear potential to have impact, but that it needs more strategic direction and oversight in order to make it work in practice. In the final analysis, the Evaluators believe that the courts need to demonstrate to the public and the business community that it is serious about reducing the backlog as quickly as possible and, at the same time, that it is an independent institution committed to and capable of enforcing contracts and protecting the legal rights of everyone. One of the ways it could do this would be for the courts to at least have a plan to dismiss uncollectable cases from its docket, starting with those that PTK and KEK have given it either express or implicit permission to do. The court’s seeming unwillingness to dismiss judgments that the debtors have told them they do not intend to try and collect calls into question their interest in getting its own house in order and in presenting themselves in the best possible light. In any event, the Evaluators believe the whole process will be more efficient and that it will have more impact once it is clear what judgments are collectable, which should be summarily dismissed which should receive priority action and what court policy is with regard to dismissing uncollectable cases. Another sign that the stakeholders are serious about real action would be for the KJC and SEAD to develop a clear strategy that outlines, step-by-step or year-by-year, how the backlog numbers will actually be significantly reduced over time both during and after the SEAD program ends. To our knowledge, no such clear operational strategy exists. It is worth noting that everyone we interviewed believes the courts in Kosovo can only become a strong independent institution over time due to many factors, including their limited court resources, the number of new judges, the lack of enforcement judges and the court’s low reputation. These real-world facts make success on the enforcement front in Kosovo all the more difficult. In sum, after many probing interviews and a close review of all available documents, as well as consideration of the action actually taken or not taken by PTK, KEK and the courts, the Evaluators can only conclude that broad consensus, clear stakeholder buy-in and demonstrated political will and judicial support for a number of the BRI activities is lacking or that more incentives need to be built into the process in order to make everyone more accountable. We also conclude that more careful planning, strategic development and coordination are needed by the KJC and SEAD in order for the BRI to have measureable impact in either the short or long-term. Systematic monitoring and reporting that closely tracks both the USAID indicators and the commitments in the MOU would greatly help get this component in order. The second important element of the enforcement component relates to SEAD’s focus on at least three important legal reforms that directly relate to or would fundamentally alter the enforcement process for court judgments in Kosovo. These reforms are: (i) legal, regulatory and policy reforms related to the garnishment of employee’s wages to pay a court judgment; (ii) legal, regulatory and policy reforms related to the attachment of personal or business bank accounts to pay court judgments; and (iii) a new law that would privatize the judicial enforcement process and give a newly created private bailiff service the task of enforcing court judgments. While the legal reforms and SEAD activities related to the garnishment of wages and the attachment of bank accounts was not specifically foreseen in the contract or work plan, SEAD has successfully supported legal reforms for the Central Bank, including the development of a Registry of Account Holders. This registry or database, once implemented, will help facilitate payment of court judgments against well-identified bank accounts. Similarly, SEAD was also successful in helping broker an agreement between the KJC and the Tax Administration that is designed to share employer information SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 7 with the courts for purposes of facilitating wage garnishment. Experience from other countries tell us that both of these reforms, once fully implemented should serve to make the enforcement process more effective and efficient, including reducing the time it takes to enforce court judgments. However, it is also clear from the experience of other countries that these reforms will need strong and on-going support long after the SEAD program is over. SEAD’s initial efforts in these two important areas are an important step in the right direction. Finally, with regard to the new draft law geared towards privatizing the enforcement system, the team came to the conclusion that political and business community support and buy-in for such a fundamental reform is weak or mixed at best, although the draft law itself contains a number of reforms that would make the enforcement process more efficient if implemented properly. Unfortunately the Evaluators did not have sufficient time to discuss or fully analyze the very lengthy, complex draft laws being debated (we were given two very lengthy versions toward the end of our trip), although this was not in our mandate anyway. Thus, it is difficult to comment too much on the substance of the drafts except in general terms. However, it is clear from all of the documents reviewed that SEAD was quite successful in promoting a new draft law that included many useful reforms that would make the enforcement process more efficient. It was also successful in promoting reform of the bailiff system, which as we understand it, would turn the current public bailiff service into a private one. This would mean several things, including the creation of a whole new profession (private bailiffs), garnering business, judicial and public trust and creating new well-funded and well-monitored oversight mechanisms needed to make it work properly and ethically. While the Evaluators do not know enough about Kosovo to make any kind of judgment as to whether a public, private or mixed enforcement system would work best in Kosovo, it would note that moving to a private system is more risky, complex and costly than moving to a mixed system. It also may not result in more competition within the enforcement sphere, as some might hope, if demand or trust is low, which would mean creditors would have no enforcement options. Since our field visit SEAD has provided additional information that tells us the draft law includes reforms that geared towards streamlining procedures, limiting the opportunity for debtors to object to enforcement actions and empowering judges to dismiss unenforceable cases. All of these are reforms being undertaken in many countries in Europe and around the world. However, the Evaluators still do not have the information necessary to be able to analyze how many steps, how much time or how much it would cost to enforce a court judgment under the draft law, which does not break-out this information in comprehensible format for a layperson (or for that matter the Evaluation Team). To our knowledge this kind of analysis does not yet exist, although it would seem to be important information for all stakeholders to consider. There also does not appear to be a big picture strategy or work plan, including some kind of notional budget, as to how much time and money it will take to create the new private bailiff enforcement system under the draft law. Further, it does not appear to the Evaluators that a consensus on how to make a privatized bailiff system actually work in practice, particularly with regard to utility judgments or smaller sized judgments, has either not been fully considered or at a minimum it has not finally jelled. All of that said, the Evaluators would note that many European countries are in the process of reforming their enforcement systems and that different models have emerged in different countries. Many of these countries have found these reforms to be very complex and difficult to implement in practice. Some have opted for mixed systems (public and private bailiffs) and others for pure public or private bailiff systems. As noted by the Council of Europe (COE), one model does not fit all within European context. Indeed, the COE emphasizes that each country should create a system that meets its needs and fits its culture but with an eye towards European harmonization. We would also note that while virtually everyone we interviewed believed the current enforcement system was broken, most we interviewed did not have an opinion as to whether the current system was 8 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION worth reforming, whether an entirely new system should be created or whether a mixed system made more sense within current Kosovo context. Some of the municipal court judges we interviewed said they believed that Kosovars had a historical disposition to rely more on the government officials to protect and enforce their rights and that they were skeptical that a private institution could gain the trust of the average citizen. Other judges we interviewed endorsed the privatization idea in theory but then noted that they did not know how the idea would play-out in practice or what their oversight role would be – if any. Other stakeholders we interviewed said they thought a pure private enforcement system could possibly work, but many were skeptical as to whether there was sufficient demand or trust in a private-sector oriented enforcement model to work in Kosovo. Unfortunately we did not have the opportunity to interview the President of the Supreme Court or the Minister of Justice so we do not know their full opinion or whether they have any concrete plans on how to address these important questions and implementation issues. In any case, there are clearly additional important unresolved inextricably linked issues, such as those related to information privacy, financial and employer information sharing and corruption and oversight (whether within either a public, mixed or private enforcement process) that are still on the table for further stakeholder and public discussion. The experience from other countries in the regional and globally tells us that fundamental reforms to the enforcement systems in many countries needs to be undertaken but that has proven to be a complicated, long-term, resource driven process that requires considerable support from all key stakeholders, including the public and the business community. Having a long-term work plan in place that promotes synergistic complementary reforms and the confidence of the public and business community, as well as a budget and a strategy are all very important to success. Finally, it is also worth noting that at the time of our field trip there was still no consensus as to whether the Ministry of Justice or the courts, or both, should have monitoring and oversight powers over any newly created private bailiff service. This is another very important issue that needs to be fully discussed and resolved within Kosovo context before moving any enforcement reform package moves forward. KEY RECOMMENDATIONS ADR/Contracts Components. The team recommends that activities related to Contracts, mediation and arbitration be kept to a bare-minimum in year three. The main SEAD outputs and successes have already been achieved in these areas. It will now be important to place more emphasis on testing the will of the relevant institutions to promote demand and to sustain these programs on their own. It will also be important to invest any remaining resources in targeted elements of these programs or on activities related to the implementation of the BRI or to resolving important issues related to the draft law on enforcement. Enforcement/BRI Component. The team recommends that USAID review the BRI strategy and the MOU and the way in which it is being implemented and monitored by key stakeholders. Prioritizing and actually enforcing judgments that may be the most collectable or dismissed, regardless of age or size, should be the focus during year three of SEAD’s work plan. Consideration should be given to renegotiation of the MOU to fully explore and to make it clear that uncollectable judgments should be dismissed or closed by both the utility companies and the courts (through clear, fully explained court guidance/policy/action). This action would help demonstrate the good faith efforts of both the utility companies (PTK and KEK) and the courts to reduce the enforcement backlog. In addition, USAID should request more utility company support for the enforcement process (KEK told us they are more than ready to step-up to the plate and do more). While the Evaluators did not have the mandate or time to explore this issue in detail, KEK said they would be very receptive to discussing the provision of more assistance in a number of areas, including: (i) more transportation assistance; (ii) more regular and timely SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 9 assistance with regard to execution team planning and field visits; (iii) more comprehensive data bases so that neither SEAD nor the courts would have to internally record executions or enforcement or duplicate enforcement information KEK already has, including batching judgments against the same debtor; (iv) more and (v) more guidance to the courts and enforcement agents with regard to which cases should receive highest priority and which should be dismissed or deemed to be uncollectable, The Evaluators believe it would be worth exploring these and other issues with both KEK and PTK. Strategic BRI Focus. The team recommends that consideration should also be given to focusing future BRI activities on enforcing prioritized potentially collectable judgments and not on attempts to execute any kind of judgment, and on the dismissal of judgments that are unlikely to be collectable. SEAD’s biggest success to-date seems to relate to the enforcement of KEK’s judgments, as this appears to be where the biggest pay-off and enhanced cooperation is most likely. Another focus should be on support for the development and institutionalization of a sound, long-term backlog reduction strategy and work plan, including a systematic monitoring and reporting process to ensure that the MOU and policy is implemented in practice. Any enhanced BRI initiative should be consistent with KEK’s new policy, which is to only enforce judgments against businesses that are over 1,000E and then only those that were filed from 2005 through 2009. PTK’s current internal policies are inconsistent with the intent of the MOU and make its implementation too costly, too complex and too time consuming to be worth further USAID investment without changes. If PTK adopts an enforcement policy and a practice consistent with the intent of the MOU and one that will actually help the courts and SEAD with the BRI initiative a partnership with it would then also make sense. Draft Law on Streamlining Enforcement Procedures and Privatization of the Enforcement Process. The team recommends that more discussion occur with all key stakeholders in order to ensure there is broad consensus on what public and/or private enforcement reforms are most likely to succeed within Kosovo context. At present, none of those interviewed seemed to fully grasp the pros and cons of the myriad reforms required under different models being implemented throughout the region, including their costs, challenges, complexities, complementarity and risks. Other legal reforms that SEAD has successfully helped launch, such as those related to streamlining enforcement procedures, wage garnishment and inter-agency/court information sharing are all positive developments that have the potential to make the enforcement process more efficient and reduce the enforcement backlog over time. The long-term challenge is to provide support to develop long-term strategies and work plans to implement these important reforms. The short-term challenge would appear to be to provide a clear side-by-side analysis of the current and proposed enforcement process so that all stakeholders can see how the proposed and new reforms are going to benefit them, from a time, cost, effectiveness and sustainability perspective. This kind of analysis might replicate or be complementary to the process and information in the annual Doing Business report by the World Bank, which many people and businesses look to for purposes of determining the effectiveness, efficiency and predictability of the legal enforcement and regulatory systems. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 11 1. BACKGROUND 1.1 CONTEXTUAL OVERVIEW OF THE SEAD PROGRAM The team was asked to evaluate a rule of law program in one of the newest democracies in the world, Kosovo, which is also one of the poorest countries in Europe. Many democratic institutions in Kosovo are still in a nascent, fragile state and capacity and resources to implement programs is limited. The legal system, including the judiciary, is one of the weakest institutions in Kosovo. Many perceive it to be among the most corrupt or least trusted. However, with recent passage of enabling and reorganizational legislation, and after weathering an unprecedented vetting and purging process, the institution of the judiciary is finally moving from a tumultuous to a transitional state, although global experience tells us that the implementation of the myriad reforms underway will take many years. For the first time in over a decade Kosovo will have most of the essential legal infrastructure and institutions in place needed to promote and sustain a wide range of democratic, economic and political reforms. To strengthen the rule of law, Kosovo has introduced a new Judicial Council and a Judicial Institute. There also appear to be new and emerging opportunities to promote an independent, effective and efficient judiciary capable of resolving and enforcing disputes and protecting human rights, as well as a more efficient judicial enforcement system. However, the institutional reality today and the likely reality tomorrow is that the judiciary remains under-resourced and under-staffed and it is still perceived as one of the most corrupt institutions in Kosovo. In addition, most courts still do not have experienced enforcement judges or enforcement clerks. The result is an increasing backlog of cases in both the to-be-decided (approximately 200,000 pending cases) and to-be-enforced (approximately 100,000 civil judgments) categories. The numbers, however, are a topic of debate. When stakeholders were queried about the 100,000 pending to-be- enforced cases, all but SEAD agreed that the 100,000 number should really be reduced to 70,000 to 80,000, since 20,000 to 30,000 judgments of that number related to criminal fines levied by the courts that are now unenforceable because of a two year statute of limitations law (the team was unable to obtain an exact number of criminal fine judgments but it appears to be in the range of 20,000 to 30,000). While the Team acknowledges that technically the law recognizes these judgments as being enforceable, everyone we interviewed, including SEAD, noted that in practice they were not going to be enforced and that they would eventually be dismissed. Another institutional reality with regard to the enforcement of court judgments is taken from SEAD’s own analysis and research, namely that the Judicial Council has chosen to invest minimally in the collections process, including having provided an inadequate number of enforcement agents and judges, often requiring the presidents of various courts to perform those tasks in addition to his or her numerous other responsibilities, providing little training for judges or court staff beyond that supported by donors, and drastically inadequate levels of capital expenditures. However, this is not to discount the Council’s recent budgetary allocation of support to provide the courts with more enforcement personnel and training, which we were told was done at the urging of SEAD staff. This is a step in the right direction that deserves further support and encouragement from the government and the parliament as well as the broader donor community. Indeed, the courts clearly need more resources for a range of important judicial reforms before they can develop their institutional capacity and independence on virtually any front, including enforcement. SEAD also makes the observation that the Government of Kosovo (GoK) seems to treat the fee system within the courts and enforcement system as just another source of revenue, with little concern for how well the system actually works. After many interviews and considerable research into past and present reform programs and issues, including a review of the meager budget for the justice system, the team reluctantly has to concur with SEAD’s overall assessment. It is clear, for whatever reason(s), that the courts are not seizing opportunities 12 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION to reduce the case backlog in a timely manner and that the GoK has yet to make a serious budgetary or strategic commitment to adequately fund reforms or to even provide the basic resources to make the wheels of justice work or run on time. It is also clear that enforcing utility judgments has never been a priority activity for the courts and that these cases still receive little attention, mainly because they are not seen as being as important as other kinds of cases and judgments on the Kosovo docket. It is within this historical, socio-economic and institutional context that we have tried to present our analysis, findings and recommendations. The team would note that our time in country and the time to write this report were necessarily short, given upcoming USAID programming priorities. That said, the team managed to meet with over fifty-five stakeholders, including visits to three of the largest courts in Kosovo where the bulk of backlogged judgments reside and where reform initiatives were underway (Pristina, Gjilan and Gjakove), as well as a smaller court in Lipjan. 1.2 KEY GOALS, OBJECTIVES, AND COMPONENTS OF SEAD A review of the relevant documents provided by USAID and SEAD reveal the stated overarching goal of SEAD is to improve the rule of law foundational structures that provide a basis for increased foreign and domestic investment and those that generally lead to an improved business-friendly environment. SEAD documents specifically state that the program has three somewhat related objectives and components: (i) to provide support for institutions that use and enforce contracts and obligations; (ii) to improve processes to enforce court judgments and reduce the backlog of resolved cases; and (iii) to develop institutions capable of resolving contract disputes through alternative dispute resolution mechanisms, such as arbitration or mediation. SEAD states that activities in these areas will help promote a ―culture of contracts‖ in Kosovo. At the direction of USAID, which is preparing for a program design exercise, and in light of the fact that the team has determined that SEAD has either met or exceeded its main objectives and targets related to two of three program components, namely, the contracts and ADR components, the primary focus of this report will be on the enforcement component, including the Backlog Reduction Initiative (BRI). The team believes this approach is appropriate given that the contracts and ADR components are mainly recently achieved outputs. Moreover, during our de-brief meetings with both SEAD and USAID, there was general agreement on the progress made and future direction of SEAD programming in these areas. The latter section of this report will examine the activities and outputs in these two components in summary form, after a more in-depth discussion of the enforcement component. Indeed, the enforcement component is the most complex and problematic component of SEAD’s program and the one that needs attention. As the Council of Europe notes in various reports on this regional and global topic, the appropriate system for enforcing court judgments, at least within debtor/creditor context, is a complex concept that varies from country-to-country. What kind of system might be most effective, efficient and fair will depend on an analysis of many factors, including a country’s legal history, socio￾economic conditions, the state of the judiciary and law enforcement community and striking the right balance between the competing interest of the creditor and debtor. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 13 2. PROGRAM COMPONENTS 2.1. ENFORCEMENT/BRI COMPONENT A key element of SEAD’s enforcement component relates to reducing the number of utility judgments in backlog. A second relates to the streamlining of enforcement procedures and to promoting legal reforms—including ―privatizing‖ much of the current judicial enforcement process. A more detailed discussion on other elements of the enforcement component, including issues related to the possible privatization of the enforcement process, will follow our discussion of the BRI initiative. SEAD states that during years two and three of its program it is primarily supporting a mid-term strategy, called the Backlog Reduction Initiative (BRI). It notes this huge backlog, which has been accumulating for over 10 years, continues to clog the courts and that the courts’ inattentiveness to this serious problem continues to raise questions related to the courts’ genuine interest to devote some of its limited time and resources necessary to enforcing PTK and KEK judgments. However, SEAD also notes that KJC’s three year commitment to provide the municipal courts 30 additional enforcement agents for three years at demonstrates, at a minimum, that the KJC is more interested in reducing the backlog than ever before. The Evaluators agree with SEAD’s overall analysis on these important court buy-in points. In an effort to reduce the backlog SEAD states that it will also support Special Enforcement Units (SEU)- 30 enforcement clerks employed by the KJC or enforcement-oriented teams, including 30 ―cataloguing‖ interns (for at least six months) in some of the largest courts in Kosovo. It notes these teams and interns will do nothing but focus on reducing the number of backlogged utility cases in Kosovo’s five courts. The Evaluators learned during field visits that the interns did not seem to even be batching cases against the same debtor in any kind of systematic manner, as SEAD had planned, and that there was no follow-on judicial effort to keep the catalogued files up-to-date after the interns had completed their initial work. If SEAD staff batch on their own the Evaluation Team was not told this by either SEAD or the enforcement clerks and judges that we interviewed. SEAD’s efforts are centered on the reduction of about 45,000 of the 65,000 backlogged judgments pending in the courts (45,000 is the total number of PTK and KEK judgments in backlog, otherwise known as authentic document cases. Approximately 20,000 of the 65,000 authentic document or utility judgments relate to other utility companies, such as water and heating. While SEAD refers to 100,000 backlogged judgments in its quarterly reports and its work plan, SEAD acknowledges that the number they are focused on in the BRI is actually only 45,000 (PTK and KEK judgments only). It should be noted that the 100,000 backlogged judgments often mentioned in SEAD materials and by others generally includes about 20,000 to 25,000 criminal fine cases and about 10,000 to 15,000 civil judgment cases of a commercial nature. When these kinds of non-SEAD cases and numbers are subtracted from the total backlog number being used, 100,000, the number of backlogged judgments is about 65,000. And when the 20,000 or so other kinds of utility judgments are subtracted from this number, one is left with a total of about 45,000 PTK and KEK backlogged judgments. In its Year Two Work Plan from October 2010 to September 30, 2011, SEAD targets reducing the enforcement backlog by 5,000 cases. Based on the limited and conflicting amount of information available to the Evaluators, it does not appear from SEAD reporting that it has met that goal, although it is noted that most of the reporting has focused on the number of attempted executions made and not the actual enforcement of judgments. Perhaps when SEAD actually provides USAID with the number of cases enforced rather than just those executed, full or partial compliance with the Work Plan can be determined. (SEAD notes the 2882 number we only learned about long after our field visit also includes “other civil judgments. Thus, even post September 30th the Team still does not think it has an accurate number that can be properly analyzed for impact or compliance reporting purposes). 14 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION The team could not find consistent reliable data from various stakeholders and finally had to conclude that the accessible court data available should not be deemed to be entirely accurate. We also concluded that various stakeholders had different information systems and different information gathering objectives that made any kind of thoughtful analysis or planning very difficult. That being acknowledged, we believe the data and information we are using for purposes of this report to be reliable enough to come to certain findings and recommendations. In any case, whether the 45,000, 65,000 or 100,000 number is used, the team notes that even though it is theoretically possible to enforce as many as 5,000 to 10,000 judgments over the next year, that such a number, even if it is somehow doubled, would still likely leave a significant number of backlogged judgments when this program ends in June 2012. The 5,000 to 10,000 number is based on current reduction rates with 30 recently hired clerks enforcing an average of two (2) judgments per day in Kosovo’s five largest courts (which have the lion’s share of backlogged utility judgments). In Pristina, the average per day in March 2011 was 1.4 per SPU clerk. While the Team can not state for sure that these numbers are entirely accurate, given the poor quality of data available from any source in Kosovo, these numbers appear to be in the ballpark and in any case help illustrate the defects in SEAD’s strategic approach to the BRI. The Team’s assessment of SEAD’s performance is based mainly on impact during the life of the SEAD program and the program’s overall objectives. We merely try to extend the logical and practical conclusions of the BRI strategy to mainly illustrate its inherent weaknesses and its overall inability to have significant short or long-term impact. This reduction rate is based on personal interviews with enforcement clerks who gave the team data and estimates based on their actual enforcement experience. If this calculation is anywhere near approximate, it means that a total of about 60 judgments would be enforced per day in these five courts, about 300 judgments per week, 1200 judgments per month or somewhere between 5,000 to 10,000 judgments maximum per year. Indeed, even if the current BRI is extended by two additional years beyond 2012, it still would probably only reduce the current PTK/KEK backlog of 45,000 by only one-half to two-thirds. While the Evaluators recognize that there are many barriers to overcoming the huge backlog enforcement problem in Kosovo, including the capacity and resources of the court, we are mainly trying to point-out that if USAID’s and the KJC’s long-term goal is to substantially reduce the size of the enforcement backlog that the current strategy and methodology will not likely accomplish this objective. As noted earlier in this report, the Evaluators believe the KJC needs to develop a long-term strategic plan that clearly outlines year-by-year the number of judgments that will be enforced or dismissed so that the backlog is significantly reduced over time. Assuming this enforcement rate holds true and the courts’ capacity to enforce cases remains about the same, simple arithmetic tells us that the backlog in Kosovo’s courts will continue to be a serious problem, given the total number of new enforcement judgments typically filed and enforced each year. The Kosovo Judicial Council’s official case management reports indicate that the courts, on average, add about 15,000 judgments per year to its enforcement files. At the same time, these reports also indicate that the courts are only able to enforce approximately half of them each year (about 7500). They are not usually utility cases that have accumulated over many years. This means that if any of the 7500 cases added in any year do not get concluded in a two year period, they will be added to the backlogged list (and these are all kinds of judgments not just utility judgments). At the same time, about the same number of judgments (somewhere between 5,000 and 10,000) might be enforced each year at the current BRI rate. Thus, it does not appear the SEAD strategy or current level of work will be sufficient to significantly reduce the total number of all backlogged judgments to any significant degree, either by the end of the program or over three years, although it appears it would be theoretically possible to reduce the current backlog of 45,000 cases over a four year period. One unknown factor that could have some impact on these calculations might be the passage of a new law privatizing the enforcement system. However, at SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 15 present, no one knows whether such a law will actually pass and no one knows what provisions it might have related to the filing or disposition of new utility judgments or reducing the current backlog of judgments. In summary, the current SEAD strategy to reduce the number of backlogged utility judgments, even over a three-year period (which would be two years beyond the life of the current SEAD program), does not seem to meet the overall backlog reduction objectives of the program (the current SEAD program funding ends in June 2012). At the current reduction rate, between now and the end of its program in June 2012, it would appear that SEAD may only be able to reduce the current 45,000 backlogged judgments by 5,000 to 10,000 at best. Even if the BRI program or some version of it continues at the current pace for two years beyond the life of the SEAD program, or through 2014, the current backlog would probably only be reduced by 15,000 to 30,000 at best (see the formula for making the current reduction rate in P16-19 above). While the Evaluators acknowledge that the SEAD program was not intended to and cannot itself significantly reduce the enforcement backlog given that it comes to an end in June 2012, we believe that one of the main goals of the overall program -- developing systems, mechanisms and strategies to reduce the court enforcement backlog – has not and is not going to be achieved. As will be further discussed, it is hard to see under SEAD’s methodology or the proposed legislative or institutional reforms, in either theory or practice, how the backlog will be significantly reduced or impacted during the life of the SEAD program or even after the SEAD program ends. In short, there is no action or monitoring plan or strategy in place that would enable any stakeholder to quantify success or failure on an on-going basis. Other issues that appear to need attention relate to the statutory time in which judgments must be filed and enforced under Kosovo law. The first legal or statute of limitation issue relates to the time in which any debt must be collected in Kosovo, including judgments. The other statute of limitations issue relates to the time in which a utility case must be filed with the court after the debt is actually incurred. KEK Internal Enforcement Policy More recently, KEK has established a new internal enforcement policy that effectively dismisses all court judgments filed before 2005 and all past judgments for less than 1,000E’s. It has also decided not to file any future cases for less than 1,000E’s. This new KEK enforcement policy and strategy means many KEK judgments now in backlog have been effectively closed or dismissed and therefore could effectively be dismissed by the courts for practical backlog planning and priority enforcement purposes. KEK told the team that sometime after the 2007 letter to the courts was written that it expanded its internal enforcement policy with regard to all court cases pending before January 1, 2010. We were told this policy was entirely focused on enforcing judgments against businesses only, not individuals, that the judgment had to be more than 1000E and that they were only going to try to enforce judgments filed from the beginning of 2005 to the end of 2009. KEK told us this policy decision was made for several financial, practical and socio-economic reasons, including: (i) the cost of collecting a judgment worth less than E1000 would not be cost-justified; (ii) most judgments against individuals would be too difficult if not impossible to collect because of unknown addresses and a lack of assets to attach; and (iii) most individuals in Kosovo were still living in poverty. PTK Internal Enforcement Policy On the PTK side of the enforcement aisle, similar policies do not appear to be in place. In fact, one might say the PTK policy is quite the opposite. Basically, PTK told us their policy is not to dismiss any case on their own initiative, no matter how old or how small the judgment. Even under the terms of the MOU (attached), PTK said that the burden was on the debtor or the court clerk to make a request to PTK to have a case dismissed for any reason. This even includes judgments for less than 50E, cases where the address of the debtor is unknown or cases where the debtor does not have any assets or is living in poverty. They appeared to say this even includes judgments where a statute of limitations might apply. The team tried to determine the total paper value of current PTK/KEK judgments in backlog against the total paper value of all backlogged judgments in order to assess and compare the costs and benefits of the 16 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION SEAD program against other possible reforms or targeted initiatives (such as an initiative focused on enforcing other kinds of commercial or civil judgments). This kind of analysis seemed all the more important since SEAD acknowledged that it chose to focus on utility judgments because they represented about two-thirds (or about 45,000 judgments) of the total number of all backlogged civil judgments (about 65,000), even though these judgments represented a relatively small percentage of the total paper value of all backlogged judgments. Indeed, the JSP program, as cited by SEAD itself, estimated that the total figure that could theoretically be collected from utility judgments was perhaps as low as 6 to 10 percent of the total amount that could theoretically be collected from all pending civil judgments in Kosovo. However, recently obtained data from KEK shows that at least in one month (March 2011) it was able to collect approximately 25% of the money owed in judgments dated from 2007 to 2010. If this amount is anywhere near representative of what is actually collectable by KEK, then it may mean that some elements of the BRI are worth retaining or focusing on. PTK and KEK told us that the total paper value of their backlogged judgments was 12,000,000E and 50,000,000E, respectively, although it is still not clear to the team exactly what timeframe this covers and whether the KEK figure only includes the kind of cases KEK is pursuing in its new internal enforcement policy. For future programming purposes, it also raises the question as to whether the focus should be more on the KEK judgments, which are directed at judgments over 1,000E involving only commercial enterprises and not individuals. Indeed, KEK told us that they were not attempting to enforce judgments against individuals for several reasons, including: (i) many individuals could no longer be found because of unreliable addresses; (ii) most judgments were too small to make them worth the cost of collection; and (iii) it realized many individuals who owed money (60% of the population) lived in poverty and had no assets. They also said they were no longer filing judgments for less than 1,000E and that they were not trying to enforce judgments at all before 2005. At the team’s request, KEK provided us a breakdown of the judgments it had been able to collect after attempting collection in 138 cases (the 149,744E as reported by SEAD in year one), although SEAD disputes this is an accurate number. While this breakdown cannot be considered representative of all of the judgments in backlog it does help illustrate, at least according to KEK, that when an attempted collection was made, the courts were able to recover either full or partial payment in a signicant number of cases (about 100). The grand total collected, 149,744E, means that about 25E was collected on every 100E owed in about two thirds of the cases where enforcement or collection was attempted. The average amount collected was about 1500E per case (149,000E divided by 100 cases). Of that number the full amount of the judgment was actually recovered in about 20 cases. The breakdown also reveals that in about one third of the cases no money at all was collected. If one were to use that 25% collectable recovery rate as typical for all KEK judgments now in backlog, the total collectable amount would be around 12,000,000E. If one were to assume that no money was likely to be collected in about one third of the cases, then about 30 to 40 judgments could potentially be dismissed or closed for every 100 now in backlog. And if one adds to this number (one third) the judgments where only a nominal amount of money was collected, the number that could be dismissed or closed would be closer to one half of the total number in backlog. In short, KEK believes its new enforcement policy is now more strategic, logical, and pragmatic and politically more attune to Kosovo’s socio-economic and judicial context. They also believe it is more cost-effective and oriented towards developing a rule of law culture within the business community, which it believes has more of an ability to both pay its legal debts and enforce its legal judgments than most individuals in Kosovo. It is also worth noting that virtually everyone acknowledges that many KEK and PTK older judgments are uncollectable for various reasons (such as unknown addresses, dead or newly located debtors, debtor bankruptcy or debtors living in or below the poverty level with no financial resources to pay). Moreover, no stakeholder we interviewed expects many of the judgments to be paid in whole or part. While neither SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 17 KEK nor PTK has had an independent auditor place a real world value on the amount they are likely to collect from all pending judgments for financial reporting purposes, even though SEAD made this recommendation to them over a year ago, a review of the research and experience from other countries related to debtor collection issues indicates that the total amount likely to be collected on debts of this nature and age would be significantly less than the amount owed. Even if one assumes the KEK data is not a representative sample, if regional and global experience is any guidepost, research from other countries reveals that the collectable amount would probably be in the 10% to 30% range (EBRD and World Bank reports). If these estimates are anywhere close to being accurate, this would mean that potentially somewhere between 6,200,000E and 18,6000,000E would actually be collected or collectable. Thus, this amount, and not the 62,000,000E (the total amount of the paper judgments), would be closer to representing the real-world value of PTK’s and KEK’s judgments. This latter figure becomes relevant for USAID and other stakeholders in any kind of cost-benefit analysis. It would also be relevant to the overall public worth of the utilities as they move farther down the path to privatization. SEAD points to the initial ―highly successful results‖ of the BRI in the PMC as justification for expanding and proceeding with the BRI initiative. However, so far most of the reporting appears to be sporadic and of a varying nature, and there is clear confusion in the reporting terminology being used. As will be discussed, some of the reporting appears to be on the number of times the court attempts to collect from the debtor and the total book value of each of those judgments (see SEAD’s April-June 2011 quarterly report). In other cases, SEAD quoted data related to the total number of cases executed and the total dollar amount collected. Indeed, the Team was never given any SEAD data in a comprehensible, consistent side-by-side format. After a thorough review of the objectives and reporting indicators agreed upon and SEAD’s Performance Management Plan, as well as a round of intensive interviews with USAID and SEAD, it is clear that SEAD should be reporting on the number of cases actually ―enforced‖, not the number ―executed‖ or attempted (as it defines that term). Tracking the number actually enforced would track the number of judgments actually being closed or dismissed from the backlog (including the amount collected). Tracking the number executed or attempted, along with the total paper value of the judgment, does not. However, it should be noted that in some reports SEAD reported on the actual amount collected against the number of the court’s collection attempts, but the team could only find one report of this nature. In this one instance, SEAD noted that during year one (spring and summer of 2010) the BRI strategy led to the ―execution‖ (not necessarily closing or dismissal) of 652 judgments and actually collected E149,744 in the Pristina Municipal Court. However, in other quarterly reports SEAD seemed to be reporting on the number of executed cases and the total amount of the paper judgment or Euro value (see QR April-June 2011). As will be discussed, even this level of reporting, which comes closer to the data needed to measure backlog reduction progress and impact (the number of dismissals or closed cases and the amount actually collected), does not allow the team to track the cost or time to reduce the backlog or the number of judgments actually enforced. During our debrief with USAID and in a subsequent meeting with KEK the same day, we learned, for the first time, that KEK does track the amount of money actually collected and not just the total value of the amount of the official judgment on paper. However, like PTK and SEAD, KEK is only reporting on the number of attempts to collect a judgment and not the number of judgments actually enforced (or dismissed and the actual number of judgments where an actual collection occurred). At the same time, SEAD notes that it’s longer-term backlog reduction and case management strategy is both forward-looking and centered around promoting alternative dispute resolution mechanisms, such as arbitration and mediation, as well as key reforms and information systems that enable creditors to more efficiently collect debts through expedited legal procedures, such as bank account seizure and garnishment of wages. 18 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 2.2 ARBITRATION, MEDIATION AND CONTRACT LAW/LLM COMPONENTS In Kosovo the institution of formal arbitration and mediation has long been a goal of multiple donors working in the Judicial Sector. Promoting the use of contract rights and the rule of law has been another closely related goal in various donor programs. Indeed, USAID has programmed in these spheres for many years during both past tumultuous and current transitional times. On the mediation front, this project alone has worked with three Ministers of Justice. While Kosovo has a long tradition of informal mediation to resolve disputes before they rise to the level when formal court proceedings are necessary, there has been no formal arbitration system to resolve disputes and avoid lengthy and expensive court litigation. Although for some years there has been a Mediation Commission working under the aegis of the Ministry of Justice, there has been no court sponsored mediation which would help clear court dockets of cases and have the effect of reducing court delay. Nevertheless, there have been other efforts by NGOs sponsored by donors to train professional mediators for work outside the purview of the courts. The broader goal of the ADR component was to establish formal arbitration and court-referred mediation centers that would give businesses dispute resolution options to the current court system, which is still emerging and remains very weak and backlogged with cases. Fulfillment of this goal would theoretically reduce the number of cases that clog court dockets, allowing the courts to focus on other issues, assuming there is sufficient demand to displace filing cases in favor of using either court-referred mediation, or chamber of commerce led mediation or arbitration centers as an alternative to going to court. Achieving these goals would necessarily require determining the qualifications, training, certification, and other regulations, including ethical codes and fee schedules for arbitration and mediation personnel. The project was also to foresee sustainability issues for the ADR Centers. For judges to refer cases for arbitration (which we were told is legally allowable and sometimes done by some judges) or mediation, they needed to be trained in how best to use these tools to help move their cases off their dockets. Additionally, an arbitration and mediation ―climate‖ was to be developed. To this end, lawyers and others would need to add arbitration clauses to contracts they developed, and a large scale public awareness program would be required to let the citizens know that there were less expensive, quicker ways to resolve their disputes other than taking their adversaries to court. Overall, SEAD appears to have achieved virtually all key outputs in these components, including new outputs added to its work plan and budget. Likewise, it received high marks from virtually all stakeholders for its training programs in all of these areas. Some of the key outputs in these components include the development of notable amendments to the existing law on Contracts and Obligations, that are designed to further harmonize and streamline Kosovo’s laws, as well as the development of new regulations, policies and guidebooks in this area. Other key outputs concern the establishment of and support for new pilot arbitration and mediation centers. Almost everyone interviewed and surveyed believed that there was a growing demand to use more contracts in business transactions and that it was time or possible to promote a wider use and ―culture of contracts‖ within Kosovo socio-economic context, as well as alternative dispute resolution (ADR). Likewise, virtually all interviewed and surveyed believed there was a demand for an advanced legal degree in Contracts, that an LLM degree program was sustainable and that it would help promote a culture of contracts. SEAD was successful in helping the Pristina Law School obtain accreditation for this new course. Since virtually all of these components are pure outputs and because some of the key draft laws have not passed (although virtually everyone believed they would pass this fall), it would be premature for the team to try to measure impact at this time. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 19 2.3 OUTREACH AND MEDIA COMPONENT SEAD was to use an outreach program as a means of understanding policy issues in the Kosovo context and formulating policy proposals for referral to appropriate Kosovo institutions for adoption. For example, in pursuing a ―culture of contracts‖ in Kosovo, SEAD was to use focus groups to enunciate the problems confronting economic and business development because appropriate contracts are not used, but also to promote critical thinking about the value of contracts generally. Media coverage of the issues was desired to buttress calls for change that emanated from the policy discussions. This was true for other components of the project, including the use of arbitration and mediation, the establishment of a Master’s program at the University of Pristine and the Enforcement of Judgments activities. As noted earlier, this Evaluation does not cover an examination of most of the major elements of SEAD’s outreach and media component, given that it was not going to be officially launched until our field visit (the campaign was to begin in October 2011). However, prior to the official campaign, SEAD engaged the media, focus groups, government officials, donors, experts and the public in a number of events that highlighted the enforcement problem in Kosovo and SEAD’s reform efforts. These events are worth noting and are summarized below. In all of SEAD’s program components, there were outreach activities to try to obtain consensus about the problems to be solved, their causes, and solutions. To that end, SEAD worked with five focus groups in years one and two to analyze why formal contracts are not more widely used in Kosovo. Through the Kosovo Chamber of Advocates, SEAD held courses for practicing attorneys in the use and development of contracts, and the need to insert arbitration clauses into contracts, as well as the international standards for enforcement of judgments and Execution procedures. SEAD held a conference on Enforcement of Judgments, at which the U.S. Ambassador, and prominent Kosovo judicial figures gave speeches. This and similar activities received much press coverage and TV spots. There were six television spots, two radio spots, and eight articles in newspapers about this event. When promoting Arbitration, a key SEAD staffer wrote an article published in a major Kosovo newspaper about the need to use formal arbitration. SEAD held a major press conference on BRI that received significant publicity that highlighted the importance of the enforcement problem and the BRI. It was attended by the Deputy Prime Minister, the Minister of Justice, the President of the Supreme Court, the Chairman of the KJC, the Deputy Chief of Mission to the US Embassy, as well as many members of the press. When SEAD signed a Memorandum of Understanding with the Kosovo Chamber of Commerce and the American Chamber of Commerce about establishing an Arbitration Center, there were seven television spots, five newspaper articles and three web sites that mentioned it. When the Masters in Commercial Law program was accredited, there was an article in the newspaper, information posted on the SEAD web site, short spots on TV, and much word of mouth promotion by professors. Although the Mediation Centers were established, the public awareness campaign had not been initiated by the time the evaluation took place, although in an apparent showing of strong support, high ranking government officials attended SEAD supported ribbon-cutting ceremonies. The challenge to building a critical mass of opinion to support substantive changes in laws and procedures is great because in a society like that of Kosovo, teaching and tradition have formed ―popular conflict resolution cultures‖ somewhat different from those espoused by SEAD. 20 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION Only time will tell if these efforts will have ―sold‖ the changes to not only the legal profession, courts and businesspersons, but to the public in general. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 21 3. KEY FINDINGS AND CONCLUSIONS 3.1 ENFORCEMENT FINDINGS As noted earlier and will be discussed further, the strategy to develop systems, mechanisms and policies to significantly reduce the backlog of enforcement cases , assuming it continues on its current course and rate, would seem to have little chance of meeting SEAD’s backlog reduction targets of 5,000 cases by the end of year two (2010-2011 Work Plan), since it has mainly been reporting on the number of attempted executions and not the number of judgments actually enforced (as that term is defined in the PMP). In addition, the policies, systems and mechanisms being put into place by SEAD do not appear to have the potential to significantly reduce the enforcement backlog even for several years after SEAD program ends. It is worth noting that the only clerks focused on the BRI or PTK/KEK judgments, are those recently hired by the KJC for a limited three (3) year timeframe. At present, we were told there is no clear, comprehensive operational KJC or SEAD plan or strategy that clearly sets out how much of the enforcement backlog will be significantly reduced either during this three year period or beyond, even though SEAD notes it will likely take longer than three years to achieve this goal. There seems to be a consensus that the current enforcement system is broken and that reforms are needed. However, it is not clear that a broad consensus has been reached as to exactly what kind of private or public sector oriented reforms are most likely to work in Kosovo. While considerable debate has occurred, a number of important issues remain for public debate and many stakeholders we interviewed, particularly those outside of Pristina, had little knowledge or no opinion as to what kinds of reforms were most needed. There are also some at USAID who have serious questions as to whether a purely private enforcement system could work in Kosovo, or whether a mixed system that includes legal reforms to the public system might work better. The team is not in a position to make meaningful comments on the likelihood of success of such a new and radical change in the way in which judgments are enforced in Kosovo or on all of the changes to the system that would be required to make such a system work. However, at the request of USAID we are attaching an appendix to this report that details key global and regional enforcement issues which we hope can help inform USAID’s future programming in this regard. What we do know is that if certain international best practices are adhered to in either a public or private enforcement system that either system or a mix of systems could work relatively well over time. Different European countries have different legal histories and enforcement traditions and Kosovars themselves will have to decide what system will work best in their country. Most countries that have recently moved toward private enforcement in the region are still experimenting with this change so there is an opportunity to learn from the experience of others. In general, there is no right or wrong approach although adopting a mixed enforcement system that gives debtors both public and private options seems to be a less risky path and the one many countries are choosing. In terms of its quarterly reports, SEAD seems to be reporting on program progress based on different objectives and indicators than those in USAID’s scope. With regard to progress on the enforcement front, it is reporting on the number of times a PTK or KEK debtor is requested to pay a debt instead of the number of judgments enforced (collected or dismissed) or the percentage of the backlog reduced. At the time of the evaluation, there also appears to be virtually no reporting on the amount of money actually collected, which was one of the indicators originally contemplated and discussed in various documents. Reporting on various fronts, including the amount of money collected, would also logically be one factor among many to measure overall court performance. SEAD’s method of reporting seems to be contrary to the earlier stated overarching goals and programmatic objectives of the program, as well as the self￾descriptive title of the program itself (Systems for Enforcing Agreements and Decisions). 22 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION In essence, SEAD appears to be reporting on the value of the utility judgments being executed by enforcement clerks or enforcement judges (attempts to enforce) not the number or dollar amount of actual judgments enforced (collected or dismissed). SEAD argues that this should be the performance indicator since their overall program is focused on the objective of promoting court performance and not a ―culture of contracts,”, although SEAD refers to both objectives in various documents. The Kosovo enforcement process is complicated, lengthy and costly, from procedural, time and total cost perspectives. Doing Business ranks Kosovo’s contract enforcement process as the worst in the region and one of the worst in the world. The team’s interviews with key stakeholders, including with enforcement clerks and enforcement judges, also supports the notion that the enforcement process related to utility cases and compliance with the KEK and PTK MOU is also very complex, time consuming and overall costly. Indeed, one enforcement clerk outlined the process he typically utilizes to enforce a utility case either through normal procedures or those outlined in the MOU. Under either system or whether the claim involved 50E or 500E, one of the clerks outlined a remarkable number of different steps involving multiple actors and institutions and a timeframe that more often than not required six months or more to complete. This clerk also noted the complexity and multiple steps required in the MOU and stated that neither PTK nor KEK were fulfilling their agreed upon responsibilities. Indeed, one clerk walked us through at least 20 steps that had to be undertaken before a case could be dismissed or closed (enforced) and noted that this process usually required many months. It is noted that many of these steps, but not all, are seen by many as necessary legal steps that must be taken as required by law. Hopefully many of these steps will be eliminated in the new legislation being proposed. However, it is also noted that some of these steps, such as the need to pursue uncollectable judgments, including those with incorrect addresses, can already be effectively eliminated by the courts under current law. A summary of what one enforcement clerk outlined as the steps usually involved, no matter what the size of the debt, tells the story best The creditor prepares and files a case against the debtor; The case is received by the court; The case and documents are reviewed by court staff and assigned to a judge; The judge conducts a proceeding to determine if it is a legal debt; If so the judge so finds and sends the case to the court’s Enforcement Clerk; Court staff then categorize the debt in the Enforcement Office; If the debtor objects, the debtor may file an appeal; The above process is repeated at the Appellate level; If the creditor does not provide an accurate address for the case file, the Enforcement Clerks try to locate an address by searching through the Tax Administration information; The clerks also try to find an accurate address through the Civil Registry; The clerks may also ask the Police for help; The clerks may also ask the utility company itself which might have developed a correct address after it filed the case for collection; Enforcement Clerks try to visit the debtor at his residence when he might be home, with an employee of the telephone company if possible, or a policeman if necessary. The debtor and the Clerk might have the same work hours and thus not make face to face contact; SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 23 If the Enforcement Clerk actually makes face to face contact with the debtor, he tries to persuade the debtor to pay the bill; If the debtor does not pay as agreed, the Enforcement Clerk must make another personal visit to the debtor; If the debtor pays the telephone company directly, and does not pay the court fee, which can be 10 or 15 Euros, the Enforcement Clerk must return to collect the court fee before the case can be considered Enforced; If the debtor, after the second face to face meeting, still does not pay the telephone company as agreed, the Enforcement Clerk must make a third personal face to face visit to assess the value of the debtor’s assets for possible seizure; If it is determined by the Enforcement Clerk that there are no seizable assets, the clerk must wait three months and then must make yet another, fourth, visit to see if the debtor has acquired enough assets to seize; If there are still no assets to seize, the Enforcement Clerk can recommend to the judge that the case be closed; The creditor can appeal that decision, however. An appeal keeps the case in the backlog category; and If the debtor alleges that he has indeed paid the telephone company, or made an agreement to pay the debt by installment payments, but the telephone company has not informed the court of this, the Enforcement Clerk must inquire of the company if the debt has been paid so that the case can be marked Enforced. (Often the telephone company does not bother to tell the court that payment has been made, or an agreement for installments has been reached.) Other judges and clerks we interviewed further noted that the reality in practice, no matter what reforms might be passed or what MOU’s with the utilities might exist, is that the judges and enforcement clerks have and will likely continue to make other kinds of enforcement cases, such as those related to the collection criminal fines, child support and criminal cases, a higher enforcement priority. They stated there were many reasons for this but they all pointed out that the virtual impossibility of actually collecting these kinds of debts in the majority of cases (wrong addresses, can’t find the debtor, no money/assets, no place to store assets, no place to auction assets, no transportation, etc.) made many of their enforcement efforts pointless and overly time-consuming. At the same time, it is clear from experience in both the SEAD program and earlier USAID funded programs focused on backlog reduction issues that the judges and enforcement clerks themselves are not exercising their full authority to dismiss cases and manage and systematize the enforcement process (SEAD Assessment). Part of the reason seems to be that neither the judges nor clerks seem to fully understand how the enforcement process should work, under the terms of the BRI or MOU, or they do not appear to have clear internal guidance on how to implement it in practice, including what the priorities should be. Similarly, the Evaluators were told by several interviewed that judges have the legal or inherent authority to dismiss, enforcement cases, particularly those involving the utilities (―special circumstances‖), that do not have correct debtor addresses or those that are clearly not collectable. While we are not prepared to argue exactly what the law allows or disallows, our follow-on points are based on what the judges told us they could do if they wanted to under the law. To the best of our knowledge neither the Supreme Court, the KJC, nor the president of any municipal court have developed such a policy or taken any action. One municipal court president even told us that while this issue has been discussed at the highest levels of the judiciary and even though an unofficial decision to do this has been made to proceed along these lines that the courts are not really moving in this direction on their own initiative. However, even if judges and the KJC do not have the legal authority to take such legal action formally we were told they can still do 24 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION considerably more to manage their caseload and establish priorities through internal policy and enforcement guidelines and objectives than is currently being done. At the same time, the enforcement clerks and judges we interviewed almost still believed they had to enforce the oldest judgments first, irrespective of their size or likely collectability, even though the KJC had rendered a decision (allowed under the special exceptions clause in the Law on Execution Procedures) that allows the courts to address judgments in other ways beyond temporal filing order. Clearly the courts have some authority to enforce some cases before others, regardless of the date in which it was originally filed, yet the courts and court personnel do not appear to even be moving in this direction. As previously mentioned, at a minimum, more court guidance, training and oversight appears to be needed. In sum, there appears to be no written policy or clear court guidance on this all-important issue and there appears to be no on-going programmatic effort underway to develop or promote it. Virtually all stakeholders also complained that the neither PTK nor KEK were living-up to the full terms of their MOU and that they were not providing the services to which they had both committed. Some interviewed also said that the process outlined in the MOU was so complex and time consuming in terms of the way in which PTK and KEK were implementing it that it made the dismissal or closing of a case extremely difficult and time-consuming at best. This included providing transportation, updated address information, employment or bank account information. Several court officials also said they were uncomfortable traveling to debtor’s homes in the cars of the utility companies, as they thought it sent a public signal that the court was not acting as a neutral arbiter of disputes. On the other hand, other court officials said they were comfortable with the cooperation, even though it was only slowly emerging. Streamlining Legal Reforms and Privatization of the Enforcement Process This section focuses on the new draft law to privatize the enforcement process, since this seems to be the main thrust of SEAD’s overall enforcement efforts and given the fact that the wage garnishment and bank account attachment reforms are not as advanced or as broad in scope. Indeed, the latter two reforms are still in the beginning stages of implementation and appear more tenuous and dependent on other legal reforms that would need to be made beyond the scope of the SEAD program. Thus, it would not seem timely or relevant to this mid-term evaluation to comment very much on either their potential enforcement impact or even the value of the planned outputs in these two areas. Also, while these two reforms are important enforcement tools in every country, if global experience is any guide, they are not as likely to have significant impact on Kosovo’s enforcement system in the short￾term, given current socio-economic, cultural, institutional, and rule of law context. Suffice it to say that SEAD’s technical and analytical work in these two areas, in terms of some of the outputs achieved to date, is satisfactory and could potentially have positive impact on the enforcement process if other needed legal, policy and technology-oriented reforms and information sharing systems (IT) are passed and implemented by institutions that are not part of SEAD’s work plan or budget. However, this additional work would require significant resources and time, and it would include significant policy and regulatory programming and IT procurement, on-going training related to the Central Bank, the KJC, the Tax Administration, the Pension Fund and the courts, as well as interagency information systems that are currently either non-existent or ineffective. Support for the development of a long-term strategic strategy and work plan on how to move forward and link-up these reforms with broader enforcement reforms would help ensure these recent reforms have impact in the future on the broader enforcement reform front. It would also help ensure that these reforms are implemented within an anti-corruption, financial privacy legal context. While the same short-term impact forecast could arguably be made with regard to the possible passage of a draft new law, which would dramatically change the enforcement process from public to private, this kind of legal reform has more far-reaching consequences for promoting the rule of law in Kosovo and an efficient effective enforcement system over the long-term. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 25 However, not unlike some of the other legal reforms being contemplated, this institutional reform raises serious privacy issues that also need to be duly considered in any serious debate or comprehensive reform program. How and whether to share private financial and employment information among state or non￾state institutions is a very important emerging issue in every country, but a more important issue in transition and developing countries, where the risk of human rights abuses and abuses of the legal system still loom large. Privatization of the Enforcement Process It is clear from a review of SEAD’s documents and from interviews with various stakeholders that the program has invested considerable resources and time in promoting a draft law to privatize all or part of the judicial enforcement process. They have also established a good record of having worked to develop a consensus among some of the key stakeholders as to how and when to make this fundamental legal reform, although that discussion seems to have mainly focused on some of the key stakeholders in Pristina and not so much with many stakeholders outside the capital or the general public. While there have been a number of media stories that highlight this general issue and topic, as well as other legal reforms being promoted in the SEAD program, SEAD notes that its larger public outreach/public education campaign will only really be launched in October of this year. While the team has not been asked to give an expert’s opinion on whether the enforcement process should be privatized, since that is a decision that should only be made by Kosovars, we have been asked to help identify and briefly comment on some of the key issues that need to be addressed before any final reform decision might be made along these lines. This approach to commenting on the key issues instead of the draft law itself is timely, given the fact that the draft law is purportedly close to being finalized, although there is no guarantee that any new law will pass the parliament this year. It is also more appropriate since the language in the draft law is still changing in the midst of an on-going discussion with stakeholders on several key issues. 3.2 ARBITRATION AND MEDIATION FINDINGS Two formal Arbitration Centers were instituted: one in the Kosovo Chamber of Commerce (KCC) and one in the American Chamber of Commerce in Kosovo. Each Arbitration Center has a Secretary Generals to be paid with USAID funds for one year, at which time the Centers are to be self-sustaining. Each Arbitration Center was equipped with the necessary office equipment to function adequately. Each Chamber maintains a separate roster of arbitrators. The number of arbitrators on the American Chamber of Commerce roster is significantly smaller than that of the KCC because it both presented fewer candidates for training and because the KCC recruited distinguished certified arbitrators internationally. In order to bolster the roster of the American Chamber of Commerce, two key SEAD staff have been placed on the roster, although it is not anticipated that they will actually perform as arbitrators. Arbitration Rules were established in conjunction with the two Chamber organizations. Appropriate arbitration training materials were developed and training was conducted for 40 arbitrators, in two training sessions. Although training to meet certification requirements was adequate, follow-up continuing training will be necessary to keep skills sharp. No cases had been arbitrated in either Center at the time of this evaluation, although the KCC seemed to be ―marketing‖ its Center to attract clients. The SEAD project plans to incorporate Arbitration and mediation clauses into formal model contracts for various economic activities, given that in Kosovo, this is a very rare practice. Nine model contracts are being developed. With SEAD support, Court Mediation Centers and new mediation regulations were successfully established in two courts, Peja and Gjilan, through work with the Kosovo Mediation Commission and the Court Presidents. This was accomplished even though at first the Commission’s members were obliged to serve without compensation, without dispensation from their normal duties, and put little or no effort into 26 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION drafting regulations or attending meetings. According to the team’s discussion with the SEAD program, with patience, SEAD and other international donors working together to achieve the goal, brought the commission members along to the point to where they actually wrote the regulations (. Licensing and fee issues have been resolved and adopted. Although the Centers have been opened, judges have not been trained on mediation issues and protocol for referral has not been finalized. Therefore they cannot refer cases for mediation yet. Publicity was directed at the opening of the Centers, but we were told that there has not been a formal public awareness campaign or long-term strategy to bring private clients to the Centers to help them attain sustainability. There is also little information in the quarterly reports or other SEAD documents that shows significant activities in this area. Two Centers have Directors, space and equipment paid with USAID funds for a period of one year. At the end of that period, they are to be self- sustaining from the fees collected from the courts and private persons. The third project involved establishing mediation centers in the two chambers of commerce in Pristina.. SEAD in cooperation with European Union (EU) Twinning and Partners Kosovo and short-term technical assistance trained 45 mediators for four mediation centers. SEAD has agreed to pay the mediators’ fees for non-court referred sessions. The Courts are to pay the fees for court referred mediation. The minimum fee has been established at 25 euros per session. Whether Kosovars are willing to use these new tools to settle disputes, which is a major change in the culture, remains to be seen. Although the framework for arbitration and mediation has been established, only time will tell if it will become part of Kosovo’s commercial culture. Embedding such innovations into a culture can be a long-term process, and then only if Kosovars see the advantage and are willing to try to resolve disputes outside the formal court structure. A year would seem to be a reasonable time for USAID to fund the salaries and costs of the Arbitration and Mediation Centers, but anything beyond that would imply that USAID found a solution to a problem unrecognized in Kosovo. If the Arbitrators and Mediators certified through the program do not get to practice their newly acquired skills within a reasonable time after training, they will both lose their skills and their interest. In order for the Mediation Centers to be financially viable the courts must begin directing cases to them. They cannot do that until the judges are trained. Only time will tell if Arbitration and Mediation will decrease the number of cases files in Kosovo courts. Although court action will be necessary to validate the decision taken during the ARD processes, if the process occurs as envisioned, the validation should proceed expeditiously and not clog significantly the dockets. 3.4 CONTRACT LAW/LLM DEGREE FINDINGS SEAD was seen by key stakeholders as very successful in its consensus building efforts to update, harmonize and draft notable amendments to Kosovo’s existing Law on Contracts and Obligations, and the development of guides, training materials and tools (such as a form construction contract) to implement the law as amended. Next steps will be for the parliament to pass the amendments, to institutionalize training programs, for relevant ministries to then implement the law and then for the courts to enforce the law effectively, efficiently and fairly. In short, implementation of the law will be no small task. However, as planned, SEAD is now poised to move on these fronts, including the continued development of form contracts that can be used by businesses in various areas, such as leasing, employment and sales. SEAD’s efforts to establish an LL.M. degree at the University of Pristina were also seen as highly successful by all key stakeholders. Most also told the team that they thought there was a growing demand for this kind of degree and specialization, that such a program should be self-sustaining in short order and that they thought this development would help promote a culture of contracts and the rule of law. The answers to the stakeholder surveys fully supported these views. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 27 SEAD’s efforts included the development of a curriculum based on international best practices, on-going support to have the new degree fully accredited and the successful recruitment of international and national law professors. SEAD’s ability to proceed with the development of a series of user-friendly contract forms as planned will depend on the passage of the draft amendments to the Law on Contracts and Obligations. SEAD’s ability to make the new LL.M. program sustainable before the end of its program will depend on whether the demand for the course is as high as is expected and planned and the law school’s capacity to employ professors from Kosovo who can teach the course in future years in both Albanian and ideally English. 3.5 KEY FINDINGS In all of the components, there were outreach activities to try to obtain consensus about the problems to be solved, their causes, and solutions. To that end, SEAD worked with five focus groups in years one and two to analyze why formal contracts are not more widely used in Kosovo. Through the Kosovo Chamber of Advocates, SEAD held courses for practicing attorneys in the use and development of contracts, and the need to insert arbitration clauses into contracts, as well as the international standards for enforcement of judgments and Execution procedures. SEAD held a conference on Enforcement of Judgments, at which the U.S. Ambassador, and prominent Kosovo judicial figures gave speeches. This and similar activities received much press coverage and TV spots. There were six television spots, two radio spots, and eight articles in newspapers about this event. When promoting Arbitration, a key SEAD staffer wrote an article published in a major Kosovo newspaper about the need to use formal arbitration. SEAD held a major press conference on ADR that received significant publicity that highlighted the importance of the enforcement problem and the BRI. It was attended by the Deputy Prime Minister, the Minister of Justice, the President of the Supreme Court, the Chairman of the KJC, the Deputy Chief of Mission to the US Embassy, as well as many members of the press. When SEAD signed a Memorandum of Understanding with the Kosovo Chamber of Commerce and the American Chamber of Commerce about establishing an Arbitration Center, there were seven television spots, five newspaper articles and three web sites that mentioned it. When the Masters in Commercial Law program was accredited, there was an article in the newspaper, information posted on the SEAD web site, short spots on TV, and much word of mouth promotion by professors. Although the Mediation Centers were established, the public awareness campaign had not been initiated by the time the evaluation took place, although in an apparent showing of strong support, high ranking government officials attended SEAD supported ribbon-cutting ceremonies. The challenge to building a critical mass of opinion to support substantive changes in laws and procedures is great because in a society like that of Kosovo, teaching and tradition have formed ―popular conflict resolution cultures‖ somewhat different from those espoused by SEAD. Only time will tell if these efforts will have ―sold‖ the changes to not only the legal profession, courts and businesspersons, but to the public in general. 28 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 29 4. RECOMMENDATIONS 4.1 ENFORCEMENT RECOMMENDATIONS 1. USAID should review the likely impact of the BRI strategy, as it is being implemented and interpreted by all key stakeholders, including SEAD. This includes its goals, program activities and SEAD’s reporting indicators. Some thought should be given to placing more focus on the enforcement of KEK judgments, since their efforts are very focused on potentially collectable larger judgments from the business community and not individuals living in poverty with no assets or unknown addresses. The potential pay-off with respect to KEK judgments, in terms of dollars and the number of KEK cases enforced, as evidenced by recent court enforcement actions and collections in Pristina, seems much higher than any pay-off from the PTK judgments under their current internal enforcement policies. However, the team believes any on-going backlog reduction effort will need to be more closely monitored and supported by both SEAD and USAID, not to mention KEK and PTK, in order to achieve any measureable impact or success. 2. USAID should consider shifting some remaining resources in the mediation component to the BRI effort. The risk of that initiative being seen as a failure by stakeholders is high. Emphasis should be placed on monitoring PTK and KEK compliance with the existing MOU and to promoting clear dismissal policies and procedures that can be undertaken on the court’s own initiatives or motions. Ideally this should include categories of prioritized cases, not just utility cases. 3. At the end of SEAD Year 3, USAID should consider rolling over any on-going activities to the Effective Rule of Law (EROL) program, but only if key laws, regulations and policies currently being promoted under the SEAD program are passed. This includes key legal reforms related to the attachment of bank accounts and garnishment, mediation, arbitration and private or public enforcement, although it would appear that follow-on activities related to the seizure of bank accounts holds the most promise of improving enforcement procedures. 4. In addition, there should be clear evidence that enforcement policies and strategies with clear, practical reduction goals and self-initiated reforms have been developed, prioritized and in implementation by both the courts and the utilities, before making a further investment in a backlog reduction program. Clear commitment and consensus on the part of the courts, the banks and the utilities needs to be solidified. Support for these reforms also appears to be deepened within all of the courts among various stakeholders, and they need to be linked more closely to broader rule of law and democracy and governance related reforms in order to obtain full-buy-in, achieve success and be sustainable. 5. Another approach that should be given consideration relates to the need to expand the scope of the MOU with the utility companies to include their verbal agreement (according to some judges) not to file any new enforcement cases that are less than certain amounts and to automatically dismiss cases before a certain date (apparently they had already agreed to reduce all cases before 2003 under the Judicial Support Program (JSP) program but this agreement was never fully implemented in practice and somehow conveniently forgotten). Cases with incorrect or incomplete addresses and those that are impossible to collect (defined criteria) should also be part of a broader MOU. Judicial policy and guidance should be developed alongside both the existing MOU and any broader MOU. 6. Review the statute of limitations issues in Kosovo. Another issue that needs some attention relates to the fact that current Kosovo law provides that if an authentic documents case is not brought against a debtor within one (1) year then the case should be automatically dismissed. It does not appear as though SEAD, the courts, or the utilities are cataloguing or reviewing cases to determine whether and how many cases fall into this category and that no dismissals are being contemplated. We were told that the SEU clerk was not to advise the debtor that the statute of limitations has run, but rather to try and collect the debt. It also appears that no notice is being given to debtors that they have a right to have their case dismissed if the case was not brought within one year after the debt was incurred. 30 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 7. Consideration should be given to the development of a new MOU that promotes more cooperation and a higher degree of support from KEK and PTK. Alternatively, the existing MOU should be clarified and made more efficient and self-executing. There is also a need to make sure that the courts fully understand the content and opportunity presented in the MOU, and to support the development of an internal court guide on how to implement it and establish clear priorities. At present it is clear there is considerable confusion within the courts as to what the MOU requires and how and who to complain to if one or more parties are not complying with the agreement. 8. Review the draft law privatizing the enforcement process to make sure it includes incentives to promote enforcement of all existing enforcement cases. To do otherwise would be to invite the bad experience of Macedonia, where virtually all of the old judgments pending before the new law was passed three years ago are still languishing. SEAD told the Team that the draft law, if passed, preserves a parallel system until court filed cases are completed in order to ensure that the Macedonia experience does not occur. However, there is also still reluctance on the part of the utilities to make a serious effort to actually implement the MOU and dismiss cases. Even their process for assistance and approving the dismissal of cases is confusing, complex and technical. It appears to be designed not to work in practice or to be so costly that their assistance is ineffective. 4.2 ARBITRATION, MEDIATION AND CONTRACTS/LL.M. RECOMMENDATIONS 9. After a suitable period, the Mediation Centers established by SEAD and those established by UNDP, when they are up and running, should be studied and compared for success to determine lessons learned from each., by a USAID project such as EROL. The IMF/World Bank has extensive experience and some success in this area throughout the region and has developed good lessons learned reports and case studies that would appear to have relevance to Kosovo. It may be worth approaching the World Bank to see what regional training activities they may have planned or what kind of technical assistance or training could be provided in Kosovo. 10. USAID projects should not finance the ARD centers after the initial one-year commitment. Many we interviewed believed that if there was demand that they should be self-sustaining within a short period of time and that in any case the business community should bear any on-going expenses if the demand for this service were there. 11. During the remaining period of this program, some continuing training for arbitrators and perhaps mediators should be undertaken, unless there is evidence that the Centers are not going to be used in the near future. However, since other donors such as UNDP are working in the area of mediation, the team recommends that most resources be oriented towards making the arbitration and LL.M. programs sustainable and to the follow-on training and form development work related to the Contract’s component. 12. Given that judges have not been trained in the courts where the Mediation Centers are located, they should be trained as quickly as possible. 4.3 KEY RECOMMENDATIONS ADR/Contracts Components. The team recommends that activities related to Contracts, mediation and arbitration be kept to a bare-minimum in year three. The main SEAD outputs and successes have already been achieved in these areas. It will now be important to place more emphasis on testing the will of the relevant institutions to promote demand and to sustain these programs on their own. It will also be important to invest any remaining resources in targeted elements of these programs or on SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 31 activities related to the implementation of the BRI or to resolving important issues related to the draft law on execution procedures. Enforcement/BRI Component. USAID support the development and institutionalization of a sound, long-term backlog reduction strategy, including actionable impact-oriented indicators and timelines that all stakeholders understand and buy into. USAID should also review the likely impact of the BRI strategy, as it is being implemented and interpreted by all key stakeholders, including SEAD. This includes its goals, program activities and SEAD’s reporting indicators. Some thought should be given to placing more focus on the enforcement of KEK judgments, since their internal enforcement policies are more consistent with the letter and the intent of the MOU and SEAD’s goals to establish mechanisms and systems to reduce the enforcement backlog. Their policy, which is focused on potentially collectable judgments from the business community, and not individuals living in poverty, who have no significant assets or identifiable address, is likely to produce more concrete pay-offs, have more impact and resonate more with the Kosovar people. The potential pay-off with respect to KEK judgments, in terms of dollars and the number of KEK cases enforced and the number of cases actually dismissed, seems much higher than any pay-off from the PTK judgments under PTK’s current internal enforcement policies. However, the team believes any on-going backlog reduction effort will need to be more closely monitored and supported by both SEAD and USAID, not to mention KEK and PTK, in order to achieve any measureable impact or success. Draft Law on Privatization of the Enforcement Process. The Evaluators recommends that more discussion occur with all key stakeholders in order to ensure there is broad consensus on what public and/or private enforcement reforms are most likely to succeed within Kosovo context. At present, few stakeholders seem to fully understand the pros and cons of different models in the region, including their costs, challenges, complexities and risks. We also recommend that SEAD support the development of a long-term draft strategy, work plan and global budget that clearly outlines and link￾up the multiple reforms that will need to be undertaken whichever enforcement reform road Kosovars decide to proceed. This kind of analysis will no doubt help Kosovars decide which road is the best one for them. 32 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION APPENDIX 1: KEY GLOBAL AND REGIONAL ENFORCEMENT ISSUES KEY PRIVATIZATION ISSUES Some of the key issues most relevant to answer the question include: (i) whether a genuine consensus has been reached among all key stakeholders on the nature and full scope of the new draft law to move enforcement out of the judicial process and into the private sector; (ii) whether important related laws, such as the right to privacy, have been passed or will or can be implemented alongside such a new law to protect everyone’s human rights and property rights, including the right to due process; (iii) whether any new law will include sufficient and appropriate oversight, including enforcement agent accountability and transparent/affordable fees and expenses; (iv) whether there is sufficient demand for and to what degree there is public trust for a private enforcement system; (v) whether any decision has been made regarding how to handle cases now pending, judgments currently in backlog or which enforcement cases should receive highest priority. The team’s overall finding or answer to most of these important inter-related questions is that most of them have either not been thoroughly analyzed, discussed or debated by all key stakeholders at the national and sub-national level or that most have not been fully resolved in the draft law – at least not yet. A short discussion of each of these issues follows. A cursory review of the global and regional research and lessons learned reports on the enforcement of court judgments reveals that all of the above issues mentioned in the preceding paragraph are very important in every country, but they are particularly important and harder to address in transition and developing countries — where many institutions are still weak or corrupt and where a rule of law culture is still emerging. Indeed, these issues and more are all discussed and in a comprehensive regional comparative survey report of over 47 European and Asian countries initiated by the Council of Europe and undertaken by the Swiss Institute of Comparative Law and the University of Nancy (France) in 2007, entitled: European Commission for the Efficiency of Justice (CEPEJ): Enforcement of Court Decisions in Europe. That report notes that while the majority of countries at that time had a public or court based enforcement system (26) that there was an emerging trend to reform these systems and a move to create new ―mixed‖ public and private enforcement systems. It also noted that mixed systems would provide stakeholders more enforcement options related to civil cases and judgments and alternatives to judicial dispute resolution (such as mediation and arbitration). The report further noted that 11 countries said they worked under a ―purely private‖ bailiff system and that some of those reserved criminal enforcement and judgments against the state to the courts or public enforcement agents. Since this report was written the trend to privatize elements of the judicial enforcement system in many countries continues to play-out. While some countries, such as Macedonia, have adopted pure private enforcement systems (Macedonia), it appears most countries in the region have adopted various forms of mixed public and private enforcement systems for civil judgments. Research reveals that the enforcement reform agenda was being driven, at least in part, by efforts of the CoE and the EU to harmonize enforcement laws and procedures across the region and by business community demand to make many inefficient enforcement systems more efficient. CONSENSUS Stakeholder interviews and structured survey questions led us to the conclusion that most believed that a full or partially privatized enforcement could potentially work in Kosovo, although some noted there were a number of legal and cultural hurdles to overcome. However, it was also fairly clear that many expressed this opinion largely on their belief that a new system could not be any worse than the current system. We would also note there was some disagreement within the donor community as to whether Kosovo cultural SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 33 preferences for public institutional powers over emerging private sector institutional powers would inhibit the practical implementation of such a fundamental change in the legal system. Indeed, one judge interviewed also told us that one of the biggest hurdles to overcome was of a cultural and social nature, since most Kosovars continued to rely upon the authority of the state, and not the private sector, to protect their rights and resolve disputes. This judge also noted that this society-wide cultural hurdle also helped explain why mediation was a mechanism in small demand in Kosovo. The Evaluators also found that most key stakeholders did not have a good grasp of what the regional experience had really been, and they did not fully understand that there were no easy public or private solutions as to how to make the enforcement process more fair, efficient and effective. The team was also unable to access a relatively recent lessons learned report that had been written by the Balkans Enforcement Reform Project (BERP), which is also working in Kosovo. We believe the country specific and comparative information in that report could be very useful to Kosovo’s stakeholders as they continue work on the draft law and related reforms. However, the team would note that BERP’s 2009 Transition Roadmap for Improving the Enforcement Process in the Western Balkans is an excellent resource for anyone interested in exploring enforcement issues more fully. BACKLOGS/PRIORITIES We have learned from the experience of other countries, such as Macedonia, that it is critical to address issues related to pending cases and case and judgment backlog issues in any new laws, regulations and policies. In the case of Macedonia, which privatized enforcement, the backlog issue remains a serious problem because the legislation did not make it clear how those judgments and cases should be handled or prioritized. Likewise, it is important for the courts and the institutions involved with the enforcement process to prioritize what kind of cases should be decided and enforced first. In the case of Kosovo it became clear to the team that the enforcement agents and enforcement judges often made their own priorities because it was either not clear what the enforcement policy was or because they did not agree with it. In Kosovo this meant that judges and enforcement clerks prioritized cases that they thought were most important and in the best interest of the family/debtor or commercial enterprise. They placed enforcement of utility company judgments at or near the bottom of the enforcement pile. This real world enforcement reality at the local level points to the need to make sure the law and policy is clear, well grounded, and well understood and to have monitoring mechanisms in place to ensure that it is followed and implemented. PRIVACY There are few issues more important or contentious than the privacy issue in any country. New laws and regulations are just emerging and it is difficult for the law to keep up with ever-changing technology. The issues are even more difficult to manage in transition and developing countries, where legal and enforcement institutions are still weak and corruption and the selling of information is still both a serious issue and a serious illegal business. While the team did not have the opportunity to explore this issue to any significant degree, it appears from the SEAD documents reviewed that this important issue has not been given very much attention and that Kosovo’s relatively recent privacy law has not been fully implemented in practice. In any case, the EU and COE have established clear privacy rules and guidelines that merit close and timely review. OVERSIGHT/ACCOUNTABILITY The oversight and accountability issues are important and contentious in every country. Indeed, it is hard for experts to identify a replicable effective model for another country, since country context should dictate what oversight and accountability system might work. That said, the CoE believes it is clear that whether enforcement agents are public or private, that they are performing a public interest duty. Thus, most countries with mixed systems, such as France, have highly regulated government and private oversight mechanisms to ensure the system is transparent, effective, efficient, fair and affordable, and that enforcement agents are accountable. 34 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION In a number of countries either the Supreme Court, the Judicial Council and/or the Ministry of Justice have important oversight responsibilities, including the transparency and regulation of fees and expenses. It is interesting to note that the COE/CEPAJ report mentioned above found that the fees and expenses in countries with public or mixed enforcement systems had far greater transparency than those with private enforcement agents. In Kosovo, the debate as to which public institution (s) should provide oversight is still under serious institutional debate. The experience of other countries tells us that this is an important question that should be fully resolved through consensus if at all possible. Other key questions that do not appear to have been fully resolved relate to the ultimate responsibility of the deciding judge or the courts to oversee the enforcement process and the disciplinary and ethical mechanisms and professional incentives needed to make either public or private enforcement agents fully accountable. DEMAND Court data and stakeholder interviews and structured survey answers revealed that there is growing demand for more efficient case management and enforcement systems. We were told more cases are being filed in the courts than in previous years and that both the number of pending cases and enforcement decisions is growing. This reality, coupled with pressure from investors, a fast growing domestic economy, the need to resolve property disputes, and increased political pressure from the COE, EU and the donor community at large, are collectively creating the need to create a rule of law society where the law is enforced efficiently, effectively and fairly. The main unanswered demand oriented question is whether there is sufficient demand and political will within governmental and business circles to undertake meaningful reform on the enforcement and rule of law fronts. Unfortunately the team did not have sufficient time or the mandate to fully explore this important issue with all key stakeholders. However, our initial impression is that the judges, at least at the municipal level, as well as the KJC, have not fully bought-into the need for fundamental judicial and enforcement reform, as best evidenced by their own past actions or lack of action. While we do not have the time to go into detail for purposes of this evaluation, we would only note that the judges, courts and utility companies seemed to have passed on past and present opportunities to implement reforms or reduce enforcement backlogs and that it has taken many years to pass, much less implement, key laws to either organize the judiciary or undertake other important substantive and procedural legal reforms related to enforcement. In any case, it would appear that this is more the time to implement many of the key legal reforms recently passed before asking the system to take on more fundamental reforms of a complicated, multi-faceted nature. SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 35 APPENDIX 2: LIST OF SEAD OUTPUTS FROM PERFORMANCE INDICATOR REFERNCE SHEETS OF THE PMP Outreach: – 2010…Project organized 25 outreach events – Provided copies of assessments, fact sheets, newsletters to 1110 persons – 2011 project website received 780 hits on daily average; 23,000 monthly – Organized 55 outreach events from October 2010 to July 2011 – Developed a master list of all electronic and printed media in Kosovo Training: – Trained 47 mediators – Trained 25 arbitrators – Developed and delivered a course on Commercial Contracts Training – Developed full LL.M curriculum in Contract and Commercial Law (15 courses) – Trained 30 KJC SEU personnel – Trained 30 BRI interns – Conducted four training sessions at the KJI for judges – Conducted five continuing legal education sessions for the KCA – Organized a Mediation Study tour to Croatia Legislation and Regulations – Prepared draft Law on Obligations – Law on Executive Procedures amendments finished – Five Mediation Regulations promulgated – All internal Arbitration Association documents drafted, adopted and promulgated – Presented concept paper to MOJ on amendments to the Law on Contested Procedures Standard Contract Forms – Developed and released model construction contract – Eight additional standard from contracts in development Assessments – Study on Enforcement of Judgments completed Enforcement of Judgments – Hired 30 interns to catalogue utility cases in the courts – Held an International Conference on Enforcement of Judgments 36 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION – Entered into two MOUs with the telephone and electric utilities to help with the enforcement of judgments – Trained 30 KJC Special Enforcement Unit Clerks in Enforcement Centers Opened – Two mediation centers equipped, opened, and staffed with SEAD funds – Two arbitration centers equipped, opened, and staffed with SEAD funds SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 37 APPENDIX 3: EVALUATION QUESTIONNAIRE MID-TERM EVALUATION --SEAD SEAD Core Goals: Promoting a Culture of Use and Respect for Contracts and a More Efficient, Fair and Effective Legal System to Enforce Court Judgments [Informal Anonymous Evaluation Questionnaire – Your name will not be disclosed anywhere on this form or anywhere in the Evaluation Report -- Kosovo – August 2011]. 1. In your personal opinion, is a realistic within current Kosovo socio-economic and political context to promote the wider use of contracts to engage in business activities? ___1.Yes___2. Possibly____3. No_____4. Not sure [Comments – please elaborate] 2. In your personal opinion, would a wider use of business contracts help promote a ―culture of contracts‖ in Kosovo at this time? ___1. Yes ___2. Possibly____3. No____4. Not sure. [Comments – please elaborate] 3. From what you know and in your personal opinion, is there informal general agreement or sufficient consensus within the judicial and legal communities that the training activities for judges, enforcement clerks, advocates and others, as well as the legal reforms related to commercial law, such as will help promote the wider use of business contracts? ___1.Yes____2.Somewhat____3. No____4. Don’t know. [Comments – if not, what are the unresolved problems/issues?] 4. What do you see as the greatest unfulfilled need within your organization with respect to how to best participate in and institutionalize SEAD training and reform activities? ____1.Capacity building___2. Resources____3. Technical assistance____4. Training____5.Awareness______Other. [Comments - - prioritize them if possible] 5. From what you know and in your personal opinion, do you believe business contracts are being used more in Kosovo over the past two years? ____1.Yes____2.Somewhat____3. No____4. Not sure. [Comments -- if so, how has it improved; if not is it the same or worse?] 6. How relevant in terms of substantive content has the training in SEAD programs been to your institution or own work? ____1. Very relevant____2.Relevant_____2. Somewhat relevant____4. Not relevant____5.Not sure. [Comments – give an example and note what, if anything, could make it more relevant?] 7. What is the overall quality of the training materials and instructors you or your organization has received under the SEAD program? _____1.High____2.Good____3. Satisfactory ___4. Unsatisfactory____5.Not relevant. [Comments – what if anything would improve the quality?] 8. From what you know and in your personal opinion, do you believe enforcing court decisions has improved over the last two years? ____1.Yes____2.Somewhat____3.No____4.Not sure. (Comments -- if so, in what ways; if not, why not?) 9. From what you know and in your personal opinion, do you believe the number of unenforced court judgments (backlogged cases) in the courts has been reduced over the last two years? ____1.Yes____No ____3.Not sure. [Comments – if so, what made a difference; if not, why hasn’t there been a reduction or what has created a larger court backlog?) 38 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 10. Have you or your institution entered into any kind of written or formal agreement with SEAD to cooperate, participate in or institutionalize activities or reforms in their program? ____1. Yes____2.No____3.Not sure.____4. Not relevant. [Comments – if any, please elaborate on what kind of agreement/MOU; if not, why not?) 11. Do you feel that the kinds of training activities and legal reforms in the SEAD program will help reduce opportunities for corruption in the Kosovo judicial oversight or enforcement process? ____1.Yes____2. Possibly____3. No____4. Not sure [Comments -- If so, how? if not, why not?) 12. Will the kinds of training activities and legal reforms in the SEAD program help promote the enforcement of court judgments and reduce case backlogs more effectively and efficiently within Kosovo socio-economic and political context? 13. ____1.Yes____2. Possibly____3.No_____4. Not sure. [Comments -- if so, which ones are most important; please elaborate on each?] 14. What are some of the key activities and reforms, beyond those in the current SEAD program, needed to help promote a culture of contracts in Kosovo? ____1.Yes____2.No____3.Not sure. [Comments -- if so, which are most important?] 15. Is there a growing demand within the business community for arbitration and mediation in Kosovo at this time? ___1. Yes____2.Possibly_____3. No ____4. Not sure. [Comments -- if so, what key issues need to be addressed to make these systems work in practice in Kosovo?] 16. Will the possibility of obtaining a Masters or LLM Degree in Contract Law help promote a culture of contracts in Kosovo? ____1. Yes____2. Possibly____3. No_____4. Not sure [Comments?] SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 39 APPENDIX 4: PERSONS INTERVIEWED USAID 1. Ardian Spahiu, Development Assistance Specialist 2. Gresa Caka, Project Management Specialist SEAD 1. James Agee, Vice President, Checchi and Company Consulting 2. David Greer, Chief of Party 3. Marilyn Zelin, Senior Legal Advisor - ADR 4. Andrea Muto, Senior Legal Advisor – Legal Education 5. Teki Shehu, Senior Legal Advisor-Enforcement of Judgments 6. Artan Haddri, Backlog Reduction Initiative Coordinator 7. Sefadin Blakaj, Legal Advisor-Legal Education KOSOVO JUDICIAL INSTITUTIONS 1. Enver Peci, Head, Kosovo Judicial Council 2. Albert Avdiu, Secretary, Kosovo Judicial Council 3. Hajredin Kuci, Minister of Justice 4. Lavdim Krasniqi, Director, Kosovo Judicial Institute KOSOVO COURT PERSONNEL Gjakova 17. Gjoke Radi, Execution Judge 18. Hektor Vula, 19. Rudin Elezi, Court Administrator 20. Sami Neziri, SEAD intern 21. Liridolia Karakushi, 22. Hilmi Hoxha, Judge 23. Liridona Ukshini, SEAD intern Gjilan 1. Ramiz Azizi, Court President 2. Burim Emerliahu, Execution Judge 40 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION 3. Berat Spalriu, Judge 4. Shemsije Kadriu, Court Administrator Lipjan 1. Gani Zabeli, Court President 2. Jusuf Bytyql, Judge 3. Isa Gashi, Judge 4. Avdi Gashi, Judge 5. Shashivar Hoti, Court Administrator 6. Hasim Soliliu, Enforcement Clerk 7. Luan Sopa, Enforcement Clerk Pristina Municipal Court 1. Makifete Saliuka, President, PMC 2. Erol Gashi, KJC Enforcement Clerk 3. Labinote Ismaili, KJC Enforcement Clerk 4. Florineta Elshani, SEAD Intern 5. Vlora Sahiti, SEAD Intern 6. Mizafere Halimi, SEAD intern 7. Besa Rexhepi, SEAD Intern 8. Vatra Fernava, SEAD Intern 9. Malesore Berisha, SEAD Intern OTHER KOSOVO INSTITUTIONS 1. Bajram Ukaj, Dean, University of Pristina Law School 2. Ahmet Kasumi, President of ARD Tribunal, Kosovo Chamber of Commerce 3. Ardi Shita, Secretary General, ARD Center, American Chamber of Commerce 4. Leke Musa, Executive Director, American Chamber of Commerce 5. Yll Zekaj, Executive Director, Kosovo Chamber of Advocates 6. Nuredin Krasniqi, Chief Financial and Treasury Officer, PTK 7. Lulzim Sokoli, Manager Legal Component, PTK 8. Rafet Halimi, Legal Manager of Telecom, PTK 9. Sani Berisha, Director of the Legal Department, KEK 10. Rexhep Podvorica, Head of Legal Affairs, KEK OTHER INSTITUTIONS SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 41 1. Ben Reed, USAID/EROL Project 2. Terry Slywka, USAID/BEEP 3. Declan O’Mahony, EULEX 4. Llyr Rowlands, Legal Adviser to the Director General of KEK 5. Ylber Batalli, Attorney/Office of Legal Advisor, Tetra Tech Inc. 42 SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS IN KOSOVO – MID-TERM EVALUATION APPENDIX 5: DOCUMENTS REVIEWED 6. Performance Management Plans (PMP),October 2010 through July 15, 2011 7. National Survey on Contracts, May 2011 8. Year One Work Plan Timeline October 1,2009 – September 30, 2010 9. Quarterly Report, October 2009-December 2009 10. Quarterly Activity Report, January-March 2010 11. Quarterly Activity Report, April-June 2010 12. Annual Activity Report , October 2009-September 2010 13. Annual Work Plan, October 1, 2010 to September 30,2011 14. Quarterly Activity Report, Oct.-Dec. 2010 15. Quarterly Activity Report, Jan.-March 2011 16. Quarterly Activity Report, April-June 2011 17. Report, Facilitation of Focus Group Meetings related to SEAD in Kosovo, 22 April 2010 18. Report, National Survey on Contracts, May 2011 19. Report, Focus Group Report on Contracts, May 2011 20. Survey of Cases in the Commercial Court of Pristina to Guide the Creation of Standard Form Contracts, August, 2011 21. Report, Streamlining Enforcement of Contracts: Report and Recommendations Regarding Commercial Case Procedures and Enforcement of Judgments (undated) 22. Arbitration Training Manual, May 6, 2011 23. Arbitration Training Manual, June, 2011 24. 6. Alternative Dispute Resolution Materials, (undated) 25. SEAD/USAID budget revised 1/14/2011 26. Arbitration and Mediation: Kosovo and Select International and Foreign Laws and Commentary 27. Andrea Muto, May 2011 28. Lists of Participants in SEAD trainings 29. The Kosovo Municipal Competitiveness Index Report 2011, USAID/BEEP, June 30,2011 30. Annual Working Program, Kosovo Judicial Institute (2011) 31. The Kosovo Municipality Competitiveness Index Report (2011) SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 43 32. Nations in Transit, Judicial Independence and Corruption Country Scores, Kosovo (2011) 33. USAID Kosovo Strategic Plan (2010-2014) 34. European Commission for the Efficiency of Justice (CEPEJ): Enforcement of Court Decisions in Europe (2008) 35. Regional Best Practices: Enforcement of Court Judgments, Lessons Learned from Latin America, IFES (2004) 36. Guidelines for Implementing Existing Recommendations Regarding the Execution of Court Decisions in Europe, COE (2008) 37. Doing Business, World Bank, Country Ratings: Business Reforms for Enforcing Contracts and Enforcement (2011) 38. USAID/Civil Execution Caseload Report, NCSC (2007) 39. Republic of Albania, General Enforcement Service Presentation, Ministry of Justice (2009) 40. USAID/Kosovo Justice Support Program, Annual Report (June 2008-2009) 41. Annual Work Plan, EROL/USAID (June 2011) 42. USAID/Kosovo Judicial Support Program Mid-Term Evaluation Final Report (July 2009) 43. USAID/Evaluation of the Justice System Reform Activity –Kosovo (July 2016) 44. Transition Road Map for Improving the Judgment Enforcement Process in the Western Balkans (BERP November 2009) SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS PROGRAM IN KOSOVO: DRAFT REPORT 45 U.S. Agency for International Development 1300 Pennsylvania Avenue, NW Washington, DC 20523 Tel: (202) 712-0000 Fax: (202) 216-3524 www.usaid.gov December 5, 2011 This Report is made possible by the support of the American people through the United States Agency for International Development (USAID). Systems for Enforcing Agreements and Decision (SEAD) Program in Kosovo: Statement Of Differences to Mid-Term Evaluation Report SYSTEMS FOR ENFORCING AGREEMENTS AND DECISIONS (SEAD) PROGRAM IN KOSOVO: STATEMENT OF DIFFERENCES TO MID-TERM EVALUATION REPORT Contract No. DFD-I-00-04-00170-00 TO 03 Implemented by Checchi and Company Consulting, Inc. Checchi and Company Consulting, Inc. Submitted by: David Greer Chief of Party, SEAD Program Address: Sejdi Kryeziu st. no H9, Pristina, Kosovo Email: dgreer@checchiconsulting.com www.checchiconsulting.com DISCLAIMER The contents are the sole responsibility of Checchi and Company Consulting, Inc. and do not necessarily reflect the views of USAID or the United States Government.           TABLE OF CONTENTS PROJECT OVERVIEW ......................................................................................................................................... 2 INTRODUCTION .................................................................................................................................................... 2 EXECUTIVE SUMMARY – KEY FINDINGS .................................................................................................... 3 OVERVIEW .............................................................................................................................................................. 3 BACKLOG REDUCTION INITIATIVE ......................................................................................................................... 3 Concerning the Key Findings ........................................................................................................................... 5 Concerning the “Lack of Good Faith” on the part of Counterpart Utility Companies .................................. 5 Concerning Problems with the Judiciary ......................................................................................................... 7 Concerning SEAD Monitoring of MOU with Utilities and Follow up with Courts and KJC ......................... 7 Concerning Reporting ....................................................................................................................................... 9 Concerning the Time Necessary to Fully Eliminate Backlog ........................................................................ 10 Concerning Support to the KJC ...................................................................................................................... 10 Concerning the Status of KJC SEU’s and SEAD BRI Teams, and their interaction ..................................... 11 Concerning A KJC BACKLOG Reduction Strategy ....................................................................................... 12 Concerning Legal Reforms and Other Enforcement of Judgments Activities ............................................... 12 KEY RECOMMENDATIONS .................................................................................................................................... 13 ADR/Contract Components ............................................................................................................................ 13 Enforcement/BRI Component ......................................................................................................................... 13 Strategic BRI Focus ........................................................................................................................................ 13 Draft Law on Enforcement Procedures .......................................................................................................... 13 1. CONTEXTUAL OVERVIEW OF THE SEAD PROGRAM ....................................................................... 13 1.1 BACKGROUND ................................................................................................................................................ 13 2. PROGRAM COMPONENTS ........................................................................................................................... 16 2.1. ENFORCEMENT/BRI COMPONENT .................................................................................................................. 16 Concerning Task Order Component definition and design: .......................................................................... 16 Concerning BRI Design .................................................................................................................................. 18 Concerning BRI Implementation .................................................................................................................... 19 Concerning Discussion of BRI in the Report.................................................................................................. 20 Regarding Partner Utility Enforcement Policies ........................................................................................... 23 2.2 ARBITRATION,MEDIATION, AND CONTRACT LAW/LLM COMPONENTS ....................................................... 23 2.3 OUTREACH AND MEDIA COMPONENT ............................................................................................................ 23 3. KEY FINDINGS AND CONCLUSIONS ........................................................................................................ 23 3.1 ENFORCEMENT FINDINGS ............................................................................................................................... 23 Concerning the Draft Law on Execution Procedures .................................................................................... 24 Concerning Privatization of the Enforcement Process .................................................................................. 25 3.2 ARBITRATION AND MEDIATION FINDINGS ..................................................................................................... 25 3.3 CONTRACT LAW/LLM DEGREE FINDINGS ..................................................................................................... 25 3.4 KEY FINDINGS ................................................................................................................................................ 25 4. RECOMMENDATIONS ................................................................................................................................... 25 APPENDIX A - MOU BETWEEN KEK, PTK, AND USAID SEAD .............................................................. 26 APPENDIX B - KEK MAY 25 2011 ANNOUNCEMENT ............................................................................... 32 APPENDIX C – LIST OF MATERIALS PROVIDED TO EVALUATION TEAM .................................... 34 APPENDIX D – BRI DATA AS OF SEPTEMBER 30 2011 AND NOVEMBER 30 2011 ........................... 36 APPENDIX E – REPRESENTATIVE SAMPLE OF BATCH REPORTS .................................................... 42 APPENDIX F – CORRECTED OUTREACH REPORT ................................................................................. 45           PROJECT OVERVIEW The USAID/Kosovo Systems for Enforcing Agreements and Decisions (SEAD) Task Order was executed by USAID and Checchi and Company Consulting, Inc. on September 30, 2009. The overarching goal of the SEAD Project is to improve the rule of law foundational structures that provide the basis for increased foreign and domestic economic investment and generally lead to an improved business-friendly environment. This program is to strengthen the legal systems in Kosovo available to citizens and businesses for 1) the enforcement of contracts and obligations; 2) the enforcement of judgments; and 3) the use of alternative dispute resolution mechanisms. The SEAD program will focus on improving the ability of citizens, businesses and the judicial system to enforce contracts and obligations and court judgments so as to benefit citizens and businesses in a timely and just manner. Recognizing that the timely resolution of disputes is essential to the facilitation of commerce and economic growth, the program will also support the establishment of an accessible and effective alternative dispute resolution system able to provide efficient, reliable and respected mediation and arbitration services. INTRODUCTION The Mid-Term Evaluation Report on the USAID Systems for Enforcing Agreements and Decisions (SEAD) Program in Kosovo, which was prepared by and submitted to USAID by Democracy International, Inc., “hits the mark” in several respects, but misses widely in several others. The Report is, notwithstanding several attempts to provide accurate information to the evaluation team, generally replete with factual inaccuracies. In addition, the Report contains misstatements concerning both the legal framework that dictates how implementation can proceed, and the practical context that informs Project activities. This Statement of Differences will therefore focus on correcting the factual inaccuracies upon which the evaluation team based its conclusions, and will avoid, with few exceptions, addressing those conclusions. Notwithstanding that the Report occasionally inaccurately conflates the Task Order organization of the Project components, structurally this Statement will track the Report’s organization, including where component distinctions are conflated by the evaluation team, so that the response applicable to a particular section can be easily identified and located. In this vein, this Statement will seek to limit discussion, where possible, only to that which is discussed in the Report, and will seek to avoid the introduction of extraneous or additional information. Additionally, it bears noting that if this Report had used the language in the TO as both a framework for evaluation, and as a basis for discussion, it would minimize problems with definition and characterization such as those identified throughout this Statement. For example, the Contract Law and ADR components are frequently conflated, and lumped together. The Enforcement of Judgments Component should be identified as such. The Backlog Reduction Initiative should be accurately understood as a part of the Enforcement of Judgments Component. Although the BRI activities receive more attention in this evaluation, they are neither the primary focus of the Enforcement of Judgments Component, nor does this accurately convey how USAID and SEAD understand the Program design and the manner of implementation. (In some, but not all, sections of this document, BRI is in fact properly identified as “an element of” the Enforcement of Judgments Component). The reason this definitional paradigm matters is that it undermines the utility of the evaluation to inform improvements in implementation, and renders many of the conclusions, indeed the discussion, inapplicable to the actual Project.           Misidentification of components – particularly the Enforcement of Judgments component – illustrates what seems to be an apparent general misunderstanding by the evaluation team that prospective institutional reforms and retrospective backlog reduction efforts are the same activity. This view, however, is not accurate. Although in some places the distinction is properly stated, in general the two distinct efforts are conflated, leading inevitably to conclusions that are not relevant to the objectives of the Program. The report would communicate Project activities better if the structure of the report, and the substance, were written to clearly capture the description of the objectives in the USAID Task Order. EXECUTIVE SUMMARY – KEY FINDINGS Overview The Report contains numerous factual inaccuracies and misstatements that are wide of the mark, particularly with regard to the Enforcement of Judgments component, but also with regard to the other Project Components. Component 1 – Support Local Institutions to Improve the Means and Mechanisms for the Enforcement of Obligations and Contracts (Contract Law), and Component 3 - Alternative Dispute Resolution (ADR) are addressed generally accurately, and contain only a few errors. For example, SEAD has established with partner Chambers of Commerce two “private sector oriented arbitration tribunal(s)” – not one, as stated in the Report – but the inaccuracies attendant to these components are not as overwhelmingly and substantively meaningful as they are for the Enforcement of Judgments Component. The Report is less accurate with regard to Outreach and Public Education (where errors similarly do not necessarily taint conclusions or recommendations). The only key point regarding outreach is that the evaluation team characterizes a major, (and admittedly important), television media campaign as the “main elements” of SEAD outreach and public education. Notwithstanding attribution to SEAD for this statement, the statement is inaccurate (as is the attribution to SEAD) – it is an important part, but does not rise to the level of “the main element.” It will be, however, the only “new” feature of SEAD outreach activities, which will still include a variety of other ongoing events, including round tables, media events, etc. Several such errors or misstatements/mischaracterizations are present in the Report, and that there are many such examples bears noting, but only once. As such, this Statement of Differences will not further correct such instances if they are not substantively meaningful, but will focus on serious and substantive factual errors or misstatements underlying conclusions and recommendations. Backlog Reduction Initiative Before addressing the specific factual errors related to the Report’s discussion of Backlog Reduction Initiative (BRI) activities, clarification of the Reports’ misstatement and misunderstanding of the purposes and design informing BRI is likely to add some value to this Statement of Differences. Expanded discussion of BRI and where it fits within the scheme of the Project is contained in Section 2 – Enforcement of Judgments. There is only one goal in the SEAD Task Order (TO): “to improve the rule of law foundational structures that provide the basis for increased foreign and domestic economic investment and generally lead to an improved business-friendly environment”. The Task Order suggests that a result that would contribute to achieving this goal would be: “Court backlogs reduced by means developed to avoid actions burdening the court system.” (Emphasis added). SEAD’s primary focus is not to eliminate backlogs, but rather is tasked with devising means to avoid actions burdening the court and leading to backlog. The BRI is an additional task that SEAD took on,           with USAID approval, because the KJC and the Courts had no plan for doing so beyond stating a goal to accomplish it, and because it is ultimately necessary. BRI is not intended “to develop systems to reduce the backlog and to make the enforcement process more efficient.” This is the role of activities related to institutional reform as part of the broader component. Further, SEAD has since the original inception of the BRI been clear that the backlog will not be eliminated or significantly reduced within the duration of the Project. Several major initiatives, many of them beyond the scope of the Project, are required for this to occur, and more time and resources than are available to the Project would be required. Both the SEAD Assessment, and the evaluation team’s own report acknowledge this. Cognizant of these limiting factors, SEAD proposed a structural design that arms the KJC with a methodology for reducing the backlog. The Project obtained clear resource commitments from the KJC to ensure that backlog reduction efforts using this methodology will continue after the end of the SEAD Project.”Structurally, the design of BRI reflects current law and practice realities. It focuses resources on the largest subset of backlogged judgments (those that are clogging the system, and which, if addressed by the courts according to the law, absent Special Circumstances1 , constitute a significant impediment to existing court execution personnel in executing “regular” civil judgments). This conclusion and assessment reflects the insufficient resources available to the KJC and the Courts (and the Project) to eliminate backlog entirely by Project end. That the BRI will not eliminate backlog is undeniable. But that was not the Program goal, nor was it ever a goal given the resources and duration of the Project. The principle question here is ignored: is the approach sufficient, given the manner of resolving cases which the current legal regime dictates, to enable the KJC itself to clear the backlog itself in a reasonable period of time? In other words, does it establish, and embed, sustainable capacity in the responsible institutions? The structural design of the intervention is appropriate given levels of KJC (and Project) resources, current law, and the nature of the backlog. By having partnered with KJC on developing the approach, by securing the KJC’s commitment for a longer time frame than even the Project was given, and by relying almost entirely on resources that are internal to the KJC, the backlog reduction effort is clearly sustainable. Indeed, sustainability was not only built into the intervention from inception, it was a primary condition for launching the initiative, being dependent, prior to undertaking any activities, on a three year minimum commitment from KJC to employ the SEU’s, and on promulgation of the KJC Decision declaring “Special Circumstances2 .” The assertions and conclusions of the Report here ignore the focus of the project as expressly stated in the Task Order, which is not to clear backlog in isolation, but to develop measures and mechanisms for doing so. Although the Project consistently maintains that it is desirable to reduce, and ultimately eliminate backlog, it also consistently and clearly represents the BRI as a means to establishing, and embedding in the KJC an approach that will reach that goal. Since the outset of BRI, the Project has maintained that an optimistic forecast for reduction is 5 years; a period of time clearly beyond the 33 months allotted to the Project. 1 “Special Circumstances” is a legal term of art. The Law on Execution Procedures requires that cases be addressed in the order in which they were filed - i.e., temporal filing order – “except under special circumstances.” At SEAD’s urging, and based on legal analysis conducted by SEAD and presented to the Board of the KJC, the Board of the KJC announced in a Decision (drafted by SEAD) that the backlog constitutes special circumstances and allows cases to be addressed in other ways than in temporal filing order. This Decision was necessary to provide a legal basis to organize backlogged judgments into batches of actionable and geographically proximate cases to allow for greater efficiency. Additionally, although judges do have some authority to dismiss cases under the Law on Contested Procedures and the Law on Execution Procedures, SEAD has observed that judges are often unwilling to dismiss these cases due to the ambiguity of judicial discretion on this issue under current law. Similarly, neither the KJC nor Supreme Court has promulgated any guidance. SEAD is addressing this issue through amended legislation making the rules governing suspension, withdrawal, and dismissal clearer. In addition to other procedural reforms, these procedural “pillars” constitute the mechanisms upon which SEAD’s systemic reform activities to establish conditions where the courts can ultimately eliminate the backlog, and as or more importantly, ensure it does not recur. 2 The Law on Execution Procedures categorically prohibits enforcement in an manner other than the order in which judgments are filed except under Special Circumstances – this is a key legal norm contributing to the growth of the backlog, as it introduces a mandatory inefficiency (e.g., 10 claims against one debtor could not legally be enforced simultaneously barring Special Circumstances).           The Report’s conclusion that the BRI will not, in itself, result in making the enforcement process “more efficient” is, strictly speaking, true, but misses the point of what the BRI is intended to accomplish. BRI was always intended to begin a process of removing tens of thousands of old cases from dockets to enable a new, more efficient, enforcement process to begin its work unburdened by this legacy. SEAD has been working closely with the Kosovo Government to create exactly that new and more efficient enforcement process. A new law implementing many of those reforms is essentially completed and ready for submission to the government and Assembly. SEAD has also worked with the Kosovo Government to facilitate enforcement against bank accounts and garnishment of wages, critical elements of making the enforcement process more efficient and effective. However, SEAD has consistently made clear that the BRI itself is not geared towards creating that new system; rather, BRI is part of the larger effort that includes the enactment of such reforms. SEAD is quite cognizant of the error of a similar program in Macedonia that reformed the system of enforcement but made no effort to reduce backlog, leaving over 600,000 cases in a legal limbo. This backlog now threatens to undermine the Macedonian reforms. In short, SEAD is actively involved in institutional reform and working hard to bring it about. The “BRI” label simply refers to a separate part of Project activities. To observe that BRI itself will not lead directly to institutional reform, as the Evaluation Report does, thus seems simply to reflect a misunderstanding of the names attached to the various parts of the SEAD Project, and does not accurately reflect overall SEAD activities. CONCERNING THE KEY FINDINGS Starting with “Key Findings” in the Executive Summary, the Report introduces four “main problems:” (i) the lack of good faith efforts on the part of SEAD’s partners, PTK and KEK, to implement the partnership agreement with SEAD and the Kosovo Judicial Council (KJC) -- particularly with respect to the dismissal of as many small, very old or uncollectable judgments as possible; (ii) the KJC’s, the Supreme Court’s and the Municipal Court’s failure to be proactive and use its court management legal powers to reduce the backlog by purging uncollectable judgments -- including those that the utilities have told the courts they can dismiss; (iii) SEAD’s failure to systematically monitor and report on PTK’s and KEK’s compliance with their partnership agreement and its lack of follow-up with the KJC, the Supreme Court and the pilot Municipal Courts and (iv) SEAD’s use of a reporting indicator that does not measure impact and does not comply with USAID’s Performance Management Plan.3 CONCERNING THE “LACK OF GOOD FAITH” ON THE PART OF COUNTERPART UTILITY COMPANIES Item (i) and subsequent discussion accuses counterpart utility creditors of a lack of good faith. This is factually wrong, and also ignores the context within which the counterparts operate. SEAD certainly does not argue that these counterparts were shining stars of implementation; yet accusations of bad faith go much too far, and are inappropriate (and additionally, contradicted by later statements in this Report!). Early participation by the counterpart utilities was indeed fraught with problems, large and small. But if performance is viewed (properly) in the context of large State Owned Enterprises (SOE) struggling to transform their calcified socialist legacy bureaucracy, and change their internal culture in anticipation of impending privatization, the conclusion of bad faith is unsupported by the facts. Performance has been, to the contrary, relatively positive.4 SEAD maintains that the circumstances 3 Page 3 – Executive Summary – Key Findings 4 The political context of privatization also informs questions surrounding dismissal of claims, as well, as will be discussed later in this Response.           and context of the partners must be acknowledged and included in any analysis in order to form realistic expectations, and reach an appropriate assessment of their performance. Notwithstanding that there were – not unexpected - problems (particularly logistical and staffing problems), that impeded nimble and rapid implementation and a “fast start”, without exception when SEAD sought resolution of the problems encountered with the SOEs’ management, leadership responded by implementing Project recommendations relatively quickly (particularly for an SOE). For example, a lack of (particularly KEK) personnel was a serious impediment to a fast start. This is one example of close monitoring and follow-through by SEAD, and the appropriate response by counterpart KEK. There was a clear deficiency in personnel assigned to support the teams (undoubtedly underlying the frustration on the part of KJC Special Enforcement Unit enforcement clerks with KEK’s support at the time of the evaluation team’s interviews). SEAD addressed this issue within days of the inception of activities in April of 2011. Underscoring the difficult context within which work with the SOE’s by necessity unfolds, recruitment of additional personnel required a Board of Directors decision, which adopted on the 8th of April – only one week after the issue was raised! Notwithstanding, due to the legal requirements – as a SOE – that the utilities are bound to observe in their hiring processes, and internal bureaucracy, public announcement of the positions was not announced until the 27th of May. The legally mandated hiring process followed, and final hiring and deployment of 6 additional legal officers to exclusively support the activity was completed only at the end of August. By the middle of the second quarter of field execution work, therefore, KEK was finally able to deploy, based on Project developed qualification criteria, an additional 6 legal officers to support the program. Interviews with line enforcement clerks and interns would of course reveal the problems; not however, necessarily the implementation of solutions at management level. Such questions were never raised with SEAD management. At a quick glance, it indeed might appear that these SOE counterparts lacked genuine commitment, particularly if judged by the inapposite criteria applicable to a Western company, or even a transition country private enterprise. Given the nature of these partners, and sharp media and political attention to both utilities’ impending privatization, however, to accuse them of a lack of good faith goes well beyond reasonable criticism, even under the evaluation team’s implied test of “proactive dismissal” of old or low value cases. An important clarification of the definition used here is that these cases will be withdrawn, not dismissed (only the court can dismiss these cases). This distinction is not necessarily relevant to the instant substantive discussion, but it nevertheless an important distinction and use of proper terminology is generally important to proper understanding of the discussion. A more important point to note is that, as clearly articulated in the Memorandum of Understanding (see Appendix A), “proactive” withdrawal is not something agreed to by the utility company parties to the MOU. Rather, withdrawal after two unsuccessful attempts to collect, (which is in effect three attempts, as notice/service of process is required before the further two attempts can be made). Further, legal processes require significant time before two attempts are completed. At the time of the evaluation team’s visit, backlog reduction activity was only at the start of its 5th month, with no cases yet ripe for withdrawal under the terms negotiated and agreed in the MOU. (This Report repeatedly states that backlog reduction efforts had been underway for 8 months, which is factually wrong – field execution activities commenced only in April of 2011, or just over 4 months at the time of the visit). Notwithstanding the evaluation team’s reporting that KEK communicated to them a willingness to withdraw claims (and contradicting the Report’s accusation of a lack of good faith), the MOU, which required a difficult negotiation to get to any dismissals, does not permit this. Additionally, the KEK CEO and Head of Legal deny making any such statement to the evaluation team, and remain unwilling to modify this provision, at least in the near term (although they have indicated that they may be willing to revisit the question next year). An additional and perhaps the most important factor that must be considered here, and is what, in fact, the KEK and PTK cases are. It must be acknowledged that these judgments are legally supported property rights and interests in debts owed for services actually provided. It is unreasonable to ask the utilities, themselves struggling with bloated payrolls, poor infrastructure, and significant theft and conversion of services leading to severe limits on their resources, to forego these rights lightly.           Allegations of bad faith in this overall context, therefore, are unfounded. It is also a peculiar statement in that the Report contradicts this finding with subsequent glowingly positive statements regarding KEK’s potential as a partner (see discussion pp-24-26 of Report). CONCERNING PROBLEMS WITH THE JUDICIARY Item (ii) and subsequent discussion accurately identifies a lingering problem with the judiciary, but fails to acknowledge important and informative context important to understanding causes of the problem. While both the Law on Execution Procedures, and the Law on Contested Procedures (the Civil Procedure law), provide, (in some cases wide) discretion and authority to manage case loads by suspending or dismissing cases for a number of reasons, this power is virtually never used. There are a number of reasons, all fairly typical for a post-socialist transition country judiciary, but mostly simply rooted in old practices and habits formed during the period when judges were “merely” civil servants and not empowered to use such discretionary power. This weakness is exacerbated by a current political focus on the judiciary. Indeed, SEAD’s own direct experience confirms the evaluation team’s point – for example, for one case in Ferizaj, for a relatively meager amount owed KEK by a large family headed by a handicapped and unemployed man, the process failed. After the Municipal Court declined to dismiss the case, which clearly satisfied the criteria in the Law on Contested Procedures for dismissal, was sent to the District Court for dismissal. Still, the District Court returned the case, refusing to dismiss. Added to the general mentality and judicial culture are myriad other influences, political and practical, that make a traditionally conservative public institution even more rigidly cautious. Indeed, this may be one of the biggest problems facing efforts to reduce backlog. Change in this area, of course, is progressing at a snail’s pace, given that USAID and other donors have been seeking to do so for over a decade. CONCERNING SEAD MONITORING OF MOU WITH UTILITIES AND FOLLOW UP WITH COURTS AND KJC Item (iii) and subsequent discussion is a broad and sweeping statement of deficiency on the part of the SEAD Program. It remains unclear to SEAD, however, what more could be done to “to systematically monitor and report on PTK’s and KEK’s compliance with their partnership agreement and . . . lack of follow-up with the KJC, the Supreme Court and the pilot Municipal Courts.” This conclusion would perhaps be appropriate if it were based on facts, and if the intervention and activities were well developed and in their second year, or even at the end of their first year. In fact, however, the evaluation team’s field visit occurred not even half way through the second quarter of an entirely, for Kosovo, novel approach. The factual basis for this conclusion does not exist, and is refuted by numerous examples (provided below in subsequent discussion, where applicable). The Report cites: “larger problem relates to the unwillingness of any of the PTK and KEK to follow￾through on their respective commitments, and the courts’ enforcement practices, policies and lack of initiative and action.” In the first instance, SEAD’s ability to motivate, let alone control, any of these counterparts is limited. Counterpart institutions are all governmental institutions or state-owned enterprises. Each, therefore, individually has its own impediments to flexibility and efficiency in the best of circumstances, even in areas of their respective primary functions. To combine efforts and resources in a joint endeavor is further complicated by these challenges. Nevertheless, when problems did arise, they were raised by SEAD, and the counterparts have, at least at the level of logistical and procedural issues, addressed (albeit not always promptly). Larger issues, of course, such as the general culture cited under item (ii) above, however, are not amenable to this type of intervention. All the same, however, the working relationships have been positive, if slow, particularly within the overall context of the institutions involved. For example, while the backlog is indeed a problem for the courts, and one which is acknowledged and addressed, it is nevertheless one item in a long menu of similar and politically more important issues. These include (but are far from limited to) the transition to the Law on Courts and efforts           towards restructuring the entire judiciary by the end of 2012, ongoing re-appointment processes, an even larger (and more important to virtually all) backlog of pending cases, as well as poor resources, etc. For the SOE utility partners, with a poorly motivated workforce, they struggle to perform even their primary functions, and operate within the strictures of the laws and regulations that govern their hiring and firing, among other things. These institutions have no history of working together but instead were (and in some ways continue to be) sometimes antagonistic (utility complaints about poor court performance, and court complaints about utilities “flooding” the court with their claims, etc.). In this context, SEAD by necessity allowed for a reasonable period of time (depending on the issue, ranging from a couple of weeks to a full quarter) to let the “newness” of the Backlog Reduction Initiative wear off, to allow the varying counterparts to adapt and learn to a wholly new set of activities, and to first see if problems would resolve themselves with some practical experience before intervention became appropriate. Each problem that arose, both anticipated and unanticipated, was raised and addressed with the relevant counterpart at a time that was considered appropriate to the Project and USAID (as consultation and coordination with USAID was continuous, often even daily). Ultimately, each counterpart reacted positively, albeit in a manner dictated by each respective institution’s intrinsic limitations. The Key Findings section further addresses other issues, including difficulties in obtaining information and accurate data from the various sources (including SEAD: “based on the limited information we were given by SEAD” – see page 4). SEAD, of course, provided a great deal of information (see list of materials provided to the evaluation team as Appendix C to this Statement); indeed, SEAD provided virtually all Project work-product to the team in both paper and electronic form (on CD’s), as well as rearranging Project schedules to accommodate the evaluation team’s numerous requests for frequent discussions and meetings with Project management and component teams. In addition, extensive factual corrections were made, twice, to earlier drafts of the Report. Corrections to earlier drafts also contained, in response to the evaluation team’s observations, complete and up to date information regarding the number of judgments finally enforced, in addition to data on field executions (the September 30 report provided the team, and which is also updated and provided weekly to USAID, is attached to this Statement as Appendix D – the November 30 Report is also included). The data provided was collected jointly by SEAD staff and KJC Special Enforcement Unit clerks in cooperation with the Court Presidents. It is verified, and reliable, and does not conflate executions with final enforcement, as stated in the Report (unless one reads only the first of two columns on the one-page spreadsheet). The evaluation team acknowledges receiving supplemental information, but for some reasons continues to doubt the veracity of this information. As such, the evaluation team’s “best guess . . . that that number includes cases that have also been executed (attempted enforcement) as opposed to enforced” is incorrect. As of September 30, 7,772 field executions had been performed, with 2,882 cases finally enforced, and with 2,162,731 Euro actually collected. This number consists of 2,293 authentic document cases, and 589 “other civil” cases (notwithstanding this Report’s misstatement that SEAD focuses “only” on authentic document cases, in fact SEAD supports the courts to enforce all civil judgments, with a primary focus on the authentic documents). The Report correctly points out, too, that this number does come in below the first year target of 5000 cases. This is because three months were lost in hiring and training the 30 new KJC enforcement clerks due to a variety of factors, including early elections that impacted the State budget, KJC’s civil service hiring procedures, and an enormous number of applications for the positions. Additionally, the averages also did not meet target expectations (SEAD had targeted – essentially guessing, as there is scant performance data on existing enforcement actions to base the forecast on, 5,000 cases assuming 9 full months of execution. This is approximately 550 cases per month reaching final disposition through the end of the Project’s fiscal year. Actual performance revealed approximately 480 cases per month. Although not necessarily relevant to this Statement, later performance reflects an overall improvement to monthly averages approaching the target. As of November 30th, 4.056 cases had reached final disposition. It was always expected that early performance would lag, as systems were tested and improved, information flow was expedited, etc. In retrospect, and in light of current           performance, although ambitious given the overall context of backlog (processes, limited information on debtors, etc.), this target was fairly accurate. The evaluation team additionally observes that this data was not contained in the quarterly reports provided them. This is a true. However, given that the team was present well before the close of what was only the second quarter of BRI field activity, the inference that SEAD was not collecting information, or was concealing it, is misplaced. There simply was no data of reportable significance in the previous quarterly report (at most a couple of hundred of the over 100,000 judgments in the courts’ dockets). As noted above, field execution is a threshold matter, without which cases cannot reach final disposition. Therefore the Project focused on this court activity. This is of course logically even more important at inception. With regard to general availability of information from courts and counterparts, SEAD completely agrees: it is difficult and frustrating to receive information from the various counterparts, who frequently change the information reported, fail to accurately collate various data sources, and collect and report differently on the same questions. SEAD’s experience mirrors that of the evaluation team. As a result, SEAD only utilizes data it is able to either itself collect, or verify if collected from another source. In fact, this point underscores one of the more disruptive challenges to the enforcement system as a whole as there is virtually no reliable information available even on the court files, let alone on debtors and their assets. It must be noted that expectations have never been exceedingly high for this activity: at no time has SEAD maintained, nor stated an expectation to eliminate the backlog during the life of the 33-month Project. On the contrary, SEAD activities seek to develop means and mechanisms for the counterparts to do so after developing their own capacity and employing the SEAD developed approach, and to provide as much assistance as possible with the time and resources at hand during the life of the Project. Indeed, SEAD has been consistent in forecasting optimistically that within the existing processes and with current resources, it will take 5 years to achieve virtually complete reduction, including dismissals, withdrawals, etc. Finally, it bears mention that SEAD’s approach was designed to circumnavigate the causes of complete and abject failure to achieve any results for several years, by several donors, and to take lessons learned from the several efforts, all of which failed to generate any discernible activity by the courts. Indeed, given the history of repeated similar efforts to address the identical problem (acknowledged in this Report), the Project was actually surprised when pilot efforts to test the approach in Pristina Municipal Court resulted even in tens of cases receiving attention. In sharp contrast with these earlier efforts, however, for which there is no evidence that even one case was resolved, the current approach does, in fact, yield results, albeit to date rather limited. CONCERNING REPORTING Item (iv) and subsequent discussion notes that the Project “use[s] . . . a reporting indicator that does not measure impact and does not comply with USAID’s Performance Management Plan” (emphasis added). This is accurate with regard to USAID’s PMP, in isolation from the duration of the activity, and the context of the legally required enforcement process, which requires several attempts toward recovery (and allows even for litigating or re-litigating a judgment) before a case can be disposed of. As such, the Project measured field executions, because this is a sound measure of court activity. The Project agrees and acknowledges that capturing final disposition is an important measure, and began reporting this information in response to the evaluation team’s recommendation (although the Report’s failure to acknowledge this adjustment is curious, that point is irrelevant to this discussion). Indeed, the Project agreed that the only true measure of success is final disposition, but that this measure, standing alone, fails to capture what is actually happening (for example, each case typically requires several attempts at field execution before final disposition can be achieved). Ultimately, however, the Report’s analysis suffers from a misunderstanding of the law, and a misstatement of SEAD’s focus. The evaluation team states:           “The Evaluators are of the opinion that as long as SEAD’s main focus is just on the courts’ performance in attempting field executions, as opposed to the courts’ performance in obtaining tangible monetary enforcements that eventually reduce the backlog and promote trust in the courts, it is difficult for the Evaluators to see significant sustainable progress or impact on this program element.” The Report does not acknowledge that these are not two separate issues. They are integral parts of the same thing. However, while execution can certainly exist without final resolution, the reverse is not true. And while it is true that the Project had focused on executions in its reporting, as execution attempts constitute evidence of court action, the rationale for this was based in efforts toward monitoring whether enforcement clerks were performing any of the precursor, or threshold actions, necessary to achieve final resolution. (These actions, too, in contrast with dismissals, which do nothing for creditors, nor demonstrate improved court performance, although they would certainly “reduce backlog”, are the only measures of whether there are court efforts to perform their functions). And because at the time of the evaluation team’s field visit, the activity was only starting its fifth month, there was rather marginal data to report regularly on cases that were finally resolved. Notwithstanding, when raised by the evaluation team, SEAD began regular reporting regularly on both field executions and final dispositions. Although the Report devotes considerable space to this issue, as the matter was resolved prior even to the first draft of the Report (and about which the evaluation team was twice informed, in written corrections to drafts), no more attention will be given this issue in this Statement. Additionally, this early reporting focus was agreed upon between SEAD and USAID for the same reasons. i.e., to monitor genuine actions geared to reducing backlog as opposed to merely reportable reductions (from withdrawals, dismissals, etc.). The general consensus from KJC leadership and business leaders, as well as in the opinion of the Project, is that aggressively pursuing administrative dismissal and statistical housekeeping at the expense of seeking to pursue viable cases would be seen by Kosovars for what it is – an effort to “look better” without actually having an impact. This approach would be contrary to the Project’s overall objective, which is to “improve the rule of law foundational structures that provide the basis for increased foreign and domestic economic investment and generally lead to an improved business-friendly environment.” CONCERNING THE TIME NECESSARY TO FULLY ELIMINATE BACKLOG With regard to whether the backlog can be reduced during the life of the Project, SEAD absolutely agrees. This was never contemplated. Indeed, given the short 33-month life of the Project, such an expectation would presume a great deal of preparatory work, which had not already taken place, and significantly greater resources than are available to the Project. CONCERNING SUPPORT TO THE KJC The Report further concludes that “additional enforcement agents the KJC has brought on board could also be much more effective and efficient if they were given the tools and assistance promised in the MOU, including prioritized collectable judgments.” This conclusion is utterly devoid of any factual basis. First, as was explained and demonstrated to the evaluation team on several occasions, prioritized geographically organized “batches” of actionable judgments are generated weekly for the SEU’s by SEAD personnel (in fact, three SEAD staff are permanently assigned to perform this function, to liaise with Court Presidents, Enforcement Judges, and creditor partners, and to manage the SEAD interns who enter information from the paper files into the Project developed database that enables geographical batching. (Examples of the April batches, or plans, which are generated weekly, and dating from the first weeks of the activity, are included as Appendix E). More discussion of “batching” is below, in this Statement’s discussion applicable to Report Section 2.1.           Additionally, the evaluation team misreads the MOU, and even misidentifies the parties to it. It is an MOU between SEAD, and two judgment creditor SOE’s5 – the electric company KEK and post/telecom PTK. It was witnessed by the KJC, but KJC is not a party to the agreement. As such, it does not promise anything to the KJC. Notwithstanding the MOU question, however, SEAD has provided a great deal of assistance and resources to KJC. This assistance has been technical, legal, and material - to equip the SEU’s so that they have, in fact, the tools they need. In order to launch the initiative, SEAD developed for the KJC a wide range of legal analyses, budget analyses, reports, and initial drafts of regulatory instruments necessary to establish SEU’s. These were presented to the KJC Board to secure its decision to support BRI. SEAD has purchased and equipped each SEU enforcement clerk with a laptop, and each SEU office has been provided with printers (including mobile printers to avoid having to fill out paper in the field, necessitating a return to the office and a repeat of a field visit to finalize an action), and other related peripheral equipment. In Pristina, SEAD rents office space for the SEU, and equipped it with the necessary furniture, etc., as there is insufficient office space to house the SEU in the Pristina Municipal Court. (Copies of all of the relevant documents were provided to the evaluation team, in addition even to the SEAD Program budget, containing detailed information on how much had spent on this support, and for what). Additionally, three SEAD Program personnel are assigned full-time responsibility for all the coordination and liaison support between the various parties, which is necessary to facilitate ongoing operations. This includes weekly batching of prioritized cases by geographical region, verification that the batches do not contain cases that have already been paid (a common flaw in the KEK and PTK databases is that debts have been paid, but not reported to the courts), assisting transfer of files to SEU’s, and a wide range of other tasks. CONCERNING THE STATUS OF KJC SEU’S AND SEAD BRI TEAMS, AND THEIR INTERACTION It is important to clarify that the KJC SEU’s and the SEAD BRI Categorization Teams are separate entities. The SEU teams are KJC employees, not SEAD’s, and SEAD therefore, does not have (nor can it have) managerial control over their work. Instead, SEAD must work with, and through, Court Presidents and the KJC. The Report notes these teams and interns will do “nothing but focus on reducing the number of backlogged utility cases in Kosovo’s five courts.” This is inaccurate, and contrary to written and verbal communications provided the evaluation team (and also contradicted by the Report in other areas). First, SEAD Teams have worked, to date, in 9 courts, and the SEU’s are assigned to 5 of Kosovo’s courts – those with the largest proportion of Authentic Document cases in the backlog. Although the main focus of the KJC SEU’s is authentic document cases, in at least two courts the KJC SEU also assists the court in the enforcement of general civil judgments as well (Peja and Prizren). In at least four courts (Lipjan, Malisheve, Suharekë, and Gjilan) SEAD BRI teams also work on supporting those courts to enforce other civil judgments. SEAD BRI Categorization Teams are categorizing all civil judgments in the courts they work in (focusing first, however, on authentic documents where SEU’s are operating and/or it is practicable). The evaluation team was repeatedly informed, bother verbally and in writing, that the BRI Categorization effort will seek to cover as many courts as possible during the duration of the project and, although focused on supporting the SEU’s, the initiative is intended to generally support the KJC with building the backlog database as completely as possible given Project resources and duration, and is not restricted to “only” supporting the SEU activities. As was explained in the SEAD briefing to the evaluation team, SEAD Staff (not interns) engage in batching categorized cases on a weekly basis, and generate batches based on geographical proximity. Indeed, the batching is not focused on singular debtors, which is too narrow a focus, but rather on covering neighborhoods for speed and efficiency. Geographical proximity batching, (which was always planned as the approach SEAD would take), however, does capture individual debtors, so long 5 Technically, these are Publicly Owned Enterprises – purportedly “private” but the State is the sole shareholder.           as they live at only one address. Additionally, SEAD supports the SEU’s by first taking each weekly case plan to verify the validity of these claims with KEK and PTK to ensure that enforcement actions are NOT taken on cases that have already been paid, but which have not been withdrawn by the creditor. The number of these cases is not high, but nevertheless, it is important that SEU’s not attempt further field execution on them. CONCERNING A KJC BACKLOG REDUCTION STRATEGY The Report also proclaims: “Another sign that the stakeholders are serious about real action would be for the KJC and SEAD to develop a clear strategy that outlines, step-by-step or year-by-year, how the backlog numbers will actually be significantly reduced over time both during and after the SEAD program ends. To our knowledge, no such clear operational strategy exists.” Such a Strategy does exist, however. The KJC and the USAID Kosovo Justice Support Program (JSP) (with SEAD Program input on judgment backlog, and Mediation questions) together developed a comprehensive backlog reduction strategy in 2010, which was adopted and promulgated by KJC as an official strategy document. Implementation of this strategy, which also addresses enforcement (and includes extensive SEAD cooperation and liaison), is continuous and ongoing. It is true that SEAD did not provide a copy of this document to the evaluation team (documents provided to the evaluation team were limited to SEAD work product and draft laws), although reference to participation in developing and the promulgating the Strategy can be found in SEAD Reporting. CONCERNING LEGAL REFORMS AND OTHER ENFORCEMENT OF JUDGMENTS ACTIVITIES Although under the SEAD Task Order, in Project documents, and in several communications, verbal and written, to the evaluation team the activities related to reform of the system for enforcing judgments are primary and priority over efforts to reduce backlog, the Report recognizes these activities as “an important second element” to SEAD enforcement of judgments activities. This is much more than another element of the Enforcement of Judgments Component – these activities are the primary focus of the Project, and relate to the following results: “Procedural shortcomings in the Law on Execution Procedure identified and amendments introduced.” Additionally, the law does vastly more than “privatize” enforcement; inter alia the draft also streamlines existing court processes, removes opportunities for endless appeal, provides greater power to courts to administratively and ex officio deal with cases proven to be unenforceable, re-establishes underlying claim statutes of limitations (see discussion under Section 2.1) in order to properly dispose of criminal and administrative fines that have been reclassified as civil judgments and constitute a large percentage of the 100,000 case backlog, in addition to establishing the legal framework for a highly regulated, non-court based bailiff system (called generally “private” enforcement). This law will achieve two goals – first, and foremost, it will replace the two laws currently in force, streamlining a number of procedures, eliminating a number of steps in the enforcement process, limit the opportunity for debtors to “object” to enforcement actions, provide greater power to judges to dismiss unenforceable cases, etc. The draft will also remove from the courts enforcement. This is commonly styled a “privatization.” This term, as it stands alone here, accurately reflects the “shorthand” usage for removing enforcement responsibilities from the courts and transferring them to a bailiff institution, but does not fully capture how such a system works in practice. As written in the draft, (provided to the evaluation team), the institution proposed is not a “pure private system” at all, but rather, on the model of more than 20 of the 27 EU Member States, a non-court based but otherwise heavily State regulated and controlled model.           Key Recommendations ADR/CONTRACT COMPONENTS This is an inaccurate identification of Project components – the ADR and Contract Law Components are two separate components, not one joint component. With regard to the recommendation, SEAD maintains that both ADR centers still require a considerable amount of effort before they will be fully functional, efficient providers of ADR Services. Although they are well-established, they lack sufficient capacity to be “cut loose” prematurely. With planned support the centers should be sustainable by Project end, but if support were withheld, SEAD maintains this would be a guarantee for these efforts to fail as a result of insufficient follow through. Additionally, Standard Form Contracts, to be developed following passage by the Assembly of the new Law on Obligations, so as not to be instantly obsolete, still remain to be finalized and promulgated. Mediation is also a nascent institution, and notwithstanding SEAD successes in establishing the secondary legislation necessary for mediation to be viable, much more work remains before this task can be considered completed. ENFORCEMENT/BRI COMPONENT As previously mentioned, BRI is but a subset of the Enforcement Component. Similarly, the specific recommendations have already been addressed above (or below), and will not be restated here. STRATEGIC BRI FOCUS As with the enforcement component, this is addressed – considerably – elsewhere, both above, and below. DRAFT LAW ON ENFORCEMENT PROCEDURES SEAD concurs virtually entirely with the Report recommendations; obviously, as the working group developing the law has yet to agree on which of two alternative approaches to overseeing the new institution of bailiffs will be contained in the final version, coordination and considerable discussion still remain. 1. CONTEXTUAL OVERVIEW OF THE SEAD PROGRAM 1.1 Background This section of the Report also contains a meaningful factual error, and concomitant flaws in legal analysis. First, the Report asserts: “The numbers, however, are a topic of debate. When stakeholders were queried about the 100,000 pending to-be- enforced cases, all but SEAD agreed that the 100,000 number should really be reduced to 70,000 to 80,000, since 20,000 to 30,000 judgments of that number related to criminal fines levied by the courts that are now unenforceable because of a two year statute of limitations law (the team was unable to obtain an exact number of criminal fine judgments but it appears to be in the range of 20,000 to 30,000). While the Team acknowledges that technically the law recognizes these judgments as being enforceable,           everyone we interviewed, including SEAD, noted that in practice they were not going to be enforced and that they would eventually be dismissed.” These numbers are not a topic of debate. While it is true that the precise number of these cases can only be estimated because SEAD has not yet categorized all of the judgments, and KJC data does not capture them as a discreet category, their legal validity is indisputable. SEAD is a Rule of Law Project, charged with legal reform. That the law “technically” recognizes these judgments as enforceable is not an insignificant issue, and the legal status of these claims must not be disregarded in a cavalier manner, if the law is to be respected and observed; this is unavoidable no matter what consensus there may be regarding the policy question of whether or not they should be legally valid. SEAD agrees that as a matter of policy that enforcement law should not depart from limitations found in the law underlying the claims. Legally, these are mostly criminal claim execution proposals (although there are a good many court fees claims in this number as well). These claims, with State as creditor, are typically administrative or criminal fines (or, as noted, court fees). In the underlying legislation, there is a two year limitation period for fines, during which the creditor (the State) must take action in furtherance of enforcing its claim. The filing of an execution proposal, under the Law on Execution Procedures, constitutes an action in furtherance of enforcing its claim, thereby tolling the claim. As such, their legal status is more than a technicality. As a matter of law, these claims are valid, notwithstanding that they have not actually been collected during the two year period. SEAD has been a vocal advocate for amendments to the Law on Execution Procedures to limit the term for collection for both practical and policy reasons. SEAD has ensured that both variants of the draft Law on Execution Procedures presently under development by the Ministry of Justice incorporate, by reference, statutes of limitations from underlying laws, and apply them to actual collection during the period. This analysis is not applicable, however, to the court fees claims. With regard to the court fees cases, SEAD similarly advocates that these cases be ex officio dismissed, as carrying them and actually enforcing them likely carries greater cost to the courts than the amount to be collected. The bottom line regarding both, however, is that they are under current law completely valid claims, and until such time as law and policy positions change (and there is no guarantee that the government will adopt SEAD’s positions with regard to either), they must be counted as valid claims, and treated with as much respect as any other. SEAD provided data on judgments categorized to date, from which approximately 30% of the backlog of unenforced judgments consists of cases that are criminal fines, court fees, or a combination of both. Even though only approximately two thirds of the 100,000 cases have been categorized by SEAD (at the time of this writing), it is possible to extrapolate from these efforts that 30% is a more or less accurate estimate as to the number of claims based on criminal or administrative fines, court fees, or both. This categorization does not capture what is to be done with court fees. Even if the statute of limitations applies, in a large number of these claims, court fees are sought as well. Recent (September 26, 2011) figures: Total civil judgment claims deriving from criminal fine cases are combined court fees and criminal fines, as all criminal fine cases also seek court fees; the total number includes these two categories as well as cases that are not past the Criminal Code Statute of Limitations, i.e., cases not amenable to dismissal. MALISHEVE 1704 cases no of cases Euro value Court fees 410 26,556.78 2 years old (end of 2008) 395 92,744.43 Total criminal Cases 931 176,687.89           GJILAN 6019 cases no of cases Euro value Court fees 655 27,355.36 2 years old (end of 2008) 221 138,380.05 Total criminal Cases 1158 990,627.88 GJAKOVE 7349 cases no of cases Euro value Court fees 1031 51,220.79 2 years old (end of 2008) 504 48,827.58 Total criminal Cases 1205 88,898.95 PRIZREN 7098 cases no of cases Euro value Court fees 917 73,366.95 2 years old (end of 2008) 567 86,775.74 Total criminal Cases 1292 214,674.11 SUHAREKE 2582 cases no of cases Euro value Court fees 429 32,082.18 2 years old (end of 2008) 770 199,902.14 Total criminal Cases 1053 255,797.77 LIPJAN 2706 no of cases Euro value Court fees 1040 63,146.43 2 years old (end of 2008) 672 122,194.07           Total criminal Cases 1275 178,423.09 TOTAL 27458 cases CASES EUROS 6914 1,905,109.69 2. PROGRAM COMPONENTS 2.1. Enforcement/bri Component CONCERNING TASK ORDER COMPONENT DEFINITION AND DESIGN: The Report conflates Project organization in this section heading and departs from the Task Order organization. SEAD maintains that adhering to the Task Order is important to understanding the Project, and to properly framing discussion of its activities and results, and forming conclusions about it. Further, SEAD suggests that this understanding must be placed in the context of lessons learned, and the context within which the activities take place to fully appreciate activities and results (on this latter note, the Report does a good job recognizing key problems and current context, but does not connect them closely with Project activities). This present discussion is therefore necessary for clarifying discussion in the Report. The Task Order Expected Results for this Component are: • Procedural shortcomings in the Law on Execution Procedure identified and amendments introduced; • Court case filing process is streamlined and tightened as court clerks are trained on the filing requirements and procedures including fee collection; • The role of the judges in the enforcement process is re-evaluated and the administration of non-judicial responsibilities is transferred to the court clerks or a private collection system; • Overall enforcement efforts are improved as training programs for judges regarding their enforcement duties are developed and delivered; • Courses on execution of judgments developed and delivered through KJI; and • Court backlogs reduced by means developed to avoid actions burdening the court system. (Emphasis added). The Task Order illustrative activities are: • Identify the procedural shortcomings in the Law on Execution Procedure and propose appropriate amendments; • Identify overly-burdensome actions and processes clogging the courts (e.g. utility bills) and propose means to resolve the problems; • Train court clerks on case filing and processing requirements and procedures; • Re-evaluate the roles of judges in the enforcement process and assess the possibility of transferring the administrative or non-judicial responsibilities to court clerks or a private collection system (e.g. private bailiffs); • Develop better training programs for judges regarding their enforcement duties; and           • Develop courses on execution of judgments for the KJC that could be added to the curriculum of the KJI.6 Under these defined activities, and as previously noted in this Statement, backlog reduction activities – BRI – are corollary, and constitute a subset of the Enforcement of Judgments component. More importantly, they do not constitute the Project’s main focus, nor are they the most important component activities. In contrast with the Task Order, however, the Report states: “A key element of SEAD’s enforcement component relates to reducing the number of utility judgments in backlog. A second relates to the streamlining of enforcement procedures and to promoting legal reforms—including “privatizing” much of the current judicial enforcement process.” SEAD, and USAID Kosovo, however, understand the primary focus of the Project is to improve processes regarding enforcement. The improved processes are required to also facilitate reducing the current backlog, and ensure that a backlog does not again arise. As such, SEAD’s efforts to improve processes are primary – indeed, really the sole goals of the Project. These activities receive minimal coverage in the Report, primarily include developing new legislation streamlining procedures, and by establishing the institution of bailiffs to prospectively reform enforcement in order to overcome the court systems current, and forecast, chronic resource and capacity limitations. SEAD activities also involve building avenues for information exchange between courts and other government institutions to allow for more efficient location of judgment debtors and identification of their assets. The Project’s primary effort is on new legislation. SEAD is officially a member of the Ministry of Justice’s legislative drafting working group developing a new draft Law on Execution Procedures. This law, in addition to streamlining court processes, etc., also creates the institution of bailiffs (in “shorthand” characterized, somewhat inaccurately given the rather extensive involvement of government in regulating the institution, as “Private”).7 This working group has actually been working on two varied approaches. One version vests nearly all responsibility for licensing, regulating, monitoring, and control of the profession of bailiffs in the Ministry of Justice. The alternative, advocated by SEAD and incorporating lessons learned in Kosovo and in the region, where the executive branch often does not respond nimbly to judiciary concerns, incorporates extensive KJC involvement in key decisions.8 This is an additional mechanism to ensure backlog does not arise again (as KJC would be in a position to ensure the number of enforcement agents was quickly expanded, in the event that there is an insufficient number of bailiffs to keep up with demand). Additional SEAD interventions to improve processes, already well-advanced, include those that allow for exchange of employer data by tax authorities so wages can be garnished; by regulations that create increased Central Bank oversight of commercial banks to ensure greater compliance with enforcement actions; and by establishing mechanisms for information exchange between courts and the Central Bank on bank accounts facilitating greater efficiency in attaching bank accounts to satisfy judgment debts. 6 For purposes of this Statement of Differences, it bears mentioning (but not belaboring) that SEAD of course is actively implementing all of these activities. The one exception is with regard to working with court clerks (not to be confused with enforcement clerks) on training and on filing procedures, as at this point in the enforcement process administrative functions are legally limited, and activities here would not lead resolution of the problems (the relevant authority and jurisdiction rests with the execution judge(s)). 7 It is “Private” in that the function is removed from the court system, and bailiffs are non-governmental and non-civil service. An important caveat to this, however, is the extensive amount of regulatory oversight that a government institution maintains. 8 Particularly those involving the number of bailiffs (a minimum threshold and non-discretionary increase should a backlog begin to accumulate), and revocation of a license (as a mechanism to minimize the influence of “telephone justice” or other influence on a bailiff), among others.           CONCERNING BRI DESIGN A conservative, risk-averse approach to seeking the Task Order results in implementation, one that focused narrowly on the implementation of the Task Order’s mandate, would have the result of limit activities accordingly, in seeking little actual backlog reduction, but being satisfied with prospective reforms that are achieved through capacity building and procedural reform. In truth, the task order contemplated a limited approach, with activities piloted in only one court (albeit Kosovo’s busiest, Pristina Municipal Court). This is also the approach taken by past donor projects in Kosovo, and in the region. It is not a stretch to infer from the fact that SEAD exists that previous efforts did not lead to resolution of the problem. Regionally, similar efforts have also failed – in some instances spectacularly: Macedonia’s reform, which largely mirrored the SEAD design, ultimately succeeded in reforming the system prospectively. Simultaneously, however, this intervention erred catastrophically as the reform left orphaned a backlog of over 600,000 cases that could not be transferred to the newly established bailiff system, while also eliminating the means by which the courts could enforce these cases (their jurisdiction and resources were limited under new law). SEAD BRI activities, developed closely together with USAID Kosovo, sought to incorporate the lessons learned from these previous experiences, both in Kosovo and in the broader region, as well as to capitalize on new opportunities with an innovative, and previously untried, approach. Briefly, three core issues informed SEAD’s and USAID’s strategic planning for enforcement reform: 1) Capacity building alone has failed in Kosovo, and doing more of the same would also result in further failure. Even assuming “perfect world” skill-sets and efficiency, the judiciary will for the foreseeable future lack sufficient resources to fully perform all of its current adjudicatory and enforcement functions. The judiciary is woefully under-resourced and it will not see improvements to resource levels any time soon given overall limitations on State resources. There will simply not be available to the courts in the foreseeable future sufficient tools for both. Without addressing the courts’ severe resource limitations, both increased capacity and streamlined procedures9 will be insufficient to resolve problems. This background informs why, by at least January 2010, the Government of Kosovo policy decision was taken to adopt the bailiff system, as was already done by more than 20 of the 27 European Union members, and others in the Western Balkans, including Albania and Macedonia. (That the Government of Kosovo had already taken this political and policy decision by the time SEAD began operations is not acknowledged by the report. The evaluation team is nevertheless accurate in recognizing that SEAD does support the introduction of bailiffs, with simultaneous procedural reform, as the best approach for reforming Kosovo’s enforcement system). 2) Compounding resource and capacity issues is the turmoil the judiciary is presently experiencing due to the complex task of transitioning to a comprehensively reorganized justice system. The transformation flows from the adoption of a four new “justice sector” laws (laws on Courts, KJC, Prosecutors, and KPC). These laws mandate transformation be completed by January 2012. These challenges, of course, are on top of existing challenges the courts face from a lack of resources allocated for the adjudication of cases, the dismissal and re-appointment of many judges, and the lack of a modern case management system, among other intrinsic problems. This transition, even solely with regard to adjudicating cases, constitutes both the political, and the institutional priority for an already nearly overwhelmed system. Enforcement, while incredibly important, still takes a backseat to these issues. This reality further supports the policy choice to transition to a bailiff system, acknowledging limitations on the ability of the courts to accomplish sweeping reorganization of organizational, administrative, and adjudicatory functions, and enforcement. 9 Those limiting the ability of judgment debtors to use legal processes to delay judgment, granting and mandating the use of greater judicial power to manage caseloads, and making greater information on debtors available, and other procedural changes.           From SEAD’s perspective, this also mandates that some mechanisms, methods, and capacity be built within the KJC to deal with its existing docket of judgments (at the time of this writing, now over 117,000 cases). As in Macedonia, these cases will remain the responsibility and jurisdiction of the courts until they are finally enforced, or judgment creditors willingly pay a second time, a fee to a bailiff to enforce (they will have already in most cases already paid a fee to the courts). This transitional filing fee challenge creates a problem. While it is certainly likely with regard to perhaps even many cases, but by no means all, judgment creditors will choose to do so as and when bailiffs demonstrate performance. But no “refund” of filing fees is practicable, and legally requiring a second payment, now to a bailiff, is constitutionally and legally problematic (as well as bad policy). Therefore, it is logical to anticipate that a large number of these cases will remain the responsibility of the courts, and a means must somehow be found, and the courts equipped with, a means to do so. For these reasons, the legislation being developed by SEAD has always contemplated that even after the introduction of the Bailiff system a “dual” system will be required for some years, until backlog is eliminated. (Additionally, the courts will retain jurisdiction for labor, family, and child related enforcement). 3) Several circumstances presented an opportunity to coincide with the foregoing. In the context of a changing institutional landscape, the new leadership and commitment to reform at the Kosovo Judicial Council, created vastly greater openness and accountability than existed even in the first months of the Project. New KJC leadership and the replacement of an “old-guard” at the KJC Secretariat, for the first time created conditions where the problem was acknowledged as serious. Thus, for the first time, KJC created with USAID support a comprehensive backlog reduction strategy, addressing problems with both open cases and enforcement of judgments virtually simultaneously with the KJC Board’s ratification and adoption of the SEAD BRI approach, and the allocation of budgetary resources to the hiring of an additional 30 enforcement clerks (incidentally, these clerks, based on SEAD recommendations, are actually trained and educated as lawyers, unlike the existing 76 enforcement clerks assigned to the courts). CONCERNING BRI IMPLEMENTATION SEAD was able, supported by USAID, to take advantage of these new opportunities. One of which was a willingness to identify the problems, and support innovations to address them. Most importantly, the KJC demonstrated its commitment to itself taking care of the problems of enforcement by adopting the SEAD judgment backlog reduction strategy, and committing what scant available additional resources it could. USAID directed SEAD to provide what support it could, and to integrate the methodology and approach into the KJC. The foregoing is the context and background illuminating how, and why, USAID Kosovo and SEAD came to introduce the SEAD BRI activities within the general framework of the Enforcement of Judgments component. As described in SEAD Memo to USAID to Initiate the BRI (dated September 29, 2010): The operation of the Special Enforcement Office will have two direct impacts on existing court enforcement operations. First, because authentic document cases will be worked on intensively by the Special Enforcement Office, the total backlog of cases in local courts should be significantly reduced. Second, because the pressure from the large number of authentic documents cases will be removed, the existing offices will be able to devote more attention to other civil execution cases. This will have direct impact on the reduction of the backlog of both authentic document cases and other civil cases. SEAD hired 15 interns (subsequently doubling his number to 30) to electronically categorize case files – i.e., entering data from each of the now more than (at the time of this writing) 117,000 paper files into a SEAD developed database. Starting in December of 2010, the interns began operations in Lipjan Municipal Court (a relatively small court close to Pristina) with a view to testing the database and developing operating procedures. This is the first step in the BRI activity – putting the           information on judgment cases in an electronic database so that the cases can be more efficiently and effectively managed. An important note on categorization is that the categorization activities are not restricted to supporting only the five courts with SEU’s, nor to only capturing authentic document cases, but rather, to completely categorizing all civil cases in as many courts as possible before Project end. The exception to this approach is in Pristina Municipal Court, where to date, only Authentic Document utility cases (AD) - more than 23,000 – are the first priority (although once those are completed, the team will also begin categorization of other civil cases). Categorization in courts where SEU’s are operating focuses first on AD cases, but ultimately categorizes all cases. SEAD hopes to achieve categorization in all courts before Project end, but frequently cautions that it may not be possible to do so. To date, SEAD categorization is concluded or underway in 10 courts. Notwithstanding this limitation, SEAD maintains that even an incomplete database has demonstrable utility to the courts, and it is expected that a follow-on Project will complete the task if SEAD does not. Additionally, notwithstanding that these databases, once finalized, are not being maintained by the courts10 (for a variety of reasons, mostly related to the personnel and IT infrastructure considerations), they are designed to integrate into anticipated improvements to court electronic case management, and will contain the overwhelming majority of backlogged judgments in those courts. Concurrently, SEAD increased the size of its Project staff by adding a BRI Coordinator, and a database manager. Later, as operations were expanded at the direction of USAID, SEAD hired another staff member to be an assistant coordinator, and added management responsibilities for the database administrator to also assist with management and coordination. These three manage the interns; and liaise with both the MOU creditors (as well as the other utility creditors), Court Presidents, enforcement judges, court based enforcement clerks, the KJC Secretariat, and the Special Enforcement Units. In addition to the wide range of coordination and logistical activities required, one of their primary tasks is to weekly provide a “Plan” for the SEU’s. This involves batching cases from the database based on whether they are actionable (i.e., notice has been provided to the debtor, and verifying that the judgment has not already been paid but not reflected in the case files as a result of poor administration on the part of a creditor, court, or both). Actionable cases are then further compiled in geographical batches (see Appendix E - examples of the April, 2010 batches dating from the first month of SEU operations). The vast majority of cases included in these plans are AD utility cases, but not exclusively. These weekly plans are then provided to the SEU’s, who implement them, and report results. SEAD BRI staff compiles the reports for USAID, and the courts. Additionally, it is worth noting that the evaluation team recommends that batches ought to be based on common judgment debtor. SEAD maintains that this is entirely too narrow a batching protocol. Geographical batching captures cases against a common debtor based on address, ensuring that multiple judgments, where they exist (not such a common circumstance), are captured in the batch, in addition to building in significantly greater efficiency to SEU work. With these batches SEU’s then focus on a neighborhood, essentially going “door to door” and minimizing the time and effort that travel from debtor to debtor requires. CONCERNING DISCUSSION OF BRI IN THE REPORT Much of the discussion in the Report is addressed above. There remain a few incorrect statements and factual errors, however, which are not addressed in this Statement’s general discussion above. 10It is true that, due to a number of circumstances SEAD does not imbed personnel (interns) permanently in the courts, and therefore once categorization of the backlog is complete, categorization teams move on to other courts. SEAD leaves in place the database, and the means to continue maintenance of it, but lacks the resources to permanently replace court personnel. Additionally, SEAD has advocated to the KJC Secretariat that the database be maintained on an ongoing basis, and used as an electronic registry of judgment cases until such time as an effective Case Management Information System is implemented. Nevertheless, IT infrastructure and personnel limitations generally result in the database not being maintained regularly after SEAD teams complete their work.           First, the Report states: [The Report] notes these teams and interns will do nothing but focus on reducing the number of backlogged utility cases in Kosovo’s five courts. The Evaluators learned during field visits that the interns did not seem to even be batching cases against the same debtor in any kind of systematic manner, as SEAD had planned, and that there was no follow-on judicial effort to keep the catalogued files up-to-date after the interns had completed their initial work. If SEAD staff batch on their own the Evaluation Team was not told this by either SEAD or the enforcement clerks and judges that we interviewed. Efforts to correct this factual error were attempted in written responses to initial drafts of the Report. It is important to clarify that these teams and interns are not intended to “do nothing but focus” on backlogged utility cases. While a priority where SEAD supports the SEU’s, the activity is not confined to these types of cases, either in categorization, or in execution and enforcement. Judicial maintenance of the databases is also addressed above. Finally, the last sentence of this paragraph contains an additional error. The evaluation team was informed verbally, and in writing of this fact on several occasions. Subsequent discussion in the Report relies on inaccurate data on performance, in addition to attributing the data used to base the analysis on to a month when, in fact, there were no actual activities (the Report cites March data, when operations began only in April). Issues of data quality are addressed more completely above in this report. Suffice it to say that SEAD data, comprehensively supplied to the evaluation team both during their visit and subsequently is based on court records and close monitoring of the SEU’s, and activities in courts where SEAD is working. Examples of the weekly data, from September 30, 2011 (data reported weekly to USAID, and also was supplied to the evaluation team in corrections to earlier drafts), and the most recent as of this writing, are appended to this Statement (Appendix D). The calculations on the average rate of case closure per day used in the Report – 1.4 cases per day on average as opposed to the actual (September) average of over 7 cases per day – is quite flawed. This Statement sets for the correction that was written by SEAD for USAID, and communicated to the evaluation team to correct the errors its first draft Report: The number of cases in the backlog, as reported by KJC is over 100,000. This is the backlog. Until categorization is completed, the precise number of backlogged Authentic Documents cases within the backlog will not be known (due to shoddy record-keeping, lack of an electronic database, etc.), but the generally accepted estimate range is between 45,000 and 60,000, or roughly half. The average per day that should be reflected, as of September 2111 is: Pristina; 221 cases executed (10 SEU officers) divided by 5 days (week) = 4.42 cases a day per SEU clerk. Ferizaj: 75 cases (5 SEU clerks) = 3 cases a day per SEU clerk, Gjakova; 222 cases (5 SEU clerks) = 8.88 cases a day per SEU per clerk. Peja: 133 cases (5 SEU’s) = 5.32 cases a day per SEU clerk; Prizren; 11These figures were generated approximately one month following the evaluation team’s field visit during the middle of August, after they had prepared their first draft. Performance has since improved further.           403 cases (5 SEU’s) = 16.12 cases a day per SEU clerk. TOTAL: average for all courts (SEU operational) is =7.02 cases a day per SEU clerk. Note: There are 2741 closed cases; or 91.36 cases (69,425.69 euros) per SEU clerk to date (starting from April, 2011). The foregoing calculation is at the low-end of performance, in the worst case. However, the analysis explicitly ignores the stated strategy of the BRI, which is to develop with and assist in the implementation of a means by which the KJC will be equipped to dispose of backlog after Project end. Although indeed it would be desirable for the Project to eliminate an overwhelming majority of the backlog, this is simply not feasible given the resources available to the Project within the 33 month Project duration. The Project has consistently maintained that the initiative will not completely eliminate backlog, and has predicted that a minimum of three, and likely five years would be necessary to do so. This context, indeed, is a key rationale for having designed the intervention to work from within the KJC; to provide a methodology and to support the KJC SEU’s with case categorization so that the caseload can be more efficiently managed by KJC when the Project ends; and to ensure that there is sustainability. It will also become easier to dispose of cases through batch processing when planned procedural reforms are fully operational, such as bank levy with the cooperation of the Central Bank, and wage garnishment with the assistance of pension information. So we should expect the rate of BRI case resolution to speed up significantly as the institutional reform portion of SEAD sees its programs come to fruition. Finally, this Strategy, with disclosure of its limitations, was developed with, and approved by, USAID. The structural design of the intervention is appropriate given levels of KJC (and Project) resources, current law, and the nature of the backlog. By having partnered with KJC on developing the approach, by securing the KJC’s commitment for a longer time frame than even the Project was given, the intervention is clearly sustainable. Indeed, sustainability was not only built into the intervention from inception, it was a primary condition for launching the initiative. SEAD had imposed this condition before committing resources itself. The initiative therefore was dependent, prior to undertaking any activities, on a three year minimum commitment from KJC to employ the SEU’s, and on promulgation of the KJC Decision declaring “Special Circumstances.” The Report’s discussion of these activities departs from the organization and purposes of the Project as expressly stated in the Task Order. This is not to clear backlog in isolation, but to develop measures and mechanisms for doing so. Although the Project is vocal that it is desirable to reduce, and ultimately eliminate backlog, it also consistently and clearly represents the BRI as a means to establishing, and embedding in the KJC an approach that will reach that goal. Since the outset of BRI, the Project has maintained that an optimistic forecast for reduction is 5 years; a period of time clearly beyond the 33 months allotted to the Project. The conclusion that the BRI will not result in making the enforcement process more efficient is, strictly speaking, true. However, SEAD has consistently made clear that BRI is not geared towards doing so. Rather, institutional reforms – new legislation and interventions to facilitate enforcement against bank accounts and garnishment of wages – are designed to make the enforcement process more efficient. BRI is designed to leave in place a methodology with which the KJC can itself, given the short duration of the Project, continue efforts with until such time as backlog is ultimately cleared. As the Report fails to note, SEAD is quite cognizant of, and frequently cites as an example for why a backlog reduction initiative is necessary, the error of a similar USAID program in Macedonia that reformed the system of enforcement but made no effort to reduce backlog, leaving over 600,000 cases in a legal limbo. As such, because BRI is expressly NOT directed toward prospective reform, the conclusion stated that it will not lead to procedural reforms here mischaracterizes the project's intentions. Finally, with regard to discussion of newly filed cases, these cases by definition are not “backlogged” cases – they are inventory. Definitions and correct characterization matter generally, but particularly with regard to law and legal systems. And while it is true that some percentage of inventory (i.e.,           newly filed cases) may eventually become backlogged, due to deficiencies and inadequacies in the system, precise use of language here is necessary to avoid an incorrect statement of the issue. REGARDING PARTNER UTILITY ENFORCEMENT POLICIES The Report extensively discusses the KEK and PTK internal enforcement policies. The Report does not acknowledge, however, that these policies are applicable to their filing of new claims, and not retrospectively to claims already filed. SEAD experience differs considerably, as achieving even the value threshold and number of attempts to secure withdrawal of cases was carefully negotiated, and both partners were unwilling to go farther in waiving their property interests. Although these current policies are welcome in that they will minimize the number of claims that will be filed now and in the future, they are largely irrelevant to the issue of backlogged cases. 2.2 Arbitration, Mediation, and Contract Law/LLM Components This section contains only one substantively factual error, regarding characterization of the SEAD Mediation Centers. While these Mediation Centers will also “take” court referrals, and SEAD is working closely with both the KJC and the Court Presidents in Peja and Gjilan, where the centers are located, to energize and systematize court referrals, they are not limited to court referrals. This distinction is important, as the purpose-driven motivation to conduct mediation is to try to resolve disputes before they rise to the level of litigation. That said, SEAD recognition that court-referrals also serve a dual role – both to expand the use, and thereby the acceptance of Mediation, as well as to relieve, where possible, pressure on the courts. It should be noted, as well, that the Mediation Commission at the Ministry of Justice also has considerable responsibility for “Marketing” mediation. The Report accurately acknowledges this counterpart’s limitations. 2.3 Outreach and Media Component As addressed above, the television media campaign planned for Project Year 3 is important, it is neither the main nor “most of” the elements of SEAD’s outreach and media activities. The Report does, however, provide a partial summary of what, in fact, are the main, and most of, SEAD’s outreach activities. It is worth mentioning, as well that, in Report Appendix 2, only partial (apparently only one quarter’s) information is captured. This Statement, in Appendix F, corrects this information. 3. KEY FINDINGS AND CONCLUSIONS 3.1 Enforcement Findings As most of the numerous issues with the Report’s discussion of enforcement are already covered above, only a couple of items bear noting. First, the Report continues to discuss at length reporting on field executions versus final enforcement. As noted previously in this Statement, the Project concurs that this number is important, but that field           execution performance must also be collected to accurately measure not only ultimate success, but also court performance within the process.. Second, the Report attributes to SEAD the statement that court performance is the “overall programming objective.” This is an incomplete statement. BRI activities (alone of Project programming objectives) are related to court performance, and the use of this (now these) measures, is a mechanism to monitor that. Generally, the Report more or less accurately restates the myriad gaps in standard operating procedure, the low institutional capacity, and the cumbersome process that constitute the enforcement environment. On the other hand the Report misuses the term “Special Circumstances” – which is a legal term of art (it means merely an authorization to courts, enabled by a KJC Board Decision having the status of a regulation, allowing for cases to be addressed in other than temporal filing order). CONCERNING THE DRAFT LAW ON EXECUTION PROCEDURES The Report very briefly summarizes the status of activities with the Tax Administration (an agreement already concluded between the tax authorities and KJC to share employer data) and Central Bank (regulation already promulgated that ensures greater commercial bank compliance with enforcement actions and the as-yet-to-be completed registry of account holders). This section, however, is factually incorrect with regard to completion of reforms. First, the legal reforms (a regulation drafted by SEAD for the Central Bank and promulgated in February of 2011) for enforcement against bank accounts is complete). The evaluation team was provided with a copy of this instruction (regulation). Further to this intervention, the development of the Registry of Account Holders at the Central Bank of Kosovo, a database containing account holder names, Personal Identification Numbers (PIN), and account numbers held at commercial banks will be completed and operational this year. This Registry will remove several steps in the process, by facilitating enforcement against identified accounts – essentially removing at least two steps in the process. Finally, a concept for a clearing mechanism for judgments similar to check clearing mechanisms will be developed for the Central Bank, but neither implementation nor necessary legislation for this is within the scope of SEAD. It is hoped that any follow-on Project will be able to build upon the foundation of this concept and fully implement it. Similarly, SEAD brokered an Agreement between the KJC and the Tax Administration of Kosovo (TAK) on the sharing of limited employer information to facilitate wage garnishment. These reforms are substantially completed, and now require only monitoring and follow-through to ensure they are institutionalized and regularly maintained. Implementation is underway, and TAK has already cleared delivery of its employer information to the KJC. Mechanisms for the regular exchange of this information are in place at the time of this writing. SEAD maintains that these reforms are the most significant interventions of the many SEAD activities, other than revised and streamlined processes in the draft law. Concerning the draft law itself, it will achieve two goals – first, and foremost, it will replace the two laws currently in force, streamlining a number of procedures, eliminating a number of steps in the enforcement process, limit the opportunity for debtors to “object” to enforcement actions (and re￾litigating them), provide greater power to judges to dismiss unenforceable cases, place greater information on judgment creditors to provide complete execution proposals, etc. The draft will also remove from the courts enforcement. This is commonly styled a “privatization.” This term, as it stands alone here, while accurately reflecting the “shorthand” usage for removing enforcement and transferring it to a bailiff institution, fails to completely communicate what is contemplated. As written in the drafts (and which were provided to the evaluation team) the institution proposed is not a “pure private system” at all, but rather, on the model of more than 20 of the 27 EU Member States, a non-court based but otherwise heavily State regulated and controlled model.           CONCERNING PRIVATIZATION OF THE ENFORCEMENT PROCESS This is addressed in greater detail above. Suffice it to say that credit for “advocating” this policy position is not due SEAD (nor has SEAD needed to exert any resources to achieve this position). Rather, this was the existing government policy decision made by the Minister of Justice. SEAD agrees with this policy decision, as noted, and has provided considerable technical and logistical support to the Ministry of Justice Legislative Drafting Working Group to finalize the draft. 3.2 Arbitration and Mediation Findings The Report also errs in characterizing the SEAD Mediations Centers as “Court Mediation Centers,” and stating that the “are within the courts.” They are SEAD Centers and are not located in the courts. Additional factual errors include that judges have not been trained on Mediation (SEAD has conducted several judicial trainings on Mediation at the KJI, and works on an ongoing basis with the Court Presidents and Civil judges in Peja and Gjilan on a direct basis). Additionally, the Report observes that there is little information in the Quarterly Reports on activities toward sustainability, etc. While true that SEAD quarterly reports available to the evaluation team did not have this information, this is because, when the evaluation team was present in Kosovo, the Centers had only been opened in the weeks prior to their visit, in other words, during the quarter in which the team conducted its field visit. By definition, therefore, this information would not be contained in reports for previous quarters. Finally, the Report notes that, “we were told there has not been a formal public awareness campaign or long-term strategy to bring private clients to the Centers to help them attain sustainability.” This is true with regard to an awareness campaign– there had not been, for the same reason that there was no information in the quarterly reports. The Centers had been open only a few weeks. The Opening Ceremonies noted in the Report were the start of formal campaigns, which were planned strategically to follow the openings (and the conclusion of the Balkan Holiday month of August) with daily face to face visits with businesses by SEAD and Mediation Center Staff, holding weekly open houses at the Centers, and continuing to liaise with Court Presidents and judges regarding referral. 3.3 Contract Law/LLM Degree Findings Only one significant error is contained in this section. The Report questions the sustainability of the LLM Program, but does not acknowledge the commitment by the University of Pristina in its MOU with SEAD to fund this LLM for three years. SEAD maintains, and the Report seemingly would acknowledge, that this is ample time for the program to take root. 3.4 Key Findings There are no significant factual errors in this section. It should be noted, however, that this summary of SEAD activities is quite summary, and selective. Nevertheless, it is a fair representative sample. 4. RECOMMENDATIONS SEAD makes no comment on the recommendations, save that they should be considered in light of accurate factual bases and other relevant contextual considerations.           APPENDIX A - MOU BETWEEN KEK, PTK, AND USAID SEAD                                                             APPENDIX B - KEK MAY 25 2011 ANNOUNCEMENT           Translation of KEK Advertisement above: KOSOVO ENERGY CORPORATION Pursuant to the request No. 2094 of 08.04.2011, on the public announcement of the Legal Office approved by the Managing Director of KEK, J.S.C, Human Resource Division issues the following Public Re-advertisement KEK, J.S.C – Legal Office shall recruit 6 employees in the capacity of interns graduated at the Faculty of Law for the needs of Districts, as follows: 1. One (1) intern for the District of Prishtina 2. One (1) intern for the District of Peja 3. One (1) intern for the District of Prizren 4. One (1) intern for the District of Ferizaj 5. One (1) intern for the District of Gjilan 6. One (1) intern for the District of Gjakova Employees will be recruited in the capacity of interns, and the duration of their internship will be 6 months. During the internship, employees will be monitored by a mentor, that is, a responsible person. During the internship, employees will be evaluated for their work by their mentor and the Manager of respective Department. Professional Requirements Applications shall only be admitted from applicants who have a degree from a Law Faculty. Candidates are preferred to be from the region covered by the respective District, since he/she would know the area and consumers. Formal evaluation and interviews will be conducted after the deadline for application is closed. Candidates are preferred to have knowledge of English Language and good computer skills. Following the interviews the selected candidates shall be informed about their selection and about when they should start working as interns. KEK reserves the right to create a shortlist of applicants. Salary The salary level will be determined in compliance with KEK Regulations. Interested persons should apply through the internet by filling in the applications they can download from KEK Website www.kek-energy.com Applications should be submitted to this email address: ofertapune@kek-energy.com Candidates may apply only electronically. Applications in the earlier advertisement shall also be taken into consideration. Deadline for application is 03.06.2011 at 16:00 hrs. Prishtina, 27.05.2011 Division of Human Resources (signature)           APPENDIX C – LIST OF MATERIALS PROVIDED TO EVALUATION TEAM Systems for Enforcing Agreements and Decisions Program – Work Product 1. Assessment ADR Assessment Enforcement of Judgments Assessment 2. SEAD Program Information Materials Scope of Work for the USAID SEAD Media Campaign SEAD Program Brochure 2.1 Fact Sheets 2.2 Success Stories 2.3 Newsletters 2.4 Mediation PR Materials 3. SEAD Program 3.1 SEAD Reports, PMP and Year 2 Work Plan 1. Focus Group Report 2010 2. Business Survey Report 2.a Focus Group Report on Contracts 3. Commercial Court Case Analysis 4. SEAD Program After Year 2 4. Commercial Law and Legal Education a) Legal Education MOU University of Prishtina Law Faculty and USAID SEAD Program SEAD LLM Progress Report Self Assessment Report LLM b) Commercial Law b.1 Standard Form Contract Standard Form Construction Contract Draft Law on Obligations Explanatory Notes on the Draft Law on Obligations 5. Enforcement of Judgments 5.1 Kosovo Judicial Council SEAD Program Proposal to initiate a Judgment Backlog Reduction Initiative (BRI) a) Memo on BRI 1. SEAD BRI and KJC Special Office Executive Summary           2. Analysis Establishment of Temporary Office for Authentic Document Enforcement 3. Proposal to Establish Temporary Office for Authentic Document Enforcement b) Decision and Proposed Regulations 1. KJC Decision to Establish Special Units of Enforcement 2. Proposed Regulation 5.2. MOU Central Bank and Tax Admin 1. TAK Agreement 2. MOU Between KEK, PTK and USAID SEAD 3. Central Bank Instruction 6. Alternative Dispute Resolution Concept on Amendment to Law on Contested Procedure 6.1 Arbitration a) Kosovo Chamber of Commerce MOU Between SEAD and KCC Arbitration Rules KCC PTA Decision on Costs b) American Chamber of Commerce (AmCham) MOU Between SEAD and AmCham Arbitration Rules AmCham ADR Decision on Costs c) Arbitrators Training Materials 6.2. Mediation a) Kosovo Judicial Council (KJC) A proposal for referral of Court Cases to Private Mediation b) Mediation Commission and MoJ regulations 7. KJI and KCA training Materials International Standards Civil Enforcement Training Material on Arbitration           APPENDIX D – BRI DATA AS OF SEPTEMBER 30 2011 AND NOVEMBER 30 2011 BRI Report - (23 September through 29 September 2011) MC LIPJAN Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil 70 42 Total to date 2706 248 212 603 TOTAL Euro 54,043.54 886,766.83 1,742,273.46 MC MALISHEVE Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil finished finished Total to date 1704 154 73 TOTAL Euro 42,893.95 374,367.81 MC SUHEREKE Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil Total to date 2582 63 26 TOTAL Euro 14,395.03 106,721.56 MC FERIZAJ Cases categorized Field Executed This week 0 PTK/Vala KEK Water/Heating Other Civil 56 9 Total to date 0 360 192 TOTAL Euro 71,972.00 356,253.62 MC PRISHTINE Cases categorized Field Executed This week finished* PTK / VALA KEK Water/Heating Other civil 96 29 120 Total to date 19929 2331 397 212 TOTAL EURO 665,783.09 1,002,036.71 64,604.76 MC GJILAN Cases categorized Field Executed This week finished PTK / VALA KEK Water/Heating Other Civil Total to date 6019 TOTAL Euro           MC GJAKOVE Cases categorized Field Executed This week 366 PTK/Vala KEK Water/Heating Other Civil 19 2 Total to date 8829 381 172 83 TOTAL Euro 75,807.69 381,923.72 14,309.73 MC PRIZREN Cases categorized Field Executed This week 651 PTK/Vala KEK Water/Heating Other Civil 271 7 82 Total to date 8239 743 249 9 119 TOTAL Euro 304,424.72 7,061.94 2,950.87 31,018.00 MC PEJA Cases categorized Field Executed This week 442 PTK/Vala KEK Water/Heating Other Civil 42 4 20 2 Total to date 4451 474 83 575 13 TOTAL Euro 96,458.92 198,565.94 87,148.74 802.93 GRAND TOTAL TO DATE Cases categorized Field Executed PTK/VALA, KEK, water supply, Heating 54459 7772 TOTAL EURO VALUE 6,582,585.56 MC LIPJAN Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 10 This week 7 0 18 Total 50 14 287 Euro value 8,220.13 31,311.14 1,079,198.04 MC MALISHEVE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 00 This week Total Euro value MC SUHEREKE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 00 This week Total Euro value MC FERIZAJ Closed cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 05           This week 13 1 Total 183 75 Euro value 30,998.16 180,497.20 MC PRISHTINE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 4 10 This week 24 3 Total 366 20 19 Euro value 65,351.47 70,987.68 4,492.35 MC GJILAN Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 00 This week Total Euro value MC GJAKOVE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 10 5 This week 6 Total 323 150 60 Euro value 68,725.40 319,637.22 11,520.72 MC PRIZREN Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 94 This week 11 4 Total 406 11 289 Euro value 28,670.72 6,950.32 15,370.67 MC PEJA Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 53 This week 28 4 20 2 Total 263 32 321 13 Euro value 46,829.47 128,421.07 64,746.81 802.93 GRAND TOTAL TO DATE Closed cases (since SEU operational) PTK/VALA, KEK, Water/Heating and other civil cases SEAD/BRI Interns KJC/SEU Clerks 2882 29 30 TOTAL EURO VALUE 2,162,731.50 *AD cases up to year 2010 finished. Waiting to allocate and categorize AD cases of 2011 and other civil cases.           BRI Report - (25 November through 1December 2011) MC LIPJAN Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil 12 2 30 Total to date 2706 322 249 853 TOTAL Euro 615,355.19 931,483.96 2,193,954.69 MC MALISHEVE Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil finished finished Total to date 1704 154 73 TOTAL Euro 42,893.95 374,367.81 MC SUHEREKE Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil Total to date 2582 63 26 TOTAL Euro 14,395.03 106,721.56 MC FERIZAJ Cases categorized Field Executed This week 566 PTK/Vala KEK Water/Heating Other Civil 27 19 Total to date 3077 927 283 TOTAL Euro 193,292.05 706,818.81 MC PRISHTINE Cases categorized Field Executed This week 336 PTK / VALA KEK Water/Heating Other civil 43 9 32 Total to date 22918 2978 614 486 TOTAL EURO 998,371.39 1,864,200.75 192,449.36 MC GJILAN Cases categorized Field Executed This week finished PTK / VALA KEK Water/Heating Other Civil Total to date 6019 TOTAL Euro MC GJAKOVE Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil           33 5 31 Total to date 9784 810 446 366 TOTAL Euro 159,321.38 747,737.55 75,986.58 MC PRIZREN Cases categorized Field Executed This week finished PTK/Vala KEK Water/Heating Other Civil 35 12 58 20 Total to date 10431 2092 333 78 614 TOTAL Euro 777,014.32 608,485.32 14,733.14 242,653.88 MC PEJA Cases categorized Field Executed This week 133 PTK/Vala KEK Water/Heating Other Civil 28 11 49 0 Total to date 7767 903 137 922 19 TOTAL Euro 162,094.64 412,626.91 150,201.58 987.93 GRAND TOTAL TO DATE Cases categorized Field Executed PTK/VALA, KEK, water supply, Heating 63911 13748 TOTAL EURO VALUE 11,586,147.78 MC LIPJAN Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 10 This week 4 2 15 Total 90 42 486 Euro value 17,968.93 118,029.04 1,525,651.86 MC MALISHEVE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 00 This week Total Euro value MC SUHEREKE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 00 This week Total Euro value MC FERIZAJ Closed cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil This week 50 85 Total 257 93           Euro value 50,818.62 257,003.66 MC PRISHTINE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 10 9 This week 42 2 4 Total 492 26 53 Euro value 88,517.89 90,901.08 19,483.49 MC GJILAN Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 00 This week Total Euro value MC GJAKOVE Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 05 This week 18 5 7 Total 414 175 120 Euro value 79,063.57 365,372.01 22,669.66 MC PRIZREN Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 05 This week 25 0 1 9 Total 578 11 1 380 Euro value 54,713.54 6,950.32 499.42 23,651.65 MC PEJA Closed Cases SEAD/BRI Interns KJC/SEU Clerks PTK/Vala KEK Water/Heat Other civil 10 5 This week 15 11 47 0 Total 325 47 450 16 Euro value 56,238.63 182,816.69 87,900.19 892.93 GRAND TOTAL TO DATE Closed cases (since SEU operational) PTK/VALA, KEK, Water/Heating and other civil cases SEAD/BRI Interns KJC/SEU Clerks 4056 29 29           APPENDIX E – REPRESENTATIVE SAMPLE OF BATCH REPORTS Below is one representative “batch” or weekly plan developed by SEAD staff and provided to the Special Enforcment Units. Typically, at least four such plans, per SEU court, are prepared weekly. Albanian Version as provided by SEAD to KJC Special Enforcement Units: KEK DARDA NIJA12 Emri i Referen tit Pergjeg jes 1. Numri i rastit: 2. Emri Kred itorit 4. Emri i debitorit 4i. Nr Kons umato rit KEK 4a. Vendbanimi i Debitorit 4a1. Qyteti/ Fshati 11. Data kur propo zimi per permb arim eshte paras htruar : 12. Pergjegja nga gjykata lidhur me propozimin 14. Data e tentimi t te dorezi mit te pare te lajmeri mit tek debitor i? 14a. Data e tentim it te dorezi mit te dyte te lajmer imit tek debito ri? 14b. Data kur eshte dorez uar lajmer imi? 17. Vlera total e e kerk uar nga Kred itori 18 . A ja n e p a g u ar ta ks at gj y gj es or e 18a. Nese po, sa eshte vlera e pages es Sabit Dakaj E DA￾190/09 KEK Isak Paci 20488 5 Dardania BI i Ri Hy Prishti ne 23/02/ 2009 Approved (E Aprovuar) 3528. 95 Y es 30 Sabit Dakaj E DA￾232/09 KEK Ismajl Gashi 20488 4 Dardania BL i Ri hy.1 Prishti ne 27/02/ 2009 Approved (E Aprovuar) 4721. 89 Y es 30 Sabit Dakaj E DA￾215/09 KEK Ismer Gjurkaj 20505 2 Dardania te Rrethi Hy 1 Prishti ne 27/02/ 2009 Approved (E Aprovuar) 3648. 67 Y es 30 Hazbie Nura E DA￾3248/08 KEK Avdulla Mirena 20495 8 Dardania BL i Ri Prishti ne 23/09/ 2008 Approved (E Aprovuar) 3521. 85 Y es 30 Hazbie Nura E DA￾3253/08 KEK Avdullah Metolli 20509 1 Dardani te Rrethi Hy 3 nr.19 Prishti ne 23/09/ 2008 Approved (E Aprovuar) 3510. 35 Y es 30 Lumnije Gashi E DA￾3795/09 KEK Nebih Sylejmani 20505 1 Dardania te rrethi Hy 2 nr.9 Prishti ne 28/09/ 2009 Approved (E Aprovuar) 3157. 61 Y es 30 ULPIAN A Emri i Referen tit Pergjeg jes 1. Numri i rastit: 2. Emri Kred itorit 4. Emri i debitorit 4i. Nr Kons umato rit KEK 4a. Vendbanimi i Debitorit 4a1. Qyteti/ Fshati 11. Data kur propo zimi per permb arim eshte paras htruar : 12. Pergjegja nga gjykata lidhur me propozimin 14. Data e tentimi t te dorezi mit te pare te lajmeri mit tek debitor i? 14a. Data e tentim it te dorezi mit te dyte te lajmer imit tek debito ri? 14b. Data kur eshte dorez uar lajmer imi? 17. Vlera total e e kerk uar nga Kred itori 18 . A ja n e p a g u ar ta ks at gj y gj es or e 18a. Nese po, sa eshte vlera e pages es Sabit Dakaj E DA￾228/09 KEK Ismajl Zhushi 648 Rr.Henry Dynan C-5 I-10 Prishti ne 27/02/ 2009 Approved (E Aprovuar) 4212. 83 Y es 30 Hazbie Nura E DA￾2575/08 KEK Agron Emerllahu 656 Rr.Henry Dynan C-5 I-Podrum Prishti ne 17/09/ 2008 Approved (E Aprovuar) 3638. 36 Y es 30 BREGU I DIELLI T Emri i Referen tit Pergjeg jes 1. Numri i rastit: 2. Emri Kred itorit 4. Emri i debitorit 4i. Nr Kons umato rit KEK 4a. Vendbanimi i Debitorit 4a1. Qyteti/ Fshati 11. Data kur propo zimi per permb 12. Pergjegja nga gjykata lidhur me propozimin 14. Data e tentimi t te dorezi mit te pare te 14a. Data e tentim it te dorezi mit te dyte 14b. Data kur eshte dorez uar lajmer 17. Vlera total e e kerk uar nga 18 . A ja n e p 18a. Nese po, sa eshte vlera e pages es 12 These are neighborhood/regional designations.           arim eshte paras htruar : lajmeri mit tek debitor i? te lajmer imit tek debito ri? imi? Kred itori a g u ar ta ks at gj y gj es or e Hazbie Nura E DA￾2600/08 KEK Agim Hivzi Muratoviq 11055 BD rr.Vellezerit Gervalla BLL 5 H-1 nr.3 Prishti ne 17/09/ 2008 Approved (E Aprovuar) 3709. 75 Y es 30 Hazbie Nura E DA￾3232/08 KEK Astrit Rifat Mustafa 20669 9 BD Rr.Vellezerit Gervalla Hyr.I/17 Prishti ne 23/02/ 2008 Approved (E Aprovuar) 3375. 1 Y es 30 English Translation of Batch Report as provided by SEAD to KJC Special Enforcement Units: KEK DARDA NIJA Name of the responsi ble Clerk 1. Case Number: 2. Na me of the Cre dito r 4. Name of the Debtor 4i.Nam e of the Consu mer KEK 4a. Location of Debtor 4a1. City/Vil lage 11. Date when the propos al was submit ted for the execut ion: 12. The answer from the court regarding the proposal 14. Day of the first atempt of the notific ation to the debtor ? 14a. Day of the seco nd atem pt of the notifi catio n to the debto r? 14b.Da te when the notific ation was deliver ed? 17. The total amou nt requi red by the credi tor 18 . W er e th e co ur t fe es pa id ? 18a. If yes, what is the value of payme nt? Sabit Dakaj E DA￾190/09 KE K Isak Paci 204885 Dardania BI i Ri Hy Prishtin e 23/02/2 009 Approved (E Aprovuar) 3528. 95 Y es 30 Sabit Dakaj E DA￾232/09 KE K Ismajl Gashi 204884 Dardania BL i Ri hy.1 Prishtin e 27/02/2 009 Approved (E Aprovuar) 4721. 89 Y es 30 Sabit Dakaj E DA￾215/09 KE K Ismer Gjurkaj 205052 Dardania te Rrethi Hy 1 Prishtin e 27/02/2 009 Approved (E Aprovuar) 3648. 67 Y es 30 Hazbie Nura E DA￾3248/08 KE K Avdulla Mirena 204958 Dardania BL i Ri Prishtin e 23/09/2 008 Approved (E Aprovuar) 3521. 85 Y es 30 Hazbie Nura E DA￾3253/08 KE K Avdullah Metolli 205091 Dardani te Rrethi Hy 3 nr.19 Prishtin e 23/09/2 008 Approved (E Aprovuar) 3510. 35 Y es 30 Lumnije Gashi E DA￾3795/09 KE K Nebih Sylejmani 205051 Dardania te rrethi Hy 2 nr.9 Prishtin e 28/09/2 009 Approved (E Aprovuar) 3157. 61 Y es 30 ULPIAN A Name of the responsi ble Clerk 1. Case Number: 2. Na me of the Cre dito r 4. Name of the Debtor 4i.Nam e of the Consu mer KEK 4a. Location of Debtor 4a1. City/Vil lage 11. Date when the propos al was submit ted for the execut ion: 12. The answer from the court regarding the proposal 14. Day of the first atempt of the notific ation to the debtor ? 14a. Day of the seco nd atem pt of the notifi catio n to the debto r? 14b.Da te when the notific ation was deliver ed? 17. The total amou nt requi red by the credi tor 18 . W er e th e co ur t fe es pa id ? 18a. If yes, what is the value of payme nt? Sabit Dakaj E DA￾228/09 KE K Ismajl Zhushi 648 Rr.Henry Dynan C-5 I-10 Prishtin e 27/02/2 009 Approved (E Aprovuar) 4212. 83 Y es 30 Hazbie Nura E DA￾2575/08 KE K Agron Emerllahu 656 Rr.Henry Dynan C-5 I-Podrum Prishtin e 17/09/2 008 Approved (E Aprovuar) 3638. 36 Y es 30 BREGU I DIELLIT Name of the responsi ble Clerk 1. Case Number: 2. Na me of the Cre dito r 4. Name of the Debtor 4i.Nam e of the Consu mer KEK 4a. Location of Debtor 4a1. City/Vil lage 11. Date when the propos al was submit ted for the 12. The answer from the court regarding the proposal 14. Day of the first atempt of the notific ation to the 14a. Day of the seco nd atem pt of the notifi 14b.Da te when the notific ation was deliver ed? 17. The total amou nt requi red by the 18 . W er e th e co ur 18a. If yes, what is the value of payme nt?           execut ion: debtor ? catio n to the debto r? credi tor t fe es pa id ? Hazbie Nura E DA￾2600/08 KE K Agim Hivzi Muratoviq 11055 BD rr.Vellezerit Gervalla BLL 5 H-1 nr.3 Prishtin e 17/09/2 008 Approved (E Aprovuar) 3709. 75 Y es 30 Hazbie Nura E DA￾3232/08 KE K Astrit Rifat Mustafa 206699 BD Rr.Vellezerit Gervalla Hyr.I/17 Prishtin e 23/02/2 008 Approved (E Aprovuar) 3375. 1 Y es 30           APPENDIX F – CORRECTED OUTREACH REPORT Highlighted figures and data are corrections to data in Appendix 2 of the Evaluation Report. Outreach: – 2010…Project organized 25 outreach events – Number of justice sector personnel who received SEAD training in year 2010 is 332 – Provided copies of assessments, fact sheets, newsletters to 1110 persons – 2011 project website received 780 hits on daily average; 23,000 monthly – Organized 57 outreach events from October 2010 to July 2011 – Developed a master list of all electronic and printed media in Kosovo Training: – Trained 47 mediators – Trained 40 arbitrators – Developed and delivered a course on Commercial Contracts Training – Developed full LL.M curriculum in Contract and Commercial Law (15 courses) – Trained 30 KJC SEU personnel – Trained 30 BRI interns – Conducted sixteen training sessions at the KJI for judges (312 people were trained within these trainings) – Conducted five continuing legal education sessions for the KCA( 147 people were trained within these trainings – Organized a Mediation Study tour to Croatia Legislation and Regulations – Prepared draft Law on Obligations – Law on Executive Procedures amendments finished – Five Mediation Regulations promulgated – All internal Arbitration Association documents drafted, adopted and promulgated – Presented concept paper to MOJ on amendments to the Law on Contested Procedures Standard Contract Forms – Developed and released model construction contract – Eight additional standard from contracts in development Assessments – Study on Enforcement of Judgments completed Enforcement of Judgments – Hired 30 interns to catalogue utility cases in the courts – Held an International Conference on Enforcement of Judgments           – Entered into two MOUs with the telephone and electric utilities to help with the enforcement of judgments – Trained 30 KJC Special Enforcement Unit Clerks in Enforcement Centers Opened – Two mediation centers equipped, opened, and staffed with SEAD funds – Two arbitration centers equipped, opened, and staffed with SEAD funds