Individual Corruption

The Ukrainian judicial system is tainted with corruption and official pressure, according to the US Department of State 2010. According to Transparency International's Global Corruption Barometer 2010, the judiciary is perceived by citizens to be the most corrupt public institution in Ukraine, and more than half of the households interviewed in the survey consider the judiciary to be 'extremely corrupt'. Similarly, according to the Kyiv International Institute of Sociology 2007 surveys - Cost of Corruption for Ukrainian Households and Public Trust of the Judicial System - the judiciary is found to be the most corrupt government branch, as reported in a 2008 article by Kyiv Post. Furthermore, according to Freedom House 2011, there is little progress in regard to the main shortcomings of the Ukrainian judiciary, which include a lack of public trust in court decisions and the judicial system as a whole, insufficient financing of the court system, an inefficient and opaque process for appointing judges, as well as corruption. In contrast, Freedom House 2011 also emphasises that the judiciary was even more inefficient and subject to corruption prior to the Orange Revolution. According to the source, corruption problems remain, but to a marginally lesser degree than in the past.

According to law, all citizens have the right to a fair, timely and open trial. The Bertelsmann Foundation 2010 reports that, for several reasons, this is not respected in practice. Pressing problems include insufficiently trained judges, low salaries and dependence on the executive branch in matters of enforcement. In addition, there is a lack of procedural transparency.

Business Corruption

It is not uncommon for companies operating in Ukraine to pay bribes in their dealings with the courts, as indicated by the EBRD & World Bank BEEPS Ukraine 2008. Relatively few companies use court proceedings in order to settle disputes and the courts have a long record of striking down or ignoring contractual provisions that assign legal responsibility for foreign disputes to a foreign court or arbitrator. Companies in general, both foreign and domestic, do not trust the Ukrainian judiciary to be an effective and fair broker in business matters, according to the US Department of State 2011. The courts are notoriously non-transparent. Aggressive minority shareholders have reportedly been able to obtain questionable court decisions allowing them to take control away from majority shareholders.

In line with this perception, the World Bank & IFC Enterprise Surveys 2008 reveals certain distrust among companies towards the effectiveness and fairness of the country's justice system. Furthermore, companies surveyed in the World Economic Forum Global Competitiveness Report 2011-2012 indicate that courts are subject to political influences of members of government, citizens and companies.

Enforcement of judicial decisions is managed by the Ministry of Justice's State Enforcement Department, which, according to USAID & MSI Corruption Assessment 2006, is not effective and allegedly subject to corrupt practices. Corruption is the main reason for many investment disputes. Investment dispute resolution mechanisms are neither fair nor impartial and frequently favour domestic companies and their government allies.

Political Corruption

According to the US Department of State 2010, although the law provides for an independent judiciary, in practice, judges do not function independently of the executive branch. Similarly, Freedom House 2011 reports that there is little respect for the division of power in Ukraine, and all political parties have attempted to manipulate courts, judges, and legal procedures. According to Freedom House 2009, obvious misuse of the judicial system in political interests was a given in 2008, where misuse of the judiciary for political purposes reached a scope of unprecedented proportions in 2008, which in turn could lead to a degradation of state power, the economy, and public administration in Ukraine.

Former President Yushchenko sacked 3 Constitutional Court judges in 2007 for procedural and ethics violations while the court was determining the legality of his decree to dissolve Parliament before its term ended. Yushchenko described the fight against corruption in the judiciary as inefficient in 2008.

In March 2009, former head of the Lvov Administrative Appeal Court, Igor Zvarych, was arrested on charges of corruption and bribery, according to a December 2009 article by Zerkalo Nedeli. Law enforcement bodies had conducted a search in Zvarych's office and found over USD 1 million as well as UAH 2 million.

Frequency

The World Bank & IFC: Doing Business 2012:
- It takes 30 procedures and 343 days at a cost of 41.5% of the claim to enforce a commercial contract.

- Both the number of procedures and the time it takes to enforce a claim are lower than regional averages, as opposed to the associated cost, which is higher than the regional average.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give the independence of the judiciary from influences of members of government, citizens, or companies a score of 2.1 on a 7-point scale (1 'heavily influenced' and 7 'entirely independent').

- Business executives give the efficiency of the legal framework for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 2.3 and 2.4 respectively on a 7-point scale (1 being 'extremely inefficient' and 7 'highly efficient').

Transparency International: Global Corruption Barometer 2010:
- 57.7% of households surveyed consider the judiciary to be 'extremely corrupt'.

- 16.9% of households who had contact with the judiciary in 2009 report to have paid a bribe.

- Citizens give the judiciary a score of 4.4 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').

EBRD & World Bank: BEEPS Ukraine 2008:
- 16% of companies surveyed state that bribery is frequent in dealing with courts.

- 59% of the companies surveyed report that the functioning of the judiciary poses a problem for doing business.

The World Bank & IFC: Enterprise Surveys 2008:
- 19% of companies believe the court system is fair, impartial and uncorrupted.

- A little more than 39% of companies identify the functioning of the courts as a major business constraint.

MSI & KIIS: Corruption in Ukraine 2007:
- 72% of the citizens surveyed think that corruption is a problem in the courts.