Businesses reluctant to embrace small claims procedure, judiciary says

In an effort to improve the business environment, the Government last year rolled out small claims procedure to help businesses easily settle corporate legal issues. Under small claims procedure, cases are litigated between 20-30 days, maximum, at any primary court in the country, rather than seek litigation in commercial courts. Litigation in commercial courts can be lengthy taking years, and is expensive. The procedure was passed in April, last year. The cases litigated under this procedure are those whose settlement is Rwf5 million or less, excluding interest of the value and procedural fees. According to Harrison Mutabazi, the Spokesperson for the Judiciary, a large section of the local private sector still go to commercial courts seeking litigation for less than Rwf 5 million. “Many people are not aware of it or just feel uncomfortable using the new procedure,” he said. Mutabazi added often lawyers lure their clients into commercial courts because there is little pay for lawyers when a case is litigated under small claims procedure. “Lawyers opt for litigation in commercial courts because they are guaranteed of more fees than with small claims procedure where the lawyers and court share the 5 per cent of the value of the settlement,” he said. The law still allows litigation of claims with a value of Rwf5 million or less in commercial courts, which means it’s upon the plaintiff to choose where to take their claims. According to statistics, since July last year, 174 small claims cases has been lodged with courts countrywide. 135 of the 174 have been settled while 39 are still pending. Nyarugenge Primary Court, in Kigali, received 27 small claims cases. According to Benon Tashobya, the president at Nyarugenge Primary Court, some cases are litigated in hours. “As judges, what the litigants come to is what we put to paper and then let them go to execute the decision,” Tashobya said. The plaintiff pays a court fee of only 5 per cent of the value of the claim at most, no fees for damages are paid. However, if the case involves criminal activities, prosecution goes ahead to process the cases through criminal procedures. Privilege is given to small claims cases such that pending cases at the court cannot stop the proceedings on asset recovery under small claim procedure. Nestor Muvunyi is legal officer at Star Times, and is one of those who have used the procedure at Nyarugenge Primary Court. “The procedure saves time and is efficient. We went to the court once and came to resolution.” he said. Muhima Investment Company (MIC) has also been to Nyarugenge Primary Court for small claims procedure case. Martin Kana Murisa, the Managing Director at MIC, said they were dragged to court by a certain company and got a ruling in the same week. “It was very swift. We were summoned and had the ruling within the same week,” he said. Karim Tushabe, the legal consultant and head of Doing Business Unit at Rwanda Development Board (RDB), told Business Times that the long course of judicial procedures in small claims has been affecting the country’s ranking in the World Bank Doing Business Indices. “Generally, litigation with big claims had no problems but small claims were taking the same time as big claims. This could be considered as a challenge,” he said Tushabe said that they were optimistic that the development will lead to the country’s improvement in this year’s World Bank Doing Business ranking. editorial@newtimesrwanda.com

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Businesses reluctant to embrace small claims procedure, judiciary says