Role of the judiciary in the global economy interview

Interview with Diane P. Wood on the role of the judiciary in the global economy
Norman P. Aquino
February 14, 2005

BusinessWorld spoke with United States Court of Appeals Seventh Circuit Judge Diane P. Wood, who was in the country last week for a magistrate-to-magistrate dialogue on the role of the judiciary in the global economy.

The forum, sponsored by the Asia Law Initiative and funded by the United States Agency for International Development (USAID), discussed how judges and justices play a role in the stability of an economy and how the entire court system fits in with the global market. It was attended by trial court magistrates, justices from the Court of Appeals and Supreme Court, as well as magistrates from special courts like the Sandiganbayan and Court of Tax Appeals. Ms. Wood spoke about the American perspective in supporting economic growth through judicial reforms.

Ms. Wood is also a senior lecturer in law at the University of Chicago Law School and has taught in several law schools in the US including the University of San Diego Institute of International and Comparative Law, Cornell Law School, and Georgetown University Law Center.

Before being commissioned to the US Court of Appeals in 1995, Ms. Wood had also worked as deputy assistant attorney general for international, appellate and legal policy matters at the US Department of Justice Antitrust Division. She graduated from the University of Texas Law School in 1975 with high honors. Excerpts of the interview follow:

BW: So what do you think are the implications of globalization on the court system?

MS. WOOD: What I can say is that in the US, and this is what again I was discussing, a reliable court system, a court system with competent judges, a court system with effective measures against corruption, a court system with the confidence of the public, creates a stable climate for business activity, for investments, for consumers, for people who have problems when they arise, to come to the court.

BW: How do you reconcile that with the argument for an independent judiciary?

MS. WOOD: The judiciary certainly should be independent and I think that is a value that is shared by judges from every country I've met. Justice Ahamadi was stressing it. Chief Justice [Hilario G.] Davide [Jr.] indicated that as true. Judges follow the law but that doesn't mean that when you're following the law, you need to be unaware of the impact of your decisions.

BW: How important is a competent judiciary as an institution to economic growth? In what ways does it contribute to a country's growth?

MS. WOOD: It's very important. A competent judiciary, by which I would mean a judiciary where the judges are well trained, they come from a strong background, they do things - like in the program of the Philippine Judicial Academy for continuing education - to understand the cases that come to them better. Complex cases especially, commercial cases require some expertise, some understanding.

BW: How do you train judges to become experts in economics and business?

MS. WOOD: In the US, we have many programs available to judges through our federal judicial center through various continuing education programs. And I think many other countries, including the Philippines, are doing the same kind of thing.

BW: Do you think judges need to be educated about the economy and business so that they can resolve cases from a business point of view?

MS. WOOD: Judges need to be educated on the law, because if judges are following the law, they're doing what they should be doing as judges. Sometimes that reveals to the lawmakers or the Executive that there need to be changes in the law and those branches of the government can then go forward and change the law.

There was a case in the US many years dealing with the endangered species act. There was a tiny fish called the snail guarder that was going to be destroyed if they built a particular dam on the river. The Supreme Court said you can't build the dam. The statue said there is no balancing, there are no trade-offs, you have to not build this very elaborate project that is supposed to assure energy production and so forth. And people said if that was what the law says, the law needs modification. The Supreme Court did was it was supposed to do. It said "you've given us a law that doesn't have any exceptions" and that's what the judges need to be educated on. They need to be educated on the law and if people don't like the law, they can go to their representatives (who can change it).

BW: So what is the role of the judiciary in the global economy?

MS. WOOD: The role of the judiciary is to be reliable, to be transparent, to be able to accomplish its job in an efficient way as it can given the resources that they have. It's difficult when the judiciary doesn't have enough resources for them to dispose of cases as quickly as they might like.

BW: How do you make it transparent and reliable?

MS. WOOD: Well, when you make it transparent, you make sure that decisions of judges are available to the public and the press. In the US we now have rules that require every decision of the court to be posted immediately on the web site of the court. Even if not everyone can get to that web site, the press can.

We also publish, if possible, financial disclosure, statements of the judges so any member of the public who wants to know what I own, and what interest I have, they then can rest assured I'm not sitting on cases I should not sit on. So there is a very public disclosure-oriented approach to that kind of thing in the US and I think it's very helpful because people realize there's nothing going on that they can't see.

BW: So they'll have more faith in the justice system.

MS. WOOD: Yeah, and when they have more faith in the justice system it encourages investments, it encourages contracts. These people know that if there is a problem, there will be somebody reliable that we can both trust to resolve it.

BW: What can we do about the problem of clogged dockets?

MS. WOOD: It's a very big problem if you don't have enough judges because you want the judges to do a careful job. At this point when I hear cases, I hear six cases a day and I probably read 200 pages per case so that's 1,200 pages so what am I going to do? You can't tell me that I should do 10 cases in a day or 20 or some other number that I simply can't prepare myself for if you make the number too big. So I think the best thing you do about crowded dockets is you make sure the judge is paid enough and to make sure you have enough judges. If you can't do that, then you certainly can try to make the system more efficient, maybe more alternative dispute resolution, maybe more encouragement of settlements. But at some point you're just going to need more judges.

BW: How do you deal with perceptions of corruption in the judiciary?

MS. WOOD: I realize this is a big issue here and all I can say is I've seen a version of it in the US, I've seen a version of it in Cook Country where the city of Chicago is located and you can deal with the problem up front by the kind of open disclosure of financial interest that I was talking about. You can deal with the problem by making sure judges are paid enough not to be tempted and you need to deal with the problem at the other end by making sure there are credible ways that people who are concerned that that might have happened, can complain. We have systems in the US that allow any person in the public to file a complaint.

BW: What are the basic judicial reforms that we need here to create a stable economy?

MS. WOOD: That's a big question. I'm really not qualified to answer but I have to say I'm very impressed with Chief Justice Davide's program and I think it occurred to me that he is seriously well aware that reform is a good thing to the Judiciary and to the country.

BW: In general, what are the basic reforms needed?

MS. WOOD: I wouldn't put it as basic reforms. I would just say for any country, again, you want a judiciary that's got honest and competent judges, you want transparency, you want enough resources in the judiciary so courts are able to do the job.

BW: How was your presentation received by the local magistrates?

MS. WOOD: People were struck by how much we had in common. The problems are quite similar. Well, legal systems really vary but in the end, judges value the independence of the judiciary, they value confidence, they value accountability.

BW: What do you think are the legal, ethical moral and social impacts of legal practice in cyberspace?

MS. WOOD: Now there is the question about the practice of medicine on the internet which is a scary thing too. The legal profession is one of those professions of trust where lawyers have a tremendous responsibility for clients and of course the problem with the Internet is accountability. I haven't seen any problems in the US about the practice of law on the internet. I'm sure we would have to approach it cautiously as I say you would with medicine.

Some people who are trying to sell pharmaceutical products over the internet and the doctors are very worried about that because they don't know if that's the right treatment for that particular patient. How would they know without seeing the patient? It's very similar with lawyers.
If there is a preexisting relationship between the person and the lawyer, fine. If there isn't, it could be my 20-year-old daughter writing back the answer and you would have no idea. Maybe it's a dark gray area.

Copyright 2005 BusinessWorld Publishing Corporation

Diane P. Wood