How do judges decide cases? In common law countries, judicial precedent plays an important role. In civil law countries, government-enacted legislation, or codes, is the primary determinant. However, as reported by the International Law Office this month, courts around the world have been abandoning tradition by becoming pseudo legislatures – sometimes with shocking results.
Debtor prisons
A surprising news item comes from Maku Maramis of Lubis Ganie Surowidjojo in Jakarta. He reports that Indonesia’s Supreme Court has issued a regulation that reinstates debtor prisons to stimulate the economy. Some might see this as backward: it is difficult to imagine how domestic and foreign businesses will be motivated to invest in a country with an outdated legal system.
As a former Dutch colony, Indonesia’s legal system is rooted in Dutch law. However, Dutch laws relating to imprisonment for debt were repealed more than 25 years ago. But because Indonesia has not recovered from the economic crisis that hit Asia in 1997, and financial institutions have found it difficult to collect outstanding debts, the Supreme Court has passed a new form of deterrence, rather than improving the judiciary’s methods of debt collection.
Although the court has indicated that it is particularly inclined to apply this punishment to debtors who have demonstrated bad faith by refusing to settle despite being able to pay, the draconian punishment may be applied to any debtor who owes a financial institution at least rp1bn (£64,369). Prison sentences are limited to six months for each debt that is owed, up to a maximum of three years. As in colonial times, imprisonment will not be considered as a sentence in lieu of debt. The debt remains and in fact, on release, the debtor will also be liable for interest accrued, court costs, custodial costs and maintenance. While the new law may not be enforced against anyone who has reached the age of 75, it may be enforced against people who inherit debt.
