There are occasions in all our lives when we come upon people so quietly and selflessly performing critical societal functions that we can only shake our heads in admiration. Foster parents for abused and neglected children are at the top of my list of heroes, but that list now also includes the arbitration court² judges of Ukraine.

In October 1999, I had the privilege of working on one of the Rule of Law projects sponsored by the U.S. Agency for International Development, participating in a training session for Ukrainian judges on the 1999 Ukrainian Bankruptcy Code. In the course of sharing experiences with those judges, I came to realize not only the extraordinary job they do, but also how fortunate we U.S. judges are in comparison.

For starters, the Ukrainian judges have watched their country's standard of living plunge from what it was at the end of the former Soviet Union to what it is now: People now survive at subsistence levels, average male life expectancy has dropped five years and more than half the businesses in the country now operate at a loss. One woman related to me how embarrassing it was to meet friends selling their personal belongings in the street. Until just before I met her, she and the other workers in a company that distributes its product throughout the European market had not been paid their wages for two years.

Because of the poor economy and a badly administered tax system, the government has little money, either for salaries, government officials, such as judges, or for physical plants, such as courthouses. One judge related how ashamed he was of the shabby state of his courthouse and how, because he believed that the hall of justice should have a physical appearance commensurate with its societal importance, he used his own meager salary to purchase materials and his own labor to repair the building. I think of this judge occasionally as I walk into the immaculately groomed historic courthouse where I hold court each day.

Another judge expressed his frustration when the president of a large company in reorganization appeared before him for the first time; the officer was a 22 year old "boy" (the judge's term). All the papers were in perfect order, yet he knew this young man was only a figurehead. The Agency for Bankruptcy, a cabinet-level agency that has some functions similar to those of the U.S. Trustee, is far too understaffed to deal with this problem. And the nationwide endemic corruption, which began to flourish during the Brezhnev era, makes it unlikely that there will soon be a systematic and effective federal effort to end such practices.

Here in the United States, it is true, we also encounter scoundrels and thieves, but relatively infrequently. We are able to function precisely because the vast majority of debtors and corporate managers that appear before us abide by the rules, thereby highlighting the behavior of those who do not. And there are a variety of effective (albeit not perfect) enforcement entities and mechanisms to punish those who do not follow the rules and to provide an incentive for those who might be tempted to stray. It is this "infrastructure" of voluntary compliance and enforcement mechanisms that allows our courts to function as well as they do.

Other judges look at the daily and continual struggle their countrymen and women are putting up with, and wonder how much higher their caseloads can and will go. Judge Boris Polyakov sits in the Donetsk region of eastern Ukraine, the heart of industrialized Ukraine, where literally thousands of heavy-industry companies, many with thousands of workers, are insolvent and continuing to operate that way. Imagine one judge with hundreds of Allegheny Industries cases.

As a U.S. bankruptcy judge, I marvel at the resources available to me to help me do my job: an elegant courthouse that inspires respect, talented and dedicated people and state-of-the-art equipment, a government authority to back up the judicial system, and a strong societal consensus that respects the courts and agrees to be bound by their decisions. When I look at the judges in Ukraine, struggling to do the same job with only bits and pieces of the resources available to me, I can only shake my head in admiration.

Footnotes

¹ U.S. Bankruptcy Judge, District of New Mexico. The views expressed in this column are the author's and not necessarily those of U.S. Agency for International Development, Deloitte & Touche (which performed the USAID contract) or the government of Ukraine. Return to article

² The arbitration court (trial courts) and the appellate-level high arbitration court function much as the commercial court system for Ukraine; their jurisdiction includes bankruptcy. Return to article