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UPDATE: A Guide to Panama’s Legal System and Research

 

By Alvaro Aguilar-Alfu and Kedar Reddy

 

Alvaro Aguilar-Alfu is a graduate of Universidad Santa Maria la Antigua, Panama (LL.B.) and The American University, Washington College of Law, Washington, D.C. (LL.M.). He is also a founding partner specialized in asset protection and other Business Law matters  at the law firm of Lombardi Aguilar Group in Panama with experience in private client, intellectual property, business, administrative and commercial law.  Mr. Aguilar is an active member of the Panama Bar Association.  Kedar Reddy is Analyst at Lazard and he currently studies towards his Master in Philosophy, Real Estate Finance at University of Cambridge.

 

Published December 2013

See the Archive Version!

 

Table of Contents

1.     Country Information 

2.     History

3.     Legal Concepts

4.     Current Government Structure

5.     Specialized Judicial Bodies

5.1.   Staffing

5.2.  Impact

6.     Law, Jurisprudence and Doctrine Websites

6.1.   Government

6.2.  Ministries

6.3.  Other Government Sites

6.4.  Discussion Lists and blogs

 

1.     Country Information

The Republic of Panama is located in the Western Hemisphere and borders to the North with the Caribbean Sea, to the South with the Pacific Ocean, to the East with Colombia and to the West with Costa Rica, Panama, forms a link between Central America and an isthmus of 80 km wide in its narrower section.  The Republic has an area of 77,082 square km, being mountainous toward the Caribbean coast, with rolling hills and extensive savannas towards the Pacific.   The country’s population of 2.7 million speaks Spanish as the official language.  However, English is widely spoken and understood in the urban centers.  Various native languages exist such as Kuna and Ngobe-Bugle.  Minority urban groups speak Italian, Panama, Greek, Cantonese Chinese and Hindi, among others, giving the capital of Panama City a heterogeneous character.  No official census is kept about ethnic groups but unofficial estimates state the population to be around 14% black, 10% white and 6% Amerindian, with the majority belonging to 70% comprised by an interracial of the previously mentioned groups known as mestizo. 85% of the population is Catholic, as the National Constitution acknowledges.  15% is Protestant and small Jewish, Moslem and Hindu congregations co-exist.

 

Panama invests great part of the National Budget in Education.  Its private and public schools are under the supervision of the Ministry of Education.  The school system is organized in primary and secondary levels of six years each one, as well as higher education or university.  Eleven Universities exist with substantial enrollment.  The University of Panama and the Technological University are state-run, while the Universidad Santa María la Antigua and others (including Panama campuses of Florida State University and other U.S. institutions) are private.

The climate of Panama is tropical and the temperature is practically uniform throughout the year.  The nights are generally fresh.  The average temperature is of 27C.  The country has two seasons: rainy season -May until January and dry season -January until May. The economy is fully dollarized, with the local Balboa and the U.S. Dollar, being currencies of legal tender.  The Constitution forbids the enactment of laws providing for a currency of compulsory tender, which has preserved the freedom from currency restrictions.  This fact has made the country different from most of its neighbors, as the economy is comprised 75% by services, 16% industries, and 10% agricultural activities.    The rate of inflation is no more than 1.5% and the official rate of unemployment is of 11%.  Major International Markets for its exports of bananas, products refined from oil, shrimp, and sugar are U.S., Germany, and Sweden.  Services to foreign customers are an important source of revenue that makes up for the substantial imports mostly from U.S. and Japan. 

 

2.     History

While human settlements have existed in Panama from prehistoric times (around 12,000 B.C.), the lack of any written records has forced scholars to rely on archaeological findings to elaborate a history of Pre-Columbian peoples of the Isthmus.

 

The prevalent theory about organized human groups points to a Southward migration of Meso-American peoples in the XII century as the source of Amerindian organizations in the Isthmus.  Unlike the empires of the Incas or the city-states of Meso-America, political organizations in Panama did not rise above the village, headed by autocratic chieftains, sometimes ruling with the advice of councils of elders.  A body of customs emerged in each village, regulating aspects of family life as well as crimes against life.  The minimal information currently available on the customary law of those days is that collected by Spanish chroniclers that lived then among the Amerindian tribes.

 

The arrival in 1501 of Spanish troops resulted in the conquest of the Isthmus and the imposition of Spanish laws.   A special body of laws was enacted for application in the American colonies and the Philippines, codified in the “Recopilación de Leyes de Indias y Filipinas” published in 1680.  The compilation has 9 volumes, 218 titles and more than 6000 laws covering all aspects of legislation in the Spanish colonies overseas.  As the character of Spanish presence changed from that of a military campaign to a colonial territorial expansion, the Isthmus was subject throughout three centuries to territorial institutions such as the Governorship, the Viceroyalty and the Audiencia.

The Governorship was a military, political and judicial institution, called Castilla de Oro and later in 1513 Veraguas, which included Panama.  The Viceroyalty was a jurisdiction where political and administrative powers of the king were exercised by a lieutenant appointed by each king.   As the importance of Panama decreased, it became part of the Viceroyalty of New Granada in 1718 until independence in 1821.   These entities governed along with the Audiencia – an entity with political, administrative and judicial duties. It also exercised judicial review of decisions taken by governors and viceroys.  The Panama Audiencia was created in 1535 and operated intermittently throughout the colonial period.

 

Panama declared its independence in 1821 and joined the Gran Colombia – a confederation also formed by Colombia, Venezuela and Ecuador.   A Presidential decree of 1825 provided that Spanish laws in force in the colonies up to 1808 would be a source of law supplementary to the Colombian laws enacted.   These Colombian laws eventually were enacted by autocratic Executive and subordinate Legislative powers in Bogota.  During said period, attempts to secede the Isthmus ensued several times.  An exception was a brief period between 1863 and 1885 when Colombia was a federal entity of which the Panama was a state called Sovereign State of the Isthmus with its state Constitution and assembly.  The state assembly enacted a Civil and an Administrative Code for Panama which replaced Spanish laws in most cases, and even served as model for other Colombian states.   The enactment in 1873 of a national Colombian Civil Code finally abrogated the Spanish law along with all state constitutions and codes.

 

The fifth secession attempt in 1903 finally succeeded in creating the Republic of Panama, which by 1904 approved a Constitution with a laissez-faire orientation product of the previous century just ended.   A Codifying Commission submitted to the Legislature in 1916 drafts of a Civil, Commerce, Criminal, Judicial, Mining, and Tax Code, which were enacted in 1917 along with an Administrative Code.

 

A Common Law area subsisted in the Panama Canal Zone, a Panamanian territory under U.S. jurisdiction pursuant to the 1904 Panama Canal treaties.  Canal Zone courts applied U.S. Federal law, as dictated in the Panama Canal title of the U.S. Code and Executive Orders, until their abrogation by new treaties in 1979.

 

The Constitutions of 1941 and 1946 granted social rights and the duties of the welfare state the rank of constitutional guarantees.   Eventually, a Labor and a Health Code were approved, and the Tax Code was replaced by a more progressive version.   These socializing trends were abruptly detained in 1968, when a military coup d’état against the civilian regime led to a suspension of most freedoms, the abrogation of all political parties and the removal of most judicial civil servants.   A new Constitution was approved in 1972 by a single-party Legislature which appeared to expand on most social rights but reserved the appointment of Cabinet ministers and Supreme Court justices on the sole discretion of the Chief of Staff of the National Guard.   Constitutional amendments in 1983 removed said reserve and most authoritarian provisions, leading to increasing restoration of the rule of law.  In the following two years the Criminal, Judicial and Mining Codes were replaced by more modern versions. 

 

3.     Legal Concepts

The Republic of Panama is a sovereign and independent State.  Its government is centralized, republican, democratic and representative, composed by a President, two Vice presidents and twelve Ministers of State that comprise the Executive Power; the Legislative Assembly with 72 Legislators integrating the Legislative Power, and 9 Magistrates that head the Judicial Power.  These three powers are the ones that govern the country.

The Civil Law system is applied by the Judicial system, which judges are not bound by judicial precedent in their decisions.   Judges rely in the Constitution, followed by Codes, laws and regulations as direct source of law.  Only 3 identical decisions by the full Supreme Court have a rank of mere “probable doctrine”.   In the absence of express legal provisions applicable to a subject matter, general principles of law as stated in scholarly publications (and in commerce law, local customs if practiced by 5 or more merchants who testify to that fact) serve as indirect source of law.

 

The Constitution and procedure laws have provisions, from which Panamanian jurists have determined to be the main concepts or principles which guide the legal system.   A chapter of the Constitution is devoted to individual freedoms, which provide safeguards against arbitrary detention or punishment. Article 20 of the Constitution provides that no discrimination shall exist by reason of birth, race, sex or religion and that foreigners and national are equal before the law.  This equality is also applicable to the acts and appearances of parties before the judicial entities. Another constitutional guarantee provides that nobody shall be judged other than by a competent authority for violations of the previously enacted law.   This rule of law principle is also extended to imposition of fines or any other decisions that any public official takes with regards to citizens or their properties. Constitutional provisions which have been criticized abroad are the powers granted to high-ranking officials to order a detention without due process for up to 24 hours and the imprisonment penalties for libel that result in "offenses to the honor". Another chapter of the Constitution provides principles for the actions of the Judiciary power.  The constitutional principle of judicial independence provides that Judges are independent in their acts and are subject to nothing more than the Constitution and the laws (Article 207, Constitution)

 

The 1984 Judicial Code, based after provisions in force in Colombia, expanded on the scope of the constitutional guarantees as applied in the procedural area.  These principles are those of contradiction or bilateral character (whereby parties be granted all the opportunities for their defense (or actions) as provided under the law), publicity (whereby proceedings are public (except when open only to the parties involved due to morality reasons) and secret proceedings are prohibited), procedural economy (whereby procedures must be conducted pursuant to the law but also in a manner that brings results promptly and with the use of less resources), Res judicata, double instance (whereby decisions are subject to review by a superior judicial entity), and congruence (whereby the award rendered should not exceed or be different from that which is requested by the parties).  An important principle of valuation of evidence is that the sound judgment ("sana crítica") of the judge, based on his technical knowledge and previous experience, is the standard whereby evidence is valuated.  However, the judge does not have a proactive approach under the procedural truth principle, whereby the evidence provided by the parties is the only one to be admitted by the judge instead of the material truth. According to the Fraser Institute, the Panama Legal Structure and its impact on Property Rights received a ranking in 1997 of 6.9 out of 10.  Aspects such as Security of Private Ownership Rights were ranked 7.2, while Viability of Contracts and Rule of Law received rankings of 6.6 and 7.0, respectively. In 1997, Panama's rating was 8.3, up from 6.9 in 1990. Its ranking rose from 30th in 1990 to 14th in 1997. In spite of these negative factors that reduce the trust of investors, Panama has the best economic freedom rating in Central America, being ranked 14th in the world. 

 

4.     Current Government Structure

On a national level, Panama has Executive, Legislative and Judicial branches.  

 

The Executive branch is formed by the President - elected in general elections for a 5-year term – which appoints at his or her discretion Cabinet Ministers and the directors of several regulatory entities.   The branch has some entities with duties related to the legal system, such as the Ministry of Government and Justice which includes several entities such as the Public Registry in charge of registering deeds and property transfers, the Public Force in charge of national defense and police duties, and the Directorate of Correction in charge of penitentiaries.  Other entities are the Ministry of Economy and Finance which imposes fines for tax infringements and its Customs Tribunal imposes imprisonment penalties for customs fraud, the Ministry of Labor and Labor Development which provides dispute resolution on labor claims and its Boards of Conciliation and Decision hear cases for unjustified termination, the Consumer Authority of Panama which provides dispute resolution in consumer disputes and files actions ex officio in anti-competitive matters, and the Public Services National Authority which provides dispute resolution in disputes between public utilities and their users and hears cases for violations of telecommunications laws.

 

The Legislative branch is formed by the Legislative Assembly, elected by popular vote.  It enacts laws and only hears cases during impeachment proceedings.

 

The Judicial branch is headed by the Supreme Court of Justice, formed by 9 Justices.  They hear jointly constitutionality cases, while groups of 3 Justices each form 4 Sections: Civil, Criminal, Contentious-Administrative (judicial review of administrative cases, appeal of labor courts) and General Affairs each with their specialized caseload.   Constitutionality cases are decided by the totality of all Justices.  Civil Superior Justice Tribunals act as appellate courts, while Civil Circuit and Municipal judges try cases above and below US$5,000, respectively.  Courts of special jurisdictions are the Family courts which try family law cases and two Admiralty courts deal with admiralty cases arising from incidents in ships sailing the Panama Canal and Panamanian waters, or on board ships with Panamanian flag wherever they are located.

In the Criminal jurisdiction, Criminal Circuit and Municipal judges try cases with imprisonment terms above and below 2 years, respectively.   Their decisions are appealed before Criminal Superior Justice Tribunals and may be subject to extraordinary review by the Criminal Section of the Supreme Court.

 

A Public Defender’s Office is of recent creation and is meant to provide counsel to defendants indicted.

 

A special labor jurisdiction has Superior Justice Tribunals as appellate courts, and Sectional judges which hear cases. Extraordinary review of their decision is exercised by the Contentious-Administrative Section of the Supreme Court, in the absence of the Labor Section provided under the Labor Code.

 

The Public Ministry is formed by the Attorney (“Procurador”) General of the Nation and the Solicitor (also called “Procurador”) General of the Administration. The Attorney General works along with lower district attorneys (“Fiscales de Distrito”), circuit attorneys (“Fiscales de Circuit”) and municipal attorneys (“Personeros”) which prosecute criminal cases before criminal courts.  The Technical Judicial Police is the investigative department of the Public Ministry. Scholars debate as to which of the branches the Public Ministry belongs, since it is not subordinate to any of the heads of the branches.

 

On a local level, municipalities have their equivalent of the three branches of power.  Each municipality is led by a mayor, who enforces ordinances enacted by a Municipal Council of community representatives (“Representantes de Corregimientos”) – all of which are elected for 5-year terms in general elections.  The mayor of each municipality appoints justices of the peace (“Corregidores”) who assist in enforcing ordinances in each Corregimiento.  Corregidores deal with most minor offenses, as they have presence in each of the 500-plus Corregimiento communities.  Their decisions are subject to appeal before the mayor of the relevant municipality and to judicial review by the Contentious-Administrative Section of the Supreme Court.

 

5.     Specialized Judicial Bodies

The Electoral Tribunal is a court separate from the other branches of government.   Its 3 magistrates are appointed by the Assembly for 10-year terms not concurrent with the presidential term or with each other’s term.  The Tribunal keeps birth and marriage records, serves as electoral office and also tries cases for violation of electoral laws.   The Electoral Attorney (“Fiscal”) takes cases to them for trial.

 

The People’s Defender or Ombudsman investigates complaints from citizens about abuses by government officials and can call for their sanction or removal.  The Ombudsman is appointed by the Assembly for a 5-yeaterm not concurrent with the presidential term.

 

A Special District Attorney (“Fiscal Especial”) was created in 1990 to prosecute crimes against the Nation.   It prosecuted several cases of human rights violations by the military of the pre-1990 governments.  However, cases were tried before traditional criminal courts, where acts of alleged coercion against juries preceded the acquittals of

 

Some non-governmental organizations have acted as human rights groups to gather complaints of violations or abuses by the Panamanian and/or U.S. military between 1968 and 1990.  The 20-year statute of limitations for further prosecution of pre-1980 violations and the uncovering of human remains at a former Panamanian military airbase triggered the appointment by the President of an ad-hoc truth commission in 2001.  The commission has the duty of gathering information about complaints of human rights violations by the Panamanian military and its mandate has a specific exclusion from exercising judicial duties.  Despite budgetary constraints, the commission has compiled a list of more than a hundred disappearances allegedly related to the Panamanian military.

 

5.1.  Staffing

The top positions in the judiciary require a number of years acting as accredited attorney-at-law (or in a position that requires a law degree), at least 30 years of age, to be in full exercise of political or civil rights, and Panamanian citizenship by birth.    The main positions with tenure requirements are: Position / Minimum age / No. of years as attorney / Appointed by

 

·      Supreme Court Justices, Attorney General of the Nation, Solicitor General of the Administration / 35 / 10 / Cabinet, approved by Legislature, for 10-year term.

 

·      Magistrates of Superior Tribunals, Secretary of Supreme Court of Justice, District Attorney  / 30  / 5  / Supreme Court Justices, for indefinite term.

 

·      Circuit Judges, Circuit Attorney / 30 / 3 / Magistrates of Superior Tribunals, for indefinite term.

 

·      Municipal Judges, Municipal Attorney / 25 / 3 / Circuit Judges, for indefinite term.

 

The Cabinet retains discretion in the selection of its appointments, while lower positions are subject to the Civil Service law which was enacted in 1991 to cover judicial branch employees.  This law is not applicable to the appointment of Supreme Court Justices, and their assistants.   The “judicial service” is meant to ensure the filling of positions with competitive candidates on a non-political basis, through the merit-based system.  Judicial branch statistics indicate that out of 2,382 judicial employees in 1996, 1,382 were appointed through the judicial service selection system.

 

Accreditation as attorney-at-law is granted to all Panamanian citizens that earn a law degree from a Panamanian law school (or a law school from a Spanish-speaking country recognized by the University of Panama) and apply to the General Affairs Section of the Supreme Court.   Graduates from non-recognized foreign law schools must comply with a thesis requirement in Panama.  

 

Membership in a Panamanian bar association is a requirement to litigate.

There is no training requirement for court administrative personnel, so a Judicial School was created with assistance from the U.S. Agency for International Development in 1993.  7,000 judicial and administrative servants have received training courses at the school.

 

More is available at:

·      Colegio Nacional de Abogados (Panama Bar Association) 

·      Abogados de Panama

·      Comision de Rlaciones Internacionales — Colegio Nacional de Abogados (International Relations Commission - Panama Bar Association) 

 

5.2.  Impact

Law in Panama has acted mostly as an instrument of centralized (and in the past authoritarian), regimes than as means for peaceful resolution of disputes between individuals.   In said sense, the law has a profound impact in everyday public and private affairs, especially among the ever-growing urban population.   The position of Panama as a trade center has resulted since the opening of the trans-isthmian railroad in 1855 in a prolific production of legal treatises and legislation by local jurists geared towards civil and business law.   However, pressures from changing party-oriented political administrations as well as kinship and social links typical of a small population have, in a decreasing manner, affected the independence of the judiciary and the perception of its proper administration of justice.

 

Negative political factors in the administration of justice have been addressed through legal reforms or have been lessened by the evolution of the local community.   This has led to the realization that non-political factors, such as the overloaded dockets, excessive bureaucratic proceedings, lack of training and equipment, and budgetary deficiencies continue affecting the administration of justice and its ability to give the law the role it is meant to have.   The visible forms of these effects are the amount years in the duration of a case and the fact that more than half of the jail population is made up by detainees awaiting their hearing.   The latest administrations, with financing and training from the U.S. and the European Union foreign aid entities, continue implementing projects in order to reverse this trend.

 

6.    Law, Jurisprudence and Doctrine Websites

Here is a selection of Panama legal "portals"(list of Panama legal websites):

 

·      Centro de Documentación Judicial — (Judicial Documentation Center) Supreme Court website with its decisions and appeals court judgments since 1993.

·      Legispan — Legislative Assembly website with searchable database of laws since 1903.

·      Infojuridica — Solicitor General website with laws and regulations since 1903.

·      Ejuridica — Law website with free laws and Codes available for download for a fee.

·      Rhino International — Catalogue of legal publisher of Panama laws and Tax Code updates.

 

6.1.  Government

Government sites provide institutional information, news and basic information about their respective fields in Spanish.

 

6.2.  Ministries

·      Panama Canal Authority  (with English site)

·      Ministry of Commerce and Industry

·      Ministry of Agricultural Development 

·      Ministry of Social Development 

·      Ministry of Education 

·      Ministry of Goverment and Justice 

·      Ministry of Public Works           

·      President of the Republic 

·      Ministry of Exterior Affairs 

·      Ministry of Health 

·      Ministry of Labor and Workforce Development    

·      Housing Ministry

 

6.3.  Other Government Sites

·      Superintendent of Banks (with English translation of laws)

·      Superintendent of the Securities Market

·      National Council for Sustainable Development 

·      National Authority for Government Innovation

·      Secretary of the Panama Metro 

·      Official Gazette 

·      Social Investment Fund    

 

6.4.  Discussion Lists and blogs

Several Panama law blogs have been created.  Some include:

 

·      My Panama Lawyer - Commentary in English about Panama legal developments with links to sources.

·      Derechos Humanos - Human rights blog by University of Panama students