To business players, sophistication of the law is not the final word. Even the best designed legal framework proves valueless when parties' lawful and legitimate expectations are not fulfilled, because, at the time of enforcement of a contract, the jurisdiction where enforcement is sought after fails to provide adequate support from its judicial system. Deficiencies may be of different sorts: cost, slow pace, complexity of the procedure (number of steps), lack of neutrality, non specialization of courts, etc. Political economists, such as Max Weber (1864 – 1920), to cite one of the most illustrious names, have well evidenced that the economic development of countries is directly linked to the mutual trust which may exist between business players and, by extension, to the trust which may be put by them in the institutions, in particular in courts. Improving court functions and efficiency is essential to sustaining a healthy and stable economy. On more micro-economics' terms, a recent study (Bae and Goyal, 2009) evidenced that an efficient contract enforcement scheme is associated with easier and relaxed access to credit.
The World's Bank's Doing Business division just issued a detailed report on the ease (or difficulty) of enforcing contracts around the world, country by country. The key parameters under review were the time, cost and procedural complexity of resolving a commercial lawsuit. This report is even more particularly timely appropriate given that the period covered coincided with the latest financial crisis' years which, not surprisingly, happened to generate a massive increase of significant commercial disputes.
The report is of outstanding interest as it goes into much detail, examining the respective strengths and weaknesses of each country in respect of their court system. Among the different conclusions achieved by the report, the final ranking is not the least noteworthy: among the 183 countries reviewed, Luxembourg gains the first position as the easiest country to enforce a contract. Luxembourg precedes Hong Kong SAR (2nd) and Iceland (3rd). This historic ranking will undoubtedly contribute to comfort Luxembourg's most positive image to the eyes of investors and business players. In addition to its well-established reputation as a top-ranking location and business attractiveness by virtue of the combined local expertise, legislative stability and political willingness, the World Bank's report evidences that the Luxembourg court system also provides a strong support for legal certainty, which is ultimately at the core of the business players' concerns.
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