In Costa Rica, a law project proposes to disable construction companies that do not comply with contracts with state entities for a period of five years.
The proposed law is analyzed by the Economic Affairs Committee of the Congress, and according to representatives of the Ministry of Public Works and Transport (MOPT), if approved, the law would allow sanctioning construction companies that do not complete the works agreed with the State.
With the new Civil Procedure Code the time it takes to conduct civil proceedings will be reduced from an average of between 10 and 15 years to just two years.
Cases of breach of contract between private parties who undergo civil suits will be resolved in an average two-years, as hearings will be held in oral rather than written form.
Nacion.com reports that "...This type of litigation is used for various subjects such as disputes over deceased estates, lawsuits between neighbors over the size of their property, charges for damage caused by a car crash, or breach of a contract between private parties. "
Insurers have started to issue these policies which compete with bank share and performance guarantees.
The National Insurance Institute (INS) and Oceánica Seguros are the two companies which have been offering such policies since this year. Meanwhile, the company ASSA will start to offer them in in 2015 and Mapre is still adjusting its offers with a view to supplying them in the future.
Judicially enforcing a contract takes 1402 days in Guatemala, 920 in Honduras, 852 in Costa Rica, 786 in El Salvador, 686 in Panama, and 409 in Nicaragua.
The data comes from the 2014 Doing Business report by the World Bank.
The extreme difficulty of enforcing contracts by means of the administration of justice systems is endemic in Latin America, which, as stated an article in Miamiherald.com by Andres Oppenheimer, contributes "to slow economic growth."
Complains include delays and disagreements in the execution of the contract, and the fact that the local manager of the project is the husband of a Supreme Court judge.
Journalist Ronny Rojas published several articles in Nacion.com explaining that Costa Rica’s Judiciary hired Spanish company INDRA to consult on a IT system and process redesign. The contract was worth $1.8 million (funded by the Inter American Development Bank), and INDRA was the only company that made a formal bid for it.
The Government of Costa Rica has failed to comply with specified spending deadlines in 60% of its contracted loans.
On December 2009, the government had $1.14 billion in outstanding loans from foreign debtors, with $734 million pending execution.
In an attempt to correct the situation, the Comptroller of the Republic asked the Treasury Ministry to instruct the Public Credit Directorate to implement controls over the next 8 months to solve each particular case. The Comptroller also requested an analysis on the consequences of these delays and which corrective measures can be taken.
By breaking a contract to build four lines of electric broadcast, ICE paid contractor $2.300.000.
ICE did not contribute to clear the land, the designs and the materials required to install the networks, the project increaased in cost by 37% at the end of three years. The companies hired by the Institute demanded the profits that were lost as well as losses incurred by having idle officials and teams.