Built for Speed: Implications of Panama's New System of Oral Trials for Attorneys, Investigators

On 2 September 2016, Panama implemented the Adversarial Criminal System (Sistema Penal Acusatorio, or SPA)--a new system of oral criminal proceedings--in all the criminal courts in the country (it was implemented in a phased approach and previously covered only certain courts in the country). With the full implementation of the SPA, Panama joins a number of other countries in the region who have moved away from the inquisitorial system approach of written criminal proceedings. The results of these reforms across the region have been mixed, but feedback in Panama has been positive so far despite several challenges like budget constraints and complaints about resources available for older cases still being litigated under the written trial system. Ultimately, it may be too early to tell how the SPA will perform and what its net effect will be on the criminal justice system in Panama. However, there are a few important implications of its implementation to point out for those living in or doing business in Panama.

Both attorneys and clients will have to adapt. The SPA is built, at least in part, for speed and efficiency. The new system would make it possible, for instance, to have a final verdict within 48 hours of an arrest. This would have been unheard of under the inquisitorial system. This means, however; that defensive strategies must also adapt.

The SPA also facilitates plea agreements and other means of alternative resolution of criminal matters. Attorneys must be adequately prepared to negotiate the best such agreements for their clients and to help their clients understand their criminal defense strategy under this new system. Under the new system, motions in any criminal trials will be considered and argued on a much shorter timeline. Ultimate resolution of criminal matters can no longer be drawn out for months or even years; both attorneys and their clients must adapt to this new reality. The implication here is that, ultimately, attorneys must be well-prepared. Some commentators have pointed to a troubling and significant gap between the training and preparation for the new SPA received by prosecutors vis-à-vis criminal defense attorneys. In other words, finding competent legal representation is all the more important under the SPA.

It should be noted that, in Panama, and much of Latin America, it is fairly easy to end up the subject of a criminal complaint (denuncia). Generally speaking, any citizen can file a criminal complaint at the prosecutor’s office, which will then investigate the facts of the case and determine whether any criminal conduct took place. In fact, due to procedural sluggishness of the civil courts, denuncias are often used as a pressure tactic to resolve disputes that are not necessarily criminal in nature. We have seen cases in a number of countries where, for instance, one party will file a criminal fraud complaint against a client in what is really a commercial contract dispute. The inconvenience of being called to the prosecutor’s office to provide sworn declarations or other statements is then used as leverage in an attempt to resolve the dispute. Whether this will increase or not under the new system remains to be seen; but those doing business or living in Panama should be aware of the possibility.

Corporate criminal liability. In contrast to the traditional principle in civil law jurisdictions that companies cannot be subject to criminal liability (societas delinquere non potest), Panama now allows for the possibility of criminal liability for companies. This is not a direct consequence of the SPA; the change was enshrined in Panama’s Criminal Code (Article 51) by Law 10 of 31 March 2015, which provides that, “any legal person [persona jurídica] that is used to commit a crime or created for the purpose of committing a crime, even if it does not benefit from it [the crime],” can be sanctioned with loss of license/registration status, fines, loss of tax benefits, bans from public contracting, and even forcible dissolution. The application of this fairly new and broadly-worded law in the context of the SPA’s implementation remains to be seen, but it’s important for those doing business in Panama to be conscious of it.

The SPA will mean less access to a paper trail in criminal proceedings. As in the rest of the region, access to criminal and other court filings in Panama can vary. For investigators, conducting a criminal background investigation in Panama has always required significant on-the-ground legwork as record coverage can be irregular and records can be located in several offices. In broad terms, basic records (e.g. the parties involved, charges filed, and case status) have always been more readily available than the details of criminal court filings. That said, it is generally possible to view criminal court filings and, in certain cases, we have even successfully obtained copies of filings.

However, the SPA is primarily a system of oral proceedings. As such, we have found that cases tried under the SPA will have a much smaller documentary profile than those tried under the previous system. The substance of a matter litigated under the SPA will typically be contained in video recordings of the proceedings themselves and access to these can be more restricted. From an investigative perspective, this means that obtaining information related to SPA matters may require more human intelligence work and that possibilities for obtaining documentary evidence from court filings will be more limited.

The ultimate impact of the SPA in Panama should become clearer over time. While it will clearly have its most significant effect on individual criminal defendants, the creation of corporate criminal liability and the propensity of some for using criminal complaints as a means of resolving disputes may mean that some companies will ultimately have to deal with the SPA as well. Whatever the end result, the SPA represents a set of significant changes to the legal system in Panama; attorneys, their clients, companies, and the general public will have to adapt along the way.