IDB-supported program to help reduce financial burden of rulings against the government
A US$10 million loan from the Inter-American Development Bank (IDB) will finance a program to help the government of Colombia improve the management of cases in lawsuits brought against the state.
According to Colombia’s Finance Ministry, over the past four years payments for lawsuits brought against the state increased nearly 50 percent, from $230 million in 2007 to $450 million in 2011.
In mid-2011, 240,000 lawsuits―most of them labor-related―were in progress against some 100 Colombian government agencies. The Colombian state loses about seven of every 10 lawsuits brought against it. In Brazil, the state prevails in nearly six in 10 cases, while in Chile, nine out of 10 cases are resolved in favor of the state.
The program will improve the case management of lawsuits brought against Colombian public entities by supporting the newly created National Agency for State Legal Defense. This agency will enable the government to consolidate its legal defense actions, better manage case information, more closely monitor the activities of government lawyers, and improve the fiscal cost by generating greater social investment.
The four-year program is expected to help the Colombian government increase the percentage of cases resolved through alternative dispute mechanisms and conduct faster and less costly trials. It is also expected that lawsuits resolved in the favor of the state will increase and average payments will be reduced, resulting in greater fiscal sustainability.
The loan is for 15 years, with a grace period of the same extension on principal repayments and a variable interest rate.