UPDATE: Panama’s Legal System and Research
By Alvaro Aguilar-Alfu
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 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.
Published March/April 2021
(Previously updated by Alvaro Aguilar-Alfu and Kedar Reddy in December 2013)
Table of Contents
1. Country Information
The Republic of Panama is located in the Western Hemisphere and borders the Caribbean Sea in the north, the Pacific Ocean to the south, Colombia in the east, and Costa Rica in the west. Panama forms an isthmus (80 kilometers wide at its narrowest section) that connects South America and Central America. Panama has an area of 77,082 square kilometers, with mountainous land towards the Caribbean coast and rolling hills and extensive savannas towards the Pacific. The country’s population of 2.7 million speaks Spanish as its official language. However, English is widely spoken and understood in 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 70% majority comprised of the mixed-race people known as mestizo. 85% of the population is Catholic, as the national Constitution acknowledges; 15% is Protestant, and small Jewish, Muslim, and Hindu congregations co-exist.
Panama invests great part of its national budget in education. Its private and public schools are under the supervision of the Ministry of Education. The school system is organized into primary and secondary levels of six years each, as well as higher education or university. 11 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 with an average temperature of 27°C. The country has two seasons: the rainy season, which lasts from May to January, and the dry season, which lasts the remainder of the year. 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 freedom from currency restrictions. This has made the country different from most of its neighbors, as the economy is comprised 75% by services, 16% by industries, and 10% by agricultural activities. The rate of inflation is less 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 the U.S., Germany, and Sweden. Services to foreign customers are an important source of revenue that makes up for the substantial imports mostly from the U.S. and Japan.
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 twelfth century as the source of Amerindian organizations on 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 was collected by Spanish chroniclers that lived among the Amerindian tribes.
The arrival of Spanish troops in 1501 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 nine volumes, 218 titles, and more than 6000 laws covering all aspects of legislation in Spanish colonies overseas. As the character of Spanish presence changed from that of a military campaign to that of a colonial territorial expansion, the isthmus was subject to territorial institutions such as the Governorship, Viceroyalty, and Audiencia over three centuries.
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 formed with Colombia, Venezuela, and Ecuador. A presidential decree in 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 were eventually enacted by autocratic executive and subordinate legislative powers in Bogota. Several attempts to secede the isthmus ensued. An exception was a brief period between 1863 and 1885 Panama was a state of Colombia called the Sovereign State of the Isthmus with its state Constitution and assembly. The state assembly enacted civil and administrative codes for Panama which replaced Spanish laws in most cases and even served as a model for other Colombian states. The enactment of a national Colombian Civil Code in 1873 finally abrogated Spanish law along with all state constitutions and codes.
A 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. In 1916, the Codifying Commission submitted drafts of civil, commerce, criminal, judicial, mining, and tax codes to the Legislature which were enacted in 1917 along with the 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, the Labor and Health Codes 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 an 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 and is composed of an executive power comprised by a president, two vice presidents, and twelve ministers of state; a legislative branch with 72 legislators; and a judicial branch headed by nine magistrates. These three powers govern the country.
The civil law system is applied by the judicial branch, where judges are not bound by judicial precedent in their decisions. Judges rely on the Constitution, followed by codes, laws, and regulations as direct sources of law. Only after three identical decisions by the full Supreme Court do cases 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 five or more merchants who testify to that fact) serve as indirect sources of law.
The Constitution and procedure laws have provisions from which Panamanian jurists have determined the main concepts or principles that 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 nationals 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 no one 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 have been criticized abroad, including 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 other than the Constitution and the laws (Article 207, Constitution).
The 1984 Judicial Code, based on provisions in force in Colombia, expanded the scope of constitutional guarantees as applied in the procedural area. These principles are those of contradiction or bilateral character, whereby parties are granted all opportunities for their defense (or actions) as provided by the law; publicity, whereby proceedings are public, except when open only to the parties involved for ethical reasons, and secret proceedings are prohibited; procedural economy, whereby procedures must be conducted pursuant to the law but also efficiently); res judicata or 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 evaluated. However, the judge does not take a proactive approach under the procedural truth principle, whereby the evidence provided by the parties is the only truth to be admitted by the judge (as opposed to the material truth). According to the Fraser Institute, Panama’s legal structure and its impact on property rights received a score of 6.9 out of 10 in 1990. Aspects such as security of private ownership rights were scored 7.2, while the country’s viability of contracts and rule of law received scores 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 thirtieth in 1990 to fourteenth in 1997. Despite negative factors that have reduced the trust of investors, Panama has the best economic freedom rating in Central America and is ranked fourteenth 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 five-year term—who appoints cabinet ministers and directors of several regulatory entities at his or her discretion. 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 for the registration of deeds and property transfers, the Public Force for national defense and police duties, and the Directorate of Correction for penitentiaries. Other entities are the Ministry of Economy and Finance, which imposes fines for tax infringements and contains a Customs Tribunal that imposes imprisonment penalties for customs fraud; the Ministry of Labor and Labor Development, which provides dispute resolution on labor claims as well as Boards of Conciliation and Decision that 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, which is elected by popular vote. It enacts laws and hears impeachment cases.
The judicial branch is headed by the Supreme Court of Justice, which is composed of nine Justices. They jointly hear constitutional law cases that are decided by majority, while groups of three Justices form four sections: Civil, Criminal, Contentious-Administrative (judicial review of administrative cases, appeal of labor courts), and General Affairs, each with their specialized caseload. 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, which deal with admiralty cases arising from incidents in ships sailing the Panama Canal and Panamanian waters, or onboard 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 two 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 Procurador) General the Administration. The Attorney General works 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 which of the branches the Public Ministry belongs to, 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 five-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 and have a 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.
The Electoral Tribunal is a court separate from the other branches of government. Its three magistrates are appointed by the Assembly for ten-year terms not concurrent with the presidential term or with each other’s terms. The Tribunal keeps birth and marriage records, serves as an electoral office, and tries cases for violation of electoral laws. The Electoral Attorney (Fiscal) takes cases to the Tribunal 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 five-year term 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 several accused members of the armed forces.
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 of an ad-hoc truth commission by the President 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.
The top positions in the judiciary require a number of years of experience as an accredited attorney-at-law (or in a position that requires a law degree), at least 30 years of age, the full ability to exercise political or civil rights, and Panamanian citizenship by birth. The main positions with tenure requirements are listed below, formatted as follows: 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 a 10-year term
- Magistrates of Superior Tribunals, Secretary of Supreme Court of Justice, District Attorney / 30 / 5 / Supreme Court Justices, for an indefinite term
- Circuit Judges, Circuit Attorney / 30 / 3 / Magistrates of Superior Tribunals, for an indefinite term
- Municipal Judges, Municipal Attorney / 25 / 3 / Circuit Judges, for an indefinite term
The Cabinet retains discretion in the selection of its appointments, while lower positions are subject to the Civil Service law enacted in 1991 to cover judicial branch employees. This law is not applicable to the appointment of Supreme Court Justices or their assistants. The “judicial service” is meant to ensure the filling of positions with competitive candidates on a non-political basis through a 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 an 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 (Lawyers of Panama) – directory of Panamanian lawyers
- Comisión de Relaciones Internacionales Colegio Nacional de Abogados (Panama Bar Association International Relations Commission)
Law in Panama has acted mainly as an instrument of centralized (and in the past authoritarian), regimes than as means for peaceful resolution of disputes between individuals. In this 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 been established 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 the social kinship 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 overloaded dockets, excessive bureaucratic proceedings, lack of training and equipment, and budgetary deficiencies continue to affect the administration of justice and its ability to give the law the role that it is meant to have. The visible forms of these effects are the typical duration of a case (years) and the fact that more than half of the jail population is made up of detainees awaiting hearings. Recent administrations, with financing and training from U.S. and EU foreign aid entities, continue implementing projects in order to reverse this trend.
Here is a selection of Panama legal "portals"(list of Panama legal websites):
- Official Gazette – an official publication of the government
- Centro de Documentación Judicial (Judicial Documentation Center) - Supreme Court website with decisions and appeals court judgments since 1993
- Centro de Documentación Judicial (Judicial Documentation Center) - Supreme Court website with doctrine, legal publications, decisions, and other judicial information
- Legispan - Legislative Assembly website with searchable database of laws since 1903
- Infojurídica - Solicitor General website with laws and regulations since 1903
- Ejuridica - law website with free laws and codes available to download for a fee
- Rhino International - catalogue of legal publisher of Panama laws and Tax Code updates
Government sites provide institutional information, news, and basic information about their respective fields in Spanish.
- Panama Canal Authority (with English site)
- Ministry of Commerce and Industry
- Ministry of Agricultural Development
- Ministry of Social Development
- Ministry of Economics and Finance
- Ministry of Education
- Ministry of Government
- Ministry of Public Works
- President of the Republic
- Ministry of Exterior Affairs
- Ministry of Health
- Ministry of Labor and Workforce Development
- Housing and Territorial Arrangement Ministry
- 311.gob.pa - e-government website for complaints and queries to the government
- Intelcom - Ministry of Commerce website with trade information
- Consumer Defense Authority - complete database of consumer regulation.
- Superintendent of Banks (with English translation of laws)
- Superintendent of the Securities Market
- National Council for Sustainable Development
- National Customs Authority
- National Authority for Government Innovation
- National Secretariat for Science and Technology
- National Authority for Transparency and Access to Information
Several Panamanian law blogs have been created by law associations and individual lawyers. Some include:
- Asociación Panameña de Derecho y Nuevas Tecnologías (Apandetec) - commentary in Spanish about technology law
- Grupos Guia - commentary and webinars in Spanish about local law
- My Panama Lawyer - commentary in English about Panama legal developments with links to sources
- Derechos Humanos - human rights blog by University of Panama students