BRASILIA, May 22 (Reuters) - When the man accused of ordering the murder of U.S. nun and human rights activist Dorothy Stang walked free this month, it was the latest blow to the image of a Brazilian justice system plagued by impunity, delays and corruption.
Reforms are taking effect in some areas of law but Brazil remains stuck with one of the world's most crowded and contentious legal systems, increasingly out of step with its booming, modernizing economy.
Nepotism, bribery and incompetence all undermine faith in the rule of law, and many criminals literally get away with murder -- only between 2 percent and 10 percent of homicides even go to trial.
Exploiting legal loopholes, Vitalmiro Bastos, the rancher previously convicted in Stang's murder over an Amazon land dispute in 2005, was acquitted in a retrial in early May.
Under Brazilian law, anybody sentenced to more than 20 years in prison is entitled to a retrial, but many Brazilians were convinced that the rancher was guilty, including President Luiz Inacio Lula da Silva.
"I'm obviously outraged with the result," Lula said. "I think it testifies a little against Brazil's image abroad."
Despite repeated attempts to fix it, Brazil's legal system is still chaotic and inefficient.
"The results from judicial reform are not what we had hoped for," said Secretary for Judicial Reform Rogerio Favreto, who occupies a position created by Lula to simplify the labyrinthine system.
Favreto told Reuters that part of the problem is a strong "culture of confrontation" in the courts and long delays caused by rules that impede out-of-court settlements and allow almost endless rights of appeal.
A backlog of 20 million lawsuits stifle Brazil's courts, where cases are sometimes stuck for decades. The Supreme Court decided 22,257 cases last year, compared to around 70 by its U.S. counterpart.
A shortage of public defenders in much of the country entrenches a system of one law for the rich and another for the poor, said Julita Lemgruber, an expert on security and justice at Candido Mendes University in Rio de Janeiro.
"If you are rich, the legislation enables you to have a lot of appeals," she said.
In one prominent case, a former editor of a major Sao Paulo newspaper remains free despite receiving a 19-year sentence for killing his ex-girlfriend in 2000.
For businesses and foreign investors, reforms designed to streamline civil justice in 2006 have helped.
The time taken for creditors to recover debts has shrunk from a costly five years to less than two, said Wilson Mello, a litigation lawyer with Sao Paulo law firm Machado, Meyer, Sendacz and Opice.
"This has helped the country because if you are a bank this reduces your costs and has a direct impact on interest (rates)," Meyer said.
Favreto, 42, exudes energy and enthusiasm when he talks about recent achievements such as judges' salaries being capped at 24,500 reais ($14,940) a month and improved access for the poor to file small claims cases without a lawyer.
But he acknowledges that the sheer scale of the task and the vested interests entrenched in the political and judicial systems make quick progress unlikely.
Other reforms in criminal law were approved only last week in the lower house of Congress where, according to Globo news agency, 15 percent of 513 deputies are under investigation for crimes.
In exchange for backing one reform, deputies want the right to be tried in the Supreme Court in case they are sued.
"There's enormous opposition -- congressmen and defense attorneys, and even some public prosecutors who benefit from delay tactics," Favreto said.
The approved bills restrict the use of irrelevant or wrongfully obtained evidence as well as defendants' rights to object and appeal. They also abolish the automatic retrial for sentences of more than 20 years.
"Our trial by jury is a circus, and it often benefits the criminals," Favreto said. (Editing by Kieran Murray)
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