Alternative Dispute Resolution: A confusing myth or a helpful reality?
The very famous quote “Justice delayed is justice denied” by William Goldstone best describes the judicial scenario of India. The country right now is facing a backlog of more than 42 lakhs cases across the various lower courts and around 60,000 cases in the apex court. Even though the sanctioned strength of judges in the country is 1079, the current working strength is just 679 which renders almost 39% of the judicial seats vacant. With just 12 judges per million population, India stands at the bottom of the list in terms of speedy and quality administration of justice.
The swelling urban and rural population of the country, only ensures an increase in the number of civil and criminal cases. Lack of experienced judges, inadequate facilities, lack of expertise in wide variety of subject matter of disputes, and procedural hurdles hamper the already overburdened judicial system. The long wait for justice along with the physical and financial strain completely drains the common man of his resources. To save the common man from such an arduous affair, the stake-holders of the judicial system of the country have designed the method of Alternative Dispute Resolution (ADR) for swift out-of-the court handling of civil suits. Thus, ADR as a mechanism to supplement the efforts by the courts needs special focus and attention.
WHAT IS ADR AND WHY ADR?
ADR comprises of “alternative” methods of dispute resolution and is listed undersection 89(1) ofthe Code of Civil Procedure, 1908.Basically, it acts as a substitute to litigation in civil cases (mostly commercial cases, family cases and cases related to property) and is a cheaper and quicker process. It involves the continuous efforts of a third party who is neutral and helps the disputing parties to reach an agreement. The perception of ADR has become increasingly significant throughout the world in the resolution of different kinds of disputes. This is due to the fact that ADR is viewed as litigant friendly system in any kind of society or economic setup.
ADR gives the parties more control over their cases rather than making them completely dependent on the court or their lawyers. While litigation focuses more on the legal rights of the aggrieved parties, ADR gives them the opportunity to focus on the issues which are actually important to them. It prevents the matters from getting adversarial unlike court cases where there’s a loser and a winner. Here, boththe parties find a solution together with the help of an arbitrator to preserve the ongoing relationship. Also, it saves you the efforts of running to the courts on various dates since the matters are mostly dealt with through phone calls, letters or face to face discussions. Other than these advantages, ADR helps the parties to keep their private matters private since only the parties invited can attend the sessions unlike those in courts where anybody can party to the proceedings.
RISKS OF USING ADR
There are some situations where using ADR may not be appropriate or may even be risky for the parties. In these cases it is important for the parties involved to consult legal advisers or solicitors. Given below are some of the general situations where mediation happens to be a risky option:
Difference in power/status of the parties: There may be an imbalance between the power or social influence of the parties involved which could make the mediation process unfair. It includes the instances where one party is able to intimidate the other. For eg : A mediation between an individual and a company with huge resources might be unfair because of the financial capability of the company or any matter between close relatives/acquaintances where the people involved might have to take decisions under moral obligations or emotional constraints. This doesn’t mean that mediation is always inappropriate but one should consider this aspect too.
Urgency: ADR is inappropriate in situations where there might be an urgent need for any legal action. For example, if there’s an illegal construction on a piece of land owned by a particular individual, then, a court case would be more appropriate . This is because the court will be able to issue a stay order as an immediate legal remedy.
Reluctant Opponent : For ADR to take place, both the parties involved should consent to the practice of out of court settlements. If even one of them doesn’t agree to it, then going to the courts would be the only way out.
No precedent : Unlike court cases where a legal point once established can be relied upon or referred to in further cases, in ADR the judgements remain confidential and cannot be used as precedents. If your case involves any point where a legal precedent is to be considered then going to the courts would be the right decision.
Binding decisions and lower compensation amounts :In all methods of ADR, other than arbitration, the decision reached to can be challenged in the court. However, in arbitration, the decision reached is unlikely to be challenged by the court. Also, the amount of compensation decided upon via ADR is lesser than that reached upon through litigation.
TYPES OF ADR IN INDIA
ADR may be grouped under two heads:-
Arbitration comes under the adversarial system of dispute resolution and is formal in nature. Rest of the methods fall under the Non-Adversarial mechanism of conflict resolution and are informal in nature.
The following are the modes of ADR practiced in India:
ARBITRATION: The process of arbitration can start only if there exists a valid Arbitration Agreement between the parties prior to the emergence of the dispute. Such an agreement should be in writing. Arbitration is done in accordance to the provisions of the Arbitration and Conciliation Act of 1996.The registration fee for matters involving less than one crore is 2500 and for matters involving more than one crore the fee goes upto 5000. This is in exclusion of the fees of the arbitrator which varies from case to case.
Either of the disputed parties can appoint an arbitrator and the appointment of such an arbitrator can be disputed only on two grounds –
Reasonable doubt that the arbitrator appointed is impartial
Lack of proper qualification/skill of the arbitrator
Except for some extreme measures there is very little chance of judicial intervention and the decision of the Arbitration Tribunal is generally binding. Thus if a party wants to challenge the decision of the tribunal it can do so only before the same tribunal. After the period for filing an appeal is crossed, the decision is considered as a decree of the court.
CONCILIATION: This refers to a less formal form of arbitration. Here too the provisions of the Arbitration and Conciliation Act, 1996 would apply. But unlike arbitration, conciliation doesn’t require any previously mentioned clause in the agreement. Both the parties have to agree to conciliation and either of the parties can appoint a conciliator. Multiple conciliators can be appointed too with the maximum cap being three. During conciliation the parties may submit statements to the conciliator regarding the general nature of dispute and the conciliator may request the parties for further details. If required the parties may be asked to communicate orally or in writing. When the conciliator figures out the points of settlement, he may draw up the terms of the settlement and send it to both the parties for their acceptance.
MEDIATION: Mediation is a simple, voluntary and structured process of dispute settlement. Since the parties have the final say in the option of settlement of dispute via mediation and also retain the right to decide the terms of settlement, the process is termed voluntary. In case the mediation fails, the report of the mediator does not mention the reason for the failure but it would only say “not settled”. It involves appointment of a neutral third party i.e. a mediator who acts as a buffer to bring the parties to an agreement. The mediator makes no decisions and does not impose his view of what a fair settlement should be. Even the exchange of information is mostly limited and optional. The mediator can be anyone, of any designation and can be appointed formally or casually depending on the wish of the parties. There are 2 types of mediation in India:
Court referred Mediation: The court may refer a pending case for mediation in India under Section 89 of the Code of Civil Procedure, 1908. This type of mediation is frequently used in Matrimonial disputes, particularly divorce cases.
Private Mediation: In Private Mediation, qualified personnel works as mediators on a fixed-fee basis. Anyone from courts, to the general public, to corporates as well as the government sector, can appoint mediators to resolve their dispute through mediation.
NEGOTIATION: Negotiation is self-counselling between parties to resolve their dispute. It is similar to mediation but it may or may not include a third party. Even if a third party negotiator is involved in the process of negotiation, his role would be limited to inducing the parties to the process of negotiation. It has no fixed rules but follows a predictable pattern.Bargaining is a common trait of the process of negotiation. There are two types of negotiations:
LOK ADALATS: The special conditions prevailing in the Indian society require a highly sensitized legal service which is efficacious for the poor and the down-trodden.
LokAdalat is a unique method of dispute resolution in India and refers to people’s courts. It provides a platform for disputes/cases pending in the court or those in their pre-litigation stage to be solved. The provision was granted the statutory status under the Legal Services Authorities Act, 1987 and is governed by the same Act.Matters in LokAdalat do not require any kind of fee and in case the court refers any matter to the LokAdalats then in such cases too the fee ,if any charged, is refunded back to them. The LokAdalat is chaired by either a sitting or a retired judicial officer, with two other members, usually a lawyer and a social worker.
The members of LokAdalat are vested with the task of deciding the cases which are brought before the body but then cannot pressurize or manipulate the parties to settle their cases directly or indirectly. The only function of the members is to guide the disputing parties to reach a solution.
Alternative modes of dispute resolution are not something unknown in India. Historically, ADR methodshave been practiced widely in India in various informal ways. Though the modern concept of ADR was introduced in India during the British regime, it was mostly confined to arbitration. It was only during late second half of the twentieth century that other ADR mechanisms started to get recognition in India.
There is hardly any doubt about the benefits of ADR and its potentiality to play a pivotal role in the dispensation of justice in India. However, before approaching these ADR mechanisms one should make some realistic comparison of the costs in both the forums for their particular cases as litigation might turn out to be cheaper in certain situations.
Prof. (Dr.) Sandeepa Bhat B., Alternative Dispute Resolution (ADR) Mechanism and Legal Aid in the Settlement of Disputes: A Case Study of State of West Bengal , Under the Scheme of Action Research and Studies on Judicial Reforms, (August 31, 2019, 4:00 PM),
See Maneesh Chhibber, ‘Do we need more judges? CJI Thakur’s plea to the govt raises key questions’, available at http://indianexpress.com/article/india/india-news-india/india-judiciary-cji-t-s-thakursupreme-court-judges-pending-cases-2778419/.
Mehka Sharma,Mediation in India, https://www.mediate.com/articles/mediation-in-india-articile.cfm ,(August 31, 2019 , 5:00 PM).
S. Chaitanya Shashank, Kaushalya T. Madhavan, ADR in India: Legislations and Practices,https://www.lawctopus.com/academike/arbitration-adr-in-india/, (August 31,2019, 5:00 PM)
By Oyshee Gupta (CNLU Patna ) & Suhaas Arora (RGNUL, Patiala), LokAdalats, https://www.lawctopus.com/academike/lok-adalats/, (August 31, 2019 , 5:30PM)
Year I, B.A.LL.B.,
National Law University & Judicial Academy.
(Image used for representational purpose only. Image Courtesy: https://murphycampbell.com/2015/05/14/fighting-fair-the-benefits-of-alternative-dispute-resolution/ )