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Alternative Dispute Resolution- a mere paper tiger?

Posted on March 1, 2010 in Society

Megha Bhasin:

My joy was boundless. I had learnt the true practice of law. I had learnt to find the better side of human nature and to enter men’s hearts. I realized that the true function of a lawyer is to unite parties riven asunder. The lesson was indelibly burnt into me that a large part of my time during the twenty years of my practice as a lawyer was occupied in bringing about private compromises of cases. I lost nothing thereby — not even money, certainly not my soul.

(Mahatma Gandhi, The Story of My Experiments with Truth)

The courtroom contest and adversarial trial has engrossed the entire legal profession to such a great extent that it has forgotten that it ought to be a healer of conflict. The ground reality is that our legal system and the conventional litigation as a way of resolving disputes have become too expensive, agonizing, vicious and incompetent.

There are only 13 judges for a million people in India which explains the backlog of two-and-a-half crore pending cases in our country. Courts have become clogged with technical arguments and procedures that delay and frustrate court proceedings. The Courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored. The Centre has allocated Rs 3 crore to popularise the ADR system of dispute resolution. Fifteen states in the country already have permanent Lok Adalats.

Alternative dispute resolution (ADR) refers to a set of practices and techniques aimed at permitting the resolution of legal disputes outside the courts. It is normally thought to encompass mediation, arbitration, and a variety of “hybrid” processes by which a neutral facilitates the resolution of legal disputes without formal adjudication. These alternatives to adjudication are advocated on a multiplicity of grounds. Potential benefits include the reduction of the transaction costs of dispute resolution because ADR processes may be cheaper and faster than ordinary judicial proceedings; the creation of resolutions that are better suited to the parties’ underlying interests and needs; and improved ex post compliance with the terms of the resolution.

Chief Justice K.G. Balakrishnan has said that the number of lower courts in the country should be 35,000 as against the present 14,000 so as to cut down delays in disposal of cases. The legal system could crumble if the backlog of cases continued for long

Recently, Parliament enacted new sec. 89 in the Code of Civil Procedure, 1908 by requiring every civil suit to mandatorily go through the ADR process, however, giving the parties the option to choose one or other of the processes — like arbitration, mediation, conciliation and settlement through Lok Adalats. These provisions came into force from 1.7.2002.

The Supreme Court had occasion to deal with the utility of ADR in Salem Advocate Bar Assn. v. Union of India, 2002 (8) SCALE 146. Speaking for the Bench, after referring to sec. 89 of the Code of Civil Procedure, Kirpal CJ observed as follows:

“It is quite obvious that the reason why sec. 89 has been inserted is to try and see that all the cases which are filed in court need not necessarily be decided by the court itself. Keeping in mind, the laws delays and the limited number of Judges which are available, it has now become imperative that resort should be had to Alternative Dispute Resolution Mechanism with a view to bring an end litigation between the parties at an early date. The Alternative Dispute Resolution (ADR) Mechanism as contemplated by sec. 89 is arbitration or conciliation or judicial settlement including settlement through Lok Adalat or mediation.”

However, a number of issues have been raised on the use of ADR in its current form and whether it can achieve the desired outcome at its promised low cost. There is no formal structure for assessing the value of ADR during the claims process and the tendency has been for parties to introduce ADR processes at the latter stages of a dispute – after much of the early cost of litigation has already been incurred. It is important to distinguish that ADR is not suitable for every situation. ADR should instead be “Appropriate Dispute Resolution” and suitably applied depending on facts and circumstances of the case. For instance, in cases of medical negligence it may not be a great idea but to negotiate terms of employment or labour grievance ADR could be more efficacious than conventional adjudication.

To sum up, I quote Justice Sandra Day O’Connor,

“The courts of this country should not be the places where resolution of disputes begins. They should be the places where the disputes end after alternative methods of resolving disputes have been considered and tried.”

The writer is a correspondent of Youth Ki Awaaz.