Mediation

Mohit Mokal on Pre-Litigation Mediation Model in India

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Introduction

Mediation can be most simply defined as party oriented negotiation, facilitated by a neutral third party, helping reach a workable solution that is mutually acceptable. Mediation has existed in India since before its colonial times centuries ago through the Panchayat system but was overshadowed by Common Law during the British rule. However, it is now getting some traction owing to the overburdened and almost paralyzed Indian judicial system with over 33 million cases in backlog as of July 2018.

The number of cases that have been pending in the courts for more than 30 years exceeds more than 38,000 in the High Court of Allahabad itself, almost 10,000 in Calcutta. A total of 4.6 million civil cases are pending in all the High Courts of the country[1]. Over 60,000 in the supreme court itself in which over 40% of cases are more than 5 years old, whose maximum strength is only 31.

It is popularly known in the judicial system and cited in many cases ‘Justice delayed is justice denied.

In my paper, my main topic will focus on providing a hybrid model of pre-litigation mediation, which could reinforce the judicial system and effectively dispense much needed justice in a timely and fair manner.

Currently in India, there are two principal legislations that deal with mediation in India. There are standard rules framed by the Supreme Court and the High Courts under section 89 of the Code of Civil Procedure to deal with – court mandated – mediation, which has become a norm in many civil cases. Part III of the Arbitration and Conciliation Act 1996 deals with private mediation.

One of the landmark cases defining Mediation in India, in the Afcons v Varkey case[2]the Supreme Court clarified that under Section 89 of the Code of Civil Procedure, the court needs to check on a case to case basis whether a dispute can be settled out of court by Alternative Dispute Resolution (ADR) methods.

The courts and legislature have both taken a Pro-ADR Policy step aimed at reducing the expanding backlog of cases through various judgments and policy steps, most recently and notably the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018.

Recently in March, the Supreme Court of India referred the parties in the Ayodhya – Babri Masjid case, arguably one of the most political and religiously significant case in the Indian context to Mediation by a panel of 3 mediators.[3]

My paper will deal with other aspects of Mediation which has remained unregulated in India.

The first part of my paper will focus on current regulation of mediation in India, the legislation, jurisprudence and practical industry practice. In the second section, I will deliberate on the nature of mediation and why it presents a model so different from any of its predecessors and how it will work in any given situation. Next I will focus on models of mediation which are impressively practiced internationally and the Italian Model of Mediation that can be looked at as an example to study and create some kind of practicable model for India.

Finally, the last part of my paper will focus on explaining the – Simultaneous Dispute Resolution Model – for India as a mechanism to help reduce the backlog of cases and create an efficient mechanism for the delivery of justice in the most time and cost effective manner, while improving the quality of justice.

Nature of Mediation

Getting away from the legal basis for Mediation, it practically has tremendous scope to reduce the burden of cases pending in the Indian courts, or at least reduce the piling of new ones given the proper opportunity. At the heart of Mediation and this is why it makes mediation so special and uniquely different from adjudicatory methods is that its most important principle is that it is a voluntary process, completely party oriented.

The most fundamental principle of any ADR mechanism whether it be Arbitration / Mediation / Negotiation, is party autonomy – the voluntary nature of the mechanism itself. Arbitration, is slightly different from the ones mentioned above since there is still an adjudicator – judge like – arbitrator who has the authority to make decisions and pronounce awards enforceable as a court decree based on a pre-existing contract or contractual clause. In all the other mechanisms, the parties with the help of the process, negotiate their own interests and reach a solution themselves.

Mediation helps the parties facilitated by the Mediator get away from superficial positions and deal with the deeper issues and real needs of the parties. A judge may give the most well reasoned judgment but could have failed to give any reasonable closure and resolve to the parties, however in mediation, the parties can themselves convey what is important to them and help reach a decision which is acceptable to all parties (Win – Win) instead of a traditional Win – Lose scenario.

Alternatively, it will provide some clarity to the parties after allowing them to vent and express themselves, as to what is it that they really want and will help them move beyond their subjective positions. Finally, nothing is final until everything that is discussed and understood at the end of the mediation that results in a settlement, is written down and signed by both the parties which can then be enforced as a decree of the court.

When instead of an award or judgment, parties reach a settlement themselves in their own best interests, they are more likely to enforce it, although a settlement agreement can be binding as a court decree as well. There are low chances of parties appealing a settlement they have consented to, rather than an award, which in today’s environment has become more open to challenges and hence arbitration as well has become just another mechanism in the process of litigation.

Mediation Models

Approaching the courts subject to law is a fundamental right of any citizen in a country, however when there are more efficient alternatives recognized internationally that are available that can save the resources of the courts and on a larger scale make the justice system of every country more approachable to the public with faster delivery of justice and better quality of solutions, the courts have the authority under law to subject parties to such alternatives including ‘mandatory’ pre-litigation mediation / negotiation.[4]

The right to access any national court is guaranteed by human rights framework, however it is varying internationally whether mandatory mediation reasonably alters this right. Many states permit a mandatory ADR mechanism in some capacity before approaching courts and restricts such a right, where else in other states such a right is absolute and cannot be restricted. Mandatory mediation is not a barrier to justice since unlike mandatory arbitration, it does bind parties to a mandatory award but rather makes the process of an attempt to resolve the dispute amicably mandatory.

In August 2010, E.U. implemented a Mediation Directive to all member states for a second time, once earlier in 2008[5]and was earliest proposed in 2004. The Mediation Directive provides Member States with a flexible regulatory framework that enables them to enact a variety of mediation laws, it sets minimum guidelines for the mediation laws of Member States.

One of the notable domestic judicial systems in this regard is the Italian Model of Mandatory Mediation that has shown promise and through trial and error has proved to be a far more efficient model of resolve civil disputes.

In March 2010, Italy had passed a Legislative Decree 28 to reconcile litigation of civil disputes with mandatory pre-litigation mediation. Article. 5, paragraph 1, of Legislative Decree. no. 28/2010 enumerated the following class of civil disputes to undergo mandatory mediation:  neighborhood disputes, property rights, division of trusts and estates, hereditary succession of property, inter family agreements, lease and rent of properties, loans of use, damages resulting from the accidental movement of cars and boats, medical liability, libel in the press or other means of advertising, insurance, banking and financial services contracts.[6]

The decree by the Italian government is highly unique because it makes Italy the only country in the EU to make mediation of civil disputes, mandatory. It is pertinent to note the scenario in which this measure was taken. In Italy, a civil dispute including appeal would take three and a half years to ten years to attain finality.[7]In addition to overcrowded courts, Italy faced a “mediation paradox” where fewer parties agreed to voluntarily mediate disputes, but part of the parties that did, an overwhelming percentage reached satisfactory settlements during the mediation process. Under the Italian Decree of 2010, not only will mediation allow a procedurally limited access to court, but it will also offer a guaranteed faster and more efficient procedure to resolve civil disputes and hence also help reduce the backlogs of domestic court. In fact, the Decree requires that all mediations cease within four months, starting from the date of the request to mediate. This cap is in place to ensure that mandatory mediation is a true improvement, at least in speed and ease of procedure, over traditional litigation and adjudication of civil disputes.

The mandatory nature of the mediation however came from a very procedural provision, in the Civil Procedure of the domestic legislation of Italy. Which allows the judge in civil trial of the cases referred to mediation to take as evidence a party’s action, to unreasonably fails to participate in the attempt to mediate the dispute. In this way, the norm on procedure dealing with so-called “atypical evidence” (party behavior in participating in extra judicial means of resolution) ended up extending its original range of application, as the current formulation allows the judge to draw evidence only from the parties “in court.”[8]

However, in the Constitutional Court of Italy in the year of 2012, this mediation directive was quashed on the terms of being mandatory for several reasons.[9]One most notable was that Directive 2008/52/EC of the European Parliament and the Council of 21 May 2008 contains an invitation to the Member States to set up alternative civil and commercial dispute resolution procedures, able to help provide more cost effective and faster solutions by means of procedures tailored to the specific needs of the parties. But the European directive, although contemplating the possibility that such procedures should be prescribed by the law of a Member State, does not require them to be mandatory.[10]

After the repeal of Legislative Decree no. 28/2010 following the unconstitutionality judgment of the Constitutional Court, the Italian government intervened again, with Art. 84 of Domestic Legislation no. 69, of June 21, 2013, to change the provisions of Legislative Decree no. 28/2010. The decree has recently been converted by Parliament with the Law no. 98 of 9 August 2013.[11]

The current Italian model of mandatory mediation post amendment in 2013 without abridging the access to the courts refers civil disputes to a mandatory initial-information mediation session where the mediator understands the dispute and explains the parties the process of mediation, its advantages and disadvantages in an initial session and after the initial session, the mediator or the parties can choose to refuse mediation and continue the court trial or attempt mediation voluntarily. Parties can pursue litigation in the court from the moment when the first mediation meeting has proved unsuccessful. The amendment has expressly provided that parties should be accompanied by lawyers in the course of the meetings. Further it added that the agreement reached by the parties to settle the mediation will have the value of an enforceable right provided that it contains the signature of the parties and their lawyers, both. It also added a provision for the training and qualification of mediators – “Registered lawyers are mediators by right. Lawyers enrolled with mediation bodies must be adequately trained in mediation and maintain their knowledge by means of theoretical and practical courses organized for this purpose.”[12]

In essence Mediation has shown to be more effective in the European Union generally, when it involves elements of mandatory nature.[13]Not making settling mandatory, but rather making an attempt to settle mandatory.

Simultaneous Dispute Resolution Model – India

Coming to the model I would like to present in the Indian scenario. Inspired from the Italian Model of Mandatory Mediation as discussed above with the Pre-trial Private Mediation as described in the Supreme Court of India Mediator’s Training Model.

A Pre-Trial Model of mediation, whereby the parties are to attempt mediation once the parties have submitted their cases to the court and are waiting for the cases to be listed before a judge or are pending for a date before the beginning of the trial. If the parties have reached a settlement during that time, the trial is closed with the enforcement of the negotiated agreement, if the mediation fails, the trial continues. This can be called the – Simultaneous Dispute Resolution Model.

In India, a civil dispute might take between 3 to 12 months on average, from the time of its filing in the court, to the time the case is listed in a court and trial actually begins. In that time, while the lawyers are busy preparing their briefs, the parties must be provided with the opportunity to save their own time and the courts’ as well.

The mediation model in order to be practical must include some elements of mandatory nature.[14]An attempt must be made mandatory to conduct in good faith meaningful negotiations during the mediation process. An initial information session for all civil disputes, whereby a trained and qualified mediator explains the mediation process to the parties, its relevant advantages and disadvantages and a reality check regarding the dispute, a case by case analysis of practicability of mediation in the dispute must be discussed with the parties.

As ligating a dispute in court is a legal right, while protecting that right, the courts can refer the parties to ‘pre-litigation mediation’ where by a trained mediator will explain the parties the process of mediation, and provide them with sufficient opportunity to settle the dispute between themselves.

If at the end of the mediation, even if the parties do not reach any binding settlement, they will be better off understanding each other’s perspectives and hopefully narrowing down the scope of the problem.[15]Hence, an initial information session should be made mandatory, at the very least if not the mediation attempt during the pendency of the suit before trial.

It must not be mandatory to be accompanied by a lawyer, but the option should always be open to parties to prevent any power imbalances. Without abridging the confidentiality of the mediation proceedings, mediator’s must be able to report to the court, a party’s conduct, who approaches the mediation in bad faith, only to delay the proceedings unreasonably or fails to repeatedly show up to the mediation without respecting the sanctity of the process or respecting the time of the mediator and the other party.

This also means a centralization and regulation of the mediation industry in India, including regularized and specialized training and qualification, registration of said qualified mediators in a centralized data base, record keeping of the number of mediations initiated, completed successfully or unsuccessfully. A central legislation regulating the ethical rules regarding their conduct, a set of rules regulating the facilitative / evaluative nature of the mediator, thereby restricting the scope of authority of a mediator to not act like an authoritative evaluative judge.

This model will have far reaching implications in the judicial mechanism. There should be caution exercised while referring disputes to mediation for example disputes involving elements of serious corruption cases, cases involving any criminality or malicious intent, cases of grave significance of precedential value and those generally involving large public interest must be analyzed first for the possibility and future effect of a negotiated settlement in the dispute.

In context that the Supreme Court of India referred one of the most iconic and politically important cases – Ayodhya Babri Masjid Case[16]– to mediation in early March of 2019 and that in the August of 2018, the legislation amended the Commercial Courts Act to include mandatory mediation, however with no real compulsion of mandatory nature as judges are not bound to consider the failure of the mediation proceedings pre-trial, but having jurisdiction covering disputes ranging from ordinary financial transactions and those relating to imports and exports, infrastructure contracts, intellectual property rights, exploitation of oil and gas contracts[17]as notified in the Extraordinary Gazette of India under the Commercial Courts Act if elements of mandatory nature are added and enforced with the intention of promoting the use of mediation, the scope for the applicability of mediation is a vast, unexplored, ocean of peaceful dispute resolution, even creating more opportunities in the legal career for already established lawyers and legal practitioners and the lawyers of the future.

Conclusion

With the current backlog in the judicial system, Mandatory Mediation can be provided a boost for integration in the traditional means of dispute resolution however the backlog is not the only reason for implementing it. Changing the default method of approaching disputes from adversarial methods to collaborative and peaceful methods is a structural change which might be important to civilization itself.

With the of Simultaneous Dispute Resolution Model applicable, along with the promotion of mediation, which can be started at any stage during the trial under Section 89 of the Code of Civil Procedure in India, it will have a substantial impact on the number of cases having to resort to trials in the courtrooms.

In terms of policy aimed towards the future, within a few years itself it will reduce the growth of new cases in the courts as well and help reduce the backlog of cases in India.

Even as a temporary measure for a few years the Model deserves to be tried out in the Indian scenario with assessment of the measure in the future to take specific amendments from time to time to make the measures more efficient and free of policy defects.

Mandatory mediation will segregate the total pool of cases to be divided amongst many trained professionals and help the judiciary better play their part in more complex and cases of public importance.

Cases involving substantial public interest and having complex legal issues will always need to be decided by a court of law, however allowing the rest of the disputes of less complex nature and having a possibility of settling outside the court must be allowed the opportunity saving the time of the courts and the taxes of the people helping implement a better justice delivery system at large.

[1]http://njdg.ecourts.gov.in/hcnjdg_public/main.php

[2](2010) 8 SCC  24

[3]https://www.sci.gov.in/supremecourt/2010/36350/36350_2010_Order_08-Mar-2019.pdf

[4]Daniele Cutolo; Mark Alexander Shalaby, Mandatory Mediation and the Right to Court Proceedings, 4 Disp. Resol. Int’l 131 (2010)

[5]DIRECTIVE 2008/52/EC, https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:136:0003:0008:EN:PDF

[6]Legislative Decree. no. 28/2010

https://www.consiglionazionaleforense.it/documents/20182/201436/D.LGS.+n.28-2010

[7]Decreto Legislativo 4 Marzo 2010, n. 28, art. 5 (It.)

[8]In particular article 8, paragraph 5, d. lgs. n. 28/2010, referring to article 116 c.p.c. (code of civil procedure), offered the judge in a possible future court case the possibility to evaluate the behaviour of the parties as evidence during the (extra-judicial) mediation proceedings. D.Lgs. 4 marzo 2010, n. 28 (It.) L. Montesano, Le “prove atipiche” nelle “presunzioni” e negli “argomenti” del giudice civile, in RIVISTA DI DIRITTO PROCESSUALE 233 (1980); but see R. Aliberti, Mediaconciliazione: il contegno delle parti nella procedura di mediazione alla luce del futuro (ed eventuale) processo, TRECANNI L’ENCICLOPEDIA ITALIANA (October 20, 2011), http://www.trecanni.it/magazine/diritto.

[9]Giuseppe Conte, The Italian Way of Mediation, 6 Y.B. Arb. & Mediation 180 (2014)

[10]Article 3, letter a, of the Directive states that the process of mediation “may be initiated by the parties or suggested or ordered by a court or prescribed by the law of a Member State.” Council Directive 2008/52, Art. 3, 2008 O.J. (L 136) 6 (EC). Article 5, second paragraphs, states: “This Directive is without prejudice to national legislation making the use of mediation compulsory or subject to incentives or sanctions, whether before or after judicial proceedings have started, provided that such legislation does not prevent the parties from exercising their right of access to the judicial system.” Council Directive 2008/52, Art. 5, 2008 O.J. (L 136) 7 (EC).

[11]L. n. 98/2013, G.U. n. 194 (2013)

[12]Amended Article 16 Legislative Decree No. 28/2010

[13]Giuseppe De Palo; Romina Canessa, Sleeping – Comatose Only Mandatory Consideration of Mediation Can Awake Sleeping Beauty in the European Union, 16 Cardozo J. Conflict Resol. 713 (2014)

[14]Frank E. A. Sander, Another View of Mandatory Mediation, 13 Disp. Resol. Mag. 16 (2007)

[15]S.GOLDBERG, F.SANDER, N. ROGERS AND S. COLE, DISPUTE RESOLUTION 162 (4th ed. 2003). Even if there was no agreement at the mediation session, one sometimes emerges later as a result of the ideas explored at the mediation session. Or, at a minimum, the mediation session may help to clarify the issues for trial.

[16]https://www.sci.gov.in/supremecourt/2010/36350/36350_2010_Order_08-Mar-2019.pdf

[17]MINISTRY OF LAW AND JUSTICE (Department of Legal Affairs), NOTIFICATION, New Delhi, the 3rd July, 2018, G.S.R. 606(E)

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