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| Let litigation be the last resort |
| Kumkum Sen / New Delhi Nov 09, 2009, 00:29 IST |
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Parties should move towards ‘alternative dispute resolution’
As a business lawyer, one gets to participate and speak at various conferences. And while the underlying purpose is to network, one also continues to derive knowledge as I did last month in the Gateway Conference held in Delhi in the session on 'Safeguarding Investment by the Litigation Process'. A joint session between lawyers and accountants, the team from Grant Thornton provided a fascinating insight on the role of forensic accountancy in identifying, analysing and presenting electronic evidence.
The lawyers, including myself, provided an overview of the Alternative Dispute Resolution (ADR) and litigation options available in their jurisdictions. What I would like to share with readers is the insight provided by my UK counterpart panelist Alias Dass who prefaced his presentation with an introduction on the Woolf Reforms, which radically changed the English litigation ethos.
While the overriding objective of the reforms was to enable courts to deal with cases justly, what impressed me as unique is Part 36 of the UK Civil Procedure Rules (‘CPR’). To those not familiar with the Woolf Reforms, the CPR replaced all earlier rules by a unified civil code applicable to all courts, including Courts of Appeal, to make the justice system litigant friendly – just, fair, speedy, comprehensible, responsive, and therefore cost effective. The bottom line is that litigation was to be the last resort, and therefore parties should move to ADR.
The Part 36 mechanism is a pre-action protocol in settling disputes, involving active case management by the courts. Part 36 deals with a situation which Indian courts are familiar with – the intransigent party’s refusal to settle, despite the judge’s best efforts at persuasion.
Under Part 36, an offer has to be made in writing without prejudice. Such offer may be made any time, pre-action, or even during appeal proceedings, and is open for a 21-day period. The offer document has to specify the claims and provide exclusions and costs, if any. If the offer is not accepted within the statutory or extended timeframe, and the offerer in the final judicial determination is able to reduce the claims further, then the “winning” party will suffer a corresponding reduction in the costs awarded by the Courts. In other words, if the decretal amount is less than the offer amount, the Plaintiff has to compensate proportionately for unreasonably refusing to attempt negotiation. For an adversarial Plaintiff with inflated claims, who tactically protracts proceedings, this is an effective deterrent.
UK pre-Woolf Reforms was very similar to India – it took years for a case to reach hearing, with continuing adjournments on spurious grounds. What has changed is now case management rests with judiciary and operates within tight time frames, fast and multi-track proceedings, early final dates, transparency in disclosures, deployment of expert determination wherever possible and discouragement of tactical applications. To achieve this, the Judiciary has to change its mindset and that cannot be achieved by a single Chief Justice or an individual approach. Case management requires training and concerted action, and cannot be imbibed through experience alone.
Inspired by the Woolf Reforms, the Indian Civil Procedure Code was amended in 2002 to provide for fixing time limits for oral arguments, limited the number of adjournments and requiring delivery of judgement in 30 – 60 days from conclusion of hearing. These amendments have not travelled beyond the statute book.
Ten years down the line – there are expectedly some grumblings about the Woolf Regime – no system can be perfect. One allegation is that the cost reduction is insignificant – most costs are frontloaded in the pre-filing discovery and disclosure exercises. Also, ADR has not emerged as a cheaper or fast track option. There have been 45 amendments till date, and the rules and interpretations lack clarity. But facts and figures show that while the number of commercial actions filed in the Courts has dropped, cases relating to bodily injury have gone up. ADR has not increased, but ADR cannot totally replace the Courts, as it represents only what it stands for – a dispute resolution mechanism – courts are there to administer justice. The distinction is subtle but clear. On balance, the legal system and litigants have certainly benefited from the reforms.
While researching, I came across an observation in The Times on the reforms that “before the CPR, the corridors outside Court 12 in the Royal Courts of Justice… heaved with lawyers and their clients waiting hearings. These places have been wastelands since”.
I cannot think of a more fitting tribute to its success.
Kumkum Sen is a partner at Rajinder Narain & Co., and can be reached at kumkumsen@rnclegal.com
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