Govt considering law to encourage out-of-court settlements

With an aim of encouraging pre-litigation settlements and reduce court cases, the government is considering to bring a law that will give legislative backing to such out-of-court settlements.
As of now, the mediation process is mostly used to settle marital disputes and the new legislation could encourage such settlements in other areas also like landlord-tenant and industrial disputes which form a major chunk of litigations.
The Law Ministry has proposed that the process of mediation "should be given statutory backing by enacting a stand-alone law on mediation."
A note mooted by the ministry says, "There is no legislation to back the mediation process in the country...The lack of any statutory backing to the mediation process is a cause of concern/apprehension in the minds of the parties regarding the validity/enforceability of the outcome of mediation. Therefore, some parties may prefer the lawyer-dominated, formal judicial process."

In addition, many stakeholders have been sceptical of the applicability of mediation to the diverse Indian caseload at the pre-litigation stage, it says.
If more and more litigations are resolved through out-of-court settlements, it will help reduce burden on courts in a country where 2.64 crore cases are pending.

"The apprehension of the effective application of mediation at the pre-litigation stage beyond matrimonial disputes and family matters and implementing the same in property, partitions, landlord-tenant, industrial disputes, cases containing elements of a crime is always present," the note says.
As of now, mediation process in the country carried out through the Mediation and Conciliation Project Committee established by the Supreme Court.

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Unlike Lok Adalats, mediation is an alternative dispute
resolution mechanism where the parties are encouraged to directly participate in the process aimed at settling the disputes keeping in mind the laws and the interests of the two parties.
A non-binding mechanism, it encourages parties to voluntarily reach an agreement.
"Pre-litigation mediation, therefore, is an extremely important aspect from the point of view of both, the parties and the judicial system. Giving parties an option to explore resolution through mediation at the pre-litigation stage without invoking the jurisdiction of the courts would be beneficial in terms of time, money and preservation of relationships," the document states.