Pre-litigation mediation is a consensual process between the parties to the resolve dispute, now learn more
The process of pre-litigation in India is quite lengthy and complicated. On the other hand, our judiciary is of the opinion that ‘justice delayed is justice denied’. When the parties to the dispute opt for litigation, they experience several setbacks such as the costs incurred, extreme delay in getting the final judgment, and most dreaded of all, the appeals that follow the final judgment. This could mentally drain the parties, who knock on the doors of the court seeking relief from the dispute. The situation could be a nightmare for those entangled in frivolous lawsuits.
History of Pre-litigation in India
As a remedial measure, pre-litigation renders a relatively easier way to settle disputes as per the convenience of the parties in the presence of an impartial adjudicator before opting for a suit in the court. Pre-litigation often arrives at a favorable outcome preferred by the parties. Unlike litigation wherein the judge is the adjudicator, in pre-litigation, the adjudicator is often chosen by the parties themselves. Here, the aim is to arrive at a win-win situation amongst the parties to the dispute. However, the procedures for pre-litigation are different in each jurisdiction. It has to be borne in mind that pre-litigation mediation is not a new age tool for dispute resolution, but has been in practice from age-old times, wherein the kings acted as mediators to solve the issues between their subjects. The same was carried out in village panchayats as well. Therefore, pre-litigation mediation has been a part of Indian culture from time immemorial.
Pre-litigation is versatile enough to be applied in various genres of cases like commercial cases, domestic issues, property-related cases, etc. Pre-litigation mediation is often advised in family courts, as an amicable solution can be attained at the earliest. However, no statute in India, makes it compulsory to opt for pre-litigation mediation in India.
Position of Pre-Litigation in the Current Judicial System
Although pre-litigation mediation is not mandatory by law, a number of cases and the judiciary, on the whole, have been pro pre-litigation mediation. For instance in the case K. Srinivasa Rao vs. D A Deepa ( (2013) 5 SCC 226 ), a case pertaining to matrimonial dispute had recognised pre-litigation mediation as a formal dispute resolution mechanism. The Commercial Courts Act, 2015 has codified pre-litigation mediation in matters relating to commercial disputes. The Act mentions that in cases wherein an urgent interim relief is not expected, pre-litigation strategies can be employed by the parties. The Commercial Courts (pre – institution mediation and settlement) Rules, 2018 govern the procedure for such pre-litigation mediations.
In order to commence such mediation procedures, the plaintiff needs to make an application to the State Legal Services Authority or the District Legal Services Authority constituted under the Legal Services Authority Act, 1987. The authority thereafter summons the other party to appear before the board within a time period of 10 days to take part in the mediation proceedings. If the opposition doesn’t respond within 10 days, a final notice is sent, and if the party still fails to respond the mediation will stand canceled. On the other hand, if the party responds to the notice, then a conflict-free settlement can be arrived at and the same can be recorded.
The Legal Services Authority Act, 1987 empowers an officer authorised by the Central Government to carry out the process of mediation, within a time period of 3 months with a permissible extension of another 2 months from the date of application submitted by the plaintiff. The settlement arrived at, during this process is treated on par with the arbitral award obtained under the Arbitration and Conciliation Act, 1996.
Further, apart from pre-litigation mediation that is suggested by court orders, the following statutes explicitly have made provisions for such mediation procedures:
- Arbitration and Conciliation Act, 1996
- Companies Act, 2013 read with the Companies (Mediation and Conciliation) Rules, 2016
- Commercial Courts Act, 2015 read with Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018
- Hindu Marriage Act, 1955
- Consumer Protection Act, 2019
- Micro, Small and Medium Enterprises (MSME) Development Act, 2006
- Industrial Disputes Act, 1947
- Real Estate (Regulation and Development) Act, 2016
- Special Marriages Act, 1954.
Advantages of Pre-Litigation Mediation
- Affordability: The major drawback of court litigations is that they are extremely time-consuming and awfully expensive. In mediation, these grievances can be addressed effectively and the dispute can be resolved quickly in a much more economical manner
- Confidentiality: Litigations take place publicly in open court halls, whereas mediation avoids this and guarantees privacy to the parties as it is held privately
- Flexibility: In litigation, the parties to the dispute lack control over the proceedings. The court procedures and the judge take complete control in litigation. Whereas in pre-litigation mediation the parties not only have the control over the proceedings but are also vested with the power to choose a judge on their own to adjudicate the proceedings
- Relationship: The relationship between the parties often turns sour during the process of litigation. Considering the fact that a litigation might run even for decades together, the parties could turn hostile against each other. On the other hand, in pre-litigation mediation, the parties aim to arrive at a neutral solution together and therefore the parties remain cordial until the end
- Informal Proceedings: Pre-litigation mediation is more casual and informal when compared to the cumbersome court proceedings in litigation.
Pre-litigation mediation is the need of the hour, as the judiciary is throttled with an endless number of litigations. The conclusion in litigation most often frustrates at least one of the parties, hence the aggrieved party resorts to appeal and frustrates both the parties. Therefore, mediation would be a game-changer and would ensure efficiency in solving the dispute in a more acceptable time frame harmoniously.
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