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<xTITLE>Ten Things Government Should Do to Make Mediation Effective in India</xTITLE>

Ten Things Government Should Do to Make Mediation Effective in India

by Nikhil Ransingh
March 2019

Originally published on the ipleaders blog

As a young republic, India and Indians have stepped up to the challenge and have successfully come within sniffing distance of setting up all the essential and necessary infrastructure that one has accustomed to associate with a modern, economic superpower of the 21st century.

The transformational process of being known as a former British colony to a self-sufficient, vibrant democracy wasn’t always going to be easy. The lack of resources in terms of skilled labor and technical expertise has been putting incremental strain on the framework. This has lead to a gradual slowing down of the efficacy of various institutions of strategic national importance.

The Indian Legal System is a prime example of an elegant framework burdened with a Herculean task of providing equitable and impartial ear and resolves disputes.

The general perception is that people tend to trust institutionalized mechanisms, especially those established in the public sphere for dispute resolution. There exists a widespread feeling that the judicial system is on the verge of collapse because of acute strain on resources. The existing crisis in the judicial system calls for a more widespread adoption of alternate means of dispute resolution like mediation and arbitration under skillful and unbiased oversight of ex-judges, experienced lawyers and government officials with special domain knowledge to cover a wide gamut of industries and nature of dispute.

Before Diving into Mediation, Let us first examine the various Archetype of Disputes Determination

As problems are diverse and the nature of disputes varied, varied models have evolved for resolving them. These models are categorized mainly into four types: rights-based, power-based, interest-based and legislative. The models promise results either on a win-lose or win-win paradigm.

The rights-based approach is adopted in litigation. Disputing parties contest on claims of ‘rights’ and the final decision are considered to be a vindication of the party whose rights were aggrieved. This model creates winners and losers.

In the legislative model, rules or laws are made by the competent authority to solve a logjam. The rules can either provide a process through which disputes could be settled or determine the issue itself. This also would result in winner-loser situation or both the parties may find themselves at the losing end.

The power-based model is a model in which one party is imposingly positioned over the other, and their relative positions determine the outcome of the disputes. This also creates a win – lose situation. This model is typically used independently or in combination with litigation.

The interest-based approach is the one that accommodates the interests of the parties involved in a dispute. Rather than an endorsement of one’s right through adjudication, the conflict is sought to be resolved by varied methods of intermediation. This method is designed to engineer a win-win situation. This model is based on a consensual scheme where parties in disputes, themselves would be responsible for the outcome.

We can clearly see how interest based approaches like meditation is intuitively better and a more holistic way to approach and resolve disputes quickly and reducing the burden of pending cases on the legal system.

Let us now Understand What Exactly Mediation is  

Mediation is the process in which a neutral third party, a Mediator helps the disputing parties to harmoniously resolve their disputes using creative methods. A skillful Mediator typically is expected to use specialized communication skills and negotiation techniques to facilitate disputing parties resolve their differences and find a solution mutually acceptable to both.

Mediation can be initiated at any stage of a dispute – prior to litigation, i.e. when differences of opinions arise or even during the trial.

Let us Take a Look at the Different Types of Mediation

1. Statutory

There are some types of cases that are required by law to go through the mediation process. Labor disputes and domestic (Family Law) disputes are two prime examples. In India, however, this type of mandatory mediation is rare.

2. Contractual

The parties to a contract, as part of the terms of their agreement, may include a mediation clause as a mechanism to resolve disputes. Although binding arbitration is a much more common contractual term since it will always result in a resolution, mediation can be an effective tool to resolve contractual disputes before they blossom into a protracted battle. The selections of the mediator, as well as the conditions of the mediation, are usually stated in the contract. If the mediation is successful, the results can be enforced as a judgment of a court.

3. Court Ordered

Most jurisdictions in India require some form of alternative dispute resolution before a case may be resolved through the traditional judicial process. As soon as a case is filed, the parties are provided a number of ADR options. They must, unless exempted by the Court, select and pursue one of these options. Included, as an option is mediation. The Court maintains a list of mediators—skilled and experienced attorneys selected by the Court — who are available to the parties. For parties who elect this option, the Court will appoint a mediator and designate a date by which the mediation must be completed. The results of the mediation are confidential — the Court will not know what occurred at the mediation, unless of course, an agreement (or partial agreement) is reached. If an agreement is reached, that agreement is enforceable as a judgment of the Court.

4. Voluntary

The parties to a dispute may decide to seek mediation without being compelled by law, court order, or contract. They may choose to mediate their dispute at any time: as the dispute is developing, before initiating legal action, or even while legal action is pending. The conditions of the mediation— e.g., who will be the mediator, when the mediation will occur, the rules of the mediation— are controlled by the parties.

Why opt for Mediation instead of Trial

Casual and Voluntary

  • Informal process that isn’t bound by rules of evidence and procedure.
  • Parties have freedom to choose their own Mediator.
  • It can be opted for at any time — before or during adjudication.
  • Allows parties and counsel to communicate their views directly, informally, and confidentially without fear of adverse repercussions.
  • Party’s’ prerogative to opt for the mediation process.
  • Parties can choose to terminate the process at any time without assigning any reason.
  • Mediation is scheduled according to the parties’ convenience.
  • Interconnected issues can be brought in for discussion and settlement.

Customized advisory

  • Tailor-made solutions and procedures and creative resolution is possible since it is the disputing parties and not a Judge or Arbitrator who determines the outcome of the case.
  • Terms of settlement isn’t restricted to factors such as claims made in Court, positions taken etc., thus, allowing for expanded permutations and combinations of outcomes.

Secure

  • It’s a closed-door process that is open only to the disputing parties and individuals chosen by the disputing parties.
  • Confidential information revealed to a Mediator during the mediation process cannot be disclosed unless allowed by the parties. Statements made during mediation or documents produced or prepared for mediation remain confidential.

Self Determined

  • Parties determine the terms of settlement and the outcome of mediation.

Win-Win

  • Settlement terms are reached only when it’s agreed by both the parties.

Closure

  • Once the terms of a mediated settlement is written and signed by both the parties involved, it becomes binding, the settlement terms are filed in Court and a decree is passed, which is final and non-appealable. A mediated settlement tends to have a high rate of compliance as it is mutually agreed to by the parties.

Symbiotic Process

  • Mediation is a symbiotic process that reduces animosity between parties by offering an opportunity to restore and preserve business and personal relationships.
  • Avoids damage to important ongoing relationships, which often results from the adversarial process.

Cost-effective and Quick

  • Mediation is conducted in an informal and comfortable setting and parties are central to the process. A few sessions has the potential to bring the dispute to a resolution unlike litigation which involves lengthy pleadings, detailed evidence, extensive arguments and several appeals which could extend to many years.
  • Separates the people from the problem.
  • Shifts the focus of the dispute from right and wrong to resolution.

Mediation Procedure can be Divided into Six Steps, Each of Which Represents a Particular Stage of the Mediation Process. These Stages have been Outlined below

a. Initiating Process and Primary Arrangements

The process of initiating the mediation is perhaps the most difficult and challenging part of the process. It often entails the coming together of parties who do not want to negotiate, or between whom relations are strained to such an extent that they may not want to negotiate.  

b.Mediation introduction and setting down the ground rules for mediation

The mediator in the second stage has to explain the mediation procedure which will be followed throughout the course of the mediation. The mediator should also inform the parties about tactics and conditions that can potentially lower the possibility of success of the mediation.

c. Statements by Representatives, Followed by a Summarization of the Problem by the Mediator

In this stage, the mediator would open the line of communication and seek statements from the representatives. This is a very important stage as it is in this stage that the parties honestly articulate their views, so that the other party to the dispute can understand exactly what they want. This is particularly important if the parties, before the mediation, weren’t cordial or on speaking terms. In addition to getting to know each other’s stance, the parties can better understand the core interests underlying the party’s positions and factors that are driving the discord.

The mediator would then summarize the point of contention and the reason of discord from the vantage points of the parties involved. This requires a lot of tact and skill on the part of the mediator to summarize the dispute while not appearing biased in the phrasing of the summary.

d. Agenda and Timeline Setting for the Mediation

While setting the agenda, the mediator would set the dates and the venue for the negotiation sessions that are in agreement to both the parties. The mediator will also list out the issues which have to be discussed by them in sequence, to remove ambiguity and uncertainty from the mediation process. This demystification of the mediation process not only helps the mediator in assisting the parties to reach a settlement, but also the parties as they now have a benchmark against which they can evaluate individually the progress of their negotiations.

e. Facilitating the Mediation

Here the mediator may strategically work towards creating various work-around to the dispute as he now has an intimate understanding of the underlying factors that caused aggravation. The creation of options for conflict resolution shouldn’t be seen as interference on part of the mediator in reaching the final settlement. The mediator mustn’t interfere by insisting that the parties reach a final settlement; the rules formulated by the Delhi High Court prohibit the mediator from forcing the parties to reach a settlement.

e. Reaching to an Acceptable Settlement

The final stage of the mediation procedure is a collection of two steps, firstly it entails reaching to a mutually agreeable settlement. Next, it requires the summation of the settlement agreement. After these two stages get completed successfully, the implementation process of the agreed settlement begins.

Now that we are familiar with the Mediation Process, let us look at the Challenges and Roadblocks the Discipline of Mediation faces in India.

1.Confusion Caused by Multiple Terms (Mediation, Arbitration, Conciliation)        

By looking at the multiple available statutes in the Indian context, it becomes clear that there are primarily four Alternative Dispute Resolution (“ADR”) processes, which may be classified as Mediation, Conciliation, Arbitration and an ambiguously defined mechanism known as Judicial Settlement through Lok Adalat.

As there are no formal legislative principles relating to mediation and settlement as there are for Arbitration and conciliation, it leads to confusion amongst practitioners who would’ve intended to opt for one method but erroneously chose the other method of ADR. Hence, caution must be exercised so that people within the ADR ecosystem are knowledgeable about the types of ADR processes and the mechanisms that are involved in each variant.

2. Lack of Clear Distinction in Laws Pertaining to Arbitration, Mediation and Conciliation

The Mediation and Conciliation Rules, 2004 was brought into effect from 11th August, 2005. A cursory look at these rules and other rules pertaining to the ADR realm would reveal that the Mediation and Conciliation Rules, 2005 aren’t adequately framed and they do not cover the entire spectrum of the mediation process.

Practitioners of ADR methods have noted that the Mediation and Conciliation Rules, 2004 cover more or less the same provisions that are covered in the Arbitration and Conciliation Act, 1996. Hence, this lack of clear distinction and absence of specific statutes leads to a lack of confidence and a feeling of vagueness in the mediation process.

3. Low Success Rate of Mediation Mandated by the Courts

It’s observed that there exists uncertainty in the minds of the parties involved in court mandated mediation regarding the impartiality of the mediator. Even if the mediator’s mandate could be regulated with a specific statute, the parties involved are jittery about whether the statute would intrinsically limit the mediator’s ability to act in an unbiased manner.

4. Absence of Mediation Culture

A big roadblock in way of successful adoption of median is the lack of attitude of peaceful settlement. A wider implementation of mediation and other ADR tools is also restricted by the affinity towards a simplistic binary result rather than a nuanced, sophisticated approach which requires communication, tact and creativity in equal parts.

5. Reluctance of the Advocates

The core reason that stands out is the perception among legal professionals that the ADR adoption at scale would lead to them losing out on potential clients with gainful litigation revenue opportunities. Also, the option of ADR in the Indian legal landscape remains to be on the more expensive side of the spectrum. There are no fixed financial costs that are specified. This leaves the mediator and the institute offering mediation services to fix rates arbitrarily. Unfortunately, the cost of litigation is lower than that of pre-litigation mediation.

6. Lack of reputed and credible mediation institutions

There is a distinct lack of dedicated mediation institutes with professionals trained in the trade-craft of mediation.

7. Lack of Public Awareness

The scarcity of publicly available information regarding ADR mechanisms and its benefits deviates them from potentially resolving them through mediation, and instead opt for litigation. This immediately puts the parties in disagreement in adversarial positions which doesn’t allow them to retract from their stands unless done via judicial or other form of settlement.

Having recognized the Roadblocks in the way of successful and effective adoption of Mediation and other ADR techniques. Let us now discuss the ways in which the Government can make Mediation effective in India.

1. Clear and Distinct Definitions for Various ADR Processes       

The government must strive to come up with succinct, lucid and intuitive definitions and explanation for the various ADR processes and attempt to clear the confusion related to what ADR constitutes.

2. Distinct Legal Framework for Laws Pertaining to Arbitration, Mediation, Conciliation

The government must come up with clear, distinct statutes that would provide a framework that can be identified with the specific ADR processes. This would greatly help the practitioners in structuring the mediation process on a more solid footing and a strong underlying legal principle.

3. Improve Success Rate of Court Mandated Mediation

The government must incentivise parties to seek mediation to resolve disputes by being more accommodative of their concerns about the impartiality of mediators. The government must make efforts to take all the concerned stakeholders in confidence and work out a roadmap to ensure statutes specific to mediation is intrinsically unbiased.

4. Encourage Mediation Culture

The government must promote a culture of resolving disputes amicably and not burden the traditional litigation channels for ironing out disputes. The adversarial stance that the parties to a dispute take ends up being counter-productive even in a court mandated ADR process.

5. Penalize Litigation Culture

The government must try to discourage parties wanting to opt for the litigation process by making the litigation process more expensive than ADR. This would prompt parties to approach ADR institutes as the first mode or step of conflict resolution. This would also reduce the burden on the courts.  

6. Set ADR Targets for Bar Associations

The government must set a minimum percentage of new cases in each financial year that must be solved via any of the ADR processes. This would prompt them to train and upskill member advocates in the field of ADR and start developing a gainful practice in ADR.

7. Develop a Framework for Accreditation of ADR Professionals

The government must come up with a mechanism to have a directory of all the ADR professionals that meet a minimum benchmark and are well versed with specific a body of knowledge pertaining to ADR practice, much like the insolvency professionals.

8. Include ADR Concepts to Make Law School Curriculum More Holistic

The government must recognize that most legal practitioners build their foundations in law schools, the curriculum of which is largely focused on training students for litigation oriented practice. Students aren’t conditioned to recognize which cases are appropriate for immediate settlement through ADR methods such as mediation and which cases are suitable for litigation.

It has been observed that even practitioners aren’t fully adept at distinguishing the two distinct classes of dispute cases. Hence, as a result, cases that could be solved by ADR processes are sent for litigation, which in turn burdens the courts.  

There is a dire need for the students to be trained and taught the distinction between the cases fit for litigation and the ones fit for ADR. If this distinction isn’t taught, they would be an inherently biased towards litigation and may not be able to adapt to a role of the mediator when the occasion arrives.

9. Setup Reputable Institutions for Mediation

The government must take the initiative and set up mediation institutions along the lines of ICC, LCIA, SIAC etc; that have come up with specific framework for mediation. These institutions must also provide clear training and continuous professional development workshops for interested people.

10. Mediator Liability

In order to protect the ADR ecosystem from scrupulous and/or under trained mediators, the government must hold the mediators to a global standard of accountability. The government must clarify if professional indemnity insurance can be made available to accredited mediators without diluting their key accountability and deliverables. There should also be a strict disciplinary mechanism to deter bad conduct and poor performance on the mediator’s part.  

ENDNOTES

  1. https://www.ibanet.org/Document/Default.aspx?DocumentUid=B705AE33-0AF0-4DA2-9C93-7421D28D2767
  2. https://gettingthedealthrough.com/area/54/jurisdiction/13/mediation-2017-india/
  3. https://vakilsearch.wordpress.com/2011/01/15/procedure-to-be-followed-during-a-mediation/
  4. http://lawcommissionofindia.nic.in/adr_conf/sriram17.pdf
  5. https://blog.ipleaders.in/indian-should-know-about-mediation/  
  6. http://mediationbhc.gov.in/PDF/concept_and_process.pdf
  7. http://campmediation.in/mediators-mediation-specialists
  8. https://static1.squarespace.com/static/551ea026e4b0adba21a8f9df/t/579ee7be5016e10ca2ae66   f0/1470031920694/Interim+Report_Strengthening+Mediation+in+India.pdf

Biography


Nikhil Mukund Borkar Ransingh pursuing M.A, in Business Law from NUJS, Kolkata



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