Mediation v. Litigation: A Critical Study

Introduction:

The justice dispensation mechanism in India is progressing towards a time where it is almost on the verge of collapsing and it will be practically impossible to entertain all the backlogs of cases. Due to the huge pendency of cases in courts, there has been a dire need to evolve an alternative mechanism which will ease out the strenuous workload of the courts and will also provide relaxation to the litigants.

In this context, a resolution was adopted by the Chief Minister & Chief Justice of States in a conference held in New Delhi on 4th December 1993, under the chairmanship of Prime Minister of India and presided over by the Chief Justice of India wherein the Chief Minister and  Chief Justice of States were of the opinion that the conventional Judicial procedure is already overburdened and the desirability of the disputants taking advantage of the Alternative Dispute Resolution Mechanism has provided them with procedural flexibility and has helped them to save their valuable time and money and has also avoided the stress of a conventional trial. 

Mediation is a dynamic, organised and voluntary method of alternative dispute resolution wherein the parties appoint a neutral third party in order to assist the parties who also facilitate them in achieving an acceptable and voluntary agreement[i].

The neutral third party uses specialised communication and various negotiation techniques in order to help them in reaching a definite objective. Mediation is a more formal dispute resolution mechanism than negotiation but less formal than arbitration or litigation. The participants or the parties are encouraged to participate in the process. Mediation is primarily focused on the needs, desires, interests and rights of the parties and uses a wide range of methods in order to help the parties to find an optimal solution.

Broadly speaking, Mediation can be defined as a voluntary process wherein the impartial, unbiased or the neutral mediator facilitates a negotiation between the parties to the disputes so that they arrive at a mutually agreeable solution. Mediators act as the ‘Guardian’ of the process and not the content or the outcome. The parties involved in the dispute have the opportunity to ventilate their grievances and issues which ultimately helps them to come to a definite conclusion. The mediator plays an advisory role and does not impose any solutions onto the parties. In fact, it provides a much favourable environment wherein the parties can alleviate their grievances and after discussions and deliberations, they reach an amicable settlement[ii].

Due to the urgency of having an alternative dispute mechanism, the legislature amended the Code of Civil Procedure, 1908 by inserting S.89 in the same. Section 89, provides for the settlement of disputes outside the court. The provisions of this Section are based on the recommendations made by the Law Commission of India and the Malimath Committee.

The consent of parties was made mandatory for alternate dispute resolution methods to settle pending disputes and the court could refer cases for arbitration, conciliation, judicial settlement through Lok Adalat or mediation. Moreover, the Civil Procedure – Mediation Rules, 2003, provide for mandatory mediation under r.5(f) (iii). According to these rules, the courts have the power to refer the cases for mediation even when the parties are not ready for the reference of mediation only if there is an element of the settlement. The mandatory mediation is generally done in family matters and labour law matters but is rarely used.

Mediation can be triggered in three ways:

  • Pre – Litigation Mediation: Parties may agree to resolve their disputes and issues through a pre-agreed mediation agreement without initiating any formal proceedings. 
  • Court Referrals: Parties to the dispute may agree to mediate at the beginning of formal court proceedings.
  • Mediation may be taken recourse of, even after the formal court proceedings have started or even post-trial i.e. the appellate stage.

Benefits of Mediation:

  • Mediation allows more flexibility and is much faster and less expensive than a trial. It facilitates the parties involved in the dispute by helping them to arrive at an amicable solution.
  •  Mediation is the kind of process that involves the parties to personally express their opinions and views very directly and in an informal mode.
  • The mediator is the caretaker of the process and is not involved in the content and outcome and therefore gives control to the parties over the scope of the mediation in terms of the issues discussed.

In Afcons Infrastructure Ltd. V. Cherian Verkey Construction Co. Pvt Ltd. and ors.[iii], The Supreme Court laid down guidelines pertaining to the kind of cases that would be eligible for ADR and those which would not. The court held that the following nature of cases would be considered unsuitable for ADR

  • Representative Suits under Order 1 Rule 8 CPC which involve public interest or interest of numerous persons who are not parties before the court.
  • Disputes in relation to Election to public offices
  • Cases involving grant of authority by the court after enquiry, as for example, suits for grant of probate or letters of administration.
  • Cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion, etc.
  • Cases requiring protection of Courts, as for example, claims against minors, destitute and mentally challenged and suits for declaration of title against the government.
  • Cases involving prosecution for criminal offences.
    • All the suits and cases were to be considered suitable for ADR

All cases relating to trade, commerce and contracts, including

  • Disputes arising out of contracts, (including all money claims).
    • Disputes relating to specific performance.
    • Disputes between suppliers and customers.
    • Disputes between bankers and customers.
    • The dispute between developers/ builders.
    • Disputes between landlords and tenants/licensor and licensees.
    • A dispute between insurer and insured.
    • All cases arising from strained or severed relationships including
      • Disputes relating to matrimonial causes, maintenance, custody of children
      • Disputes relation to partition / division among family members/ Coparceners / Co-owners
      • Disputes relating to a partnership among partners
    • All cases where there is a need for continuation of the pre-existing relationship in spite of the disputes, including
      • Disputes between neighbours (relating to encroachment, nuisance etc.)
      • Disputes between employers and employees
      • Disputes between members of societies / associations / Apartment owners / Associations etc.
    • All cases relating to tortious liability including claims for compensation in motor/accidents / other accidents.

All consumer disputes including disputes where a trader/supplier/manufacturer/service provider is keen to maintain his business / professional reputation and credibility or product popularity

Under the Indian Law, contractual dispute (including money claims), similar disputes arising out of strained relationships (from matrimonial to partnership), disputes which need continuity of relationship (neighbour’s easement rights) and consumer disputes have been held to be the most suited for mediation.

Whereas, on the other hand,Litigation is the legal term for a lawsuit. It can be described as a procedure which involves a process wherein the litigants having a dispute contest their right in a court of law. The Judges make a final decision on the parties involved in the disputes and these decisions are binding on the parties to the dispute[iv].

Benefits of Litigation[v]:

  • In litigation, the parties are compelled to abide by the judgements which are pronounced by the judges as non-compliance can lead to penalties which will be incurred by the individuals.
  • The right to appeal is given to the parties involved in a dispute who are not satisfied with the outcome of the judgement or if it is not in their favour. This allows the previous decision to be overturned and ultimately a new trial to be ordered.
  • A court judgment sets a legal precedent which leads to effectively clarifying laws for future cases. This helps the litigants to incorporate previous judgements which ultimately helps them to boost their arguments and makes their case stronger and effective.

Comparative Analysis of Mediation and Litigation[vi]:

  • Mediation is faster and generally less expensive than a trial. Whereas, trial or the process of Litigation is more time consuming due to increasing cost of prosecuting and defending a case, court fees, lawyer’s fees and incidental expenses.
  • The process of Mediation involves full confidentiality and privacy with regard to facts or views expressed by the parties but in case of Litigation, the risk of taking a case to the trial attracts public attention which might not be beneficial to the respective parties.
  • In Mediation, parties have more control over the outcome as they are actively involved in the dispute, unlike in trial where the lawyers are contesting the case of the parties and Judges are supposed to give decisions.
  • The decision given by the Mediator is not binding on the parties, whereas in a trial the Judgement given by the Judge is final and binding on both the parties.

Conclusion and Suggestions:

Mediation is considered to be a better alternative than litigation as it attempts to solve a case without going to the trail.  Due to its speedier and flexible mechanism, it helps the parties in facilitating their grievances in less complex form and giving them the desired results. Mediation can be considered as a much better platform if the parties wish to make a settlement. One of the biggest benefits of mediation is the fact that settling the case before it goes for the trial saves a lot of time, effort and money.  Mediation should be promoted and encouraged as it leads to faster results and quick disposal of cases besides taking the burden from the already over clogged mechanism of courts. The lawyers should not take mediation as an effort to curtail their practise and participation in the justice dispensation system rather they should be encouraged to give their consent for mediation and help the parties arrive at a settlement.

The lawyers and legal professionals shall also be encouraged to participate in the process of mediation by giving them a practical experience by indulging in the process of training in pursuance of how to conduct negotiations, conciliation & mediation and enhancing their purview by helping them to enact a role of a mediator. The court shall also undertake the process of inculcating a habit of seeking recourse to Mediation as a preferred option to litigation

The imminent resistance to change from the legal profession also requires to be overcome and their apprehensions regarding dilution of work should be overcome. Rather it should be taken as an opportunity for an additional role and additional income. A shift in the focus of the legal profession should also be highlighted and the Bar Councils should be involved as an important stakeholder and formal changes in the legal curriculum should be brought in whereby the legal education hitherto centred on precedents must now accommodate practical training in negotiations, conciliation and mediation. The mediator must take this process to be a collaborative system rather than an adversarial process and must make suitable changes in the language and words to be used. The mediator should consciously eschew the words- liability, rights, damages and default. Courts must also be sanitised to undertake the process of inculcating a habit of seeking recourse to Mediation as a preferred option to litigation. It is high time that the potential of the process of Mediation bringing a paradigm shift in the focus of the legal system from adjudication to the settlement of disputes is recognised.

Concludingly, I would like to quote

“An ounce of Mediation is worth a pound of Arbitration and a ton of Litigation”.

Joseph Grynbann

Following is the Research Postulate and research questions forming part of my Research:

Whether Mediation is beneficial than Litigation?


[i]https://en.wikipedia.org/wiki/Mediation

[ii]Ibid.

[iii] (2010) 8 SCC 24

[iv]https://www.americanbar.org/groups/dispute_resolution/resources/DisputeResolutionProcesses/litigation/

[v]https://pacificadvisors.ca/the-pros-and-cons-of-litigation/

[vi]https://www.azizilaw.com/mediation-vs-litigation-advantages-and-disadvantages-of-both/

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