COMPULSORY MEDIATION: NECESSITY OR CONTRADICTION?
The adversarial nature of the Indian legal system is well acknowledged. However, systemic deficiencies and an increase in pendency of cases continue to plague the judicial and quasijudicial forums. The government has taken a number of steps to address this, including the creation and promotion of alternate dispute resolution (“ADR”) methods. Even today, Arbitration continues to be the most popular ADR mechanism in India, but the focus is slowly and gradually shifting to other ADR forms such as mediation. In fact, institutionalizing mediation settlements has become the primary focus, in that the government has mulled over enacting a comprehensive mediation law for a while now. Only on December 20, 2021, was the Mediation Bill, 2021, (“Bill”) introduced in the Rajya Sabha, which was promptly forwarded to the Parliamentary Standing Committee on Law and Justice for additional consideration. 1 The proposed draft consists of the 65 clauses and 10 ten schedules. The Bill extensively covers a wide range of topics, including the institutional mediation framework, the creation of a regulatory body, the recognition of organizations that mediate disputes, the role, credentials, and training of mediators, community mediation, online mediation, the resolution of cross-border disputes through mediation, mandatory pre-litigation mediation, and the enforcement of mediated settlement agreements.2 The paper attempts to analyze the mandatory mediation clause provided in the draft Bill and weigh the pros and cons of such clause.
THE NATURE OF MEDIATION
Mediation is often described as „facilitated negotiation? between parties to a dispute wherein a third neutral party (the mediator) serves as a catalyst in dispute resolution. This is usually done by aiding parties to look beyond their respective positions and identify their underlying interests, generate options, consider alternatives, and develop an amicable resolution to their dispute. This dispute resolution method is an inherently voluntary collaborative process and thrives on confidentiality. Mediation is a low-cost, time-efficient dispute resolution procedure that produces outcomes that are acceptable to both parties. This is rarely accomplished through litigation. Recognizing the benefits of mediation, several jurisdictions have implemented mandatory mediation programs to encourage settlement and reduce the strain on courts.
1 Jain, R. (2022, October 14). India: Mediation Bill, 2021: Necessity Or Over-Complication? Retrieved from Mondaq:
2 Ibid.
UNDERSTANDING MANDATORY MEDIATION
There seems to be an unmissable contradiction with mandatory mediation. Since this method of dispute resolution not only addresses each party’s underlying issues, but also promotes self-determination, collaboration, and innovative ways of settling a dispute, formality is usually eschewed in mediation. Any attempts to impose a formal and involuntary process on a party may potentially undermine the raison d?être of mediation. 3 Given this risk, there must be strong justifications for mandating mediation. The principle of „voluntariness? is undisputedly fundamental to mediation. It is for this reason, that purist mediators and litigators show an intuitive resistance to the compulsory nature of mandatory mediation. The line of argument is thus: compulsory mediation would only create another expensive procedure, and unfairly restrict the public?s access to courts thus resulting in statistically lower success rates. With voluntariness being so fundamental to mediation, any modification to such principle could be construed as a denial to access real justice. On the other hand, mediation, especially in India, is still in its infancy and has not gained enough traction, hence necessitating the adoption of compulsory mediation – although in my opinion, should only be a temporary solution. Even in jurisdictions where mandatory mediation is not widely accepted, judges almost universally agree that mediation must be given strong encouragement. Mandatory mediation is a contentious idea. The idea of an imposed procedure creates a conflict with the nature of mediation, despite the fact that it is a powerful tool that may be very advantageous for both parties to a dispute.
3 Stavros, T. (2012). “Compulsory mediation: A contradiction?”. Retrieved from School of Economics, Business Administration and Legal Studies:
ISSUES WITH COMPULSORY MEDIATION
The move towards mandatory mediation has been leveled against considerable criticism. Mediation, by its very virtue is a voluntary process. Mandatory mediation interferes with the parties’ autonomy and voluntariness, compromising the mediation process itself. Therefore, introducing coercion (i.e., making it compulsory) into the mediation process seems at odds with the core principles of the consensual mediation process.4 Diverse viewpoints on whether it is possible to genuinely distinguish between coercion into mediation and coercion within mediation have been prompted by the apparent paradox of mandatory mediation. Critics of mandatory mediation argue that there is no clear delineation, or even a semantic distinction, between compulsion into and inside mediation. According to mediation research, when the mediation process is non-coercive and mindful of the parties’ interests, disputants are most satisfied with it. However, others are of the opinion that there is a distinction between being coerced to attend the mediation session and the mediation itself and hence, there is no contradiction. For example, a person may be advised to try to mediate the dispute, but this does not compel him in any way to reach a settlement during such mediation. Only when parties are required to strive to reach an agreement to resolve their disagreement does such mandatory mediation become coerced in itself. Hence, no person is prevented from accessing courts for the mere reason that mandatory mediation has not been used in lieu of attending court. At the most, the parties? ability to access court is only delayed; if the mediation fails, they are free to return to litigation. As a result, mediators are not required to help parties come to an agreement, and parties are free to end the mediation at any moment. It is desirable that mandatory schemes only serve to eliminate the element of voluntariness from entering into the process and that parties preserve their freedom within the process in order to avoid any intervention into the voluntary nature of mediation.5 On the other hand, comparing mandatory and voluntary mediation may not be very useful given the strong likelihood that parties who choose to participate in mediation are more willing to reach a solution. Hence, all of the aforementioned worries concerning the extent of coercion during the mediation process might not be wholly unfounded. Voluntariness is multidimensional. For example, it may be said that voluntariness consists of 4 elements: 1. Disputants may choose the law by which their dispute will be resolved, 2. They choose the impartial third party who will assist in the resolution, 3. They voluntarily participate in the dispute resolution process, and 4. They voluntarily accept the resolution. The first of these parts, i.e., choosing the law, is exclusively applicable to norm-based processes (i.e., adjudication and arbitration). In compelled mediation, the other three elements may all be compromised to varying degrees.6 The first is the selection of the mediator. This is not inherently problematic because even in cases wherein the dispute is resolved by a State-appointed mediator (i.e., generally without the participation of the disputants), this in no way implies that the mediator was not unbiased and efficient. The second and more important (and disputed) consideration is mandatory mediation, i.e., the parties to the dispute are compelled to participate in the mediation process. It is only logical that parties who are forced to mediate are unlikely to view the procedure favorably, but this is not always the case. It should be highlighted, however, that the claim that because both voluntary and compulsory mediation have been effective and that, given the chance, disputants will choose to opt out of the mediation procedure, the implementation of mandatory mediation is justified, is absurd. The final consideration is the voluntariness of the agreement reached. It is widely agreed that coercion in reaching a settlement makes such an agreement invalid. Through mandatory mediation, parties are in a way compelled to negotiate “completely and in good faith”. This quickly devolves into pressuring them to settle. Requirements for good faith negotiations can sometimes be seen as a form of pressure on the parties to reach a settlement. Therefore, rejecting a settlement offer is often interpreted as failing to make a genuine endeavor to reach an agreement. Additionally, parties who are sent to mediate may worry that the judge won’t rule in their favor if they don’t reach a settlement.
BENEFITS OF COMPULSORY MEDIATION
Successful mediations save money, time, the stress of going to court and typically end in a win-win situation for both parties. Further, it has the ability to salvage professional and personal relationships that would otherwise be irrevocably harmed. To an extent, even if the mediation is unsuccessful, these potential advantages exceed the additional expense and effort that litigation demands. Parties tend to support mediation for the reason that it allows them to engage in the process, convey their side of the story, and have a say in how the disagreement is resolved. The fundamental advantage of mandatory mediation over voluntary mediation is that it brings more individuals to the mediation table since voluntary mediation is often underutilized.7 Numerous free Mediation systems have been widely marketed since the beginning of the 1980s, however, majority of the time, people choose to disregard them, as do their attorneys. Some Lawyers are discouraged to suggest mediation since it is an unfamiliar area, others because it takes up fewer hours, meaning a reduced paycheck. Where the parties’ aversion to mediation is due to a lack of familiarity with or comprehension of the process, mandatory mediation may be useful in overcoming their preconceptions or lack of understanding. The need to raise knowledge and use of mediation services are undoubtedly one of the most compelling reasons for instituting mandatory mediation. In areas where mediation is comparatively less developed, it can be employed as a temporary solution. Similarly, disputants are often under the „who blinks first? dilemma. The notion that the party suggesting mediation puts them at a lower pedestal or points to their lack of confidence in winning the case in court is a common fear. Therefore, compulsory mediation establishes a safe setting in which neither party is required to initiate it, and both begin on an equal footing. This, in my view, is the strongest argument in favor of mediation.
A SUITABLE MANDATORY MEDIATION MODEL FOR INDIA
The inclusion of a mandatory pre-litigation clause with an opt out provision, is one of the most noteworthy and disputed clauses of the Bill. Mandatory pre-litigation is found in section 6 of the Bill and obligates parties to a civil dispute to mediate their dispute before approaching the court. However, the parties may choose to „opt-out? of the mediation after having attended 2 such sessions if they feel that such an ADR mechanism is of no use to them. This mandated mediation process with an opt-out clause is not alien to Indian law. For example, commercial disputes cannot be brought within the purview of commercial courts before an attempt to resolve the dispute through mediation is made, as required by the Commercial Courts Act of 2015.8 In the Indian context, the question of utmost importance is whether India is ready for compulsory mediation as a pre-litigation technique. In the lack of empirical proof, there can be no definitive response. The unsatisfactory response to obligatory mediation under the Commercial Courts Act 2015, on the other hand, is a strong indicator that there is reason to be skeptical. Before implementing mediation as a necessary option, there is a lot of ground to cover in raising knowledge about it, particularly in the community and private mediation spaces. This is because, in countries such as India, wherein mediation has not gained momentum, mandatory mediation ends up as a mere formality, while being a burden on the taxpayer?s money.9 The success of mandatory mediation with an opt-out mechanism in Italy may have inspired Indian authorities to follow suit. However, India should have followed the lead of those countries that did not choose to institutionalize compulsory mediation, instead adhering to the underlying idea of keeping mediation voluntary. Countries such as Ireland, Singapore, and Scotland, for example, have placed the onus on legal professionals to raise mediation awareness among their clients as a prerequisite to beginning litigation. Before they can start legal procedures, lawyers and solicitors must make a declaration to the court to that effect. While this is not a panacea for all issues that may occur, it would solve one of the most pressing concerns, namely the legal community’s participation, which now would be vital to the mediation framework’s success. This is significant in the backdrop of when Italy first mandated mediation. The legal fraternity perceived this to be a threat rather than an opportunity which in turn created lot of backlashes. Thus, it is important to co-opt lawyers as important stakeholders in this process. It goes without saying that the judiciary’s efforts in supporting mediation has resulted in reasonably successful court-annexed mediation, even in difficult and long-pending cases. Outside of court intervention, however, the success of mediation, such as private or community mediation, is mainly in the hands of the legal community. Unfortunately, the importance of mediation in the legal community is still widely underestimated. In the absence of enough resources, lack of infrastructure and with only a few expert mediators in the country, mandating mediation would result in an explosion of cases. While the establishment of a regulating organization in the form of the Mediation Council of India will undoubtedly accelerate the expansion of mediation, India must be patient and ensure that mediation becomes a default mechanism that parties adopt voluntarily and with full awareness, rather than a mandatory recourse imposed on them.
Legal, J. (2022, January 9). Mandatory pre-litigation mediation needs lot of ground work before rollout. Retrieved from The Hindu Business Line
CONCLUSIONS AND RECOMMENDATIONS
It is a known fact that civil justice systems all around the world face numerous issues with pendency of cases, costs etc. More often than not, one sure outcome of litigating is the damage to the relationship between parties, be it professional, personal or spousal. Therefore, there is a pressing social need to prevent people from getting involved in futile, drawn-out arguments. Governments everywhere should strive to make litigation the alternative and mediation and other forms of ADR the standard method for resolving disputes. If logic cannot persuade, then some sort of coercion is likely to be the obvious and most successful solution to advocate for mediation. Compulsory mediation, at least temporarily, can settle issues relating to access to civil justice and, perhaps, can help advance our society by avoiding litigation. Unlike the Arbitration and Conciliation Act, 1996, there is no overarching law in the nation governing mediation as of yet. It is undisputed that a common national legislative framework for mediation will offer the much-needed impetus. Whether or not parties enter into a mediation agreement, clause 6 of the Bill proposes to make pre-litigation mediation mandatory for civil and commercial disputes. The rationale behind such a proposition is to a) reduce the burden of the courts and b) create awareness by nudging parties to try mediation. The legislative goal does not appear to violate the spirit of voluntariness or compel plaintiffs to negotiate a settlement. Instead, it enables parties to choose an alternative before going the traditional way that ensures anonymity and is more flexible, cost-effective, and time efficient. From a policy standpoint, one of the main justifications for mandating mediation is to make sure it serves as a prod for the disputing parties to settle their differences and reach an early settlement, so to prevent future problems. Early dispute resolution will greatly facilitate the decrease of cases pending in an already overburdened judicial system, in addition to saving the parties money and time. This mandatory mediation strategy with an opt-out provision has been seen to be effective in nations like Turkey and Italy. So as to avoid teething problems, India should look to Italy to anticipate some common hurdles beforehand. In 2013, Italy adopted mandatory mediation with a 4-year sunset clause, after which the Bill was to be reviewed. India might use a similar strategy where mandatory mediation would start as a modest pilot program and then be updated progressively to address any flaws that time uncovers. Any attempt to make mediation necessary would gain greater validity if it took an evidence-based approach. Further, caution must be exercised in that mediation does not end up being a token gesture wherein parties to such mediation do not mediate seriously. It is for this reason, as mentioned above, that India?s approach based on Italy?s opt-out approach may fail miserably if there is a lack of awareness and seriousness attached with such an ADR mechanism. Further, Italy mandates only 1 session, wherein the proposed Mediation Bill proposes a minimum of 2 sessions. This was a smart decision since it is necessary, especially in countries still unfamiliar with mediation, such as India, to derive substantial value from the session and understand the working of the process to be able to consequently judge if it is a fit form of dispute resolution to those parties. – 9 – Additionally, all of this will go to vain, if the infrastructure is not upped. Any attempt to make mediation necessary would fail unless there are an appropriate number of competent mediators available to match the demand. Hence, training lawyers to be mediators is the need of the hour. Furthermore, it is essential that no limitations be imposed on who is eligible to serve as a mediator. Instead, aside from certain basic credentials, regulation should only demand mandatory mediation training. This would encourage people from various professions to choose to train as mediators, bringing with them specialized knowledge, needed for various types of diputes. Finally, since India has already experimented with mandatory pre-litigation mediation in Section 12-A of the Commercial Courts Act, it is of utmost importance to conduct a detailed analysis on the success or failure thereof, before such a clause is rolled out in the Mediation Bill. All in all, the Bill is a positive move in the direction of India’s goal of enhancing corporate accessibility. Going ahead, the only hope is that mediation becomes a long-term solution to mounting case backlogs rather than devolving into pseudo-litigation.