THREE core fundamental policy gaps that are clogging the courts of India
No civilisation can exist or prosper without the rule of law. The rule of law cannot exist without a proper justice system. In India, criminals have a free reign as justice system is used as a tool to make victims succumb into unfair settlements or withdrawals. Unfortunately, the Indian justice system has gone caput and remains clogged with over 3+ crore cases pending in courts due to following core reasons.
Policy gap 1 — Only in India there is zero deterrence to perjury
a. In India, perjury law is taken very lightly. 99% of cases are full of lies, deceit and mockery of justice. Affidavits in India do not serve much purpose. There have been various judgments and cries from all levels of judiciary but in vain.
b. Perjury makes any case 10x more complex and consumes 20x more time to adjudicate. It is akin to allowing a bullock cart in the middle of express highway. It is nothing but an attack on justice delivery system. Historically, perjury used to be punished with death sentence and considered an equally serious crime as murder.
c. This is against the best international practices and does not make economic sense for India.
Policy gap 2 — India has no equivalent laws such as the U.S. Federal Rule 11 enacted in 1983 (as amendment in 1993) to curb the explosion of frivolous litigation.
The entire provision of rule 11 of U.S. federal rules can be summarized in the following manner:
It requires that a district court mandatorily sanction attorneys or parties who submit improper pleadings like pleadings with
- Improper purpose
- Containing frivolous arguments
- Facts or arguments that have no evidentiary support
- Omissions and errors, misleading and crafty language
- Baseless or unreasonable denials with non-application of mind
- Negligence, failure to appear or unreasonable adjournments
All developed countries like UK and Australia also have similar laws to combat frivolous litigation.
Police gap 3 — Only in India the lawyers are barred from contingent fee agreements under Bar council rules
- Indian lawyers are incentivized to make cases go longer, add complexity and never end. Consequently, they super specialize and become innovators in creating alibis so that the case never ends.
- Lawyers in India do not investigate or legally vet the case before filing.
- There is no incentive to apply for torts claims or prosecute perjury and therefore there is no deterrence created.
- Lawyers are supposed to be gate keepers to prevent frivolous litigation but in India it is actually opposite due to the perverse policy on contingent fee and torts.
Economic modelling suggests that — contingent fee arrangements reduce frivolous suits when compared to hourly fee arrangements. The reasoning is simple: When an attorney’s compensation is based solely on success, as opposed to hours billed, there is great incentive to accept and prosecute only meritorious cases.
At least one empirical analysis concludes that — “hourly fees encourage the filing of low-quality suits and increase the time to settlement (i.e., contingency fees increase legal quality and decrease the time to settlement).”
Negative impact of the 3 policy gaps
1. Conviction rates in India are abysmally low below 10% whereas internationally between 60% — 100%.
a. Japan — 99.97%
b. China — 98%
c. Russia — 90%
d. UK — 80%
e. US — between 65% and 80%
2. Globally the 80%-99% cases get settled before trial but India its actually opposite because
- There is absolutely no fear of law and perjury is a norm.
- Lawyers have no interest in driving a settlement due to per appearance fee system.
- There is an artificial limit of fee shifting (awarding costs), torts and there is no motivation of the part of judges to create deterrence.
3. The contingent fee and tort cannot be enabled till such time the fraternity of lawyers can be relied upon for ethical and moral conduct.
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Easy solution to complex problem
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Policy 1 — Restricting perjury and making it a non-bailable offence will resolve 50% cases immediately
(i.e. 1.5 crore cases within 3 months)
India must truly embrace “Satyam ev jayate” and make perjury a non-bailable offence. All lawyers and litigants should be given 3 month’s notice to refile their pleadings or settle the cases. They would have to face the mandatory consequences of false evidence or averments later found to be untrue.
There needs to be a basic expectation reset in Indian courts litigation — the filings are correct, and the lawyer is responsible for prima facie diligence and candor before courts. The role of judiciary is not to distinguish between truth and false but to determine the sequence of events, fix accountability and award penalties. Presenting false evidence or frivolous arguments must be seen as separate offence on its own.
At a minimum IPC 195(1)(b)(i) must be removed that states the following –
“No Court shall take cognizance- of any offence punishable under any of the following sections of the IPC (45 of 1860), namely, sections 193 to 196 (both inclusive), 199, 200, 205 to 211 (both inclusive) and 228, when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court”
- This necessarily makes the judges party to the complaint and therefore all judges are reluctant to prosecute perjury.
- This estoppel opens up possibility of corruption in judiciary and public offices.
- The intention of this provision has clearly backfired. This restriction is unique to india and against the international norms
Policy 2 — Sanctions on lawyers to streamline the perverse incentives that plague Indian justice system
The courts in USA are mandated to compulsorily sanction lawyers for various professional misconduct in litigation (Federal rule 11 of civil procedure) like:
Remedies and sanctions for lawyer’s misconduct can be categorized into three groups.
- Sanctions and remedies for attorney misconduct which are available to public authorities. Such sanctions include professional discipline, criminal liability of lawyers who assist their clients in committing criminal acts, and judicially imposed sanctions such as for contempt of court. Professional discipline is generally the best known sanction for attorney misconduct.
- Sanctions which are available to lawyers’ clients. For example, damages for attorney malpractice, forfeiture of an attorney’s fee, and judicial nullification of gifts or business transactions that breach a lawyer’s fiduciary duty to a client.
- Remedies that may be available to third parties injured by a lawyer’s conduct on behalf of a client. These include injunctions against representing a client in violation of the lawyer’s duty to a third party, damages for breach of an obligation the attorney assumes to a non-client, and judicial nullification of settlements or jury verdicts obtained by attorney misconduct.
Policy 3 — Contingent Fee and Tort Law making judiciary 3x efficient.
(needs perjury law as discussed above to unlock)
In India Lawyers spend more time in making the case complex and lengthy based on “dehari system” while the western counterparts earn far more money by genuinely solving cases and creating real values for the country. The market economics based on judicial policy on regulating legal profession and ethics in India is however geared towards permanently clogging the system. 3 of the 4 stakeholders benefit by making the litigation never end.
There is a dire need for the system to be re-incentivized wherein the legal profession can generate 10x more value for the country in catching and penalizing law abusers. This in turn will also attract and create more talented lawyers because then they will be investing more time in investigating and preparing the cases to win.
Making perjury a non-bailable offence and rules for mandatorily sanctioning lawyer mis-conduct will unlock the contingent fee and tort law in India.
Allowing contingent fee for lawyers have four principal policy justifications
Firstly, such arrangements
- enable the impecunious (having no money) to obtain representation. Such persons cannot afford the costs of litigation unless and until it is successful. Even members of the middle- and upper-socioeconomic classes may find it difficult to pay legal fees in advance of success and collection of judgment.
- This is particularly so today as litigation has become more complex, often involving suits against multiple parties or multinational entities, and concerning matters requiring expert scientific and economic evidence.
- Contingent fee arrangements can help align the interests of lawyer and client, as both will have a direct financial stake in the outcome of the litigation.
- By predicating an attorney’s compensation on the success of a suit, the attorney is given incentive to function as gatekeeper, screening cases for both merit and sufficiency of proof, and lodging only those likely to succeed.
- This provides as an important and genuine signal for litigants to understand the merit of their case.
- And more generally, all persons of sound mind should be permitted to contract freely, and restrictions on contingent fee arrangements inhibit this freedom.
Three other reasons to justify unlocking of contingent fee:-
- Clients, particularly unsophisticated ones, may be unable to determine when an attorney has underperformed or acted irresponsibly;15 in these instances, an attorney’s reputation would be unaffected, and thus the risk of reputational harm would not adequately protect against malfeasance.
- Even when clients are aware of an attorney’s poor performance or irresponsibility, they may lack the means, media, or credibility to effectively harm the attorney’s reputation.
- The interests of attorney and client are more closely aligned, ceteris paribus, when fee arrangements are structured so as to minimize perverse incentives.
Why contingent fees reduce caseload:
Lesser cases better filing
Complainants get genuine advice about chances of winning. They do not file unless they get lawyer’s buy-in.
- Lawyers screen cases for merit and sufficiency of proof before filing.
- Lawyers don’t pick up bad cases to manage reputation.
- Comprehensive evidence gathering happens before Lawyer decides to file a case.
Lawyers simplify case and only allege charges that can be sustained.
- Use simple and concise arguments for the judges.
- Lawyers spend more time working hard outside the courts. Thus increasing case quality.
Faster case proceedings
- Less adjournments and hearings
- They do better preparation and take less adjournments.
- Multiple steps get completed in single hearings.
- They create urgency for clients to show up at every hearing.
- Lawyers do not unnecessarily appeal and stay matters because they do not get paid per hearing and want quick results.
- There are less takers if a lawyer drops a case when there are surprises by client which will adversely impact the outcome.
- Lawyers persuade complainants to settle when appropriate.
With 3+ crore cases pending and a dysfunctional justice delivery there is a mass exodus of Ultra High Net worth Individuals (UHNIs) from India. There is an absolute urgent need for above reforms before the situation turns into a complete banana republic.
It is an absolute embarrassment and national shame to allow Indians to be blatant liars even in courts. Business and survival in India today is a race to the bottom just because there is no bar on falsehood and having corrupt values, it is near impossible to survive without being part of the same culture.
It is prayed that even more stricter laws be enacted than just global norms such that Indians can be trusted globally to never lie. It’s not just about Indian courts but they could be counted as the most truthful race even in foreign lands and command high respect globally.
Restoring justice delivery
Economic benefits of reform in perjury, contingent fee and legal ethics
1. Higher quality of litigation work.
2. Attract better talent to the profession due to higher profitability.
3. Create more jobs in the economy.
4. Offer higher pool of qualified people for judiciary.
5. Drastic reduction in corrupt or criminal activity due to fear of law.
6. Unlocking of trillions of dollars of wealth/resources stuck in litigation.
7. Better investment climate due to more reliability in business transactions.
8. Higher reliability in products and services.
9. Access to justice for all.
10. Restoring faith in judiciary and honour in being Indian.