THREE core fundamental policy gaps that are clogging the courts of India

Policy gap 1 — Only in India there is zero deterrence to perjury

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.

  1. Improper purpose
  2. Containing frivolous arguments
  3. Facts or arguments that have no evidentiary support
  4. Omissions and errors, misleading and crafty language
  5. Baseless or unreasonable denials with non-application of mind
  6. Negligence, failure to appear or unreasonable adjournments

Police gap 3 — Only in India the lawyers are barred from contingent fee agreements under Bar council rules

  1. 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.
  2. Lawyers in India do not investigate or legally vet the case before filing.
  3. There is no incentive to apply for torts claims or prosecute perjury and therefore there is no deterrence created.
  4. 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.

Negative impact of the 3 policy gaps

a. Japan — 99.97%

b. China — 98%

c. Russia — 90%

d. UK — 80%

e. US — between 65% and 80%

  1. There is absolutely no fear of law and perjury is a norm.
  2. Lawyers have no interest in driving a settlement due to per appearance fee system.
  3. There is an artificial limit of fee shifting (awarding costs), torts and there is no motivation of the part of judges to create deterrence.

Easy solution to complex problem

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)

  1. This necessarily makes the judges party to the complaint and therefore all judges are reluctant to prosecute perjury.
  2. This estoppel opens up possibility of corruption in judiciary and public offices.
  3. 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

  1. 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.
  2. 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.
  3. 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)

  • 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.
  1. 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.
  2. 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.
  3. 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:

  • 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.
  • Use simple and concise arguments for the judges.
  • Lawyers spend more time working hard outside the courts. Thus increasing case quality.
  • 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.

Conclusions

Restoring justice delivery

Economic benefits of reform in perjury, contingent fee and legal ethics

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Founder & CEO— Diro Labs

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Vishal Gupta

Vishal Gupta

Founder & CEO— Diro Labs

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