Mandating Mediation: India's Learnings from the Italian Experience
The debate on mandatory mediation has come to the fore again, with India as the hotspot. In response to the massive 4.7 crore cases clogging its courts, the state has finally introduced umbrella legislation pertaining to mediation in the form of the Mediation Bill 2021 (“the Bill”). In addition to other proposals the bill prescribes pre-litigation mediation as a mandatory step before filing any civil and commercial suits, except for a select few categories of cases. India, thus, will join the list of countries that have attempted to utilize mandatory mediation to unclog their judiciary.
Italy is one country that was successful in such an attempt. The success of the Italian mandatory mediation model introduced in 2011 can be evinced by the fact that Italy has been able to use mediation at a rate 6 times higher than the rest of Europe. Furthermore, the country was able to achieve a massive 53,000 agreements through mediation in 2020, a figure which is inarguably astronomical compared to the miniscule number of mediation settlements reached in the pre-2011 Italian voluntary mediation regime.
The author of this article has primarily argued that the Indian attempt to mandate mediation can learn from the Italian experience. To justify the use of the Italian model as a benchmark for the proposed Indian model, the article draws commonalities between the problems that have stymied pre-2011 Italy and present-day India, respectively. This is followed by an analysis of the shortcomings of the Bill with reference to the established Italian benchmark to highlight the areas where affirmative changes can be made to improve the draft legislation.
Though the parallels between the two jurisdictions seem to be limited to the massive pendency common to both, a historical analysis would lead to a contrary conclusion. India and Italy both have had mediation in their cultural and juridical tradition, which, despite facing certain setbacks, has been reinstituted to serve the need of the hour. Italy’s Civil Procedure Code of 1865 had ‘Conciliation’ as the heading of the introductory seven articles. Furthermore, despite the setbacks to the process by a totalitarian regime that opposed private conflict resolutions, mediation was resuscitated in the late 20th century. The credit for this ‘re-institutionalization’ of mediation in Italy can be given to the Law 580 of 1993, which prescribed each Italian Chamber of Commerce to institute an arbitration and conciliation chamber as well as the Legislative Decree 5/2003, which ruled voluntary mediation in corporate, financial, and banking disputes. This was followed by a necessitation of mediation in a prescribed category of cases by Legislative Decree no. 28/2010 in order to address the massive 5.82 million pending civil litigations. The decree was struck down by the constitutional court on the ground of excessive delegation. However, the idea of mediation as a prerequisite to filing a suit was reinstated by Legislative Decree 69/2013 in September 2013.
The Indian mediation system, similarly, in the form of Panchayat and community-based resolution, was suppressed by the introduction of the adversarial common law by the colonial government. Despite this, the presence of mediation in the legal landscape of independent India can be evinced by Section 89(1) of the Civil Procedure Code 1908, which allows a court to refer a dispute to alternate forums such as arbitration, conciliation, judicial settlement, or mediation. Provisions for mediation further exist in various laws such as the Consumer Protection Act 1986, Commercial Courts Act 2015, etc. The Mediation Bill, 2021 is the latest enactment dealing with mediation and prescribing the same as a mandatory pre-litigation requisite in all civil and commercial cases.
Commonalities can also be observed in the reasons for the treatment of mediation as a ‘child of a lesser god’ despite the appropriate legal backing provided to the process in both the jurisdictions. A lack of general awareness among people coupled with lawyers’ unfamiliarity regarding the process led to a fundamental mistrust resulting in a general avoidance of the process before its necessitation in Italy. The same has been observed in the Indian legal scenario where, despite the recognition given to mediation as an alternate mode of dispute resolution by the Supreme Court, judges and lawyers lack incentives to nudge parties towards mediation. Mandatory mediation, thus, became and has become the only viable way to promote the process. This renewed emphasis on promoting mediation, in addition to domestic case pendency, has been facilitated through international impetuses, which in the case of Italy was the 2008 EU Mediation Directive (Directive 2008/52/EC). Likewise, in the Indian case, it is the Singapore Mediation Convention 2018, which India signed in 2019.
The Italian Model vs The Mediation Bill Model
Despite being referred to as ‘mandatory’ mediation, both the Italian and the proposed Indian model adopt an ‘opt-out’ framework, where there is a ‘coercion into and not within’ the process of mediation. Thus, the parties are obligated only to the extent of an ‘attempt to mediate’ with the actual settlement through this process being at the parties’ volition. This is showcased in the Italian law, which coerces the parties only to the extent of attending an inexpensive first meeting with the mediators, with the continuation left to the discretion of the parties. Similarly, Section 20 of the Bill will also allow the parties to withdraw from mediation after attending the first two sessions. The problem, however, arises with respect to the prescription of a timeline. Though Section 21 of the Bill prescribes that the overall mediation process is to be completed within a period of 180 days (which can be extended to a further 180 day period with the consent of the parties), there is no specific prescription with regards to the time period within which the two mandatory sessions are to be held. This is in contradistinction with the Italian model which requires the parties to hold the initial mediation session within 30 days of the filing of the mediation request. In the absence of a shorter timeline for fulfilling the bare minimum requirements, crafty parties will be able to abuse the prerequisites prescribed by the Bill and delay the subsequent filing of cases by almost half a year (and a whole year if an extension is granted). Further, the requirement being prescribed in Section 22 of the Bill to get all mediated settlements mandatorily registered before the legal services authority, a body which was never constituted to perform this function, to make them enforceable, instead of merely requiring to get them signed by the parties and the mediators as in Italy, leads to reasonable qualms regarding the effectivity of this Kafkaesque model in decreasing court pendency in India.
The difference between the Indian and the Italian model can also be observed in the categories of cases prescribed to undergo mandatory pre-litigation mediation in both jurisdictions. The Italian decree prescribes only specific categories of cases, which mainly deal with alienable rights, to be referred to mediation, and as a result mandatory mediation matters only constitute 8.5% of ordinary litigation in 2020. On the other hand, the Bill will make pre-litigation mediation a prerequisite for all civil and commercial suits while culling out certain exceptions such as disputes relating to claims of individuals who are minor or of unsound mind, or those affecting rights of third parties. This move may be backed by the argument that a greater number of disputes should be referred to mediation in India so as to observe a proportionate ‘de-clogging’ given that India’s present court pendency of 4.7 crore cases is much higher than the 5.82 million (58.2 lakh) cases that were pending before the Italian courts when the government introduced the ‘opt-out’ model. The flaw in this reasoning, however, stems from the failure of these proponents to take cognisance of the dearth of mediators in India. The present qualifications prescribed for becoming a mediator in the Mediation and Conciliation Rules, 2004 primarily focus on empanelling acting and retired judges as mediators. Making mediation the rule in India will prove counterproductive in the light of this inadequacy. This is the main argument backing the requests made to introduce pre-litigation mediation in a phased manner while emphasising the need to focus on capacity building. Furthermore, the dearth of correct coaching of mediators in India translates into a dearth of properly skilled mediators, despite the issuance of a coaching manual along with the conduction of a coaching program by Supreme Court’s Mediation and Conciliation Project Committee. The absence of statistics regarding the number of mediators in India makes one further question India’s ability to address the potential ‘mediation explosion’ that Italy had to face as a consequence of making mediation mandatory in 2011. The expansion in the classes of dispute subjected to pre-litigation mediation as a prerequisite should thus be made in correspondence to an increase in the number of mediators and dispute resolution centres while maintaining the statistics regarding the same.
The Bill is a step forward in the correct direction. However, the model prescribed still lacks in various areas that have allowed the Italian model to successfully unburden the judiciary. This includes the lack of a prescribed timeline and an overwide applicability. Ignoring such problems would not only render the bill useless but would further burden the judicial system by inserting an additional step in the already cumbersome litigation process. This elongation would result in adverse consequences not just for civil and commercial litigation, but for the concept of mediation, which would get further stigmatized as an unfortunate obstacle in the process of attaining justice.
This article has been authored by Aaryan Dhasmana, a second-year student at NALSAR University of Law, Hyderabad. This blog is a part of RSRR’s Rolling Blog Series.