Monday, July 18, 2005

unclogging the courts

The Indian justice system is legendary for its delays and diversions. But changes are finally on the way.

By Jason Overdorf

July 18 issue - Sunila Awasthi, a 36-year-old New Delhi woman, isn't a big fan of India's justice system. It's easy to see why: when Awasthi was 10, her father died. Her uncles then legally forced Awasthi's mother out of the family home. The mother battled in court for eight years to claim her husband's assets before she settled and took her two daughters to live in the house of her own father, who had died around the same time. There was only one problem: except for the single, dilapidated room in which Awasthi's grandfather had lived, the house was occupied, and the tenants refused to leave. With no other choice, the women moved into the old room, a virtual cell.

They then went to court again, to evict the squatters. It should have been an open-and-shut case—and by the odd standards of the Indian court system, it was. Only one lawyer died during the course of litigation. Only four high-court judges passed the case on to colleagues. And the matter was resolved in only 16 years. "We were one of the lucky ones," Awasthi says.

That's no exaggeration. There is a joke in India that the closest anyone will come to experiencing eternity is the country's court system. The problem is a strange aversion to settling cases. Judges pass them along to somebody else, and rarely dismiss lawsuits, no matter how frivolous. The result is judicial gridlock: India's lower courts have a backlog of about 20 million civil and criminal cases. An additional 3.2 million cases are pending before the high courts, while the Supreme Court has about 20,000 old cases on the docket. Many of those cases will take far longer than 16 years to resolve, and if the Awasthis lived in a virtual cell while their case ground on, at least they weren't literally incarcerated, like the millions of "undertrials" who languish in prisons, often for longer than the maximum sentence possible for their alleged crimes, while they await a trial date.

But now, experts say, Prime Minister Manmohan Singh is committed to fixing the problem. And the judiciary itself, long criticized as insular and resistant to change, seems finally to have concluded that changes are needed. R. C. Lahoti, the chief justice of the Supreme Court, has declared that 2005 will be the year that India reduces its massive case backlog. "There will be no place for any corruption or indolence in the system," he vowed last September. "I mean business."

His choice of words was telling. Whatever moral imperative exists, the chief reason that India is getting serious about streamlining the legal system is economic. Dysfunctional courts increase the risks to foreign investors, tortuous rules slow the rise of new enterprises and murky laws regarding land ownership and other issues stifle the growth of industries like construction and retail. Indian business is lobbying for change; the Federation of Indian Chambers of Commerce and Industry, for instance, recently published a report that bemoaned the regulatory maze that confronts every commercial project, contributing to delays and cost overruns and providing one explanation why India receives only a tiny fraction of the foreign direct investment deposited in China. "Speedy judicial resolution will be one of the keys to making India a competitive economy, conducive to growth and foreign investment," says Nandan Nilekani, CEO of Bangalore-based software giant Infosys. Singh's reform-focused government is listening. "This is a new climate," says Law Minister Hansraj Bhardwaj. "If economic reforms are to succeed, we should have a compatible justice administration, where cases are not delayed."

The reasons for India's judicial debacle are legion. For one thing, India has fewer judges per capita than almost any country in the world. In 2000, India had fewer than three judges per 100,000 people, according to a World Bank study—less than half the number available in 30 selected countries. And the state itself, which accounts for 60 percent of court cases, is overly litigious. Branches of the government are often suing each other over contracts, land and other matters. The system also lacks the infrastructure to handle a large caseload and the documentation that goes with it. Only the Supreme Court is computerized.

New initiatives are beginning to help. In 1995, when Singh was Finance minister and Bhardwaj was serving his first term as Law minister, they helped introduce new methods of out-of-court dispute resolution, including conciliation, mediation and arbitration. Such decisions are binding, and they've helped slash the number of commercial disputes that go to litigation. The out-of-court settlement movement lost steam when Singh's Congress party was defeated at the polls in 1996, but it's now being cranked up again.

Likewise, Bhardwaj's predecessor as Law minister, Arun Jaitley of the Bharatiya Janata Party, established some 1,700 so-called fast-track courts to resolve criminal cases where the accused had been jailed for long periods while they awaited trial. Since 2000, these courts have helped to clear hundreds of thousands of old cases. In addition, this year the criminal-justice system will adopt the concept of plea bargaining for the first time—a key feature of the U.S. court system. And the agenda calls for the computerization of all of India's courts over the next three years.

Perhaps the biggest sign of the administration's commitment to judicial reform is the amount of money it's spending. "Earlier, it was very difficult if you asked for 100 or 200 crores [$23 million to $45 million] for computerization," says Bhardwaj. "Now the prime minister has given me 1, 000 crores [$227 million]." In the next phase, Bhardwaj hopes to establish more fast-track courts, to require every court to have an in-house conciliation program for litigants before their case goes to a judge and to set up additional "people's courts" to help resolve petty disputes arising from marital arguments, traffic accidents, billing errors and so on through mediation.

Ambition is not accomplishment, of course. The latest report from the parliamentary committee responsible for evaluating the Law Ministry's budgetary requests excoriates the government for its "lackadaisical approach" to setting up people's courts, noting that only three (of 28) states have set up permanent people's courts for public-utility disputes. It questions delays and cost overruns related to Bhardwaj's International Centre for Alternative Dispute Resolution, the centerpiece of the mediation and arbitration program. And it attacks the government for failing to fill bench vacancies at all levels of the judiciary. While paying lip service to the need to increase the number of courts, the judiciary has yet to fill two vacancies in the Supreme Court and 141 vacancies in the high courts, the report says.

But some progress is better than none. The criminal courts may be a shambles and arcane legal procedures may add 10 percent to 20 percent to the cost of doing business, but according to Bibek Debroy, head of the Rajiv Gandhi Foundation think tank, the resolution of civil cases has improved, primarily because of the amendments to the arbitration law pushed through in 1996. "Computerization, infrastructure, all of that has helped," he says. Moreover, although India's courts are exceedingly slow, they're generally fair. "Foreign investors do appreciate that it is a fair, rule-based system, and not ad hoc," says Nilekani of Infosys. DaimlerChrysler India CEO Hans-Michael Huber agrees. "The judicial system works too slowly, and the backlog of cases is a big burden. But on the other hand, at least it works."

Sort of. While Sunila Awasthi is now a successful corporate lawyer, with a nice house and slick new SUV, the young judge who banged the gavel in their favor has since quit the bench in disgust and gone into private practice. He's just one more casualty of Indian justice.

© 2005 Newsweek, Inc.