Analysis, Income Tax

Are you on the fastest legal route?

mapThere was a time, when we would carry a physical map with us while travelling to unfamiliar places. If we lost track of the road, then the only way out was to trust a complete stranger on the road to guide us. The estimated time to reach a destination was also unpredictable because traffic was a surprise. Now, with the advent of digital maps, you exactly know the routes and how much time it would take to reach a destination. Today, even a small decision like which path to take to reach a destination is driven by data. Using the relevant data, the most efficient way to complete a task can be predicted thereby helping us save time and money. It, therefore, begs the question that why has data analytics not been used in the field of law to identify and utilise the most efficient way to resolve a dispute.

The most popular (and possibly the costliest) method of dispute resolution in India is litigation through courts. Going to court to get a dispute resolved is a costly affair in India, and such an expense might offset a significant portion of the gains sought to be achieved through enforcement of a contract. Today, over 70 lakh cases are pending in the civil court in this country out of which around 20 lakh cases have been pending for five years or more. According to the World Bank’s Ease of Doing Business report (2016), India ranks 172 on the Enforcing Contracts indicator with average time taken to dispose the case being 3 years 11 months. The amount of money spent during litigation on court fee, attorney fee and enforcement cost amounts to nearly 40% of the claim. Despite such substantial costs involved in the process of litigation, parties continue to prefer courts instead of choosing alternative dispute resolution methods like mediation. The absence of information on relative costs of litigation might be the reason.

This is not to say that mediation will necessarily be a cheaper and more viable alternative, but it is an alternative worth considering and an informed choice should be made. The right information can help you decide if you want to settle a dispute through courts or utilize mediation. Should you decide to go for mediation, then the right information can help you identify your bargaining positions. In mediation, even if you  decide to relinquish a portion of your claim, you might find it more advantageous vis-a-vis a court driven dispute resolution, where even if you are awarded 100% of the claim amount you may incur considerably greater costs- in the form of both time and money.

The World Bank report defines ‘cost of litigation’ as the sum of the cost of attorney, court fee and enforcement costs. It does not account for the opportunity and time cost of the litigant and the resource that is the subject matter of the dispute. As per a survey conducted by Daksh, 72 % of the litigants stated that they had to take leave from work to attend the court proceedings and thereby had to forego the potential earnings from their business or profession. Also, because land or property is the subject matter of civil dispute in 66% of the cases, there is a significant loss of potential earnings during the period the dispute is pending in the courts. Even the fee charged by a lawyer is contingent upon the number of appearances. Therefore, to identify the actual cost of litigation, it is very important that the timeline of a case (along with the number of hearings required to dispose of a case) be identified with certainty because many of the components of cost depend upon the timeline of a case. The timeline of a case depends upon multiple factors like the legal issue involved, the forum and the judge under which the case has been filed, the value of the subject matter of the dispute etc. For example, a case filed in Uttar Pradesh may take more time because UP has a large number of pending cases (2500) per judge, which is twice the national average.

Also Read: Unreported judgments: Why is it not required for tax cases?

Just as your favourite digital map does a data based prediction of the estimated time of arrival, and the most efficient way to reach a destination, the timespan of a case can be ascertained using the data from similarly placed cases. Using this information, you can decide which method of dispute resolution would be beneficial for you. This will not only solve your problem, it will also decongest the traffic in the judicial system. The result of such analytics can act as a guide, though they may not completely take into account the vagaries of human nature. Some factors like behaviour of the parties cannot be easily quantified and analysed. For example, parties might or might not want to appeal a judgement. Similarly, emotional cost that parties suffer during litigation process cannot be ascertained.

Coming back to the question as to why the potential of data analytics has not been harnessed in India, the answer is that to run data analytics, relevant data is needed. To be able to predict timeline of a case, all the information related to a case including the number of hearings, adjournments, all orders and judgements passed are required. As matters stand today, many High Courts do not have all the information related to a case available on their website and even when they do, it is only for the judgements that have been passed in the recent years. Also, it is extremely cumbersome and costly to download the relevant data, with some of it hidden behind a wall of Captcha.

It is now imperative that a National Judicial Data Sharing Policy be put in place similar to the National Data Sharing and Accessibility Policy, to ensure that judicial data is easily available. Providing more choices, will not only benefit the parties but also help in reducing the burden on the courts today.

Many have traversed the path before us, and it is time we learnt how they did it.

(Written by Anuj Sharma. Anuj  is a graduate from NLU Delhi, and Product Counsel @ Riverus.)

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