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Are the government’s amazing fast-track commercial courts a cure for our legal system’s ills? Legally Explained by Nick Robinson

Legal scholar Nick Robinson explores how (and if) the proposed new commercial fast-track courts might work.

So... The government said in the budget that we’ll have new fast-track courts. Why would we need that?

Well, the courts definitely need reform. Cases routinely take years to be initially decided. Then they are appealed and more years pass before final resolution.

Statistics from the Supreme Court say there are some 27 million cases pending in the lower courts and 4.5 million in the high courts, though, to be honest, there is no reliable data on how long it takes cases to go through the system.

However, the effects of delay are huge. Those accused of crimes languish in jail waiting for their trials, property matters are hung up for a generation, commercial disputes drag on and on.

So there definitely needs to be change.

In that case, awesome. What a great idea!

There have been many proposals for different kinds of fast-track courts over the years.

The proposal in the budget is to create a commercial division in high courts.

The idea was actually recommended by the Law Commission of India back in 2003 and in 2009 the Lok Sabha passed a bill to set up a commercial division in high courts, but the act ultimately got stalled and it never passed the Rajya Sabha.

This year the Law Commission again recommended a commercial division in high courts, with a few tweaks to the old bill, and the government has now indicated that they will try to pass something this year.

So how will they decide whether a case goes into a normal court or into the amazing new fast court system?

The proposed commercial division of the high courts would only handle commercial disputes with a value over one Rs.1 crore.

It’s important to keep in mind these courts would therefore mostly deal with high-value, complicated commercial disputes.

Who’ll be judging over matters that come up before these courts?

These cases will still be decided by high court judges.

These judges will be designated to the commercial division because they have particular skills in commercial matters.

The Law Commission proposes that appeal from these decisions should then be within the high court.

How fast will these things be?

No one really knows until they are set up.

However, these divisions would be operating under a different set of rules that are designed to speed things up.

Some draft bills have called for the parties to pay severe penalties if they unnecessarily delay litigation, such as not making filings on time.

It is also proposed that the losing party pay the legal costs of the winning one. This should encourage parties to settle because they don’t want to prolong cases if they don’t think they will win.

Essentially, the judges would be given a lot of power to manage these cases so they go as quickly as possible and penalize parties if they are unnecessarily slowing down the process.

The divisions would also be equipped with the latest technology to speed up the hearing of these cases. Still, these are complex litigation matters so they would take a year or two to decide even if everything ran smoothly.

When will we have the first one of these things?

Having a commercial division is still a proposal. The government said it was going to start consulting stakeholders this year.

Then a bill will have to pass Parliament and the commercial divisions be set up. This would all likely take a couple of years if it went off without a hitch but then again it may never happen.

Who’s going to pay for these courts?

This is not clear. The judges in these divisions will be reassigned from other benches in the high court. It is proposed that parties before this commercial division pay higher fees than others in the high court and that these fees increase the more time their cases take.

Taxpayers at the end of the day though will have to provide the money to make sure these courts operate.

Still, there are potentially large returns: commercial litigation that gets tied up for years slows down the economy and deters investment by both domestic and foreign companies.

Hold on, could this not end up turning the old court system into becoming some cattle-class equivalent of justice for the poor, while those with money get first-class justice?

This is one of the big fears and part of the reason the bill has not passed to date.

Companies with large disputes will get speedy justice, while those with smaller, but no less important, disputes will be stuck in the old system.

Why shouldn’t under-trials get fast track justice? Or those who have had their lives torn apart by an inheritance dispute?

And who is to guarantee that the new shiny fast track courts won’t be as bogged down within 10 years as the existing systems?

Yes, this all might amount to rearranging furniture in the same room at the end of the day.

The judges on these courts will just be assigned from the high court so it is not clear why we think the same judges who are hearing the disputes now would produce dramatically different results given a slightly different context.

There is an opportunity to specialise and some powers of the judges to manage cases are made more explicit, but to be honest the high courts are arguably the weak link in the Indian justice system.

As Arun Jaitely pointed out when he opposed the creation of commercial divisions under the last government (he supports them now), the high courts are slower than the district courts at deciding cases. So why take these matters out of the district courts and give them to the high courts?

So, commercial courts: panacea or band-aid?

There are examples of similar commercial divisions elsewhere in the world.

There are such courts in London, in New York, and in Singapore. They have had some limited success in speeding things up and giving higher quality judgments but it is not clear that every high court in India needs such a division.

It probably makes sense to have them in Mumbai and Delhi and maybe Bengaluru, Hyderabad, or Chennai, but not every state.

These courts aren’t going to be a cure all for what ails the Indian judicial system and need to be part of a much larger set of reforms if they are going to make a difference.

Nick Robinson is a fellow at the Harvard Law School’s Program on the Legal Profession and at the Centre for Policy Research in Delhi.

This article was first published in Mint. Mint’s association with LegallyIndia.com will bring you regular insight and analysis of major developments in law and the legal world.

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