Law to push out-of-court deals

To encourage pre-litigation settlements and reduce court cases, the government plans to bring in a law that will give legislative backing to such out-of-court settlements.

As of now, the mediation process is mostly used to settle marital disputes, while the new law could encourage such settlements in other areas too, like landlord-tenant and industrial disputes that form a major chunk of cases.

The law ministry proposed that the process of mediation “should be given statutory backing (with) a standalone law on mediation”.

A ministry note says: “There is no legislation to back the mediation process... The lack of any statutory backing is a cause of concern/apprehension in the minds of parties regarding the validity/enforceability of the outcome of mediation. Therefore, some parties may prefer the lawyer-dominated formal judicial process.”

Many stakeholders are also sceptical of the applicability of mediation to the diverse Indian caseload at the pre-litigation stage, it says.