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Thursday, December 12, 2013

Cost of Litigation

Litigation expenses and inordinate delays in deciding cases have become characteristic of our legal system. Any litigation is a costly affair: court fees, expenses for preparing a case, expenses in the courts, additional miscellaneous expenses, lawyers' fees- all these have to be incurred by the litigants.

      The State incurs heavy costs to keep the machinery of justice in working order. The salary of judges, officials, the staff machinery for execution of judgements, decrees, warrants and keeping police and prisons, are all expenses which the state has to bear.

    Keeping peace by providing a proper system for the administration of justice is the first duty of any organised state. Criminal Courts are supported out of public funds, as there is no provision in law for making the accused or guilty person pay the expenses, and small receipts from fines imposed cannot balance the expenses of maintaining the judiciary, staff, courts, prosecutors, police officers, etc.

   The basic principle is that the crime has to be tried locally and the local authorities and the state must provide court-houses, salaries of magistrates, staff and all other outgoings, preparation of briefs, providing defence lawyers to an indigent accused in serious matters, etc. The cost of prosecution also falls upon the state. The cost of trying a man on criminal charges (exclusive of catching him and punishing him after trial if he is convicted and keeping him in jail) is quite substantial. Except for the High Court Judges whose salaries, etc. are provided from the Consolidated Fund of India, all other expenses are borne by the state or local authorities. With the increasing growth of population, poverty and breaking up of family/social controls and authority, the crime rate is increasing and as such the costs of detecting crimes, of investigations, and getting the offender convicted are also increasing.

   However, in civil court, a litigant has to pay for three main items:

i. court fees, which is a substantial source of income to the states and which is high;

ii. expenses of collecting evidence and bringing witnesses to the court for proving his case or defence;

iii. the fees of Advocates and preparation of briefs and miscellaneous expenses.

      Our system has adopted the principle that in the High Court and the Supreme Court, the costs of the judges shall fall upon the public funds and all other expenses of the administration of civil justice upon the litigants. The schedule of fees which is fixed by every state differs and in a recent judgement of the Supreme Court, it was held that a state can increase court fees to any extent.

      The costs to the litigants are high in our system and some of the reasons are:

  i. The nature of our procedure, which requires most cases to be proved by oral evidence involving an elaborate process of examination, cross-examination, and re-examination of witnesses in open court subject to technical rules of evidence. Such a procedure, however meritorious in itself, tends to prolong the trial stage of action, which also calls for a trained and specialised class of advocates.

ii. The division in the legal profession between senior and junior Advocates. This results in a case involving at least two sets of fees.

iii. The peculiar position in our legal system, where the Advocates' earnings are dependent on fees in connection with litigation of one kind or another. To attract the right type of entrant to the profession the rewards must at least be commensurate to the hard work and responsibilities which this profession imposes on its members. Moreover, the well known difficulty of the lean years of practice at the Bar, coupled with the fact that the Advocate depends on litigation practically as his sole source of remuneration, means that such fees must necessarily be on a fairly substantial scale-which is the justification generally given by lawyers for charging high fees. It is now utterly impossible to count the cost of litigation beforehand. It is difficult, sometimes impossible, for any party or Advocate to forecast what will be the costs. Since everything depends on the manner the other side and /or Advocates and the court conduct the case (including adjournments on frivolous grounds), one does not know whether a litigant who succeeds will be a winner in terms of money, even if he succeeds in the case if agony, time and cost are taken into consideration. Small claims and small litigants are at a special disadvantage. The expenses of the litigation very nearly consume the claim, and sometimes the costs may exceed the amount in dispute; if not, may still eat away so much of the claim as to make litigation futile. On the other hand, persons or organisations possessing consideration or relatively considerable financial resources that can be utilised for litigation gets obvious advantages in pursuing or defending a claim. In the first place they can afford to litigation. They can pay high fees and retain the best advocates. They are, in addition, able to withstand the delays of litigation. Each of these capabilities in the hands of one party can be powerful weapon. The threat of litigation becomes both credible and effective. Similarly, one of two parties to a dispute may be able to outspend the other and, as a result, prosecute his case more effectively. Passive decision makers, whatever their other, more admirable characteristics, clearly exaggerate this problem by relying on the parties for investigating and presenting evidence and fro developing and arguing the case.

iv. The absence of fixed days for hearings involves a great deal of wasted time and money by reason of parties, their witnesses and their lawyers having to wait around sometimes for days before their case is called on, apart from the difficulty of making firm arrangements in regard to other matters, when it is not known within how many days or even weeks a case is likely to be reached and even then adjourned.

v. There is also under the present system multiplicity and high costs of appeals.

   It will be seen that many, though not all, of the above causes are deeply rooted in our existing legal system and its long traditions. So long as there is desire to retain these essential features of the present the high cost of litigation flows as a direct consequence.

   Apart from Civil and Criminal litigation, there are a large number of statutory Tribunals, such as Income-Tax, Sales-Tax and Customs, Monopolies, Restrictive Practices Commission, Family courts etc. where there are no court fees but the litigants have to pay the fees of Advocates and expenses which too are very substantial.

  If social, economic changes and equal justice to all is of high constitutional priority, then the effectuation and realisation of the same would depend directly in proportion to the availability of expeditious and expansive legal system and remedies. The administration of justice will not be effective and real, if access to justice is so expensive as it has become today.

   Some relief has been provided by way of legal aid, a step towards affording relief to the poor, but it is a drop in an ocean of high costs.

   

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