Rising to the challenge

Transformation on several levels is needed if India’s new law minister, Veerappa Moily, is to accomplish judicial effectiveness, argues Shardul Thacker

The Indian electorate has given the Congress-led United Progressive Alliance (UPA) a definitive majority and a clear mandate, placing huge expectations on the government to deliver value and realize unfulfilled promises. The recent inflow of foreign investment is evidence of global confidence in the new government, even at a period of great economic difficulty.

As a BRIC country (Brazil, Russia, India & China), India has not received its fair share of foreign investment. The new wave of investment by foreign institutional investors, and the volume of joint ventures since the new government’s inception, demonstrate that India could become a fast-growing economy once again if the UPA fulfils its mandate during its five-year term.

While the restoration of economic stability is a major priority, the real challenges for the government lie in eradicating poverty, providing effective and efficient healthcare and nationwide education, clamping down on corruption, implementing an efficient judicial system and ensuring the quick and effective disposal of the enormous backlog of court cases.

The new law minister, Veerappa Moily, has a considerable task to perform. He inherits the same long-standing problems faced by former law minister Hans Raj Bharadwaj. Moily must bring about a sea change in judicial infrastructure, in order to deal with delayed justice and the mounting costs which are incurred by litigants as a result.

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Judicial inefficiency has often been blamed on the extremely poor remuneration packages of court officials, which in turn perpetuate corruption in state machinery. Bharadwaj introduced measures such as the Right to Information Act, a very useful piece of legislation, and making judges a part of the Sixth Pay Commission, which he incorporated as a system to periodically review and increase judges’ salaries. Although such a move was a positive step, further reforms are needed, and quickly. For example, despite a 2005 Bombay High Court order directing the state to employ an additional 100 magistrates to dispose of millions of pending cases, the appointments have not yet been made. Similarly, grants provided by the Finance Commission to create additional courts have remained unused because implementation is impeded by factors such as lack of infrastructure in India.

Furthermore, vacancies created by the retirement of judges have not been promptly filled.

Moily’s short-term plans should include the execution of a computerization programme for reforming administrative processes within the judiciary and courts; currently these are administered using obsolete technology, which slows down processes tremendously and unnecessarily.

In order to reduce litigation, equitable legal reform should be introduced making it compulsory for courts to award realistic costs to winning litigants. Indian courts have always awarded only illusory costs to successful litigants. This results in a large number of frivolous litigations being launched. Similarly, litigants take advantage of delayed disposal, and unsustainable dishonest defences are adopted to avoid liability.

Moily has the experience, vision and ability to implement the desired changes. His vast experience as the former chief minister of Karnataka and chairman of the Revenue Reforms Commission and the Tax Reforms Commission stand him in good stead. Moily directed the implementation of economic reforms in Karnataka in 1992 and has led several projects in the state in sectors such as finance, power, urban development, infrastructure and housing, and education. Moily is also a trained lawyer who has practised at Karkala, Mangalore, Bangalore High Court and the Supreme Court of India. He was instrumental in establishing the nation’s leading law institute, the National Law School University in Bangalore.

One of the most hotly debated issues within the legal fraternity is the entry of foreign law firms into India. Opposition has been voiced in some legal circles and particularly loudly from the Bar Council of India. Sharp differences have emerged within India’s commercial bar, which is split on the issue.

Despite the resistance to such entry, foreign law firms have official tie-ups, “best-friend” arrangements and associate offices in India, and thus have access to the Indian legal market. Although they do not have an establishment in India, they have liaison offices and they poach Indian lawyers extensively during campus recruitments for their worldwide offices. With the assistance of modern technology, they have positioned themselves effectively in the Indian legal market.

Such a surrogate presence is unhealthy. Permitting regulated entry would be advantageous, as it would increase the professionalism of India’s bar. The Indian Advocates Act would have to be amended, requiring the Bar Council to alter its conventional thinking.

Indian law firms are becoming more professional after having recently undergone significant changes. However, restrictions on their size placed by Indian regulations, and impediments on advertising placed by the Bar Council, limit the creation of an equal playing field. In order to make reciprocity meaningful, the Indian commercial bar should be allowed to grow in size and strength to attain international presence and be able to compete with foreign law firms globally. It is hoped that the new law minister will succeed in bringing about the globalization of Indian law firms and the legal market.

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Shardul Thacker is a partner at Mulla & Mulla & Craigie Blunt & Caroe, a law firm based in Mumbai.