Centre plans to have new law for out-of-court settlements

In an effort to reduce the massive pendency of cases, the Narendra Modi government is considering bringing in a new law on voluntary out-of-court settlements.

Sources stated that the representatives of the Department of Legal Affairs in the law ministry were asked “to take necessary steps to introduce a stand-alone law to regulate pre-litigation voluntary mediation” at a recent meeting of a task force on improving India's ranking in the World Bank report on ‘Ease of doing business’.

The task force’s second meeting discussed the need for legislation on mediation on the lines of a similar law in Singapore.

According to the minutes of the April 18 meeting, it was observed that the World Bank report mentioned financial incentives for those opting for mediation, such as refund of court fees and other benefits such as rebates in income-tax.

Currently, the mediation process is mostly used to settle marital disputes, but the new legislation could encourage settlements in areas such as landlord-tenant and industrial disputes.