Informal Settlement of Disputes: Conciliation and Mediation

The Legal Services Authorities Act 1987 establishes Lok Adalats, sections 19 to 22 dealing with their organisation, cognisance, procedure and powers. A Lok Adalat has no power to adjudicate: it determines a case only by settlement between the parties. Its award is deemed to be a decree of a civil court and is final, with no appeal. Permanent Lok Adalats for public utility services, such as transport, postal, telegraph, power, water and sanitation, may in certain circumstances decide the dispute on the merits where the parties fail to agree, which makes them a hybrid.

The Mediation Act 2023 provides a general statutory framework for mediation in India: it defines mediation, provides for pre-litigation mediation, for the registration of mediators and mediation service providers, for the confidentiality of the process, and for the enforcement of a mediated settlement agreement, which is enforceable in the same manner as a judgment or decree of a court.

Commencement is worth a word, because assent is not commencement. A student writing about the Mediation Act 2023 should check which of its provisions have been brought into force before asserting that a particular section operates. The general point about commencement is made in [Sources of Administrative Law].

Grievance redressal inside the administration

Conciliation and mediation are only part of what the syllabus head covers. Inside the administration the following machinery exists, and it disposes of far more grievances than any court.

1. The departmental appeal or representation, which the Administrative Tribunals Act 1985 makes a precondition of approaching a tribunal by its section 20: [The Working of Tribunals: the Administrative Tribunals Act 1985].
2. Grievance cells and public grievance officers in ministries and departments, with a designated officer and published timelines.
3. Online grievance portals, which acknowledge, allot a number and track a complaint to disposal, and which have made the process auditable.
4. Citizens' charters, which publish the standards of service a citizen may expect and the remedy if they are not met: [Accountability and Responsiveness: Problems and Perspectives].
5. Ombudsman machinery, the Lokpal and the Lokayuktas, treated in [The Ombudsman] and the two chapters that follow it.
6. Sector regulators and their consumer grievance mechanisms, such as consumer grievance redressal forums under electricity legislation and the ombudsman schemes of banking and insurance regulators.
7. Consumer forums under the consumer protection legislation, which cover services rendered by public utilities.

Why these methods suit administrative disputes

Five reasons, and they double as the advantages.

1. Most administrative grievances are not about law. A pension not paid, a file not moved, a connection not given, a certificate not issued: there is nothing to adjudicate, only something to be done.
2. Speed and cost. The citizen who cannot afford a writ petition can send a complaint.
3. The relationship continues. A citizen must go on dealing with the department, and an agreed outcome damages that relationship less than a litigated one.
4. Flexibility of outcome. A court can quash an order; a settlement can produce an apology, an expedited hearing, a partial payment or a phased solution.
5. It relieves the courts, which is why section 89 was inserted into the Code of Civil Procedure.

The limits, which an answer must give

1. Inequality of bargaining power. The State is a repeat player with lawyers and files; the citizen is not. A settlement between unequals may simply record the stronger party's position.
2. No precedent and no public statement of the law. A settled case decides nothing for the next citizen with the same grievance, and a systemic illegality can be settled away one complainant at a time.
3. The public interest may require a decision. Where the legality of an administrative practice is in issue, settling it privately leaves the practice untouched. This is the strongest objection in public law.
4. An authority cannot settle away its statutory duty. A public body holds its powers in trust and cannot agree to exercise them contrary to the statute, which is the fettering point in [Grounds of Judicial Review: Failure to Exercise Discretion].
5. Confidentiality can conceal. Mediation is confidential, and confidentiality in a public matter sits uneasily with the transparency the Right to Information Act 2005 requires.

A worked example

Farida Shaikh's application for a widow's pension has been pending for eleven months. The department says the file is with the treasury; the treasury says it has not received it.

What a writ petition would give her. A mandamus to decide the application, after months and a lawyer's fee. It would not tell anyone where the file is.

What a grievance mechanism gives her. A complaint on the grievance portal is allotted a number, is assigned to a named officer, and produces either the sanction or an explanation, in weeks.

What conciliation adds where there is a genuine dispute, for example about the date from which arrears are payable, is a neutral who can get both sides to a figure without either conceding a legal position.

Where it fails. If the department's position is that widows of a class of employee are not entitled at all, that is a question of law affecting everyone in that class. Settling Farida's case by paying her quietly leaves the rule in place for the next hundred widows. That is when adjudication is the right route, and it is the core public law objection to settling administrative disputes.

What it does NOT mean

It does not mean the neutral decides. In conciliation and mediation the outcome is the parties' agreement.

It does not mean a settlement is unenforceable. A Lok Adalat award is deemed to be a decree and is final, and a mediated settlement agreement under the Mediation Act 2023 is enforceable as a judgment or decree.

It does not mean these methods replace judicial review. They dispose of the mass of grievances; judicial review decides the questions of law.

It does not mean an authority may settle anything. It cannot contract out of a statutory duty.

Quick revision

1. Conciliation and mediation: a neutral assists the parties to reach a settlement and does not decide. Classically a conciliator may propose terms and a mediator does not, though Indian statutes have merged the two.
2. Distinguish from arbitration and adjudication, in which the neutral decides and the outcome binds.
3. Section 89 of the Code of Civil Procedure 1908: the court may refer a dispute to arbitration, conciliation, judicial settlement including a Lok Adalat, or mediation.
4. Legal Services Authorities Act 1987, sections 19 to 22: Lok Adalats determine only by settlement; their award is deemed a decree and is final. Permanent Lok Adalats for public utility services may decide on the merits in certain circumstances.
5. Mediation Act 2023: a general framework, including pre-litigation mediation, registration of mediators, confidentiality, and enforcement of a settlement as a judgment or decree. Check commencement before asserting a section operates.
6. Administrative grievance machinery: departmental appeal, grievance cells and portals, citizens' charters, Lokpal and Lokayuktas, regulators' consumer forums, and consumer forums.
7. Advantages: most grievances are not legal disputes, speed and cost, preservation of the relationship, flexible outcomes, relief of the courts.
8. Limits: unequal bargaining power, no precedent, the public interest in a decision on legality, the inability of an authority to settle away a statutory duty, and confidentiality.

Test yourself

1. Distinguish conciliation, mediation, arbitration and adjudication. In conciliation and mediation a neutral third person assists the parties to arrive at their own settlement and has no power to impose an outcome; classically a conciliator may put forward proposals for settlement whereas a mediator confines himself to facilitating the parties' own solution, though Indian legislation has largely merged the two. In arbitration the neutral hears the parties and decides, and the award binds them. In adjudication a court or tribunal hears the parties and decides according to law, and the decision binds and may create a precedent. The essential line is between processes where the outcome is the parties' agreement and processes where it is a third party's decision.

2. What statutory provision requires Indian courts to consider settlement? Section 89 of the Code of Civil Procedure 1908, which provides that where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and, after receiving the parties' observations, refer the dispute for arbitration, conciliation, judicial settlement including settlement through a Lok Adalat, or mediation. Alongside it stand the Legal Services Authorities Act 1987, which constitutes Lok Adalats whose awards are deemed to be decrees of a civil court and are final, and the Mediation Act 2023, which provides a general framework for mediation including pre-litigation mediation and the enforcement of a mediated settlement agreement as a judgment or decree.

3. Why are informal methods particularly suitable for grievances against the administration? Because most such grievances are not disputes about law at all but about inaction: a pension not sanctioned, a file not moved, a certificate not issued. There is nothing to adjudicate and only something to be done. They are also cheap and quick, which matters because the citizens most affected are least able to litigate; they preserve a relationship the citizen must continue; they permit flexible outcomes that a court cannot order, such as an expedited hearing or a phased solution; and they relieve the courts, which is why section 89 was inserted into the Code of Civil Procedure.

4. State the limitations of settling administrative disputes informally. The bargaining power is unequal, since the State is a repeat player with legal resources and the citizen is not, so a settlement may simply record the stronger party's position. A settlement creates no precedent and states no law, so a systemic illegality can be settled away one complainant at a time while the practice continues for everyone else, which is the strongest objection in public law. A public authority cannot in any event agree to exercise or forgo its statutory powers contrary to the statute, because it holds them in trust and cannot fetter them. And confidentiality, which is essential to mediation, sits uneasily with the transparency that the Right to Information Act 2005 requires of public authorities.

5. What is a Lok Adalat, and how does it differ from a court? It is a forum constituted under the Legal Services Authorities Act 1987, sections 19 to 22 governing its organisation, cognisance, procedure and powers. It differs from a court in that it has no power to adjudicate: it determines a case only by bringing about a settlement between the parties, and if they do not agree the matter returns to the court. Its award is nevertheless deemed to be a decree of a civil court and is final, with no appeal, which gives a settlement reached there the force of a judgment. Permanent Lok Adalats established for public utility services such as transport, postal, telegraph, power, water and sanitation are a hybrid, because in certain circumstances they may decide the dispute on its merits where the parties fail to reach agreement.