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Mediation and the State: The real problem is not reluctance, but risk

Not every dispute is suited for mediation and the system must retain the ability to distinguish between cases that can be settled and those that must be adjudicated.

Shridhar Prabhu

The recent remarks of Justice Sandeep Mehta - that government officers are among the biggest stumbling blocks to mediation - merit serious consideration.

At one level, the observation is both valid and necessary. Government litigation in India is notoriously protracted. Decision-making is layered, accountability is diffused and officers often hesitate to take positions that may conclude disputes. Resistance to mediation, in that sense, appears as an extension of institutional inertia.

Yet, to stop at this diagnosis would be to mistake the symptom for the problem.

The State as India’s largest litigant

The State is, by every account, the single largest litigant in the country. There is near consensus across stakeholders that about fifty per cent of pending cases involves government departments, public sector undertakings or disputes between State entities themselves. The result is a system in which the State is not merely a litigant, but often a litigant against itself.

If even a fraction of this litigation were meaningfully diverted to mediation, the burden on courts could be significantly reduced. Judicial backlogs - long recognised as a structural challenge - would see tangible relief.

Judicial push towards mediation

The Supreme Court has, over the years, consistently encouraged recourse to alternative dispute resolution. In Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co, the Court structured the framework for ADR under Section 89 of the Code of Civil Procedure (CPC). Subsequent developments have only strengthened this trajectory, including the recognition of mandatory pre-institution mediation in commercial disputes.

The judicial message has been clear: mediation must move from the margins to the mainstream.

Despite this direction, government participation remains hesitant.

A quiet but significant shift: Karnataka’s Section 89A

A recent development at the State level reinforces this shift. The State of Karnataka has introduced Section 89A into the CPC, marking a decisive move towards embedding mediation at the threshold of civil litigation.

Suits that do not involve urgent interim relief are now required to be referred to mediation at the outset, within a defined and time-bound framework. Settlements reached through this process culminate in decrees of the court, ensuring enforceability.

This is not a minor procedural adjustment. It represents a structural reorientation of the litigation process itself. Where Section 89 once depended on judicial discretion and party willingness, Section 89A signals that mediation is no longer optional in spirit; it is structurally embedded.

For the government, this shift has profound implications. As the largest litigant, it can no longer treat settlement as an exception. It is now institutionally required to engage with mediation at the earliest stage of dispute.

Decision-making can no longer be deferred indefinitely through layered approvals and reflexive appeals. The system is, in a very real sense, compelling the State to confront disputes early and consider resolution before positions harden.

But this structural compulsion also raises an important question: should all disputes involving the State be steered towards settlement?

The limits of mediation in a rights-based framework

Mediation, for all its advantages, is not a normatively neutral process. In practice, it often reflects existing inequalities between parties. Mechanisms such as mediation and Lok Adalats have, in certain categories of cases, particularly motor accident claims, been used by institutional actors such as insurance companies to induce claimants to accept reduced compensation.

Speed is achieved and pendency is reduced, but not always with full regard to fairness.

In a constitutional democracy, dispute resolution is not merely about efficiency; it is about the vindication of rights. An excessive or uncritical push towards mediation risks normalising compromise in situations where the law demands enforcement. Statutory entitlements may be diluted, bargaining disparities may be amplified and outcomes may reflect expediency rather than legality.

The continued availability of courts, therefore, is not a procedural luxury; it is a constitutional safeguard.

Seen in this light, governmental hesitation towards mediation is not entirely without justification.

Courts, despite their delays, perform functions that mediation cannot replicate. They authoritatively determine rights, develop legal principles and subject State action to constitutional scrutiny. Many disputes -particularly those involving public law elements - require precisely this form of adjudication.

An overemphasis on mediation may therefore truncate remedies and reduce disputes that require authoritative resolution into negotiated settlements. The objective cannot be to replace courts with mediation, but to calibrate their roles carefully.

There is also a clear doctrinal boundary that cannot be ignored. It is well-settled that a writ of mandamus can be issued only where there exists a vested legal right and a corresponding duty. This principle has direct implications for mediation involving the State. A government authority cannot be compelled to concede claims that are legally untenable or contrary to statutory mandates.

Nor can mediation become a mechanism to pressure the State into agreements it is not legally entitled to make. Settlement must remain consistent with law, not merely expediency.

Lok Adalats: Proof of concept, with caution

India’s experience with Lok Adalats shows what is possible. Legal services authorities have demonstrated that large volumes of disputes can be resolved efficiently with inventive interventions.

These initiatives establish that when institutional alignment exists, large-scale resolution is achievable. But they also underscore an important caution: efficiency must not come at the cost of substantive justice.

The real promise of mediation

Mediation must, therefore, be understood in its proper role. It is not merely a disposal mechanism; it is an instrument of governance. Its value lies not in replacing adjudication, but in enabling early, informed and efficient resolution of disputes where compromise is appropriate. A significant portion of government litigation arises not from complex questions of law, but from avoidable administrative failures. In such cases, mediation offers a meaningful alternative.

The hesitation of government officers must also be understood in context.

Officers who settle disputes in good faith often face the risk of audit or vigilance scrutiny, while those who choose to litigate are perceived as having acted cautiously. This creates a perverse incentive structure: settlement invites suspicion, while litigation ensures institutional safety.

In such a system, reluctance to engage in mediation is not merely a matter of mindset; it is a rational response to structural risk.

The missing piece: Protection and calibration

The challenge, therefore, is not simply to promote mediation, but to calibrate it carefully. Decision-makers must be protected when they act in good faith. At the same time, mediation must not dilute statutory or constitutional rights. Not every dispute is suited for mediation and the system must retain the ability to distinguish between cases that can be settled and those that must be adjudicated.

Even in regimes such as Karnataka’s Section 89A, where mediation is structurally embedded, these safeguards are indispensable.

Government disputes often involve complex legal and financial considerations. A purely facilitative process may not provide sufficient guidance to decision-makers.

Evaluative mediation, where legal positions are assessed and risks are articulated, offers a more structured basis for settlement. It enables decisions that are not only expedient, but also defensible within the framework of law and audit.

Conclusion

Justice Mehta’s observation is an important starting point. But the issue is not merely one of reluctance. It is one of design, risk and constitutional balance.

Recent reforms such as Karnataka’s introduction of Section 89A demonstrate that the system is already compelling the State to engage with mediation at the threshold of litigation. The question is not whether mediation should expand, but how far and at what cost.

A system that promotes mediation must also protect those who settle, preserve rights that cannot be compromised and retain courts as forums of authoritative justice.

Only then can mediation move beyond being a tool of expediency and evolve into an instrument of principled governance.

Shridhar Prabhu is an advocate practising before the Karnataka High Court.

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