‘Big government’ is in no hurry to recede, thereby making itself the biggest litigator in the country. Spiralling litigation is a factor that principally contributes to the dim view on ease of doing business .
Apart from the inherent bureaucratic deficiencies, the government has to contend with periodic transfer and change of guard at all levels of its functioning. Absence of suitably institutionalising knowledge and practices cause gaps in understanding, loss of files or papers, and difficulties in providing the right brief to the lawyers handling the litigation.
Even large private businesses have in recent times seen the need to systematise litigation management and minimise, if not eliminate, unhealthy dependence on specific persons. Their domain knowledge is not captured in a manner that allows anyone competent to seamlessly pick up the baton and continue the run.
In this setting, the initiative of the Tamil Nadu Government to come up with a litigation risk management system is certainly pioneering.
Often, the litigation process is poorly handled by the officials concerned either due to systemic flaws or pressures/ allurements, resulting in cases that government should win being decided otherwise.
Some of the international arbitration concerning the Union have ended up in embarrassment due to inadequate attention to the needs of the task. While a State government may not have such matters in normal course, it may have enough issues arising out of tax disputes, claims for compensation by contractors/agencies executing government contracts, compensation for acquisition of land and the like which have significant financial implications. Add to this, the public sector and corporations, and the pie would be quite sizeable.
Indifferent administration can result in financial costs, wastage of administrative time in pursuing trivial and lost causes, expenses on lawyers and incidental administrative costs.
Expert lawyers
The highlight of the Tamil Nadu government initiative is the appointment of expert lawyers to serve as a team and put in place a robust system to remove the personal element as much as possible, bring in sufficient objectivity, streamline the administrative process, and decide the basis to pursue or drop a matter after it is fructified as a litigation.
The annual budget allocated is quite modest, but it may just be the start. Once the benefits become apparent, the allocation may rise to a level corresponding to the importance of the exercise.
If the committee set up the Tamil Nadu government merely creates a system for the benefit of internal administration it may still deliver value and be a forerunner for other governments to follow. But the aspect of creating this as a public database for achieving transparency should be set as a key cornerstone.
The government has set its boundaries and the committee gets involved only in high-risk and high-value litigation. At ₹100 crore, the threshold is sufficiently high for tax cases — the most common domain of litigation for any government.
The downside of this approach is that issues which are below the threshold will be taken up in litigation, as no officer at any level has the guts to put a lid on litigation even if the matter is evidently weak. If such cases are already in the pipeline, the committee may find it awkward to suggest a contrary course when a particular issue above ₹100 crore comes before it.
It is important to add a clause that the committee will have the remit to suggest withdrawal of even existing cases even if below the threshold if it has come to such a decision in a different reference.
National policy
In 2010, the Centre had brought out a national litigation policy and the document is quite comprehensive. It deals with how the government should be a responsible litigant and pursue alternative dispute resolution mechanisms before approaching courts.
Hence the subject is not new and has been engaging the attention of the governments at various levels to usher in a systematic approach to litigation management.
The Finance Commission had earmarked specific funds for efficient litigation management, and to become eligible for this, each State had to have a policy in place; Tamil Nadu had brought out its litigation policy in 2012.
The one brought out by the Punjab government is quite comprehensive and contains all the ingredients that the present committee set up in Tamil Nadu has been mandated to cover. The committee should look into what the previous policy achieved in Tamil Nadu and elsewhere so that it doesn’t end up rediscovering the wheel!
It is essential that the committee should put out in the public domain what it can be held accountable for over, say, two years from its convening, and provide a six-monthly update.
The committee in its early days should, after due deliberations, get the mandate duly modified to make its role effective and serve the purpose it has been constituted for, than feel constrained if the terms of reference seems to be inadequate.
The writer is a chartered accountant