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Why Do Property Disputes Linger On For Decades?

Why Do Property Disputes Linger On For Decades?

Why Do Property Disputes Linger On For Decades?
(Flickr)

Throughout the world, courts take longer than necessary to deliver justice. The track record of Indian courts is particularly disgraceful. Recently, the Delhi High Court said it was unfortunate that a property dispute was pending for 30 years, even after 75 judges had heard the matter. As real estate prices in Delhi have been rising for many years now, such property disputes tend to exhaust time, money and resources of defendants, even if it is not their fault.

It is true that not every case remains in court for three decades or so. But, the fact remains that it is impossible to get justice in a reasonably short period of time. In India, this is even more troubling because only a minority has clear, unambiguous property titles to the real estate assets they own. Public courts take long to deliver their verdict because they function in a bureaucratic manner. Courts do not get the same incentives as private enterprises to serve the needs of their customers as soon as possible. People are not allowed to choose their tribunals. There is no competition in arbitration, because everything is vested in a centrally planned system. This does not mean that there is no alternative.

If public courts do not decide to overrule agreements to have private arbitration, the problem would have come to an end. This has not happened yet.  In the United States, most commercial disputes in the thousand largest corporations are settled through private arbitration because it is far more efficient. This means that there is no external involvement in such disputes. This has been so for long, though courts still have the right to overrule such agreements. Large corporations in the US and other developing countries find private arbitrators a more efficient alternative to government judges.

As George Mason University Law professor Todd Zywicki points out, Visa Corporation handles conflicts between banks which are members. Without lawyers, conflicts are resolved efficiently. Banks find this cheaper and less tedious. Visa Corporation has its own legal code, which banks are expected to abide by. The point is that private arbitration is not as rare as believed. It happens all the time, throughout the world.

But, there are many ways in which public courts in India can be reformed. One of the major reasons why the process takes too long is that the services of courts are underpriced or even free. When a service is underpriced, there will be too many people who want to consume it. As the Delhi High Court perceptively noted, many people initiate a legal battle to tire out the other party, and to squeeze time and resources out of them. If courts charge people proportionate to the value of the services they perform, justice will become much faster. It may be argued that such a system would be rigged against the poor. But, it is already so. It is much better to charge people for the services they consume than to allow them to pester people without money, resources or time.

There are others way to deal with nuisance suits in which the plaintiff tries to tire out the defendant. If the plaintiff loses the suit, courts can force the plaintiff to adequately compensate the defendant. This will discourage people from initiating such nuisance suits.

Courts can also allow people to pay more for speedy adjudication of disputes. The Delhi High Court, for example, noted that real estate price in Delhi have been rising steeply in the past 30 years in which the dispute have happened. Presently, people do not have the right to speed up the process by paying more. But, not every case has the same level of importance as other. So, it is in the best interest of everybody to allow people to sell one's place in line, for example. If courts do this, people with disputes that does not matter would be quite willing to drop out of courts. This will also save tax payers' money. To draw an analogy, not every patient who visits a hospital has needs urgent care. Treating everybody as if they are equal is neither efficient, not just.

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Last Updated: Sat Jun 18 2016

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