Editorials/Opinions Analyses for UPSC 08 December 2021

Contents

1. Mediation Bill: Not getting the Act together
2. Health account numbers that require closer scrutiny

Mediation Bill: Not getting the Act together

Context:

The Ministry of Law and Justice has placed the Draft Mediation Bill, 2021 in public domain seeking feedback and suggestions from all stakeholders.

Relevance:

GS-II: Governance (Government Policies and Initiatives, Issues arising out of the design and implementation of Policies)

Dimensions of the Article:

1. What is Alternative Dispute Resolution (ADR)?
2. Types of Alternative Dispute Resolution
3. Highlights of the Draft Mediation Bill 2021
4. Issues with the bill

What is Alternative Dispute Resolution (ADR)?

• The process by which disputes between the parties are settled or amicably resolved without the intervention of judicial institution and any trial is known as Alternative Dispute Resolution.
• The ADR mechanism offers to facilitate the resolution of matters of business issues and the others where it has not been possible to initiate any process of negotiation or arrive at a mutually agreeable solution.
• ADR offers to resolve all types of matters including civil, industrial, and family, etc where people are finding it difficult to settle.
• Generally, ADR uses a neutral third party who helps parties to communicate, discuss the differences and resolve the dispute.
• ADR enables individuals and groups to maintain co-operation, social order, and provides an opportunity to reduce hostilities.

Types of Alternative Dispute Resolution

Arbitration:

• The dispute is submitted to an arbitral tribunal which makes a decision (an “award”) on the dispute that is mostly binding on the parties.
• It is less formal than a trial, and the rules of evidence are often relaxed.
• Generally, there is no right to appeal an arbitrator’s decision.
• Except for some interim measures, there is very little scope for judicial intervention in the arbitration process.

Conciliation:

• A non-binding procedure in which an impartial third party, the conciliator, assists the parties to a dispute in reaching a mutually satisfactory agreed settlement of the dispute.
• Conciliation is a less formal form of arbitration.
• The parties are free to accept or reject the recommendations of the conciliator.
• However, if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both.

Mediation:

• In mediation, an impartial person called a “mediator” helps the parties try to reach a mutually acceptable resolution of the dispute.
• The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves.
• Mediation leaves control of the outcome with the parties.

Negotiation:

• A non-binding procedure in which discussions between the parties are initiated without the intervention of any third party with the object of arriving at a negotiated settlement to the dispute
• It is the most common method of alternative dispute resolution.
• Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life.

Lok Adalats:

• The establishment of Lok Adalat system of dispute settlement system was brought about with the Legal Services Authorities Act 1987 for expediting the system of dispute settlement. In Lok Adalats, disputes in the pre-litigation stage could be settled amicably.

Highlights of the Draft Mediation Bill 2021

• The Draft Mediation Bill 2021 recognises mediation as a profession and acknowledges the importance of institutes to train mediators, and service providers to provide structured mediation under their rules. These provisions of the bill are seen as a huge improvement over the part-time honorarium basis it has in the court-annexed mediation schemes.
• The Bill does away with the confusion emanating from using both expressions ‘Mediation’ and ‘Conciliation’ in different statutes by opting for the former in accordance with international practice, and defining it widely to include the latter.
• It provides for pre-litigation mediation and also recognises online dispute resolution (ODR).
• It provides for enforcement of commercial settlements reached in international mediation viz between parties from different countries as per the Singapore Convention on Mediation to which India was a notable signatory.
• The Convention assures disputants that their mediation settlements will be enforced without much difficulty across the world, unlike the fresh headaches that the litigative decree or arbitration award presents at the time of enforcement.
• It is expected that this Bill would make India a hub for international mediation in the commercial disputes field, and indeed institutions are being opened for this purpose.

Issues with the bill

• Despite dispute resolution being the judiciary’s domain, there is no role for CJI in the appointment process.
• It unwisely treats international mediation when conducted in India as a domestic mediation.
• Now, that is excellent for cases between Indian parties, but disastrous when one party is foreign. The reason is that the Singapore Convention does not apply to settlements that already have the status of a judgment or decree. Therefore, if you conduct your cross-border mediation in India, you lose out on the tremendous benefits of worldwide enforceability.
• The Council has three members, a retired senior judge, a person with experience of Alternative Dispute Resolution (ADR) law and an academic who has taught ADR. None of the members will be active practitioners as mediators, hence, it establishes a profession which is being regulated without a single professional on the regulator side.
• There is an unnecessary long list of disputes which should not be mediated, which is not understandable. For example:
  • Patents and copyright cases settle on commercial terms leaving untouched the validity of the grant, so why deny this possibility and consign the parties to litigative longevity.
  • In the case of telecom, why can’t manufacturers and service providers and consumers be allowed to talk and resolve issues?
  • In cases involving minors or persons of unsound mind, the law provides for the court to pass orders to protect them.

-Source: The Hindu

Health account numbers that require closer scrutiny

Context:

National Health Accounts (NHA) report for 2017-18 released shows an increase in public spending on health and a decline in out-of-pocket expenditure.

Relevance:

GS-II: Social Justice and Governance (Issues related to Health, Government Policies and Initiatives)

Dimensions of the Article:

1. Highlights of the National Health Accounts (NHA) report 2017-18
2. Issues with National Health Accounts (NHA) report for 2017-18

Highlights of the National Health Accounts (NHA) report 2017-18

• National Health Accounts (NHA) 2017-18 clearly shows an increase in the share of government health expenditure in the total GDP of the country. It has increased from 1.15% in 2013-14 to 1.35% in 2017-18 (finally breaking through the 1%-1.2% mark of GDP).
• Government Health Expenditure as a percentage of overall health expenditure has also increased over time. In 2017-18, the share of government expenditure was over 40%, which is much higher than the percentage in 2013-14 (Less than 30%).
• Between 2013-14 to 2017-18, in per capita terms, the government health expenditure has increased by almost 70% (from Rs 1042 to Rs 1753).
• Out-of-pocket expenditure as a percentage of total health expenditure has come down to just below 50% in 2017-18 from almost 65% in 2013-14 due to the rise in Government Health Expenditure.

Issues with National Health Accounts (NHA) report for 2017-18

Problem in accounting capital expenditure

• Counting the capital expenditure by NHA for a specific year leads to severe overcounting as the capital expenditure incurred is used for the lifetime of the capital created and the use does not get limited to that particular year in which expenditure is incurred.
• If we take out the capital expenditure, current health expenditure comes down to only 0.97% of GDP. This is only a marginal increase.

Incorrect relations of Public spending and benefit of population

• Increased public spending on health care may not benefit the general population.
• Much of this increase has actually happened on account of a tripling of expenditure of the Defence Medical Services (DMS).
• Though the increased spending for the health of defence personnel is a good thing, such spending does not benefit the general population.

False sense of improvement regarding decline in out-of-pocket expenditure

• The decline in out-of-pocket expenditure could be due to a decline in utilisation of care.
• NSSO 2017-18 data suggest that utilisation of hospitalisation care has declined compared to 2014 NSSO estimates for almost all States and for various sections of society.
• The decline in out-of-pocket expenditure is essentially due to a decline in utilisation of care rather than greater financial protection or increased public spending.
• NSSO survey happened just after six months of demonetisation and almost at the same time when the Goods and Services Tax was introduced.
• As purchasing power declined, after demonetisation, healthcare would have become more unaffordable, forcing people to forgo care.

-Source: The Hindu