Economically responsible justice
Live Mint, April 27, 2017
By Pradeep S. Mehta
Judges need to understand the complex linkages
between various areas of governance and economic
and legal activity today
The judiciary is increasingly dealing with issues
with economic and commercial impact.
The Supreme Court collegium has recently cleared a
record 51 names for high court judge posts. Of
these, 20 are judicial officers and 31 are
advocates. Other than this, not much information
is available in the public domain about the
expertise of the selected individuals. In the rush
to fill judicial vacancies, there should be no
compromise in the quality of judicial decisions
and ensure judges are capable of dealing with
increasingly complex issues interlinking law,
economics, technology, intellectual property,
competition and allied fields.
An inability or unwillingness to take into account
economic considerations in judicial decisions is
putting a significant number of jobs at risk, and
a substantial amount of investment in peril.
Therefore, it is time to enable delivery of
economically responsible justice by addressing the
Knowledge about the interfaces between law,
economics, technology, cybersecurity, intellectual
property and allied fields and their overlaps is
increasingly becoming relevant for the higher
judiciary in order for them to adjudicate fairly.
A quick review of recent decisions reveals that it
is unfortunately not up for the challenge.
The higher judiciary is increasingly dealing with
issues which have large-scale economic and
commercial impact. These include allocation of
natural resources such as spectrum, coal blocks,
allowing mining of sand and sandstone, use of the
Aadhaar card to access essential services, data
privacy and security and waiver of farm loans.
A lack of economic analysis while passing
judgement has the potential to create an adverse
impact on employment, growth of infrastructure,
hospitality, tourism, real estate and other
economically relevant sectors, revenue of state
and Central governments, and balance sheets of
banks and financial institutions, without having
the desired positive impact on social behaviour.
For instance, the Supreme Courtís recent order
banning the sale of liquor near highways could
adversely affect the tourism sector and result in
the loss of a great many jobs. Alcohol consumption
is not a social ill but irresponsible drinking is.
Perhaps the neglect of economic considerations is
baggage from the past. Historically, the Indian
judiciary has dealt with socially significant
issues such as health, education, reservations in
education and employment, priority sector lending,
bank nationalization, bank branch licensing in
remote locations, etc. While such issues have
direct and indirect economic impact, the need for
conducting economic analysis of judicial decisions
was not felt, perhaps owing to our limited
understanding of the linkages between judicial
decisions and economic governance.
It would be foolish to repeat the mistakes made in
the past. We are increasingly looking to the
judiciary to balance apparently conflicting
interests: the rights and obligations of sovereign
and private parties; the right to privacy and
economic inclusion; environmental considerations
and economic equity; innovation/intellectual
property and public interest. Such matters have
significant economic impact. Ascertaining the
correct balance even for granting interim
injunctions could become complex at times.
Efforts in the past to undertake economic analysis
of judicial decisions have remained half-baked.
For instance, in M.L. Sharma v. Principal
Secretary And Ors, the Supreme Court heard parties
on the potential economic impact of cancellation
of coal blocks, but was persuaded by Central
government submissions that it was fully prepared
to deal with the impact of cancellation and levy
of additional penalty on coal block allottees. It
did not provide any rationale for accepting the
Central governmentís contentions; nor did it take
into account the economic impact of cancellation
and levy of penalty on several stakeholders.
Thus, while the economic impact of decisions may
often be recognized, the depth of economic
analysis and the significance given to it while
decision making seem to be inadequate. A
comprehensive economic analysis not only aids in
sound decision making, but also promotes
transparency and improves the quality of decision
It is thus important for the judiciary to conduct
sound economic analysis before arriving at
decisions and efficiently communicate the
rationale of its decisions. Such analysis should
not be a one-off or depend on the judgement or the
judge, but must follow a well laid out process,
which considers different interests, and
facilitates disclosure of the rationale for the
decision in simple language.
It needs to be recognized that the economic impact
of judicial orders could be direct, indirect,
patent or latent, and different stakeholder groups
could be differently affected. Accordingly,
capacity building within the judiciary to balance
different competing interests will be needed. With
the arrival of commercial courts and benches, this
becomes more necessary than ever.
The economic impact assessment of judicial
decisions will aid in upholding the credibility of
the judiciary and the quality of judicial decision
making, which is increasingly coming under
scrutiny. Judges need to understand the complex
linkages between various areas of governance and
economic and legal activity today to ensure
delivery of economically responsible justice.
Pradeep S. Mehta is secretary general of CUTS
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