Courting 21st century reforms

There are a number of issues that require reform in Pakistan’s judicial system to improve foreign investment

May 27^th was a historic day for justice system in Pakistan. The Supreme Court of Pakistan allowed, for the first time, the use of video conferencing while hearing a case. It is being said that on its maiden day, the plaintiffs benefitted by saving two to two and a half million rupees due to the video call proceedings held in the country’s top court.

Now that the change has been adopted, it has transpired how the change was so simple to introduce, as it did not require any constitutional amendment or adoption of any new legislation. The chief justices of the Supreme Court and High Courts are free to amend the court rules as the rules are set by the judiciary itself.

Pakistan is placed on 156^th on ‘Enforcing Contracts in the Doing Business Rankings 2019’. The report assigns this ranking judging mainly on three criteria: time to resolve a dispute (in days), cost (% of claim value), and the quality of judicial processes.

There are a number of issues that require reform in Pakistan’s judicial system if it wishes to improve its ranking even on the Doing Business Index.

For example, the chief reason for delays in case proceedings is the absence of the defendant, in-person or through his counsel, in the court. The law requires that a defendant be served a summon using three modes in a sequential manner. First is personal service (issuance of a summoning notice by court). Second is service by affixation (pasting the notice on the provided address). Third is substituted service e.g. using an announcement in a newspaper, or delivering it at the workplace of the said person etc.

For the court to exhaust all the three modes of serving a process, it can take up to six months just to summon a person to court for his first hearing. Now if instead of exhausting all the three modes sequentially, the court serves the summon using all the provided means in parallel, this could save a lot of time. And the greatest thing is that this would not require any lengthy legislative process as this is within the powers of the High Court chief justices.

Further, the judges are empowered to order compensation for the cost of litigation to the aggrieved party. However, a common phrase at the end of most court orders is “no order as to costs”. The only understandable reason for this is that should the judge award reparations, he/she will have to put in extra time and effort to assess the true costs incurred by the litigant. The introduction of video link hearings will not only reduce the burden on courts due to frivolous petitions but at the same time it will also reduce the cost (in terms of % of claim value).

While the judiciary is at it, the legislatures too should think about using their powers to modernise the country’s laws. Pakistan still uses the Civil Procedural Code (1908). This Act lays down the procedures of conducting a civil case trial. The Act dates back to a time when computer had not been invented yet, and hence there was no concept of internet, email, or video conferencing. It is about time that the legislature takes the task of amending its laws.

The justice system of a country has a great bearing upon the country’s ease of doing businesses and hence the investment it attracts domestically and internationally. Foreign investors are reluctant to invest in a country where it takes many years to settle commercial disputes in courts, and the high cost of litigation (court fees, lawyer’s fee, bribes, opportunity cost of time) does not make it worthwhile to approach the court.

Published in The Express Tribune, June 12^th, 2019.

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