Necessity Of Legislative Impact Assessment

The Chief Justice's comments bring into sharp focus the tendency of legislatures passing laws without undertaking any research, survey or analysis at the policy, economic and judicial level. The comments also assume relevance considering the legislative impact assessment of the Consumer Protection Act, 2019 carried out by the Union Government. Recently, a Supreme Court bench, while overseeing the filling of vacancies across consumer fora, had directed the Union Government to conduct a legislative impact assessment of the Consumer Protection Act, 2019. The Impact Study Report assessed that the changes in the pecuniary jurisdiction of the fora under COPRA, 2019 would overburden the District Commissions. It noted that since the Act came into force, there has been a 6.3% increase in complaints filed at the district commissions. In light of the 45% unfilled vacancies at the district level, the Report went on to suggest a revision in the pecuniary jurisdiction of the fora, increase the number of benches, among others.

Currently, in India, there is no Rule which mandates the legislature to undertake the impact assessment of laws that it passes. In the absence of such a mandate, assessment studies conducted have been few and far between and mostly at the behest of Courts or by independent private researchers.

Legislative Impact Assessment

Legislative Impact Assessment can take two forms- pre-legislative impact assessment and post-legislative impact assessment. The purpose of pre-legislative impact assessment, to put it crudely, is to analyze whether the law and the approach adopted by it would be the best way possible out of the available alternatives. Since every law is enacted with a stated objective, a pre-legislative scrutiny would assess how the law would achieve the said objective in light of its intended impacts and the legislative/policy alternatives available. Researchers have long suggested that good legislative practices ought to include an estimation of all such possible consequences that can be anticipated before enacting a law; and also, an assessment as to whether the proposed law is the best way to address the problem at hand. Vagda Galhotra, a researcher working on judicial and legislative reform, suggests that such a framework of legislative impact assessment encompassing the economic, social, environmental, and administrative impact of draft legislation should start with the "problem identification, laying out the policy options, impact assessment, comparing the alternatives in the light of their impact and ending with a scheduled post-enactment appraisal."^[1]

The other aspect of the issue is post-legislative impact assessment where the indirect and unintended consequences of the law, ambiguities in the text are analyzed and amendments accordingly made.

Currently in India, there is neither a mandatory nor a systematic process to conduct a full assessment of laws. Impact assessments of laws have arisen either out of a court-mandated process or by independent researchers and think tanks.^[2] Absence of this mechanism leads to situations where interventions are required at a later stage- by way of provisions being challenged in a court of law, or courts reading down a statute or it being subject to numerous amendments to make it practical or workable. This duty to make laws workable and to iron out issues falls invariably on the Judiciary- that does disservice to the idea of separation of powers.

Square Pegs and Round Holes

While instances of laws being passed without adequate scrutiny and analysis are many, one issue which has vexed the Supreme Court particularly has been Section 138 of the Negotiable Instruments Act that deals with 'cheque-bounce cases.' Section 138 of the NI Act not only imposes monetary penalties for the dishonour of cheques but also ensues penal consequences. The criminalisation of cheque-bounce cases has put an additional burden on the judiciary with cheque bounce matters occupying almost 15% of the total criminal case pendency. Critics have questioned the need to cloak commercial matters with a criminal colour that has the effect of increasing the number of criminal cases being filed and overburdening the judiciary.

To tackle this issue, in the earlier part of 2020, the Supreme Court registered a suo moto case to devise methods for expeditious trial of Section 138 NI Act cases. The Supreme Court suggested adoption of mediation and conciliatory mechanisms for resolving cheque bounces issues and asked the Union to consider setting up special courts to hear cheque bounce cases. The issue which has imposed additional burden on the criminal justice delivery system and the consumed judicial time could've been entirely avoidable if a pre-legislative impact assessment had been conducted to assess whether criminalisation of cheque-bounce cases, when most jurisdictions have imposed only civil liabilities, was required at all. The Finance Ministry too had mooted the idea of decriminalising the "cheque-dishonour" cases.

The experience with S.138 of the Negotiable Instrument Act and the COPRA 2019 amendments increasing the pecuniary jurisdiction of the district court show that there is an urgent need to introduce a comprehensive legislative impact assessment at both stages- pre and post enactment in order to frame better laws, improve the quality of governance and reduce the burden on judiciary.

Interestingly, in 2014 attempts were made by the Legislative Department, Ministry of Law and Justice to introduce a formal pre-legislative consultation policy. The policy provides that the Department/Ministry concerned should publish/place in public domain the draft legislation, the essential elements of the proposed legislation, its broad financial implications, and an estimated assessment of the impact of such legislation on environment, fundamental rights, lives and livelihoods of the concerned/affected people, etc. It also recommends that the summary of comments received from the stakeholders/ should be placed on the website of the Ministry concerned.

The fact that other than the Legislative Impact Assessment of the Consumer Protection Act, 2019 carried out at the behest of the Supreme Court, there has been no proof of impact assessment actually being carried out shows that the policy has remained only on paper. The policy also fails to mention another crucial aspect of impact assessment which has been of relevance to the judiciary- the impact of laws on judicial caseload.

Judicial Impact Assessment

A related exercise, especially relevant for the Judiciary as an institution has been the concept of Judicial Impact Assessment.^[3] Judicial Impact Assessment is a process whereby the government can anticipate the likely cost of implementing legislation through the courts and help deliver timely justice to litigants. Simply speaking, judicial impact assessment is an exercise to assess and analyze the additional resources which the Judiciary might need to handle litigation generated by the newly enacted laws.

The Supreme Court of India in Salem Advocates Bar Association (II) Vs Union of India (AIR 2005 SC 3353), for the first time, considered the question of the need for Judicial Impact Assessment in our country. The Apex Court in the Salem Case (2005) issued directions to the government to make Judicial Impact Assessment an essential component of the Financial Memorandum of legislative proposals. The said budget must mention the number of civil and criminal cases likely to be generated by the new Act, the number of courts that are necessary, the number of judges and staff required and the necessary infrastructure.

Based on the directions of the Supreme Court, a Task Force on Judicial Impact Assessment was constituted by the Government under the chairmanship of Justice M. Jagannadha Rao (Retd.), former Judge of the Supreme Court and formerly Chairman, Law Commission of India. The Task Force recommended the establishment of a 'Judicial Impact Office' at the Central and State levels to estimate the extra case load and expenditure on account of new laws to be introduced.^[4] It was also decided that the methodologies of the Judicial Impact Assessment as recommended by the Task Force may be gone into further by a Committee of Experts to assess the practicability of their implementation in the given circumstances.

Accordingly, a Committee of Experts was constituted in September 2013 to examine the issue of implementability of methodologies of Judicial Impact Assessment and suggest further action in this regard. The Committee in its report submitted on 9th January, 2015 inter-alia concluded that Judicial Impact Assessment was neither feasible nor desirable as a method of proper budgetary planning and allocation of funds for the judiciary.

Though past attempts at having a legislative and a judicial impact assessment in place have reached a logjam, recent experiences with the Consumer Protection Commission vacancies and the legislative impact assessment of the Consumer Protection Act, 2019 carried out show that having a comprehensive analysis of laws can help in understanding the root causes of a number of problems facing the judiciary. Experiences of other democracies that have a system of evidence-based law-making show that it not only helps ease the burden on courts but also make it easier for its seamless implementation without it being marred with endless litigation thus furthering the goal of good governance. The UK has had legislative impact assessment since 2005 for interventions of a regulatory nature that affects the private sector, civil society organisations, and public services for parent and subordinate legislations. Finland introduced Guidelines on Impact Assessment in Legislative Drafting in 2007 after having fragmented assessment guidelines for many years. Countries like Kenya too have mechanisms in place for the assessment of regulatory and legislative proposals as essential part of their legislative process.

It's time for India to incorporate into the legislative procedure, a framework of legislative impact assessment that would encompass the economic, social, administrative, and judicial impact of draft legislation—starting with the problem identification, laying out the policy and legislative alternatives, conducting stakeholder meetings, impact assessment, comparing the alternatives in the light of their impact and ending with a scheduled post-enactment appraisal. While there is no constitutional mandate on the legislature to undertake such impact assessment of laws, it would be prudent to pay heed to the words of the CJI and earnestly begin with legislative impact assessment of proposed Bills and enacted laws.