Economic Efficiency of Public Interest Litigations (PIL): Lessons from India

Raja, A.V and Rathinam, Francis (2005): Economic Efficiency of Public Interest Litigations (PIL): Lessons from India.

Abstract

Past interest in the phenomena of Public interest litigation has concentrated on a legal justification of PIL and on arguments based on “access to Justice” for the poor. There seems to be scant literature that looks at PIL from a Law and Economics perspective. This paper sets up a framework to analyze the economic efficiency of public Interest Litigation in the Indian context. We argue that PIL can be justified as an economically efficient choice of redressel if certain conditions are fulfilled. These are, insufficient incentive for private litigation, regulatory failures and the inability of class action to counter harm due to high transaction costs. Thus PIL is seen as an efficient method of bundling interests wherever there are failures of the kind mentioned. We delineate the kinds of economic activity that generate these specific conditions and analyze if PIL has been successful in such cases. We show that PILs filed in India do seem to stem from considerations of Economic efficiency, but there are instances where PIL may be used strategically to pull off private ends and open up a floodgate of litigation. We present only a basic direction of the research since this is still a part of on going research.

• Item Type: MPRA Paper
• Institution: University of Hyderabad, India
• Language: English
• Keywords: Public Interest Litigations; Litigation Process; Environmental; Health; and Safety Law
• Subjects: K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K41 - Litigation Process

References

Bardhan K. Pranab (2000), “Understanding Underdevelopment: Challenges for Institutional Economics from the Point of View of Poor Countries,” Journal of Institutional and Theoretical Economics 156, 1: 224. Baxi, U (1987), ‘Taking Suffering Seriously: Social Action Litigation’ in Tiruchelvam and Coomaraswamy, eds. The Role of the Judiciary in Plural Societies New York, St. Martin’s Press. Brandon C. and K. Hommann (1995), The cost of Inaction: Valuing the Economy-wide cost of Environmental Degradation in India, United Nations University, Symposium on Global Sustainability (Proceedings), Tokyo, October. Cane P. (1981), The Function of Standing Rules in Administrative Law, Public Law, reprinted in D.J. Galligan (ed), ADMINISTRATIVE LAW (1992). Che, Y.-K. (1996) ‘Equilibrium formation of class action suits’, Journal of Public Economics, 62:339-61 Cunningham, C (1987), ‘Public Interest Litigation in Indian Supreme Court: A Study in the Light of American Experience’ in Journal of the Indian Law Institute 29(4). Delhi Urban Environment and Infrastructure Improvement Project (DUEIIP) Delhi 2021, Ministry of Environment and Forests and Government of National Capital Territory of Delhi (Planning Department), Government of India, New Delhi. MoEF & NCTD 2001 Desai H. Ashok and S. Muralidhar (2000), “Public Interest Litigations: Potential and Problems”, B.N.Kirpal et.al. (eds.), “Supreme Court not Infallible – Essays in Honor of the Supreme Court of India”, New Delhi: OUP, 2000, p.159. Divan, Shyam and Armin Rozencranz, (2001), Environmental Law and Policy in India: Cases, Materials and Statutes, Oxford University Press, Second Edition, New Delhi. Epstein A. Richard, (2003), “Class Actions Aggregation, and Distortion”, The Law School The University of Chicago, httpwww.law.uchicago.edu/Lawecon/index.html Hershkoff, Helen (unknown), Public Interest Litigation: Selected Issues and Examples, www1.worldbank.org/publicsector/legal/PublicInterestLitigation.doc (Site last visited, 26/11/04). John, J (1996), Labour and Environment: the Case of Delhi’s Polluting Industries, Labour File, Volume 2 No. 5 & 6 May & June 1996. Kapur, Jagga (Ed.) (1999), “Supreme Court on Public Interest Litigation” Vol.1, LIPS Publication, SCALE, A-43 at A-53. Kathuria Vinish (2001) Vehicular Pollution control in Delhi, India - Are the efforts enough? http://www.beijer.kva.se/publications/pdf-archive/Disc144.pdf Miller, G. 1998. "Class Action" In Peter Newman, ed., The New Palgrave Dictionary of Economics and the Law, Macmillan Reference Limited, 257-262 Ministry of Environment and Forests, Government of India, “Policy Statement for Abatement of Pollution”, para 3.3, February 26, 1992 22 Muralidhar S, (2003), India: Public Interest Litigation - Survey 1997-98, published in Annual Survey of Indian Law 525. Ott and Schäfer, (1996) “Widening the Scope of Environmental Liability”, Erling Ide and Roger van den Bergh, Eds, Law and Economics of the Environment, (J & F), p. 109- 114 Pani, Sukanya (2002) Comparative Analysis of Environmental Activism through Constitutional Rights: Two Case Studies: India and Hong Kong, National Academy of Legal Studies and Research (NALSAR), University of Law, Hyderabad, India Raja, A.V and Xavier, Francis R (2005) “Efficiency and Strategic Behaviour: The case of Mass Torts” Working Paper, Dept. of Economics, University of Hyderabad. Report of the Expert Committee on Auto Fuel Policy, August 2002, New Delhi, India. GOI 2002 Schaefer, (2000) “The Bundling of Similar Interests in Litigation. The Incentives for Class Action and Legal Actions Taken by Associations,” European Journal of Law and Economics 183 Silver, Charles (2000), “Class Actions - Representative Proceedings,” in V Encyclopedia of Law and Economics 194 (Bouckaert and Geest eds.,) Spulber, D. (1988) Regulation and Markets, MIT Press Status Report on Ambient Air Quality, New Delhi, Central Pollution Control Board, Government of India CPCB: 1991 & 1996 Tiwari G.S. (2001), “Conservation of Biodiversity and Techniques of People’s Activism”, 43 Journal of the Indian Law Institute Vishnupriya, Y (1995), ‘Public Interest Litigation in India’ Indian Socio-Legal Journal 21(1-2).