MOST legal commentators agree that our justice system can be improved if the courts start imposing costs because it would discourage frivolous litigation. Though often overlooked, the proper implementation and enforcement of our penal law against perjury can also speed up the adjudication of disputes.
To understand why, consider what happens in a typical banking case in Pakistan. A bank extends a loan to a company which subsequently defaults on its repayment obligations. The bank moves to file a case against the debtor for recovering the outstanding amount. The court then examines the bank’s case and directs the debtor to file its reply asking it to explain why the court should not decide in favour of the bank.
Now, a good system of civil litigation should narrow the field of inquiry by forcing the defendant to admit what is factually true and identify only those disputed issues which the court must decide before ruling in favour of either party.
But that is not what happens in our civil justice system. Instead, the debtor denies every single thing that the creditor has alleged. Typically, the debtor will use an off-the-rack response and claim that it never obtained a loan from the bank, no agreement was ever signed, and that the signatures attributed to its directors are forged or were obtained on a blank piece of paper. Some will go so far as to allege that no amount was ever disbursed by the bank even though this claim clearly contradicts the statement of account.
Parties to civil litigation know they can get away with anything because no one is punished for perjury.
This means that the original ‘range of dispute’ between the debtor and the creditor regarding (a) the existence of a default and (b) the amount thereof has now been extended to include the following three questions as well: (c) whether a loan had actually been granted; (d) whether the signatures on the loan agreement are forged; (e) if not, whether they were obtained on a blank piece of paper such that the company did not know at the time of signing what it was contracting for.
Should the case now go into evidence, the court will have to make a determination on all these points. Witnesses will be called in to testify. Handwriting experts will be summoned. Signatures will be compared and in the rare case, documents may be referred for forensic examination by an independent third party. Expanding the ‘range of dispute’ increases the work that a court must do before deciding a case. This allows a debtor to buy additional time, frustrate the creditor, and force it into a negotiated settlement at a fraction of the amount that is outstanding.
A neutral observer may wonder how is it possible for the debtor to deny the existence of a legal relationship with its bank when a computerised statement of account clearly shows that money has moved into, and out of, the bank account.
Well, that’s because there is no credible threat of punishment for lying on oath. Parties to civil litigation know they can get away with just about anything they might write in their pleadings because they don’t ever see anyone being punished for perjury. There’s no downside. Instead, making untrue statements to mislead the court confers highly important strategic advantages; it expands the range of dispute, leaves the judge with greater work to do, helps delay the adjudication of the case, and thereby frustrates the counter-party.
Unless these advantages are offset by a corresponding threat of punishment that is credible, parties have no incentive to submit a true and accurate picture of the facts before the court which partially explains why cases take such a long time to decide.
Sadly, this attitude has, over the years, diffused into legal practice and has now been internalised by legal practitioners. Young law graduates are trained to deny everything that the claimant has alleged and are instructed to never make an admission in writing — leaving the judge to shoulder the additional work of separating fact from fiction.
Theoretically speaking, the rules of civil litigation are designed to help the court parse through complicated facts, identify and isolate important issues and disputed facts and decide accordingly based on the evidence. This is particularly true for adversarial systems where the court is reliant on the conduct of the litigating parties. But if both lawyers and their clients have come to believe that they can put a spin on the facts to expand the field of inquiry and thereby increase the amount of work a court must do on so as to delay decision-making, we are stuck with a dysfunctional civil justice system from which there appears to be no escape.
Maybe it’s time to change that by punishing those who commit perjury.
The writer is a lawyer.
Published in Dawn, September 15th, 2019