Feisal Naqvi

Reforming the justice system

In Uncategorized on October 10, 2014 at 6:26 am

Let’s start with an obvious fact: Pakistan’s justice system is broken. There are millions of cases pending and rich and poor alike are frustrated with their inability to get justice.

So far, so good. There is broad consensus among all stakeholders in Pakistan that the justice system is highly unsatisfactory. What then is to be done?

Till date, the standard approach toward legal reform of the justice system in Pakistan has been to focus on making the system more efficient or on expanding the size of the system. Standard remedies for dealing with legal issues in Pakistan include calls to increase the number of judges and for cases to be disposed of more expeditiously. This is a fundamentally misguided approach.

The reason why Pakistan’s legal system is broken is not because there are insufficient judges (though that is also a limitation). Instead, the fundamental reason why Pakistan’s legal system doesn’t work is because the system itself allows, and encourages, needless litigation. Fixing the system is therefore beyond the scope of executive action. Fixing the justice system requires legislative action.

In simple terms, there are two types of cases: criminal cases and everything else (i.e., civil cases). Let’s focus first on civil cases.

The vast majority of civil cases pertain to real property – the sale of land, the rental of land, the inheritance. Any which way you choose to deal with it, land causes problems. More importantly, land doesn’t only form the basis of most civil disputes, it also forms the basis of many criminal disputes.

Finally, it needs to be understood that a dysfunctional land regulatory system isn’t only a legal problem but also an economic problem. The primary form of wealth in Pakistan is land. If you can’t sell land without legal hassles, if you can’t rent your house because you’re scared of the litigation that might follow, and if every death is to be followed by endless years of dispute amongst children bickering over who gets what share, then it’s not just the people involved who have a problem, it’s the country as a whole.

Let me make the above point in simpler form. Assume that you want to start a business and that you need a loan. Assume further that you own a piece of land which has a market value of US$ 1 million. If you happen to live in the United States, chances are that a bank will be willing to lend you up to US$ 900,000. On the other hand, if you live in Pakistan, no bank is going to lend you more than US$ 600,000. That difference (between 90% and 60%) is dead value. What it represents is the difference between a system in which you can actually rely upon systems of title and one in which you can never really be sure as to who owns what.

What then is the systemic problem in Pakistan’s land regulation framework? Well, to begin with, there are several. The most fundamental problem though is that we do not have a system of recorded title.

When you buy land in the United States (or any other developed country), your agreement to buy the land is in writing and recorded in some sort of centralized registry operated by the government. When the government issues you a title deed, you can relax. If there is a problem in the title, that problem is the government’s problem, not yours. In other words, the government both records title to land and guarantees title to land.

The opposite system operates in Pakistan.  Our government does not record title to land. And it does not guarantee title to land. Instead, every time you buy land from another person, you are taking a punt on the bona fides of the person selling you that land. Unfortunately, even if the seller is a person of good morals, and even if he has evidence to substantiate his claim to be the legitimate owner of the land, there is no definitive way for buyers to confirm that sellers do indeed own the land that they are selling. And if there is indeed a dispute over title then the problem is yours, not that of the government.

Let me give you a simpler illustration of the difference between the two types of systems. Prior to 1997, Pakistani companies issued actual, physical share certificates. If you bought shares, ultimately you wound up in possession of heavily embossed paper proclaiming themselves to be share of a particular company. If you bought fake shares or if the person selling you shares was not authorised to sell you shares, then that was your headache. It was your job to make sure that the person selling you was indeed the owner of the shares in question and that he was indeed authorised to do so. Not surprisingly, litigation often ensued.

In 1997, this system was changed through the promulgation of the Central Depositary Act, 1997. What this act provided was that shares were to be deposited with a particular company (the depositary) and after that the shares were to be sold and traded electronically. More importantly, it was the job of the depositary to guarantee that the shares were valid and that the transaction was valid. So, so long as you bought your shares in electronic form, you were guaranteed both that the shares were authentic and that nobody could take the shares back from you (on grounds of their being sold in an unauthorized manner). Instead, what the law provides is that even if the sale to you was unauthorized, the person defrauded can only sue the fraudster for damages and cannot ask for his shares back.

Electronically traded shares can still result in litigation. But the litigation is now of a different type (i.e. regarding the quantum of compensation, not whether or not shares are to be given back). The result is that more shares are getting traded in Pakistan, there is more confidence in the share markets and there is less litigation – all because of certain, very simple, very obvious legislative choices.

Pakistan needs to do with land what it has already done with share certificates. In other words, Pakistan needs to examine the way in which the sale, purchase and transfer of land now occurs and make amendments to the legislative framework so that transfers are made safer and more secure. Obviously, since land is a far more complicated subject than share certificates, the solution will not be as simple. But there is no shortage of low-hanging fruit which can be plucked. For example, oral transfers of land have been banned in England since 1604. In Pakistan, oral gifts of land are still possible!

Let me return to my basic point: if we want to fix the justice system, it is not enough to try and make the justice system more efficient in terms of processing the disputes presented for adjudication. Instead, if we want to fix the justice system, we need to review and revise our legislative choices so that less disputes arise. In blunt terms, most of the disputes which are adjudicated in Pakistan simply don’t exist in other countries because their systems of law do not allow for the existence of such types of disputes.

To take another example, the Government of West Pakistan promulgated the West Pakistan promulgated the West Pakistan Urban Rent Restriction Ordinance in 1959. What that law provides is that no matter how long the lease, every tenant is entitled to stay on as long as he likes unless he defaults in payment of his rent or unless the landlord can show a bona fide personal need for the rented property.

The obvious consequence of the law was an explosion in rent litigation. In 1991, the Pakistan Law Commission wrote that landlord-tenant disputes accounted for more than 1/3rd of all cases pending in the courts. It became normal for rent cases to be litigated all the way up to the Supreme Court. And as a consequence people either stopped renting their properties or starting demanding huge security deposits.

In 2009, the rent law was changed in the Punjab. It is now possible for landlords to simply tell their tenants to leave when the lease terminates. And, lo and behold, the number of rent cases has gone down too.

The point to note regarding the impact of the change in the Punjab rent law is not that it had an impact. Instead, the point is that its impact has gone unnoticed. In 2009, the National Judicial Policy Making Committee of Pakistan issued the Judicial Policy of 2009. That policy is still in effect as of today. And it contains not a word which would indicate any awareness that the legislative framework can and should be changed. Even in terms of rent laws, none of the other provinces has followed the Punjab.

Pakistan’s legal problems need to be viewed in the same manner as Pakistan’s traffic problems. To clarify, the standard response to urban congestion is to widen roads. But as the well-known saying goes “Trying to cure traffic congestion by adding more capacity is like trying to cure obesity by loosening your belt.” The solution to increased car traffic is therefore not to add lanes but to get people to stop using cars (and use bicycles or mass transit options instead). Similarly, the solution to legal congestion is not to add more judges or to try and browbeat judges into disposing of cases more quickly. Instead, the solution is to rework our legal architecture so that litigation becomes less likely.

Paleo Governance

In Uncategorized on September 27, 2014 at 7:16 am

Every year a new diet becomes popular. One year it’s the Mediterranean diet. The next year it’s the Atkin’s diet. Then it’s the cabbage soup diet followed by people swearing that kale smoothies three times a day are the only way to go. Currently, the most popular diet is Paleo – the idea that if we only eat like Neanderthals we will be able to recover our youthful figures.

I have tried all of the above diets and like most people, am still very far from my ideal weight. What I now know is what I knew before I tried each of the various diets: if you want to lose weight, eat less and exercise more. And do it consistently.

The problem with common sense though is that it is not news. Common sense doesn’t sell. And so it is that people like me rush from diet to diet, never losing weight permanently and yet never losing faith that a sylph-like figure is just around the corner.

The point of this elaborate introduction is not to talk about food. Instead, the point is that good advice remains good advice, even if it isn’t fashionable.

I mention all of this because there is obviously a tremendous pent up demand in Pakistan for better governance. The most recent illustration of this anger came in the form of rebellious passengers on a PIA flight who reacted to a two-hour delay by verbally assaulting the VIP allegedly responsible for the delay (the previous government’s minister of the interior, Rehman Malik). This being the Information Age, the abuse hurled at Malik was captured on a cell-phone video and has since been viewed with much delight by millions.

Predictably, the Rehman Malik incident has been used by our container-wallahs to justify their own rebellions against the state. A new Pakistan is coming, they say; one in which the masses will rise up and refuse to accept the corruption and misgovernance that has been their lot so far.

The problem for the Imran Khan’s excitable band of followers is that there is a very significant difference between what the PIA passengers did and what Imran Khan is urging. What the passengers did was to revolt against the abuse of an existing system. If the PIA passengers had done the equivalent of what Imran Khan is demanding, they would have thrown out the entire PIA flight crew as well and then demanded that the plane be flown by the passenger with the most wickets in international cricket.

Look, nobody disputes that Pakistan has problems. But just like fad diets don’t fix weight problems, quick fixes don’t fix governance problems. Governance takes time. More importantly, it requires consistency.

It may not be fashionable to admit this, but the fact remains that the Musharraf years saw a lot of very positive steps being taken in terms of governance. Local government, police reform, tax reform, higher education reform – the list is actually pretty long. Many of those reforms were however writ on nothing more than water and when the politicians became entrenched, many of those reforms were either repealed or diluted into nothingness.

How then does one fix a country like Pakistan? The short answer is, slowly. Yes, it would be great if we had a dynamic, far-seeing, corruption-free political regime that was free from all petty considerations. But we’re not going to get one. And the only thing our feverish search for a saviour is going to do is to prevent ourselves from getting on with the business of living.

What we keep forgetting is that most of the world didn’t transition overnight from corrupt kleptocracies into liberal democracies. Yes, some countries have leaped into the front rank very quickly – Singapore being the paramount example. But for every Singapore, there is a North Korea. And for every Lee Kuan Yew, there is a Kim II Sung.

The fact that we are still having this idiotic debate in Pakistan is particularly perplexing because we have had ample experience of dictatorships. And yet we keep wishing for miracles.

A friend of mine recently returned from a trip to southern Punjab where he worked with the army on flood relief. After the trip, his Facebook update was effusive in its praise of the men he had worked with. But then came the kicker: “The civil government should abdicate its responsibilities to the Pakistan Army, at least until our current breed of politicians has been put to sleep.”

The problem with this binary perspective is that it assumes the army exists somehow independent of the ‘civil government’. This is entirely incorrect.

I am delighted that the army is doing a good job with its flood relief efforts. But the reason why the army was able to help my friend with his flood relief efforts is because the entire state of Pakistan helps pay for a modern, highly effective military which has more than half a million men at its service. It is the civil government and more specifically, its tax collection machinery, that allows our army to function as well as it does.

But the fact that the army does a good job of doing its job is no basis for assuming that the army can do other jobs as well. In fact, the assumption made by highly successful people that they are somehow more likely to succeed in every other field is a flaw recognised by modern psychology. This is a lesson that our armed forces have learnt after multiple attempts at trying to show the bloody civilians how a state should be run. And it is a lesson that Imran Khan needs to learn.

Modern political philosophy is normally traced back to ‘Leviathan’, the masterwork of Thomas Hobbes. Hobbes, born in 1588, spent a large part of his life in exile in France as a consequence of the English Civil War. This close exposure to political turmoil in turn informs the political philosophy of Leviathan.

In simple terms, what Leviathan argues is that left to their own devices, human beings are insecure and violent beings who will only kill each other. Hobbes’ view of life without governance, or what he referred to as “the state of nature” was thus decidedly bleak. In such a condition, he argued that there could be no place for industry (“because the fruit thereof is uncertain”), no progress in the arts and sciences and “which is worst of all, continual fear and danger of violent death.” In short, life in a state of nature would be “solitary, poor, nasty, brutish and short.”

My point here is that anarchy is not a desirable condition for any country. And in our case, attacking the legitimacy of state organs is a particularly dangerous tactic. Pakistan is not a stable country. On the contrary, it is a dangerous bundle of contradictions lashed together by the remnants of the governmental structures bequeathed by the English to us. We have spent 68 years lurching from crisis to crisis and from dictatorship to dictatorship. It is about time we had a little less excitement in our lives, not more.

Backyard games are notorious for coming to an unscheduled halt when the person who has provided the equipment becomes upset at being given out and decides to take his bat (or ball) and go home. Or as Punjabis describe this approach, “na khedaan gay, na khedan deyaan gay.”

What we are seeing with the PTI’s never-ending dharna is just a manifestation of this deeply unsportsmanlike attitude. Yes, I know politics is far more important than sports. But then all the more reason for the people involved to show some maturity. After all, we teach our children not to be sore losers. One expects somewhat better of our leaders.

This column was printed in The News on 27 September 2014

When the madness passes

In Uncategorized on September 27, 2014 at 7:14 am

As I write this column, the streets of Islamabad are still occupied by supporters of Imran Khan and Dr Tahirul Qadri. And both leaders are still occupying their respective containers.

But assume for a minute that this storm too will pass, that battered and bruised as it is, parliamentary democracy in Pakistan will survive to fight another day. Does that mean we can (or should) forget about what the container-wallahs are saying?

Well, the answer is yes and no.

Imran Khan’s main argument is that the current parliament is illegitimate because it is the product of rigged elections. That argument is rubbish.

Let’s start with the basics. The way polling works in Pakistan is that empty ballot boxes are brought to a polling booth. Each party is allowed to have polling agents at the booth. Those agents certify that the ballot boxes are empty. The ballot boxes are then sealed and placed in the middle of the polling booth. Polling agents are also allowed to challenge the identity of every voter who shows up. And the votes themselves are cast in public, in full view of the polling agents. When the polling time ends, the ballot boxes are opened in front of the polling agents and the ballots are then counted in front of the polling agents. At the end of the counting, each and every one of the polling agents signs off on the voting tally.

Obviously, this is not a foolproof process. However, it is a pretty good process and one whose kinks have been worked out overtime. Thus, if somebody is going to allege that the process was hijacked, he needs the following: (1) a theory of how the process could have been hijacked; and (2) evidence that the process was indeed hijacked in the manner suggested.

In the instant case, Khan lacks both elements of a convincing case. He has no theory as to how the polling process was rigged in favour of the PML-N. And he has no evidence.

Lest you think I’m being too harsh, let’s look at the facts. Following the 2013 elections, PTI candidates filed 58 election petitions – 30 in relation to National Assembly seats and 28 in relation to provincial assembly seats. Out of these 58 cases, 39 have been decided. And out of these 39 decided cases, only two have been appealed to the Supreme Court.

The PTI response, to the extent one can discern a coherent argument, is that the whole process of deciding election disputes is fundamentally biased against them. If so, let me repeat my question: how?

Election petitions are adjudicated by retired high court judges appointed by the Election Commission. The Election Commission itself consists of five retired high court judges appointed with the consent of both the PPP and the PML-N. As already noted, appeals from election tribunals lie to the Supreme Court. And not even the PTI has directly accused the current Supreme Court of being biased.

What then are we left with?

Well, what we are left with are the following queries: when is revolution justified? And are there any such conditions justifying revolution in Pakistan?

Let me try to answer the first question by looking at it through a judicial lens. Most democracies today embrace the concept of a court which has the right to strike down legislation. Certainly, our constitution and our legal history embrace that concept. At the same time, given that laws have to be passed by a majority of the representatives of the people, how does one justify a situation in which a few unelected persons can overrule the will of the people?

Alexander Bickel, the famous legal philosopher, defined this problem as the “counter-majoritarian” dilemma. And in countries where people take representative institutions seriously, this problem too is taken seriously.

One minimalist answer as to when judicial intervention is justified is based upon the judgement of Justice Harlan Fiske Stone of the US Supreme Court in a 1938 case, US v Carolene Products. Or, to be more precise, footnote 4 of that case. Footnote four has sometimes been referred to as ‘the most famous footnote in constitutional law’ and has provided fodder for legal arguments for decades. Stripped of all verbiage, what footnote four says is this: courts are not to strike down legislation unless it is impossible to find any rational basis for it. On the other hand, where legislation appears to discriminate against minorities, especially to keep them from participating in the political process, then a heightened degree of scrutiny (and intervention) is justified.

Let me simplify footnote four even further: so long as the legislature is playing by the rules, courts shouldn’t interfere unless the law is utterly insane. But if the legislature bends the rules to keep people out of power, then the courts must be vigilant and interfere.

What does all of this have to do with Pakistan? After all, Pakistan does not have the kind of deep and prevalent racism that marred the United States.

Well, Pakistan may never have had slavery but we have certainly had millennia of extremely unequal relations between the classes. Even today, Pakistan is a deeply divided society in which inequality runs deep. This is not a society which embraces the common man. More importantly, this is not a society whose political institutions are structured to be responsive to the common man.

In Pakistan, political power is concentrated in the hands of a tiny few. All decisions at the federal level are taken by the prime minister or by a handful of his associates. All decisions at the provincial level are taken by the relevant Chief Minister or by a handful of his associates. Given Pakistan’s ‘first past the post’ system, a party either wins an entire province or wins nothing. In turn, this means any party with a secure hold on either a province or the federation can simply ignore whatever its rivals want.

The standard solution to this concentration of power issue is to call for proportionate representation. Unfortunately, the only way proportionate representation works is if there is a high degree of enlightened self-interest amongst elected representatives. Without that enlightened self-interest, proportionate representation only results in endless bickering and deadlock.

In Pakistan, our parliamentarians are barely under anyone’s control. Those of us who are not in our teens remember a time when ‘horse-trading’ of parliamentarians was a serious problem. Installing a proportional representation system in Pakistan would therefore result in complete chaos.

The alternate solution is to keep the ‘first past the post’ system but break up the power structure. In other words, have a ‘first past the post’ system but either increase the number of provinces or devolve real power down to the district level. That way, the resulting system can be both functional and yet more representative.

More importantly, the constitution itself is very clear in this regard. Article 140A of the constitution says that every province shall establish a local government system and devolve “political, administrative and financial responsibility and authority.” Till date, no province has done this; not even Khyber Pakhtunkhwa.

Let’s go back to Imran Khan now. What he should be asking for is not the dissolution of parliament but a more representative democracy, one with an effective local government system. Yes, his party did get the second-largest number of votes in the 2013 and yes, it doesn’t have much to show for it in terms of concrete power. But that isn’t because the elections were rigged. That is because the system is rigged.

Khan has a right to demand that the system be changed. He has a right to demand that the constitutional mandate in favour of local government be respected and implemented. What he does not have is the right to destroy what little democracy we do have.

This column was printed in The News on 18 September 2014

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