INDIA Law and Practice Contributed by: Roopali Singh, Yugank Goel, Aayushi Rout and Sushanth Sanjay, Vritti Law Partners
Insurance and Collective Risk Pooling Innovative mechanisms include collective insurance or loss mutualisation via class administrators. While widely untested in India, such models hold promise for specialised laws, particularly consumer class actions where scale allows for risk pooling. In summary, the funding landscape in India is transi- tional. Existing public funds play a limited role, while private funding is nascent and needs regulatory scaf- folding. Courts actively calibrate costs orders to pre- Rules on disclosure and privilege vary across India’s collective redressal forums. In civil suits under the CPC, disclosure follows a traditional adversarial model, with parties exchanging relevant documents through discovery and production of documents. In contrast, tribunals such as the NCLT and NGT adopt a more pragmatic documentary evidence-based approach, often relying on statutory filings, regulatory records, specialist reports and on-site investigations. This flexible model reflects the fact-driven and tech- nical nature of collective proceedings, where the aim is to balance transparency with efficiency and confi- dentiality. Pre-trial Disclosure Framework Indian civil procedure offers limited pre-trial disclo- sure under Order XI of the CPC. However, in collec- tive redress cases, courts have expanded information access to address mass harm complexities. Disclo- sure balances collective claim development against confidentiality, cost concerns, and procedural effi- ciency. Companies Act Class Actions: Corporate Document Discovery Under Section 245, the NCLT may compel production of corporate, audit, and internal records from com- panies, auditors, and advisers. Electronic discovery, confidentiality orders, and protective directions ensure balanced disclosure that addresses digital evidence and protects business interests. serve access while deterring abuse. 3.10 Disclosure and Privilege
currently relies on a mix of traditional and emerging funding sources, which together form a transitional and evolving landscape. Loser Pays Principle and Costs Orders India adheres broadly to the “costs follow the event” principle, meaning that an unsuccessful litigant may be ordered to pay the successful party’s costs. How- ever, courts exercise this rule flexibly in public interest cases and are mindful of the chilling effects. PILs often attract no adverse costs unless the petition is vexa- tious or mala fide. Public and Institutional Funding Two statutory sources merit attention. SEBI’s Inves- tor Protection and Education Fund (IPEF) can finance legal proceedings affecting large numbers of inves- tors; it has been used selectively to support collec- tive investor actions. The CCPA has investigatory and enforcement budgets enabling regulator-led class interventions. These public mechanisms alleviate some barriers but are not a panacea for privately ini- tiated collective litigation. Third-Party Funding Third-party litigation funding is an emergent phe- nomenon in India. It offers the promise of unlocking resources for meritorious claims but simultaneously raises difficult questions about control, conflict and disclosure. At present, third-party funding exists in a regulatory grey area: funders operate via commercial contracts with claimants or law firms, and courts have required disclosure of material funding arrangements in some high-profile matters. Policy debates favour a framework that mandates transparency, prohib- its funder control of litigation strategy, and prevents funder conflicts with defendants. Cost Management Orders and Security for Costs Courts may order security for costs, particularly where defendants show a risk of vexatious, speculative or underfunded claims. Conversely, courts sometimes grant cost relief to impecunious claimants or waive costs in genuine public interest suits. Cost manage- ment orders control expenditures on expert evidence and discovery to keep litigation proportionate.
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