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

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.