By Utkarshika Srivastava ~ Law College Dehradun


Quoting the exact words of Aristotle, “The guest will judge better of a feast than the cook.” Taking the above saying into consideration, it is best to administer a third party or an individual who has no relation with either of the parties to give out the most genuine and unbiased adjudication, in both formal or informal situations.

As the name suggests, Neutral Evaluation refers to unprejudiced assessment. It is one of the forms of Alternative Dispute Resolution (ADR) which deals with the involvement of the third party to reach some conclusion. However, the decision or suggestion provided is not necessarily binding on the parties or their respective counsels. The mechanism of Neutral Evaluation involves a third party to intervene in the matter at hand. It is made obligatory by the court to seek evaluation in some cases, whereas it is solely based on the discretion of the parties to seek evaluation in the others.

The Structure of Neutral Evaluation

The evaluator is always a senior advocate or any qualified person with a good reputation and significant expertise in the subject matter. The qualification of the evaluator enables the parties to see him/her with eyes full of belief and hope for appropriate redressal. The evaluator has to be made familiar with facts, defenses, legal merits and pieces of evidence of the case beforehand to resolve the issue accurately. Neutral evaluation (also known as early neutral evaluation) assists the parties to attain steady redressal with the help of the third party (partly like arbitrator).

Owing to the functioning of neutral evaluation, it is an evaluation process which is carried out confidentially. The parties in dispute, with or without their counsels, narrate the issue of the case, the pieces of evidence attained, the defenses prepared, the judgement expected, etc. to the evaluator. The court maintains a roster of neutral evaluators[1] and chooses the one with the right expertise in the case at hand. Concerning the facts ascertained and the expertise held, the evaluator renders a non-binding judgement. The evaluator can ask questions designed to elicit information and clarify issues though. The evaluator provides the parties with insight about which arguments are likely to gain adhesion at trial and which are likely to fail. The evaluator, in most of the cases, explains the parties about the areas where they lack pleas and the areas in which they have the edge over the other party. This case analysis and assistance are given to both parties by the evaluator with an unbiased opinion to reach onto some mutual settlement. The evaluator can either give implied opinion, which is easily understood by the parties or can express it vocally or in a written form precisely. There is no mechanism to appeal an evaluation, nor is it clear what a court will do if one party considers the decision to be wrong. Courts use early neutral evaluation to correct counsel’s mistaken assessment of their cases and to find ways of getting to the decisive issues quickly. This mechanism majorly focusses on settling up the conflict between parties by negotiation and genuine settlements. However, this suggestion is discretionary.

The CPC on this particular matter, and states the following:

Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of the settlement and give them to the parties for their observations, and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for—

  1. arbitration;
  2. conciliation;
  3. judicial settlement including settlement through Lok Adalat; or
  4. mediation.[2]

The same is also stated under High Court of Gujrat Mediation Centre.[3]

The Introduction of Neutral Evaluation in India: Bawa Masala Company v Bawa Masala Pvt Ltd

The Delhi HC in one of the leading cases referred the parties to early neutral evaluation, thus introducing the concept to India. The matter had earlier been referred for mediation as there were several interlinked disputes pending before the trial court. Although the two officials of the Delhi High Court Mediation and Conciliation Centre, who had been appointed as mediators in the matter had successfully resolved all the other disputes, the instant suit had not been settled. Given this, the counsel for both parties suggested that another attempt for amicable resolution through the ADR mechanism be made and instead of mediation, the endeavour should now be through the process of Early Neutral Evaluation (ENE).[4] Hon’ble  Justice Sanjay Kishan Kaul describes ENE in the words of Robert A. Goodin as “Early neutral evaluation is a technique used in American litigation to provide early focus to complex commercial litigation, and based on that focus, to provide a basis for sensible case management or offer a resolution of the entire case, in the very early stages”.[5] While referring the parties to ENE, he observed: “ENE is, thus, a different form of alternative dispute resolution and I see no reason why this process cannot be resorted to towards the object of a negotiated settlement in pursuance to Section 89 of the Code of Civil Procedure, 1908 especially when the parties volunteer for the same. The provisions of the said section inter alia provide for Alternative Dispute Resolution Mechanism, which inter alia includes mediation. ENE also broadly follows the same process as a mediation, though the concept is not a negotiated settlement, but a neutral assessment”.[6]

Concluding Thoughts

ENE is an effective means of dispute resolution as it provides steady redressal if approved. Owing to the fact that it is relatively less time consuming, if successful, can avoid extensive litigation. The fact that the main agenda of appointing an evaluator is to attain an unbiased opinion makes it possible for the parties to re-evaluate their own cases and find the loopholes accordingly. The significant benefit of ENE is that it is cost-effective. It not only saves time but also helps an individual to get drained financially. If the ENE can assist in settlement of the matter, it can save a considerable sum of money which could have been spent on court proceedings otherwise. In addition to the same, ENE helps the party to focus on the critical issues as the evaluator, by his expertise and experience, cuts short the unnecessary points, thus, making it easier for the parties to deal with the major ones. ENE proves to be of the best help in cases of child custody and divorce. These are two of the most delicate issues which an individual deal with. Further, these are the cases which require better evaluation, valid compromise and better explanation of the pros and cons of each statement the party makes.

Nonetheless, ENE can also prove to be troublesome in a few regards. One of which is that ENE maybe too short and informal to deal with complex, technical or factual questions unless they can be broken down into single issues. ENE may not be appropriate in cases involving severe credibility disputes, cases where the parties have not yet exchanged critical evidence and cases raising issues with no legal precedent or unresolved public policy questions. Also, it can majorly be problematic if either of the parties is not satisfied with the evaluation of the evaluator.

The neutral evaluation may, thus, help in the early settlement of the cases which might have taken long to be solved otherwise. Although not suitable in all cases, there are apparent benefits to Neutral Evaluation. The process provides a speedy, private and non-adversarial opportunity for reality checking without the pressure of having to settle then and there. Henceforth, it can be regarded as one of the most essential forms of Alternative Dispute Resolution.

Citations and References

  • [1] Rule 16.1, Early Neutral Evaluation (ENE).
  • [2] Civil Procedure Code, 1908, Section 89.
  • [3] Mediation Center, High Court of Gujrat, see ~ (last visited on 17/09/2020)
  • [4] Bawa Masala Company v Bawa Masala Pvt Ltd, AIR 2007 Delhi 284.
  • [5] OS No.139 of 2002
  • [6] (2008) 149 PLR 38.

The Concept of Neutral Evaluation

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