New Delhi: An expert committee set up by the insolvency regulator has recommended mediation between lenders and borrowers even at the pre-default stage to “achieve faster out-of-court outcomes”. The panel, headed by former legal affairs secretary TK Viswanathan, has said mediation at the pre-default stage would aid in resolutions “without recourse to insolvency.” The committee’s suggestion aims to facilitate lenders and borrowers in finding common ground and reaching agreements before default occurs, thereby avoiding lengthy insolvency proceedings. The move is in line with the regulator’s goal to streamline the resolution process and reduce the burden on the courts. Mediation at the pre-default stage can potentially lead to quicker resolutions and better outcomes for all parties involved. This approach would be particularly beneficial in cases where borrowers are facing financial difficulties but are still in a position to negotiate and work out a viable solution with the lenders. By engaging in mediation, both parties can openly discuss their respective concerns and explore mutually agreeable alternatives. Mediation has proven to be an effective dispute resolution mechanism in various contexts, and its inclusion in the insolvency framework can help expedite the resolution of stressed assets in a fair and transparent manner. The recommendation by the expert committee underscores the importance of alternative dispute resolution methods and their potential to provide timely relief to the lenders, borrowers, and the overall economy. The proposal will likely be considered by the insolvency regulator for implementation, and if approved, it could bring significant improvements to the insolvency resolution process in the country.