ADVOCATES NOT LIABLE UNDER CONSUMER PROTECTION ACT FOR DEFICIENCY OF SERVICES

TAG: GS 2: POLITY

THE CONTEXT: On May 14, 2024, the Supreme Court of India issued a landmark judgment, ruling that advocates cannot be held liable under the Consumer Protection Act, 1986 (as re-enacted in 2019), for deficiency of services.

EXPLANATION:

• This decision differentiates professionals from those engaged in business and trade, highlighting the unique nature of professional services.

Background and Context

• Previous Rulings
  • The Supreme Court’s ruling overruled a 2007 judgment by the National Consumer Disputes Redressal Commission (NCDRC) that categorized the services rendered by lawyers under Section 2(o) of the Consumer Protection Act, 1986.
  • The Court clarified that the primary purpose and objective of the Consumer Protection Act were to protect consumers from unfair and unethical trade practices, not to include professions or professionals within its ambit.

Key Highlights of the Judgment

• The Court highlighted that professions require advanced education and training in specific branches of learning or science.
• The nature of professional work involves specialization and substantial mental labour rather than manual work.
• Factors beyond the control of professionals often influence their success, distinguishing them from businesses and trade activities.
• The Court described the legal profession as sui generis, possessing unique attributes that set it apart from other professions.
• Advocates are perceived as agents of their clients, owing fiduciary duties and respecting client autonomy.
• The relationship between a client and an advocate is distinct, as advocates cannot make concessions or undertakings without specific client instructions, reflecting the significant control clients have over advocates.
• The judgment stated that the services provided by advocates form a contract of personal service, thus excluded from the definition of service under Section 2(42) of the Consumer Protection Act, 2019.
• This exclusion is based on the unique nature and role of advocates within the judicial system.

Implications for the Legal Profession

• The ruling clearly establishes that complaints against advocates for deficiency of services are not maintainable before consumer forums.
• This distinction protects advocates from being equated with service providers in business and trade, acknowledging the specialized and controlled environment in which legal services are rendered.

Comparison with Medical Profession

• The Court’s judgment calls for a reconsideration of the precedent set in the Indian Medical Association v. VP Shantha (1995), where doctors and medical professionals were held liable under the Consumer Protection Act.
• The bench requested the Chief Justice of India to refer this judgment to a larger bench, indicating a potential re-evaluation of the inclusion of medical services under the Act.

Independence of the Legal Profession

• The judgment underscores the importance of the independence and immunity of advocates.
• Senior advocates argued that lawyers, as officers of the court, require a certain level of independence to perform their duties fearlessly.
• This independence is crucial for maintaining an effective and unbiased judicial system.

Consumer Protection Act, 2019:

• The Consumer Protection Act, 2019 was enacted in India to safeguard the interests of consumers and establish mechanisms for timely and effective resolution of consumer disputes. Here are some key provisions of the act:
• Three-Tier Quasi-Judicial Mechanism:
  • The act establishes a three-tier quasi-judicial mechanism for redressal of consumer disputes:
    • District Consumer Disputes Redressal Commission: At the district level.
      • This is the lowest body that consumers can approach. The State Government, under section 28(1) establishes at least one district consumer dispute redressal commission in every district of the state.
      • If the government deems fit, it can even establish more than one district commission in a district.
      • District Commission shall consist of— (a) a President; and (b) not less than two and not more than such number of members as may be prescribed, in consultation with the Central Government.
    • State Consumer Disputes Redressal Commission: At the state level.
      • A State Consumer Disputes Redressal Commission is an Indian autonomous, statutory and constitutional institution formed as a quasi judicial body at the state and union territory level under Section 2(44) of the Consumer Protection Act, 2019 to protect the rights of consumers.
      • It is a system of alternate dispute resolution between conflicting parties during the process of trade.
      • The president of the States Consumer Disputes Redressal Commission is appointed by the state government in consultation with the Chief Justice of state high court.
    • National Consumer Disputes Redressal Commission: At the national level.
      • The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988 under the Consumer Protection Act of 1986.
      • Its head office is in New Delhi.
      • The Commission is headed by a sitting or a retired Judge of the Hon’ble Supreme Court of India or a sitting or a retired Chief Justice of an Hon’ble High Court, in terms of Rule 3(12)(a) of the Tribunal(Conditions of Service) Rules, 2021.
    • Pecuniary Jurisdiction:
      • The act specifies the pecuniary jurisdiction of each tier of the consumer commission, ensuring that disputes are handled appropriately based on their financial value.
    • Improved Protection for Consumers:
      • The Consumer Protection Act, 2019 replaces the Consumer Protection Act, 1986.
      • It aims to strengthen consumer protection, especially in the context of globalization, online platforms, and e-commerce markets.
      • The act provides improved protection for consumers involved in online transactions.
    • Establishment of Authorities:
      • Central Consumer Protection Authority (CCPA):
        • CCPA is a statutory body constituted under Section 10 of the Consumer Protection Act, 2019.
        • Responsible for administration and settlement of consumer disputes at the central level.
        • Empowered to recall goods, issue penalties against false/misleading advertisements, and more.
      • District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission, and National Consumer Disputes Redressal Commission:
        • Each tier handles consumer complaints and disputes within its jurisdiction.
        • Provides a structured process for resolution, including mediation, hearings, and appeals.

SOURCE: https://www.livelaw.in/supreme-court/advocates-liable-under-consumer-protection-act-for-deficieency-of-services-supreme-court-257837?code=g18qfHyqQ4qFpBbfG1VQcZTU4zl9RY