A Primer on Mediation in Consumer Protection suits
The new Consumer Protection Act, 2019, brings in many changes. One of the key changes is the introduction of mediation for consumer protection suits/ disputes. Chapter V of the Consumer Protection Act, 2019 (“the Act”) outlines Mediation as a mechanism of resolving disputes. There are a couple of supplementary laws too. The Consumer Protection (Mediation) Rules, 2020, and the Governing Regulations (Consumer Protection (Mediation) Regulations, 2020) encourage consumers to undertake mediation. A consumer may choose mediation either after the admission of the complaint or at any stage afterwards.
As per Section 74 of the Act, the respective State Government shall attach a Mediation Cell with the District and State Commission. In case of the National Commission, the Central Government would establish the mediation cell. Same is the mechanism for regional benches too. The law requires each mediation cell to submit a quarterly report to their respective commissions. The Mediation cells shall maintain:
- A list of empaneled mediators:
- A list of cases handled by the cell;
- Record of proceeding; and
- Any other information as required.
The Consumer Protection (Mediation) Regulations, 2020 lay down details regarding the qualifications and disqualifications of the Mediators to be empanelled in the Mediation Cell. A detailed procedure for training and empanelment of the Mediators has also been laid down under this Regulation.
Duty, Role and Immunity of a Mediator
First of all, the Mediators must disclose:
- any personal, professional or financial interest in the outcome of the consumer dispute;
- or the circumstances which may arise to a justifiable doubt as to his independence impartiality;
- or whether he has had any kind of relationships with the parties or their advocates.
The law prohibits empaneled mediators from having any form of communication or accept any gift or hospitality from the parties to the mediation and their respective counsels. Once the mediator discloses the above said, it is his primary role to facilitate a voluntary resolution of disputes between the parties. He helps them remove the misunderstandings and suggests suitable options for resolution. However, in the process he cannot impose any term or settlement upon the parties.
Confidentiality regarding the mediation process and the events is of utmost importance. Additionally, no audio or video recording of the mediation proceedings recorded shall be undertaken by any party.
In addition to all the responsibilities, the Mediator is immune from attending any civil and criminal proceedings- either to testify in regard to any information received or action taken by him during the mediation proceedings. As such, he can’t be summoned by the Court.
Fee of the Mediator
Regulation 8 of the governing regulation states that the fee of mediator shall be fixed by the President of the respective Consumer Commission, on a case to case basis, depending upon the nature of the dispute. In case the mediation is unsuccessful, the mediator shall be paid half of the fees. The parties to the dispute shall borne the fee equally and they shall deposit it in advance. In case of default by any party in depositing the fee, the Consumer Commission can direct the defaulting party to pay the amount within a week’s time. If the party once again fails to deposit the fee of the cost of mediation, the Consumer Commission may permit the other party to deposit the fee and recover the amount from the other party through a civil court, or terminate the mediation proceeding altogether.
As stated under Regulation 11 of the governing regulations, the proceedings shall take place in the presence of the parties and their respective counsels or authorized representatives. A positive result should be achieved within 3 months from the data of first appearance, unless extended by the Consumer Commission.
The parties must provide all necessary information to the Mediator for effective disposal of the issue. In case a party does not participate in the mediation proceedings, then the Consumer Commission may direct such a party to participate in the proceedings.
The Mediator is also in charge of maintaining records of each proceeding- which the parties shall sign (or their counsels or authorized representatives). In case the parties reach an agreement, the mediator shall submit it in a sealed cover with a forwarding letter to the Consumer Commission. However, if the parties fail to reach such agreement within the prescribed time, the mediator has to intimate the Consumer Commission stating what transpired during the proceedings, what stand was taken by the parties and why was an agreement not reached.
Matters Not to Be Referred to Mediation
The Consumer Protection (Mediation) Rules, 2020 state certain matters which parties cannot refer to mediation. They are:
- the matters relating to proceedings in respect of medical negligence resulting in grievous injury or death;
- matters which relate to defaults or offences for which applications for compounding of offences have been made by one or more parties;
- cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion;
- issues relating to prosecution for criminal and non-compoundable offences;
- matters which involve public interest or the interest of numerous persons who are not parties before the Commission.
The list so mentioned above is not exhaustive. The Commission before which the matter is pending may choose not to transfer any unlisted matter for mediation.
Thus, the mediation process lays down a simpler mechanism of consumer disputes redressal. The clear cut provisions would help achieve efficiency and cost less as well. This will further reduce the pending cases for adjudication with the Consumer Commissions and further the cause of consumer rights.
Speaking of consumer rights, did you know that the new law punishes misleading endorsements with a fine up to Rs. 10 lakh?
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