This article is written by Divyanshi Singh, a learner at Symbiosis Law School, Noida. This article analyses the Consumer Protection Act, 2019 and how the Act affects the legal profession.
Table of Contents
The Digital Age has brought with it a new era of commerce and digital branding, as well as new customer expectations. Digitisation has enabled quick access, a wide range of options, convenient payment systems, improved services, and convenient purchasing. However, as India advanced in trade and commerce, it encountered consumer protection issues.
The Consumer Protection Act, 2019 replaced the older Consumer Protection Act, 1986 and came into force on 20th July 2020. It empowers the consumers to protect their rights through various rules and provisions. The new legislation is faster and less time consuming than the previous one. The previous one provided single-point access to justice, i.e., only one consumer redressal mechanism was available. Thus it made the process time-consuming. The previous Act established a three-tiered consumer dispute redressal mechanism at the national (National Consumer Disputes Redressal Commission), state, and district levels.
Key highlights of the new Act
E-filing of complaints
The new Act allows consumers to file complaints with the jurisdictional consumer forum closest to their place of residence or employment. This differs from the existing practice of submitting it at the point of purchase or the seller’s registered office address. The new Act also includes provisions that allow consumers to make complaints electronically and to hear and/or examine parties via video conferencing. This is intended to make the procedure easier for consumers while also reducing inconvenience and harassment.
Covers e-commerce transactions
The new Act broadens the concept of “consumer.” Any person who purchases things, whether through offline or online transactions, electronic means, teleshopping, direct selling, or multi-level marketing, is now included in the definition. The previous Act did not clearly encompass e-commerce transactions, and the new Act fills that void.
Enhancement of pecuniary jurisdiction
The new Act establishes revised pecuniary restrictions. As a result, where the amount of products or services paid does not exceed INR 10,000,000 (Indian Rupees Ten Million), the district forum can now hear consumer complaints. The State Commission can hear disputes where the value exceeds INR 10,000,000 (Indian Rupees Ten Million) but does not exceed INR 100,000,000 (Indian Rupees One Hundred Million), and the National Commission can hear disputes where the value exceeds INR 100,000,000 (Indian Rupees One Hundred Million).
Establishment of Central Consumer Protection Authority
The new Act proposes the creation of a regulatory body known as the Central Consumer Protection Authority (CCPA), with broad enforcement powers. The CCPA will have an investigation wing, led by a Director-General, that will conduct inquiries or investigations into infractions of consumer law.
If a consumer complaint affects more than one individual, the CCPA has been given broad authority to take suo-motu action, recall products, force repayment of the price of goods/services, cancel licences, and initiate class action litigation.
Unfair trade practices
The new Act has a broad definition of unfair trade practices that includes revealing personal information given in confidence by the consumer unless such disclosure is undertaken in conformity with the terms of any other legislation.
Provision for Alternate Dispute Resolution
The new Act includes mediation as an Alternate Conflict Resolution mechanism, which simplifies and streamlines the dispute resolution process. This will aid in the resolution of disputes more quickly and relieve pressure on consumer courts, which already have a large number of cases pending.
Penalties for misleading advertisement
The new Act imposes liability on endorsers in light of previous cases in which customers have been subjected to unfair commercial practices due to the influence of celebrities acting as brand ambassadors. In such instances, the endorser must assume responsibility and perform necessary diligence to evaluate the veracity of the statements stated in the advertisement to disprove liability claims.
Product liability & penal consequences
The new Act introduces the concept of product liability and makes the product manufacturer, product service provider, and product seller liable for any compensation claim. The phrase ‘product seller’ is defined to cover anyone participating in placing a product for a commercial purpose, which includes e-commerce platforms. The argument that e-commerce platforms just serve as “platforms” or “aggregators” will not be accepted.
Manufacturers have more liability risks than product service providers and product sellers because, under the new Act, manufacturers will be liable in product liability actions even if he establishes that he was not negligent or fraudulent in establishing the express promise of a product. The new Act makes several exclusions to liability claims, such as not holding the goods seller accountable if the product has been mistreated, altered, or modified.
Does the word ‘service’ include legal service in its scope as well?
Section 2(42) of the Consumer Protection Act, 2019 defines the “service” as, “any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”
The definition can be interpreted in a variety of ways. The definition begins with the terms “service of any description” and “potential users,” both of which have a fairly broad meaning. Furthermore, the 2019 amendment adds the terms ‘but not limited to,’ which broadens the reach of the clause even further. The same was determined in the case of Lucknow Development Authority v M K Gupta (1993), which provides a detailed interpretation of the Section. The judge pointed out that the definition is divided into three sections. The main section, which is followed by an inclusive clause and concludes with an exclusionary clause. The primary clause is quite broad in its own right.
The third part of the definition, the exclusionary clause, excludes two categories of services from the scope of the Act: when the service is provided for free and when it is performed under a contract of personal service. The second portion of this clause can be expanded upon. It was examined to gain a better understanding of it. It is referred to as a “contract of personal service.” Is the relationship still active? That of personal service between an advocate and a client? Is it also a ‘service contract’?
It is an undeniable fact that an advocate and a client have a fiduciary relationship that is based on trust. The advocate has a moral obligation not to reveal any confidential information about the client.
Personal service is defined by Merriam-Webster as “a service based on an individual’s intellectual or manual efforts (as for income or wages) rather than a saleable result of his or her talents.” As a result, it can be argued that the legal profession is a service based on intellectual and manual effects, and so is exempt from the Act’s scope.
According to Section 2(1)(o) of the Consumer Protection Act, 1986, service under a contract of personal service is omitted from the meaning of the word service, and because the advocate-client relationship falls within this category, it is automatically excluded from the definition of service.
Now, the next question is whether this falls under the definition of a “contract of service.” It is vital to distinguish between the terms ‘contract for service’ and ‘contract of service’ for this purpose. In the case Dharangadhara Chemical Works Ltd vs State of Saurashtra (1956), the Justice cited Hilbery, J. in Collins v. Hertfordshire County Council (1947), which is as follows: a distinction is also drawn between a contract for services and a contract of service, and that distinction is put in this way: “In the one case the master can order or require what is to be done while in the other case he can not only order or require what is to be done but how itself it, shall be done.”
However, in the same case, he cited Cassidy v. Ministry of Health (1951), in which Lord Justice Somervell stated that the test is not universally correct. There are several service contracts where the master does not influence how the work is done, such as a captain of a ship. However, the Justice stated that “it is impossible to lay down any rule of law distinguishing one from the other. It is a question of fact to be decided by all the circumstances of the case.” As a result, there are no explicit conditions to distinguish between a ‘contract of service’ and a ‘contract for service.’
However, in Indian Medical Association v Shantha (1995), the Supreme Court enunciated and held that there is no doubt that Parliamentary draftsman was aware of this well-accepted distinction between “contract of service” and “contract for services” and has deliberately chosen the expression “contract of service” instead of “contract for services,” in Section 2(1)(o). The reason for this is that an employer cannot be considered a customer in respect of services given by his employee under a contract of employment. As a result of this decision, advocates cannot be included in this Act.
On the other hand, it should be noted that the services given by an advocate cannot be compared to other services such as banking, telecommunications, or entertainment because they are fundamentally different. According to the BCI, it is a judicially recognised reality that advocates are neither part of any trade, commerce, or industry, nor does their employment fall under the purview of the Service Tax Act, but rather an activity in aid and assistance of the justice administration.
Duties of an Advocate
The duties of an advocate can be classified into three:
- Towards clients
- Towards court
- Towards opposite party
In Rondel v Worsley (1967), immunity for barristers was held on the argument that advocates do not owe a responsibility only to their client, but also to the court and must obey it, even if doing so appears to be detrimental to the client’s interest. In addition, it was declared in State of U.P v U.P State Law Officers(1993) that a lawyer must be fair to guarantee that justice is done. He degrades himself if he only serves as his client’s spokesperson. This relationship between the lawyer and the private client applies equally to him and the public bodies.
However, in K Vishnu v National Consumer Dispute Redressal Forum(2000), it was stated that even if the advocate is regarded as an officer of the court and is a part of the justice system, he cannot be released from his basic role of providing services to his client in exchange for the consolidation received.
The legal profession has long been seen as honourable. Currently, legal professionals are not liable under the Consumer Protection Act. Legal professionals play an important role in sustaining societal order. People, in general, seek justice through a lawyer rather than taking the law into their own hands and fighting on their own. This is due to their trust in lawyers and the court system. As a result, nothing should stand in their way of receiving the justice they deserve. Making advocates responsible for negligence or wrongdoing is not a novel concept.
Lawyers could be charged with carelessness or misconduct under the Advocates Act, 1961 if they are sued. But the problem is that suing them in court is a time-consuming and expensive process, and the Advocates Act does not allow for compensation. As a result, there must be a remedy. One possibility is to include them in the Consumer Protection Act. However, given the nature of the profession and the fact that advocates are currently governed by a separate Act, it would be preferable to add a clause in the Advocates Act that provides compensation to the affected parties.
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