Historical Framework and Legislative Purpose
Consumer protection laws are put in practice to ensure that consumer interests are safeguarded, and their rights are upheld in cases of any deficiencies in goods or services. The Consumer Protection Act, 2019 is responsible for ensuring that consumer interests are met in India. It created a mechanism to address any consumer disputes and safeguards their rights.
To navigate the Consumer Protection Act 1986 and its 2019 re-enactment and to gauge if it encapsulates the professional services (as that of a lawyer/doctor), we must examine its legislative history and purpose. The Consumer Protection Act finds its genesis from the United Nations guidelines that proposes and calls for consumer protection. This was subsequently adopted and practiced by India to protect consumer interests via the said Act.
The Consumer Protection Act established a mechanism of legal councils and dispute settlement infrastructure that safeguard and ensure consumer rights by looking into and acting upon any unfair or unethical means of trade practices, thereby advocating for consumer awareness and education. As the markets undergo evolution due to globalization and rise of e-commerce, new challenges came into being. This led to the enhancement of the Consumer Protection Act, 2019 which addressed these modern consumer vulnerabilities.
The Act focuses on unfair trade and unethical business practices. Individuals providing professional services (advocates or doctors) and working in specialized fields that require advanced skill sets are not to be included under the Act. The idea behind this legislation is to exclude any professionals and their services from Consumer Protection Laws.
Consumer Services under the ambit of Consumer Protection Act
The Consumer Protection Act defines ‘consumer services’ as:
“Any individual who hires or avails the services for consideration that has been paid or promised”.
To qualify as a consumer under the Act when dealing with legal services, the following criteria must be satisfied:
- Hiring or Availing of Legal Services: A person is considered a consumer if they engage with an advocate’s services. If it is demonstrated that legal services have been availed, the transaction falls under the purview of the Consumer Protection Act.
- Consideration Paid or Payable: An exchange of consideration must occur, i.e., an initiation of payment has been made or promised for the services. If legal services are rendered without any fee, the recipient is not deemed as a consumer under the said Act.
Deficiency in Service in Case of Advocates
The Act defines deficiency in consumer service as any imperfection, shortcoming, fault, or inadequacy in the nature, quality, and manner of performance which is required to be maintained under the law. The motive of the Act is to safeguard and protect the interests of consumers vis-a-vis the products or services that the consumers avail. A consumer who is not satisfied with the outcome of the product or services rendered can file a complaint of deficiency of services in the Consumer Forum.
Through the case of “M. Mathias vs DK Gandhi PS National Institute of Communicable Diseases”, one can analyse this legal shortcoming. In this instance, the National Disputes Redressal Commission (NCDRC) disputed the State Commission's decision and confirmed that the professional services provided by lawyers were covered under Section 2(o) of the Consumer Protection Act, 1986.
In this instance, the Respondent appointed an Advocate to work upon a cheque bounce matter, in accordance with the Negotiable Instruments Act, 1881. The accused party in the case consented to settle the due sum, including any additional expenses, which were provided to the Respondent's Advocate.
However, the advocate retained a part of the said amount, claiming that it was owed to him as fees, thereby leading the respondent to file a consumer complaint seeking the recovery of the withheld sum, in addition with compensation for harassment and mental distress.
The District Consumer Forum dismissed the first objection regarding the jurisdiction to hear a complaint against an advocate and a decree was passed in favor of the respondent. The advocate appealed to the State Commission, who declared that Section 2(1)(o) of the Consumer Protection Act, 1986, did not encompass legal services. However, the NCDRC, upon revision, overturned the State Commission's decision.
Stance of the Apex Court on whether an Advocate can be held liable under the Consumer Protection Act for Deficiency in Service
The Hon'ble Supreme Court, in its recent ruling titled "Bar of Indian Lawyers Through its President Jasbir Singh Malik vs. D.K. Gandhi PS National Institute of Communicable Diseases", further solidified the status of the Advocates being held accountable under the Consumer Protection Act by negating a judgment passed by the National Consumer Disputes Redressal Commission (NCDRC), which had held that services rendered by lawyers and advocates were covered under Section 2(o) of the Consumer Protection Act, 1986.
The Supreme Court stated that the major goal of the Consumer Protection Act is to protect consumers from unfair and unethical business practices. The Court further emphasized that including legal services under the Act would undermine this goal by likely flooding consumer courts with disputes of professional services.
The Court additionally remarked that the practitioners in professions like law and medicine might refrain from their practices if they are exposed to consumer court litigation for every complaint. These professionals are governed and structured by their respective regulatory bodies, such as the Bar Council for attorneys, which is tasked with handling matters related to professional misconduct.
The Apex Court also regarded the nature of the legal profession as Unique (sui generis) as compared to the others which fall under the purview of the Consumer Protection Act. Pertinently, Advocates have a paramount duty to assist the court, embodying multiple responsibilities, playing a crucial role in strengthening one of the three pillars of democracy and the role of an advocate extends beyond providing services to a client.
The Apex Court has established that the relationship between an Advocate and a client is considered "of service" as against "for service."
Henceforth, it will not fall under the definition of 'service' in the Consumer Protection Act. This further confirms the exemption of professionals like advocates from consumer protection laws.
Position of Non-Enrolled Legal Practitioners Under Consumer Protection Act
According to the Advocates Act, Advocates who are enrolled with the respective State Bar Councils and are practising law cannot be held liable for the deficiency of services under the purview of the Consumer Protection Act.
NOTE: Lawyers possessing a degree of LL. B Degree but not registered with the State Bar Council, if provide legal services such as drafting agreements, imparting legal advice, and other services, are likely to be subjected to the conditions of the Consumer Protection Act.
This distinction ensures that while formally recognized advocates are regulated by their professional bodies, those providing legal services without such enrollment are subject to the Consumer Protection laws.
Current Status of Advocates under the purview of Consumer Protection Act
After the pronouncement of the Judgement by the Apex Court, Advocates are no longer liable under the Consumer Protection Act for deficiency of services. The legislation portrays the unique structure of the legal field, wherein they are operated through specialized regulatory bodies that oversee complaints and uphold professional standards and henceforth, Advocates are not subjected to prosecution under the Consumer Protection Act.
Conclusion
Henceforth, Advocates do not fall under the purview of the Consumer Protection Act. In case of any deficiency of services in case of advocates can be dealt with the Respective Bar Councils of the State. Furthermore, the Advocate is bound to maintain the code of conduct, ensuring that there is no misconduct and the client- attorney relationship is maintained throughout. However, the Apex Court in its recent judgement has clarified by considering Legal Profession as Sui Generis and an Advocate cannot be held liable under the purview of the Consumer Protection Act.
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