MEDIATION AS A WAY OF RESOLVING CONSUMER DISPUTES

MEDIATION AS A WAY OF RESOLVING CONSUMER DISPUTES

This Article is written by Adv.  Anchal Chhallani, she is an Legal Associate at LawDocs.

INTRODUCTION

Considering the current scenario of a huge backlog of consumer cases, the Legislation has included mediation as a way to resolve consumer disputes. Mediation as a consumer dispute resolver has been introduced by the Consumer Protection Act, 2019. This gives the parties an option to settle the dispute by way of mediation after the admission of the complaint or at any later stage. For instance, if a person takes a course from any e-learning platform and there is some issue, the institution, as well as the student, can choose to go for mediation instead of filing a case before the consumer forum.

The government has also notified the Consumer Protection Mediation Rules, 2020. They are as follows:

  1. The Consumer Protection Act, 2019 has provided for the creation of mediation cells at three levels – National, State, and District with all three being attached to the respective commissions.
  2. The mediation cells have to compulsorily create a panel of mediators and this panel is to be updated on a regular basis. The duties and responsibilities of the mediator in the process of mediation are given under Section 77 of the said Act especially with regards to the duty to disclose necessary information to either of the parties.
  3. The Act also talks about the procedure for mediation and how to reach the settlement for the same. The Act also provides for the recording of the settlements by the respective commissions.
  4. The process of mediation in consumer protection is a new concept and is set up with an intention to deal with the cases quickly.
  5. The inclusion of mediation as an alternative mechanism follows the recent shift in the legal system to ensure faster addressing of cases and faster provision of justice.
  6. The District Commission if thinks appropriate can direct the dispute to be settled through mediation at the stage of admission or at any later stage. The parties need to give their consent within 5 days from such direction.
  7. In case the parties agree for the same, the matter is to be referred for mediation within a period of 5 days from the date of such consent by the District Commission.

WHAT CANNOT BE REFERRED TO MEDIATION?

There are certain matters that cannot be referred to mediation which are mentioned as follows:

  1. Matters that relate to medical negligence resulting in grievous injury or death.
  2. Matters relating  to defaults or offenses for which applications for compounding have been made by one or more parties;
  3. Matters that involve serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion, etc.;
  4. Matters that relate to prosecution for criminal and non-compoundable offenses;
  5. Matters that involve public interest or the interest of society at large who are not parties before the Commission;
  6. Matters where the Commission feels that no chance of settlement exists between the parties or that mediation is not an appropriate way of resolving disputes in the given facts of the case.

MANNER FOR INITIATION OF MEDIATION PROCEEDINGS

In the beginning, a written request is required to be made to the concerned authorities (i.e. District/State/National Commission) depending upon the facts. The request should contain the following heads:

  1. An explanation of the nature of the dispute;
  2. Estimated value of any disputed amount;
  3. Relief to be claimed or sought by the requesting party;
  4. Names and address, e-mail address,and contact numbers of all the parties (inclusive of any legal or other representative involved) to the dispute;
  5. A proposal for the appointment of a mediator, inclusive of suggested qualifications such aslanguage, skills, or mediation experience on the subject matter has to be mentioned.

The party or parties that initiate the proceedings or file the request shall simultaneously have to send a copy of the request to all other parties, until and unless the request has been made jointly by all the parties. Such a request has to be accompanied by a fee amounting to Rs. 500/-.

ROLE AND DUTY OF A MEDIATOR

The duties of the mediator are as follows:

  1. The mediator should try and facilitate a voluntary resolution of the dispute between the parties,
  2. He/She should communicate the view of each party to the other,
  3. The mediator should assist them in identifying the issues, reducing the clashes, glorifying the priorities, enunciating on the areas of compromise, and lastly, generating options in an attempt to solve the disputes,
  4. He/She should constantly press on the point that is the duty/responsibility of the parties to make a decision and that he shall not impose any terms of settlement on the parties.
  5. The mediator shall also disclose the following facts:
  • Any personal, professional, or financial interest in the outcome of the consumer dispute;
  • The circumstances giving rise to justifiable doubt as to his independence or impartiality; and
  • Such other facts as may be specified by regulations.

SETTLEMENT BY MEDIATION

  1. If an agreement is reached between the parties through mediation (for example the issue between the e-learning platform and the student) for all the issues involved or some of the issues, the terms for the same shall be reduced to writing and should be signed by the parties or their authorized representatives.
  2. The mediator should make a report of settlement and should forward it to the concerned Commission along with the signed agreement.
  3. In case the parties could not reach an agreement within the stipulated time, or the mediator opines that settlement is not possible between the parties, a report should be prepared by the mediator regarding the same and should be submitted to the concerned Commission.
  4. The concerned Commission, depending upon the case shall, within 7 days of the receipt of the settlement report, pass suitable order recording such settlement
  5. In case the dispute is settled only in part, the same Commission, depending upon the case, shall record settlement of the issues which have been settled and continue to hear the other issue.
  6. In case dispute could not be settled by mediation, the concerned Commission, depending upon the case, shall continue to hear all the issues involved in the case.

CONCLUSION

The Consumer Protection Act, 2019 tries to protect consumer rights by establishing and recruiting the concerned authorities from time to time by an effective administrative system in order to settle the consumer disputes with a minimum amount making it flexible to the aggrieved parties. Further, it is also dependent upon the consumers how effectively and efficiently they use the rights given to them in the Act, which have not only improved the dispute resolution mechanism but have also reduced the pressure on consumer commissions, who already have numerous cases pending for adjudication before them.

REFERENCES

  1. Abhishek Bagga, Smita Paliwal, Mediation: A Resolution To Complaints Under The Consumer Protection Act, 2019, MONDAQ (Oct 21, 2020, 2:20 PM), https://www.mondaq.com/india/dodd-frank-consumer-protection-act/975302/mediation-a-resolution-to-complaints-under-the-consumer-protection-act-2019
  2. Consumer Protection Act 2019 Sec. 37.
  3. Consumer Protection Act 2019 Sec. 80.
  4. Consumer Protection Act 2019 Sec. 81.
  5. Consumer Protection Act 2019 Sec. 37.
  6. Consumer Protection mediation Rules 2020 Rule 4.