For consumers, mediation might not mean much

Changes proposed to the Consumer Protection Act, such as inserting another round of mediation after filing a case, are unnecessary

The next time you file a complaint in consumer court, you might go through the process of mediation twice. That is, if the proposed amendments to the Consumer Protection Act, 1986, go through. These proposals have been put up on the website of the ministry of consumer affairs.

According to the proposals, there will be a process of ‘mediation’— a mediator appointed by a national commission, a state commission or a district forum will help the parties identify issues, reduce misunderstandings, clarify priorities and explore areas of compromise.

Consumer activists, however, say these proposals don’t mean much. “This will be a step back. Normally, a complainant goes to consumer court only after she/he has contacted the company’s grievance cells, reached out to the Ombudsman, if any (if the company did not help), or the sector regulator. Only in case there is no solution from these authorities does a consumer go to court. In such a case, what is the point in introducing another round of mediation?” asks consumer activist Jehangir Gai.

The process of mediation need not always help complainants secure compensation. Consumer law experts say a mediator can only suggest compensation, but the opposing party (one against whom the complaint is filed) always wants better bargaining power and, therefore, might not pay the compensation.

According to consumer activist Y G Muralidharan, the current Act allows consumers to move court directly, if they so wish. “Mediation should not be compulsory, as it will deny one his right. The Consumer Protection Act preamble says it is informal, without technicalities of the civil court; that’s why it is called Consumer Disputes Redressal Forum,” he says.

The Consumer Protection Act, in fact, states the forum must “settle” dispute.

Some feel the mediation round is being included to reduce the number of frivolous cases. But Muralidharan says frivolous cases aren’t too many — less than a per cent of the total number of cases. Besides, in the Act’s current form, there is already a provision to dismiss frivolous and vexatious complaints, with compensatory costs.

It is also being proposed a consumer has to file a case in the city where the manufacturer’s registered office is located. This is logistically difficult for consumers, as many shop online. Also, it means higher expenses for consumers. But Gai cites a Meghalaya Commission ruling that says according to the Information Technology Act, a company carries out business at the place where a consumer is checking the website or products, even if this is on a computer screen. Therefore, a consumer can file a case against a company in the city where he checks the products.

As the ‘direction’ in the proposal refers to the direction issued by the Centre to the consumer for a, it means consumer fora might not remain independent to take decisions.

There are, however, some positive proposals, too. First, barring those affiliated with political parties from appointment as president and members in the consumer fora. “This is positive, but how far it will work remains to be seen, as the selection of members is riddled with political interference and bureaucrats who indulge in string-pulling,” says Gai.

Also, the power of deciding ‘regulations’ under the Consumer Protection Act earlier vested with the National Commission; but according to the proposed amendments, ‘regulations’ refer to those made by the Centre, under this Act. This is a welcome proposal, as the judiciary is usually inclined to bring in technicalities, which is against the spirit of the Consumer Protection Act.