Mediation under the Consumer Protection Act 2019

Chapter V of the Consumer Protection Act 2019 provides for the Mediation.

It comprises of eight provisions – Sections 74 to 81. It has come into force from 20th July 2020.

Recently, Supreme Court of India has directed all State Governments and Union Territories to take measures to establish Mediation Cells and enable e-filing of complaints by consumers at District level (District Consumer Dispute Redressal Commissions) and at State level (State Consumer Dispute Redressal Commissions) by next date of hearing i.e.July 26, 2022.[In re: Inaction of the Governments in appointing President and members/staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India v. Union of India & Ors. In Suo Motu Writ Petition (Civil) Nos.2 of 2021, Order dt. April 12, 2022]

The Central Government has framed the Consumer Protection (Mediation) Rules, 2020, made operational from 20th July 2020.

Rule 3 requires that a Commission (District, State or National) shall have a Mediation Cell comprising of panel of mediators.

Rule 4 provides for matters not to be referred to mediation and it reads:

“The following matters shall not be referred to mediation, namely:-

(a) the matter relating to proceedings in respect of medical negligence resulting in grievous injury or death;

(b) matters which relate to defaults or offences for which applications for compounding of offences have been made by one or more parties;

(c) cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coersion;

(d) cases relating to prosecution for criminal and non-compoundable offences;

(e) cases which involve public interest or the interest of numerous persons who are not parties before the Commission:

Provided that, in any case other than those mentioned in this rule, the Commission before which the case is pending may choose not to refer it to mediation if it appears to the Commission that no elements of a settlement exist which may be acceptable to the parties or that mediation is otherwise not appropriate having regard to the circumstances of the case and the respective positions of the parties.”

Rule 6 also provides that the parties shall not resort to any arbitral or judicial proceedings in respect of a matter which is the subject matter of the mediation.

Further, the National Consumer Disputes Redressal Commission has made the Consumer Protection (Mediation) Regulations, 2020 and is made effective from 24th July 2020.

It provides fro eligibility o mediators for empanelment. It also provides (regulation 8) that mediator shall be entitled to a consolidated fee, as fixed by the President of the respective Consumer Commission considering the nature of the dispute. Fees are fixed case wise. And in an unsuccessful mediation, half of the fee will be paid to the mediator. And fee of the mediator shall be shared equally by the parties.

Regulation 9 requires that mediators shall undergo training from experts nominated by the Mediation Cell.

Regulations 10 to 15 are relevant from Mediators and parties perspective and hence is reproduced below:

Regulation 10. Code of conduct.—(1) The empanelled mediators shall not communicate, directly or indirectly with any of the parties or their associates, affiliates, promoters, holding companies, subsidiaries companies, directors, partners or employees or with any of their counsel during pendency of the mediation proceedings, except during the course of the mediation, in the presence of the parties or their counsel.

(2) The empanelled mediator shall not accept any gift or hospitality from any of the parties or their associates, affiliates, promoters, holding companies, subsidiaries companies, directors, partners or employees or any of their counsel.

(3) In addition to the disclosure required under clauses (a) and (b) of Section 77 each mediator shall disclose the following information before commencement of the mediation in a case assigned to him, namely—

(i) whether he has or in the past had any personal, business or professional relationship or connection with any of the parties to the consumer dispute or other proceedings or any person associated or connected in any manner, to any of the parties or their associates, affiliates, parent companies, subsidiaries companies, directors, partners or employees;

(ii) whether there exists any circumstance which may give rise to be reasonable doubt as to his independence and impartiality.

Regulation 11 Mediation proceedings.—(1) The mediation shall be conducted in the presence of the parties or their authorised representatives or counsel.

(2) The mediation shall stand terminated on expiry of three months from the date of first appearance before the mediator unless the time for completion of mediation is extended by the Consumer Commission, in which case it shall stand terminated on expiry of such extended time.

(3) The parties shall be entitled to appear before the mediator in person or through their respective counsel or authorised representatives.

(4) The mediator shall be guided by the principles of natural justice and fair play but shall not be bound by the provisions of the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

(5) If a party does not participate in the mediation proceedings, the Consumer Commission may direct such a party to participate in the proceedings.

(6) The parties shall provide all such information to the mediator as may be reasonably required by him for conducting the mediation proceedings.

(7) The record of the proceedings shall be prepared by the mediator on every date and shall be signed by the parties or their Counsel, authorised representatives or Attorneys.

(8) The agreement executed between the parties shall be submitted by the mediator, to the Consumer Commission, in a sealed cover, with a forwarding letter.

(9) If no agreement is executed between the parties, within the time prescribed in these regulations, the mediator shall intimate so, to the Consumer Commission, without in any manner disclosing as to what transpired during the mediation proceedings, what was the stand taken by the parties or why the agreement could not be reached.

Regulation 12. Role of mediator.—(1) The mediator shall attempt to facilitate a voluntary resolution of the disputes between the parties, assist them in removing the misunderstandings, if any, and generating options to resolve their disputes, but shall not impose any term or any settlement upon the parties.

(2) The mediator shall explain the terms of the agreement, to the parties, before obtaining their respective signatures on it.

Regulation 13. Confidentiality.—(1) The parties and the mediator shall maintain confidentiality in respect of the events that transpire during the mediation proceedings and shall not use or rely upon any information, document etc. produced, the proposals and admissions made or the views expressed during the mediation proceedings.

(2) There shall be no audio or video recording of the mediation proceedings.

Regulation 14. Communications.—The mediator shall not communicate with the Consumer Commission except by way of his report, with copies to all the parties.

Regulation 15. Immunity.—(1) No mediator shall be liable for any civil or criminal proceedings, for any act done or omitted to be done bonafidely by him, in his capacity as a mediator.

(2) The mediator shall not be summoned by a party to appear in a Court or other forum, to testify in regard to any information received or the action taken by him during the mediation proceedings.”

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