Mediation in Consumer Protection Act, 2019: Understanding the Process and Eligibility, Cheat Sheet of Indian History

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CONSUMER HANDBOOK

ON MEDIATION (FAQ)

First of all, I would like to thank and congratulate Ministry of Consumer affairs, Food and Public Distribution, Government of India for incorporating ‘Mediation’ Chapter under Consumer Protection Act, 2019, through their untiring efforts.

Right to timely access to justice is a well-recognised fundamental right. The term justice means giving a person what he or she deserves. Mediation under Chapter V of Consumer Protection Act, 2019 has empowered the consumers to negotiate on his own for what he deserves. Introduction of Mediation in Consumer Protection Act, 2019 is commendable since it is a milestone in the history of Consumer Law.

The Ministry of Consumer affairs, Food and Public Distribution, Government of India has facilitated the cost efficient and time saving platform for resolution of consumer disputes in the form of mediation. Now it is the responsibility of the educational institutions, academicians, professionals, Non-Governmental Bodies and Voluntary Consumer Organization’s to popularize and to create awareness about the ‘Mediation’ as an effective tool to resolve consumer disputes and an attempt of the same has been made through this hand book.

This Handbook contains useful information on Mediation in Consumer Disputes. With an aim to familiarise the reader with the concept and process of mediation, various questions framed on layman’s point of view have been answered in this

Preface

hand book. We are grateful to Ministry of Consumer Affairs, Food and Public Distribution, Department of Consumer Affairs, Government of India, New Delhi, for their valuable inputs & the support and motivation they extended in preparation of this Handbook.

I would like to thank Prof. (Dr.) Sudhir Krishnaswamy, Vice-Chancellor, NLSIU, Bangalore and Prof. (Dr.) Nigam Nuggehalli, Registrar, NLSIU, Bangalore; for their constant support and encouragement. Also I would like to thank Mr. Akshay B. Yadav, Mr. Sanjay Utagi and Ms.Vasavi Hegde for their support in bringing out this Handbook.

7.36. Whether arbitral or judicial proceedings can be resorted in respect of a matter which is the subject-matter of the mediation? .................................... 51

7.37. Who are eligible for empanelment as mediator for mediation of Consumer Disputes? ................................. 52

7.38. Who are disqualified from acting as mediator under Consumer Law? ........................................................... 53

7.39. When a person can be removed from the panel of mediators? ....................................................... 54 7.40. Is a person who has completed his term as mediator, eligible for re-empanelment? .......................... 54

7.41. What the regulations say about fee payable to the mediators? ............................................................... 54

7.42. What is role of the mediator during the mediation process? ........................................................ 56

7.43. Can a mediator communicate with the concerned commission directly? ..................................................... 56

7.44. Can a mediator be prosecuted or summoned as witness for any act or information relating to the mediation in any matter? ............................................... 56 Bibliography .................................................................. 58

1. INTRODUCTION

Mediation, as a mode of alternative dispute resolution has a long history in the diplomatic arena.As pointed out by Hon’ble Chief Justice of India, N V Ramana, our ancient epic Mahabharata, is best example of an early attempt at mediation as a conflict resolution tool, where Lord Krishna attempted to mediate the dispute between the Pandavas and Kauravas. Also it is the best example of how the failure of mediation may lead to disastrous consequences taking lot of time.

In the Modern days, due to rapid increase in the commercial disputes, the interest in the mediation has increased sharply. The increased interest towards mediations is directly attributable to dissatisfaction with the cost, time consumed and lengthy & complicated procedures adopted in the traditional dispute resolution systems. This has made people & business entities to focus and consider the advantages of mediation, particularly its simple and easy procedure that offers parties full control over both the process of resolution and the outcome of the process.

Since mediation is amicable settlement of the disputes, using mediation to settle the disputes has been proved very satisfactory because of very high rates of success. Parties’ themselves deciding the outcome of the dispute is a notable feature of the mediation. An achieved result acceptable to both the parties of the dispute, gives no scope for further litigation on the decided subject unless there is

2. THE CONCEPT OF MEDIATION

The Mediation is a not a new concept in the field of law. Mediation as a method of dispute resolution can be traced to the ancient times as well. Also, in pre-British India, mediation was popular among businessmen. Impartial and respected businessmen called Mahajans were requested by business association members to resolve disputes using an informal procedure, which combined mediation and arbitration. In the modern days, mediation is known but least practised method of alternative disputes resolution due to lack of awareness. Developments in the medieval and the modern period led to growth of written laws which defined the rights of individuals very well. With the passage of time, to claim the rights, the written laws were adopted by the individuals as tools for dispute resolution. These written laws proved to be tools for adversarial remedies for the parties, which again made a way for non-adversarial methods. Considering the same, need for recognition of mediation was felt by the legislature, which was performed by it through incorporation of the mediation in various laws and the Consumer Protection Act, 2019 is one such example.

2.1. Definitions of terms:

2.1.1 Dispute

Dispute means disagreement or holding opposite views between two or more persons on any point.

According to legal dictionary, dispute is a conflict or controversy; a conflict of claims or rights; an assertion of a right, claim, or demand on one side, met by contrary claims or allegations on the other.

2.1.2 Disputed parties

Parties claiming different interests or rights and holding opposite views in dispute are referred as disputed parties.

2.1.3 Negotiation

Dictionary meaning of the term ‘Negotiate’ is to bargain for something to agree at some point. Negotiation is a process where two or more parties having conflicting interests in any dispute bargain among themselves to reach a settlement where they can both agree on. Negotiations are made by the parties through discussions between themselves or their representatives without an involvement of the third party.

2.1.4 Mediation

The term mediation can be defined as a voluntary dispute resolution process where the third party facilitates negotiation between the disputed parties to negotiate for their rights and interests by themselves. The third party who facilitates the negotiation between the disputed parties is called mediator.

As described by the Mediation and Conciliation Project Committee of Supreme Court of India , ‘Mediation’ is a voluntary, binding process in which an impartial and neutral mediator facilitates disputing parties in reaching a settlement. A mediator does not impose a solution but creates a conducive environment in which disputing parties can resolve all their disputes.

3. ADVANTAGES OF MEDIATION

3.1. Voluntary Process

Mediation is a voluntary process and parties are at liberty to opt out of the mediation process at any stage if they don’t find it useful. ‘Voluntary Nature’ is essence of mediation, where parties are not compelled to go through it, which ensures compliance with the settlement reached.

3.2. Control of the parties

In mediation, during the entire process, parties have full control over the scope and outcome of the mediation. Parties themselves decide the scope of reference or issues of dispute subjected for mediation and also the outcome of the mediation process i.e to settle or not and also terms of settlement.

3.3. Active participation of parties

Unlike other dispute resolution methods, mediation provides the parties an opportunity to actively participate in the mediation proceedings and to negotiate directly. Mediation facilitates parties to present their caseby their own.

3.4. Cost and time efficient

Due to absence of strict and rigid procedure, the mediation is time efficient and cost efficient m ethod of dispute resolution. Fees of

professionals and other expenses in mediation will be very less compared to traditional methods of dispute resolution.

3.5. Convenient to the parties

Simple and flexible procedure makes the mediation convenient to the parties. There will be no fixed/conditional adjournments in the mediation. Hearing can be modified to suit the demands of each case, which allows the parties to carry on with their day-to-day activities.

3.6. Ensures fair process

The mediator chosen will be impartial, neutral and independent. The laws ensure that the mediator doesn’t have pre-existing relationship/ interest of any kind with the parties or subject matter. If any suspicion arises on impartiality of the mediator, the parties have option to change the mediator.

3.7. Confidentiality

Mediation process is much more confidential than conventional methods of dispute resolution. The name and facts of the cases which are resolved through adjudicating bodies are easily accessible to everyone, since they enter public domain and hence there will be threat to confidentiality. Especially in consumer disputes, consumers and sellers (including E-commerce companies) are more concerned about the privacy and confidentiality. In case of matters settling through mediation, laws ensure confidentiality of the proceedings.

3.8. Amicable settlement of disputes

Mediation provides amicable settlement of the disputes which in turn helps to maintain, improve and restore relationships of the disputed parties.