Supreme Court reserves judgment on whether lawyers come under Consumer Protection Act

Insight Online News

New Delhi, March 1 : The Supreme Court on Thursday reserved its judgment on the issue of whether advocates can be held liable under the Consumer Protection Act for Service deficiency.

Various bar Associations across the country argued before the Bench comprising Justice Bela Trivedi and Pankaj Mithal for three consecutive days.

Senior Advocate V Giri, the amicus curiae, addressing the bench on the final day asserted that legal services fall under Section 2(o) of the Consumer Protection Act. While acknowledging that lawyers aren’t responsible for case outcomes, the ruling stated that if there was a service deficiency for which a fee was received, lawyers could be subject to the Consumer Protection Act.

Lawyers appearing in courts are immune from the Consumer Protection Act, but lawyers providing other services can be brought under CPA: Amicus V.Giri said.

The case originated from a 2007 judgment by the National Consumer Disputes Redressal Commission, The Commission had ruled that the services rendered by lawyers are covered under Section 2 (o) of the Consumer Protection Act. The said provision defines Services.

It was held that a lawyer may not be responsible for the favorable outcome of a case as the result/outcome does not depend on only the lawyer’s work. However, if there was a deficiency in rendering services promised, for which he receives consideration in the form of a fee, then the lawyers can proceed under the Consumer Protection Act.

It is against this order that the appeal was filed before the Supreme Court. Earlier, in 2009, the Top Court had stayed the judgment of the Consumer Commission.

During the proceedings, Giri distinguished between lawyers appearing in court and those offering legal services like consultations and document drafting. He argued that the lawyer acts as an agent for the client, emphasizing the binding nature of the advocate’s actions on behalf of the principal.

Referring to legal precedents such as Byram Pestonji Gariwala vs Union Bank Of India And Ors. (1991) and Salil Dutta V/s. T.M. and M.C. Private Ltd. (1993), Giri underscored the agency relationship between lawyers and clients. The court’s observations in these cases supported the notion that lawyers, as agents, have the authority to compromise and settle claims on behalf of their clients.

Additionally, Giri invoked the case of Himalayan Coop. Group Housing Society vs. Balwan Singh & Ors., emphasising that lawyers, acting as fiduciaries, may have more stringent duties than other agents. This line of reasoning suggested that the traditional law of agency might not strictly apply to the lawyer-client relationship.

The Senior Counsel pointed out that when a lawyer appears before a court on the strength of a vakalatnama, they act on behalf of the client, and the distinction between a service provider and a service consumer is lost in the context of court proceedings. He argued that the lawyer-client relationship, once established in court, does not fit the definition of a service provider-consumer relationship. Giri addressed the distinction between a lawyer acting as an agent inside and outside the court. He asserted that outside the court, lawyers are hired and do not act as agents, thereby falling within the definition of service providers. He provided an example of a lawyer continuing to act on behalf of a client after a suit concludes, stating that in such cases, lawyers do not have immunity outside the court.

Moving to his argument, Giri discussed the practical difficulties in dealing with consumer complaints against lawyers. He raised concerns about parallel proceedings, where a lawyer could face both an appeal on the main case and a complaint before a consumer forum. Giri argued that the material considered by the consumer forum may not be sufficient, as it relies on the adjudicatory process of the court of general jurisdiction.

The court also heard arguments from other petitioners, including Senior Advocate Manoj Swarup, who represented the Punjab and Haryana High Court Bar Association. Swarup emphasized the need for the bar to remain independent, citing the importance of freedom of expression in advocacy. He referred to legal precedents, including R. Muthukrishnan vs The Registrar General of The High Court, to support the autonomy of the bar.

Senior Advocate Vikas Singh argued against including the legal profession under the Consumer Protection Act, drawing parallels with the medical profession. Singh suggested a reconsideration of the Indian Medical Association v VP Shantha case and echoed concerns about harassment faced by doctors.

Senior Advocate Ramakrishnan Viraraghavan, representing the Bengaluru Bar Association, raised the possibility of including arbitration services under the Consumer Protection Act’s definition of service, potentially subjecting arbitrators to negligence claims if their awards are set aside by the court. The court continued to consider these arguments as part of its ongoing proceedings.

Continuing with the legal proceedings, Senior Advocate Vikas Singh argued that the legal profession should not be included under the Consumer Protection Act, drawing a comparison with the medical profession. He urged a reconsideration of the Indian Medical Association v VP Shantha case, expressing concerns about the increasing harassment faced by doctors. This sentiment echoed the views of Senior Advocate Guru Krishnakumar, representing the Bar Council of India, who had previously pointed out discrepancies in the mentioned case and urged the bench to consider referring it to a three-judge bench for a comprehensive review.

Senior Advocate Manoj Swarup, representing the Punjab and Haryana High Court Bar Association, emphasized the importance of the bar maintaining its independence. Citing the case of R. Muthukrishnan vs The Registrar General of The High Court, Swarup argued that the autonomy of the bar is crucial for preserving democracy and ensuring a robust judicial system.

As part of his submission, Swarup referred to the case of O.P. Sharma & Ors vs High Court Of Punjab & Haryana, emphasizing the significance of freedom of expression in advocacy. He quoted a paragraph from the judgment, asserting that advocacy is a practical manifestation of the principle of freedom of speech and is essential for the progress of the legal fraternity.

Senior Advocate Ramakrishnan Viraraghavan, representing the Bengaluru Bar Association, introduced an interesting dimension to the discussion. He raised the possibility of including arbitration services under the Consumer Protection Act’s definition of service. Viraraghavan argued that every arbitrator whose award is set aside by the court could potentially be sued for negligence, bringing forth a novel aspect of legal accountability within alternative dispute resolution mechanisms.

The court continued to hear these diverse arguments as part of the ongoing proceedings. The legal fraternity’s stance on the inclusion of lawyers under the Consumer Protection Act, the need for an independent bar, and the potential extension of the Act to cover arbitration services added layers of complexity to the case. The court’s final decision on these matters would likely have significant implications for the legal profession and its interaction with consumer protection laws.