Lawyers welcome SC judgement exempting them from prosecution under Consumer Protection Act

Supreme Court judgment welcomed by lawyers

Lawyers have hailed the judgment of the Supreme Court exempting them from prosecution under the Consumer Protection Act, 2019, noting that the ruling rightly draws a distinction between professionals and those involved in business.

“It’s a welcome decision. The court has correctly come to the conclusion that an advocate being a professional is not covered within the purview of the Consumer Protection Act,” said Indranil D. Deshmukh, partner (head - disputes) at Cyril Amarchand Mangaldas.

Deshmukh noted the court rightly held that the legal profession is regulated by the Bar Council of India and any grievance with respect to a lawyer’s service must be raised with the council and not the consumer forum.

“Emphasising the distinction between legal professionals and businessmen, the ruling highlights the importance of education, skill, and the unpredictable nature of success in the legal profession,” said Sumant Nayak, a senior partner at Desai & Diwanji.

What is the judgment about?

In 2007, the National Consumer Disputes Redressal Commission held that lawyers provide a service to their clients and hence they can be sued for deficiency of service. This case ultimately reached the apex court where the judgment was passed.

The Consumer Protection Act is aimed at protecting the interests of consumers with respect to products or services they avail. The first version of the act was enacted in 1986 and it was subsequently repealed, and a new act was brought in its place in 2019 to keep up with the changing times.

A consumer who is unhappy with a product or service can file a complaint of deficiency in the consumer commission. The act defines deficiency in service as any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained under law.

The 2019 act defines service as something that is “made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.”

The court concluded that the object of the Consumer Protection Act, 2019, was to provide protection to consumers from unfair trade practices and unethical business practices. The law was not intended to include professions or services rendered by professionals within its purview, the court said.

Samarjit G. Pattnaik, a partner at Karanjawala & Co., said, “The nature of work performed by professionals does not align with the concept of 'service' as defined in the act. Professionals exert their utmost effort in handling each case, yet the outcome often depends on numerous external factors beyond their control.”

In the judgment, court noted that the legal profession is unique in nature and cannot be compared with any other profession. The court said that hiring or availing of an advocate is “a contract of personal service” and is therefore exempted from the scope of the consumer protection law.

“The court has also, in a manner, kept the legal profession at a higher pedestal and held that it is sui generis, i.e. unique in nature, and cannot be compared with any other profession. It reaffirmed the position that the legal profession is not commercial in nature but is essentially a service-oriented, noble profession,” said Stella Joseph, a partner at Economic Laws Practice.

Joseph noted that the judgment resonates with the fact that lawyers not only have a duty towards the client or their opponents, but they also have a paramount duty to assist the court as well.

According to Arunav Guha Roy, partner-designate at Saraf & Partners, the apex court has emphasised that the legal profession is unique and specialised, distinguishing it from ordinary businesses or trade practitioners. He said, “While advocates can still be sued for negligence in the ordinary course of law, they are excluded from the CPA’s definition of services.”

Doctors in consumer law

The Supreme Court also called for reconsidering an earlier judgement that brought doctors under the purview of the Consumer Protection Act.

In 1995, a three-judge bench of the Supreme Court ruled that doctors would be covered under the consumer protection law, opening the gates to a flurry of medical negligence suits filed against doctors for deficiency in service.

In its judgment on May 14, the court recommended reconsideration of the 1995 order applying the logic and judgment of this case.

“In view of the above, we are of the opinion that the decision of the three-judge bench… deserves to be revisited and considered by a larger bench. We, therefore, refer the matter to Hon’ble Chief Justice of India for His Lordship’s consideration,” the order said.

Ravi Prakash, associate partner at Corporate Professionals, said, “At the heart of the ruling lies the distinction between professionals and businessmen or traders. Professionals, characterised by advanced education and specialised training, operate within a realm governed by their respective councils, such as the Bar Council.”