Tuesday, May 28, 2024





Explain the role of mediation in consumer grievance redressal.

A mediator is an impartial third party who helps the parties in a dispute to reach a mutually agreed upon solution. Mediation is one of the dispute resolution methods listed in the Consumer Protection Act. The Act promotes mediation as a fast, simple, and cost-effective way to resolve consumer disputes.

A consumer or a business may submit an application for mediation to the relevant Consumer Commission or Authority. The case will then be referred to a Search Mediation Cell established under the Act.

Three months after the application is received, the Search Mediation Cell must attempt to mediate a solution to the dispute. If the matter is resolved by mediation, a settlement agreement must be made in writing, signed by the parties, and submitted to the relevant Commission/Authority.

The settlement agreement will work in a similar way as a Commission/Authority order. If no settlement is reached, the dispute will be referred back to the respective Commission/Authority for resolution under the terms of the Act.

Due to the voluntary nature of the process, the parties can opt out of the mediation at any time. The mediator is required to keep the proceedings confidential, be impartial, and assist the parties in finding a solution. Section 89 of the Civil Procedure Code, 1908, introduced the concept of mediation in India. It was the first time that mediation was made available in India and entered into force on 1st July, 2002.Prior to the introduction of Section 89, there was little knowledge about the benefits and applications of mediation in dispute resolution. In fact, in 2002, the idea of mediation as a means of justice and dispute resolution outside of the traditional court system was still in its infancy.

Consumer Mediator Cells
The Act, 2019 introduced mediation as an Alternative Resolution Mechanism (ARM) in Chapter V. The Chapter V of the Act contains various provisions regarding the establishment and functioning of the Consumer Mediation Cells (CMCs) under Section 79(1).

The CMCs are attached to each level of the consumer Redressal Commission (CRSC):
• On District Level:
• On State Level:
• On National Level:

These CMCs do not have any appellate jurisdiction. At each stage, the decision of the CMC is final and no dispute can be raised against the order passed by the CMC. The CMC’s order will be considered final and the same applies to both the complainant and the respondent.

For the consumer dispute mediation, a mediator is a member of the panel. The panel will be set up by the relevant CPC Commissions. The CPC Mediation Cell attached to the CPC Commission will set up the panel on the basis of a recommendation by a selection committee comprising the Chairperson and one member of the CPC Commission. The Mediation Panel is valid for 5 years.

Fees of Mediators
The fee shall be paid to the mediator in accordance with the terms and conditions laid down in Regulation No 11. The President of the relevant Consumer Commission shall attach the fee to the mediator. The parties shall pay the same amount to the mediator if the mediation is unsuccessful.
Only half of the above fees shall be paid in the event of a successful mediation. The Mediation Cell shall receive the fee deposited in advance by the parties.

• Code of conduct
Mediators must adhere to a code of conduct, which includes the following:

  1. not communicate directly or indirectly with the parties or their representatives during the mediation process, except during the mediation itself.
  2. not accept any gifts or hospitality from the parties, their representatives, or their counsel.
  3. disclose any prior or present personal, business, or professional relationships or connections with the parties to dispute, or any circumstances which may lead to reasonable doubt as to their independence and impartiality.

• Process of Mediation
The consumer mediation process is divided into three distinct stages, as outlined in the consumer manual on mediation, 2021, published by the Government of India. The first stage is the ‘Introduction and Opening Statement’, during which the mediator establishes a rapport with the parties and encourages them to reach an amicable settlement. The second stage, the ‘Joint Session’, is a joint hearing in which the mediator collects information and provides the parties with an opportunity to hear the other parties’ perspectives. The third stage, the ‘Separate Session’, is the mediator’s attempt to gain a deeper understanding of the dispute and the individual interests of the parties. Finally, the ‘Closing’ stage occurs when the parties submit the terms of settlement, with the mediator verbally confirming the terms and reducing them in a document known as a ‘settlement agreement’, which is then signed by all parties..
According to Regulation 11 of the Consumer Protection (Mediation) Regulation, 2020, the following are the guidelines for mediation proceedings-

  1. Presence of parties– The mediation shall be conducted in the presence of the parties or their authorised representatives or counsel.
  2. Time period for mediation– 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. Appearance before mediator– The parties shall be entitled to appear before the mediator in person or through their respective counsel or authorized representatives.
  4. Principe of natural justice to be followed– 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
  5. Consequence of non-participation– If a party does not participate in the mediation proceedings, the Consumer Commission may direct such a party to participate in the proceedings.
  6. Information provided– The parties shall provide all such information to the mediator as may be reasonably required by him for conducting the mediation proceedings.
  7. Record of proceedings– The record of the proceedings shall be prepared by the mediator on every date and shall be signed by the parties or their Counsel, authorized representatives or Attorneys.
  8. Agreement executed– 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. Agreement not reached– 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.

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