Indian Supreme Court to consider Liability of Lawyers Under Consumer Protection Act

On Thursday, February 29, the Supreme Court reserved its judgment regarding the question of law, whether advocates can be deemed accountable under the Consumer Protection Act for service inadequacies. This case hinges on whether a lawyer's work qualifies as a "service" and what are the liabilities of Lawyers, if any under the Consumer Protection Act (CPA).

Supreme Court of India

Background: A 2007 National Consumer Disputes Redressal Commission (NCDRC) judgment deemed legal services covered under the definition of "service." as per Section 2 (o) of CPA. The judgment sparked a discussion among Indian lawyers throughout the country and what immediately followed was an appeal challenging the NCDRC's decision, which is currently under consideration by the Supreme Court of India.

Key Arguments made before the Supreme Court of India: Senior Advocate V. Giri, acting as the amicus curiae (friend of the court), presented key arguments before the Supreme Court, the thrust whereof was on:

1. Differentiation:  Lawyers appearing in court might be treated differently from those providing legal advice, consultations, or drafting agreements outside court.
   

2. Agency Relationship:  When lawyers appear in court, they act as agents of their clients. Their actions bind the client, negating the service provider-consumer dynamic envisioned under the CPA.
   

3. To bolster this argument, he cited several landmark cases:

• Byram Pestonji Gariwala vs Union Bank Of India And Ors. (1991 AIR 2234): This case highlighted the counsel's role in entering into compromise decrees and acting as a representative of their client.

• Salil Dutta V/s. T.M. and M.C. Private Ltd. (1993 SCR (1) 794): The Court observed that "the advocate is the agent of the party. His acts and statements, made within the limits of authority given to him, are the acts and statements of the principal i.e. the party who engaged him."

• Himalayan Coop. Group Housing Society vs. Balwan Singh & Ors. (Civil Appeal Nos 4363-4364 & others): This case emphasized the law of agency while acknowledging the unique fiduciary duties of lawyers.

Arguments put forth by various Bar Associations: Senior advocates representing various bar associations emphasized the importance of an independent bar free from undue restrictions. They argued that the CPA's application could hinder lawyers' ability to perform their duties fearlessly.

The Court is yet to deliver its judgment, leaving the legal community in anticipation. Key questions remain:

• Will the Court uphold the NCDRC's decision, bringing lawyers under the CPA's ambit?

• Or will it carve out an exemption for lawyers appearing in court, considering the unique nature of the lawyer-client relationship in such settings?
  

This case has the potential to significantly impact the legal profession in India by shaping the way lawyers are held accountable for their services. It also raises crucial questions about the balance between consumer protection and the autonomy of the legal profession. The Supreme Court's decision will be closely watched not only by legal professionals and consumers but also by those concerned with the broader implications for professional accountability and consumer rights in India.