Supreme Court Rules Advocates Exempt from Consumer Protection Act Liability

In a landmark judgment on May 14, the Supreme Court has rules that advocates are not liable under the Consumer Protection Act 1986 for any alleged deficiency of services, distinguishing legal professionals from ordinary business or trade practitioners.

This decision effectively overturns a 2007 National Consumer Disputes Redressal Commission (NCDRC) verdict which previously held that legal services fell under the Act’s scope.

A bench of Justices Bela Trivedi and Pankaj Mithal ruled that the inherent nature of professional services which require advanced education, specialized skills, and substantial mental effort, stands distinct from typical business activities.

The bench highlighted the distinctive relationship between an advocate and their client, noting that clients have considerable control over their advocates, including not allowing any concessions or decisions without explicit instructions. This, the court argued, categorically separates the legal profession from others, making it ineligible for inclusion under the standard definitions of ‘service’ provided by the CPA.

The Court emphasized that unlike businessmen, the success of professionals such as advocates is influenced by factors beyond their direct control, thus meriting different legal consideration under consumer protection laws.

Further the Court suggested a reevaluation of the Indian Medical Association v. VP Shanta judgment, which had concluded that medical professionals could be held liable under the Consumer Protection Act. This call for review signals a potential shift in the legal boundaries concerning professional liability.

The judgment also highlighted the unique characteristics of the legal profession, categorizing it as sui generis—of its own kind. It underscored that the advocate-client relationship is predominantly governed by a personal service contract, which the Court argued should be exempt from the definitions typically applied to services under the Consumer Protection Act.

While the previous NCDRC ruling acknowledged that lawyers might not guarantee the favorable outcome of a case, it held that deficiencies in promised services could still lead to proceedings under the Consumer Protection Act. This ruling was stayed by the Supreme Court in 2009, culminating in the recent judgment which has now set a significant precedent for the treatment of professional services within the realm of consumer law.

The Supreme Court concluded arguments and reserved judgment on February 29, 2024, regarding whether lawyers should be covered under the Consumer Protection Act (CPA).

This case revisits the scope of the term ‘services’ as defined in the CPA, initially expanded to include medical professionals in the 1995 Indian Medical Association v. VP Shantha case. The appeal challenges a 2007 NCDRC judgment that included legal services under the CPA, which led to a stay of this judgment by the Supreme Court in 2009.

Title: Bar Of Indian Lawyers Through Its President Jasbir Sigh Malik v.  D.K. Gandhi PS National Institute Of Communicable Diseases & Anr.

Case No.- Civil Appeal No(s).2646/2009

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