9 May 2010

Lawyers liable for deficiency in service?

In this commercial era, all services have a price. Thus even though the Bar Council of India may prescribe that law is a noble profession and intended to be maintained that way, there are no second thoughts that law profession is inevitably a service. So was also the conclusion of the National Consumer Disputes Redressal Commission. However the Supreme Court, it seems, has doubts on that proposition. Thus was stayed by the Supreme Court the decision of the National Commission which had held that lawyers also provide service and thus can be brought to terms under the Consumer Protection Act for deficiency in service. 

In its judgment dated 06.08.2007 passed in D.K. Gandhi v. M. Mathias a Bench of National Commission, headed by Justice M.B. Shah (a former Judge of the Supreme Court) had inter alia held as under;
In our view, the reasoning given by the State Commission is totally erroneous. The ambit and scope of Section 2(1)(o) of the Consumer Protection Act  which defines ‘service’ is very wide and by this time  well established. It covers all services except  rendering of services free of charge or a contract of personal service. Undisputedly,  lawyers are rendering service. They are charging fees.  It is not a contract of personal service.  Therefore, there is no reason to hold that they are not covered by the provisions  of the Consumer Protection Act,1986.   The State Commission approached the question totally in an erroneous manner by holding that by executing power of attorney the client authorizes the Lawyer to do certain acts on his behalf  and there is no term of contract as to the liability of the lawyer  in case  he fails to do such act.   It is to be stated that a Lawyer may not be responsible for the favourable outcome of a case as the result/out come does not depend upon only on lawyers’ work. But, if there is deficiency in rendering services promised, for which consideration in the form of fee is received by him, then the lawyers can be proceeded against under the Consumer Protection Act. Further, it is totally erroneous to hold that it is a unilateral contract  executed by the client  by giving authority to the lawyer  to appear and represent the matter. Apparently, it is a bilateral contract between the client and the lawyer, and, that too, on receipt of fees, lawyer would appear and represent the matter on behalf of his client. To hold that contract is unilateral is to ignore the fact that even after discussion the client may not engage the Advocate or the Advocate may refuse to accept the brief. Hence, such a contract can never be said to be unilateral.  
A petition for special leave to appeal was filed against this decision by an association in the name of Bar of India Lawyers where the Supreme Court, allowing leave to appeal (and thus paving way for a decision to be given on the issue on merits) stayed the judgment of the National Commission by its order dated 13.04.2009 in Bar of Indian Lawyers v. D.K. Gandhi.  Thus as of now, given the operation of stay, no final opinion can be given as to the status of lawyers as service providers under the Consumer Protection Act. However one thing can definitely be said with certainty and this is that the outcome, whichever way it may come, will nonetheless be interesting. 


Foodydude said...

Is there a final decision on the case?

Foodydude said...

Is there a final disposal of the case? What is the verdict?