Consumer protection act and medical profession

Source: Indian Express

Introduction

The Supreme Court, on May 14, signaled a reconsideration of its 1995 ruling in the landmark case of Indian Medical Association v. VP Shantha (1995), which brought medical practitioners under the purview of the Consumer Protection Act.

• This development emerged during the adjudication in case of Bar of Indian Lawyers v. D.K.Gandhi (2019) of an appeal questioning the liability of advocates under the Consumer Protection Act for service deficiencies. Justices Bela Trivedi and Pankaj Mithal, comprising the Bench, deliberated extensively on the matter before reserving judgment on February 26.
• The Court's stance, nearly three decades later, marks a departure from its previous stance, underscoring that legal professional, as 'professionals', are exempt from legal proceedings for offering faulty services under the Consumer Protection Act of 2019.
• This recalibration raises pertinent questions about the interpretation of professional liability within the ambit of consumer protection legislation.
• Supreme Court bench comprising Justices S C Agarwal, Kuldip Singh, and B L Hansaria ruled that medical professionals fall under the definition of "service" in the Consumer Protection Act, allowing them to be sued in consumer courts for providing defective service. However, following the recent ruling, this decision has been referred to a larger bench for reconsideration.

Background

• In 1995, the court recognized the distinct nature of professional work, emphasizing its skill-based and mentally demanding characteristics, often influenced by factors beyond the professional's control.
• Senior Advocate Harish Salve, representing the Indian Medical Association, contended that medical practitioners shouldn't be judged by rigid norms and hence shouldn't be covered under the Consumer Protection Act (CPA) or held liable for service deficiencies.
• However, the court asserted that doctors still have obligations to their patients, including exercising care in treatment decisions and administration.
• Failure to meet the standard of reasonable care could render a doctor liable for service deficiencies, as outlined by the court.
• Justices Bela Trivedi and Pankaj Mithal, in 2024, indicated a leaning towards a more lenient approach for medical practitioners, suggesting that the CPA primarily aims to safeguard consumers from unfair and unethical business practices, rather than regulating professions or professionals.

Indian Medical Association v. V P Shantha (1995)

• Facts:
  • Due to ambiguity surrounding medical services falling under COPRA 1986, numerous Special Leave Petitions and Appeals flooded the Supreme Court, prompting a PIL under section 32 of the Constitution of India for clarification.
  • Respondents argued against medical services being covered by COPRA, citing occupational service distinctions and limitations in Section (1)(g) regarding deficiency in medical services.
  • Supreme Court rejected these arguments, asserting that medical services are included within COPRA's scope, emphasizing liability for negligence based on Bolam Test and compensation under section 14 (1) (d).
  • The court clarified that there's no master-servant relationship between doctors and patients, but the "inclusionary part" of the definition of service encompasses medical services.
  • Regarding payment categories, the Court ruled that free services don't qualify, full-paying individuals are covered, and those paying for non-paying patients are beneficiaries, thus included under COPRA.
  • Whether the services of a medical practitioner can be considered as ‘services’ under Consumer Protection Act, 1986?
  • Whether hospitals and doctors come in the ambit of the Consumer Protection Act, 1986?
  • The ratio decidendi of the case revolves around the interpretation of whether medical services fall within the scope of the Consumer Protection Act (COPRA) 1986.
  • The Supreme Court established that medical services are indeed covered under COPRA, rejecting arguments to the contrary.
  • It emphasized that liability for negligence in medical practice can be determined through established tests like the Bolam Test and that compensation can be awarded for damage caused by such negligence.
  • Additionally, the court clarified that the absence of a master-servant relationship between doctors and patients does not exclude medical services from COPRA's purview.
  • The decision also defined the categories of payment for medical services, establishing that individuals paying the full amount are considered consumers under COPRA, along with those who pay for non-paying patients.
  • The Consumer Protection Act (CPA), 1986, now includes the medical profession under Section 2(1)(o), encompassing various categories of doctors and hospitals.
  • This extension of the Act applies to medical/dental practitioners in independent practice, private hospitals treating all patients, and hospitals catering to both paying and non-paying patients.
  • Exceptions are made only for hospitals and practitioners providing entirely free services, while those receiving payment from insurance firms or through employment are included.
  • Consequently, this judgment broadens the scope of the CPA to encompass most private and government hospitals, along with employed and independent medical/dental practitioners, except those engaged in specified welfare activities.

  What is Services under the Consumer Protection Act, 2019?

  • Section 2(42) defines "service"
  • It means service of any description which is made available to potential users and includes, but not limited to, 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.

  What is Deficiency of Services under the Consumer Protection Act, 2019?

  • Definition:
    • The Section 2 (1) (g) of Consumer Protection Act, 1986 and Section 2(11) of Consumer Protection Act, 2019 defines "deficiency" as any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance required to be maintained under any law or undertaken to be performed by a person under a contract or otherwise in relation to any service. It includes:
      • Any act of negligence or omission or commission by the service provider, which causes loss or injury to the consumer.
      • Deliberate withholding of relevant information by the service provider from the consumer.
      • The concept of "deficiency of services" encompasses any failure, lack, or shortfall in the expected standard of services provided to consumers.
      • It covers instances where the service rendered falls short of the legal requirements, contractual obligations, or reasonable expectations of the consumer.
      • Deficiency can arise due to negligence, intentional acts, or omissions by the service provider, leading to consumer dissatisfaction, inconvenience, or harm.

      Conclusion

      The Supreme Court in its recent judgment exempting lawyers from liability under the Consumer Protection Act contradicts the court's 1995 decision regarding doctors, prompting a referral to a larger bench for reconsideration. This reflects a change in interpretation regarding the inclusion of professionals within the Act, expanding its coverage to encompass doctors and hospitals. The decision aims to ensure consumer protection and accountability within professional services by defining the scope of services and addressing deficiencies therein.