Introduction

The Consumer Protection Act, 2019 encourages quick and peaceful resolution of consumer disputes. One important method for achieving this is mediation. Section 37 allows the Consumer Commission to refer disputes to mediation if there is a possibility that the parties can settle the matter amicably (peacefully).

Meaning / Definition

Reference to mediation means sending a consumer dispute to a mediation process (a method where a neutral mediator helps parties reach a settlement) instead of continuing with regular adjudication (formal decision by the Commission).

Under Section 37, the Consumer Commission may refer a dispute to mediation if it believes that the matter can be settled through mutual agreement between the parties.

Modes or Types

Reference to Mediation by the Commission

If the Consumer Commission believes that a dispute may be resolved through mediation, it may ask both parties to give their consent in writing to settle the matter through mediation under Chapter V of the Consumer Protection Act, 2019.

Mediation is voluntary. This means it will take place only if both parties agree.

Consent of the Parties

Once the Commission asks the parties whether they are willing to go for mediation:

• The parties must give their consent in writing.
• The consent must be given within 5 days from the date on which the Commission asks for it.

If the parties agree, the dispute may be referred to mediation.

Time for Referring the Dispute

If both parties give consent, the Commission must refer the matter for mediation within 5 days from the date of receiving the consent.

Stage at Which Mediation May Be Suggested

The Commission may refer the dispute to mediation at any stage of the proceedings.

However, it is preferable to consider mediation at the first hearing of the complaint, because early settlement saves time and cost for both parties.

Cases Where Mediation May Not Be Allowed

The Central Government may prescribe certain types of cases where mediation is not permitted.

In such cases, the Commission cannot refer the dispute to mediation.

Practical Example

A consumer files a complaint against a mobile phone company for selling a defective phone. During the first hearing, the District Commission feels that the dispute may be resolved if the company replaces the phone or provides compensation.

The Commission asks both parties if they are willing to settle the dispute through mediation. If both parties give written consent within 5 days, the Commission will refer the dispute to mediation within the next 5 days.

Summary

• Section 37 of the Consumer Protection Act, 2019 allows consumer disputes to be referred to mediation.
• Mediation is a voluntary settlement process with the help of a neutral mediator.
• The Commission may suggest mediation at any stage of the proceedings, preferably at the first hearing.
• Both parties must give written consent within 5 days.
• If consent is given, the Commission must refer the matter to mediation within 5 days.
• The Central Government may specify cases that cannot be referred to mediation.