Consumer Protection Act 2019 effective from 20th July, 2020

By Adv. Dr. Arun Mishra

New Consumer Protection Act 2019 effective from 20th July, 2020: till date Consumer Protection Act 1986 was applicable. This has been replaced by Consumer Protection Act 2019. This was signed by the President on 20th July, 2020 and has been made effective from 20th July, 2020 i.e. today.

This Bill was passed in the Lok Sabha in December 2018 but it lapsed since it could be passed in the Rajya Sabha as the term of the Govt came to an end. Subsequently it was re-introduced by the Govt in its next term and was finally signed by the President 0n 9th August 2019. However, it has been made effective from 20th July, 2020 following a notification issued on 15th July, 2020.

A very quick and brief review (focused on points affecting doctors) of the CPA 2019

  1. Earlier a patient wanting to claim compensation of Rs 20 lakhs had to file a complaint before the District Commission, to the State Consumer Forum if he wanted to claim Rs 20 lakhs to 1 crore and to the National Commission if the claimed amount was above 1 crore .Now, for a compensation up to Rs 1 crore, he has to complain to the District Forum, From Rs 1 crore to 10 crores to the State Commission and to National Commission for compensation above Rs 10 crores. As a consequence, you can now expect patients to claim higher compensation against you because up to Rs 10 crores he will not have to travel to Delhi and can conveniently file the complaint in Mumbai itself (for Maharashtra). So get prepared to increase your Professional Indemnity Insurance Cover and shell out more money.
  2. Earlier, if you had operated or treated a patient in Mumbai the patient could file a complaint only in Mumbai. Under the new Act, if you had done a cholecystectomy of a patient from Bihar, he has a right to file a complaint against you in Bihar Consumer Forum and you will have to travel to Bihar. You will have to grin and bear it. That is now the law.
  3. If you fail to issue a bill or receipt to a patient (for whatever reason, maybe inadvertently) this now has been included in unfair trade practice, and you are liable to face action under the CPA and may have to pay compensation.
  4. If you disclose personal information given to you by a patient (unless required by law) you can face action under the new CPA. Hence, strict confidentiality from now on.
  5. Earlier, in all Consumer Forums, one of the members on the bench had to be necessarily an Ex- High Court or Supreme Court Judge. Under the new CPA there may not be a single person who has any knowledge of law. Hence you can expect more perverse judgments from now on.
  6. Earlier the appointment of the members of the Commission had to be appointed by a State judicial committee. Now Central government will appoint members by a notification. Hence expect any Tom, Dick and Harry to be on the Forum.
  7. Now a Mediation Cell will be attached to every Forum to facilitate Alternate Dispute Redressal (ADR). Hence expect to go through a longer trial –first before Mediation Cell for settlement, and then before the Forum if this fails.
  8. Earlier, if you did not comply with the orders of the Commission you could face a jail term between one month and three years and a fine between Rs 2000 to Rs 10000. Now you will face imprisonment of three years with a fine not less than Rs 25000 and extendable to Rs 1 Lakh
  9. In case you wish to appeal against a judgment to a higher Forum, it is mandatory to deposit 50 % of the decreed amount before Appeal.
  10. E Commerce and telemarketing now included
  11. Concept of ‘Unfair Contract’ has been introduced in the new Act. Application of this for Healthcare providers could be as follows: The Consent taken by us from the patient could be brought under this ambit esp. by invoking the charge that the consent was not an informed one and hence ‘Unfair’
  12. Unfair Trade Practice may also pull doctors under its ambit by challenging professional fees etc which were not covered earlier.
  13. The new Act also has a provision for “Product Liability” which covers which is defined as the responsibility of a product manufacturer or product seller. For doctors it could be beneficial since we are all the time using some product or the other and liability arising from using a defective product could be deflected to the manufacturer. For example, a hip implant placed by an orthopaedic surgeon got fractured when the patient resumed his activities. It was the doctor who had to bear the brunt of the damage to the patient. This could change in the new Act.
  14. Under the new law, E-Complaints will now be permitted and patients could make on-line complaints against you.
  15. Misleading Advertisements now covered
  16. False Endorsements of products by celebrities or others now actionable under the new Act

I have spoken to various fora in the past on this subject and have also shared dias with sitting and past Member Judge and Ex Judge of National commission, who all have also given clarification on Present CPA 2019, in relation to Health Sector inclusion. I would like to share my opinion. After this news, I received almost 1000+ messages from different parts of India. A few were congratulating the removal of medical professionals from the ambit of CPA-2019 from now on. I felt that rather than replying to all individually, I should put forward my stand in General so that everybody can go through the same.

In my understanding and opinion,

Facts of the Matter

  1. Medical Professionals and Healthcare word was not there in CPA-1986
  2. After decision of S.C. in V.P. Shantha vs IMA – It was held that medical professionals should be considered as service provider under CPA.
  3. After that it was routine that cases against healthcare professionals were filed on regular basis.
  4. In CPA-2018 bill Government added two words Telecom and Healthcare in the definition of service
  5. After recommendation or request of a few bodies form CPA-2019 bill word healthcare was removed
  6. CPA-2019 Act was notified in Gazette on 9th august – 2019.
  7. CPA-Rules – 2020 are notified in Gazette on 15th July – 2020
  8. CPA rules were declared to be implemented from 20th July
  9. Doctors are celebrating that healthcare is now excluded from the ambit of CPA.

My Interpretation

  1. Doctors were not there in CPA as per CPA-1986. Healthcare professionals were added in CPA after 1994 after judgment of S.C. i.e. IMA vs. V. P. Shantha.
  2. Laws are made in Parliament and implemented and its interpretation is done by Courts.
  3. Now old CPA Act -1986 is repealed by new CPA Act – 2019.
  4. There are many changes and new provisions in the CPA-Act.
  5. Section 2(19) of new CPA Act defines establishment in which healthcare establishments and establishment of professionals is included.
  6. In definition of service although the word healthcare is not there but it was not there in CPA-1986 too.
  7. As per our understanding Healthcare Professional cannot be kept out of ambit of CPA-2019 unless the decision of IMA vs. V. P. Shantha is overruled by Supreme Court larger bench.
  8. As I have said laws are made in Parliament and interpreted and implemented by court, we will have to see how court interpret the same in due course.
  9. If courts continue filing cases against healthcare professional under CPA then question arise that can we challenge the same or should we challenge?
  10. The answer is YES. Our body must challenge the same.
  11. There can be many grounds to challenge.
  12. One of the main grounds should be – Government added word Healthcare in CPA-2018 bill and then they removed the word healthcare from the definition of service in CPA-2019 Act. This proves that the intention of Government is to keep healthcare professionals out of the ambit of CPA.
  13. There are many such laws which need to be challenged. Many bills in pipeline which needs serious attention and must be challenged and properly dealt with at a proper time with proper body.
  14. Definition of Services used word

INCLUDING NOT LIMITED TO TELECOM, INSURANCE, ETC

Which means Health sector is Services

Consumer Protection Act 2019 and it’s applicability to Health sector

Section 1 (4) says as otherwise expressly provided by the Central Government, by notification, this Act shall apply to all goods and services. Since the Government has nowhere expressly stated in the Act that healthcare is excluded, it remains within  the  purview  of  CPA . The  Section 2 (42) defines “service” means service of any description which is made available to potential users and includes, but not limited to, 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. This could be  interpreted by  someone  to  say  that  Government  healthcare  services  provided  free may  be  excluded  in  the  new  Act. However, it  is  to  be  realized  that  the  exact  same  words  regarding  free  service  were  also  mentioned  in  the  1986  Act. Despite that the  honourable  SC  in  1995  had  decided  in  its  wisdom  that  free  services  provided  by  a  hospital / doctor  would  remain  within  the  purview  of  CPA if  other  patients  pay  for  the  service. The  term  included  but  not  limited  to is  self-explanatory  and  implies  the  list  provided  is  not  exclusive.

The  Section 4 of  Consumer  Protection  mediation  rules 2020 states  that the following matters shall not be referred to mediation, namely:— (a) the matters relating to proceedings in respect of medical negligence resulting in grievous injury or death;…..How  then  are  we  still  celebrating  our  pseudo  victory  is  beyond  me. Fact  remains  that  CPA 2019  is many  times  worse  than  CPA 1986. Patient  now  has  a  right  to  file  a  case  at  his  native  place  not  necessarily  at  the  place  where cause  of  action  has  accrued. The  medical  professionals will  need  to  appear  for  cases  across  India and  a  victory  in  a  case  may  lose  its  meaning  if  a  doctor  has  to  travel  from  Delhi  to  a  district Commission  in Orissa  for  the  15  odd  dates  over  3-4  years.

As  per  Section 34.(1)The District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees. Nowhere  is  the  term  “compensation  asked  for”  used. To  my  mind  it implies  that  if  a  patient  has  paid  up to  Rs  1  crore  as  fee  for  services  rendered  by  a  hospital he  will  file  a  case  at  District Commission even if he  demands  10  crore  as  compensation. This  will  mean  that  number  of  cases  filed  against  doctors  will  rise  because  it  is  easier to  file  a case  in  District  Commission.

Another  peculiar  problem  seems  to  be  gestating  in  the  CPA 2019 where  the  qualification  of  President  of  the  Various Commissions  has  not  been  defined. Medical  fraternity  has  cried  itself  hoarse  asking  for  doctors  to  be  part  of  the  bench  deciding  cases  of  medical  negligence. Now  it  seems  it  will  no  longer  be  necessary  to  even have  a  judicial  background as compared  to  what  was  in  CPA 1986. Since  these  are  nominated  positions  it  worries  me  to  think  who  will  be  nominated  to  be  President  of  consumer  commissions  in  future.

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