Consumer Welfare Fund to pay fee of the Mediator in Consumer Complaints

The Consumer Welfare Fund Guidelines have been amended and now Section IV Purpose (m) of the updated guidelines includes reimbursement of legal expenses incurred by a complainant, or class of complainants in a consumer dispute, after its final adjudication.

The amount of dispute, or the fee of the mediator as set by the President of the Commission, or the fees prescribed in the following table, whichever is least, shall be paid to the mediator, from the interest accrued on the Consumer Welfare (Corpus) Fund, established with co-contribution from the State and the Department of Consumer Affairs.

The Consumer Protection Act, 2019 for the speedy, hassle-free, and, inexpensive redressal of consumer complaints has provided the provision of settlement of consumer disputes through Mediation under Chapter V. With regard to it the Department have notified Consumer Protection (Mediation) Rules, 2020 on 15th July 2020 and the Consumer Protection (Mediation) Regulations 2020 were notified by the National Consumer Dispute Redressal Commission on 24th July 2020.

Most of the Consumer Commissions have set up Mediation Cells and have also empanelled mediators. Currently, there are 247 mediators empanelled in the State Commissions and 1387 in the District Consumer Commissions all over India. The Department observed that a substantial number of cases are not resolved through mediation. The department held deliberations on this issue during the Regional Workshops held in the North-Eastern States and the Northern States. And also held various stakeholder consultations with Voluntary Consumer Organizations and Alternate Dispute Redressal Agencies working in India.

Among the several issues, the main issue resulting in non-satisfactory results in the redressal of cases through mediation is the fee of the mediator. The parties in the disputes are observed to be reluctant in paying the fees of the mediator which results in unsuccessful conduct of the mediation process. To resolve this issue department furnishes suggestions and comments from all the State Consumer Commissions. On the basis of the Deliberations held, and suggestions and comments furnished have decided to pay the fees of the empanelled mediator from the corps of the Consumer Welfare Fund. 

To elaborate the above, the examples are given below:-

• Example 1: ‘A’ and ‘B’ have a dispute of the amount ₹ 200 pending in the District Commission. They approach the President of the District Consumer Commission to refer their case to be resolved through mediation. The President on the basis of the facts and amount of dispute sets the fee of mediation ₹ 50. The mediator successfully resolves the dispute and ‘A’ and ‘B’ arrive at a settlement.

The mediator will be paid a fee of ₹ 50 (as the amount set by the President is lower than the amount of dispute i.e. ₹ 200 and fee prescribed for successful mediation in District Commission i.e ₹ 3000) from the interest accrued on the Consumer Welfare (Corpus) Fund, established with co-contribution from the State and the Department of Consumer Affairs.

• Example 2: ‘A’ and ‘B’ have a dispute of the amount ₹ 50,000 pending in the District Commission. They approach the President of the District Consumer Commission to refer their case to be resolved through mediation. The President on the basis of the facts and amount of dispute sets the fee of mediation ₹ 5000. The mediator successfully resolves the dispute and ‘A’ and ‘B’ arrive at a settlement.

The mediator will be paid a fee of ₹ 3000 (as the fee prescribed for successful mediation in District Commission i.e ₹ 3000 is lower than the amount of dispute and the amount set by the President of Consumer Commission) from the interest accrued on the Consumer Welfare (Corpus) Fund, established with co-contribution from the State and the Department of Consumer Affairs.

• Example 3: ‘A’ and ‘B’ have a dispute of the amount ₹ 60,00,000 pending in the State Consumer Commission. They approach the President of the State Consumer Commission to refer their case to be resolved through mediation. The President on the basis of the facts and amount of dispute sets the fee of mediation ₹ 25,000. The mediator successfully resolves the dispute and ‘A’ and ‘B’ arrive at a settlement.

The mediator will be paid a fee of ₹ 5000 (as the fee prescribed for successful mediation in State Commission i.e ₹ 5000 is lower than the amount of dispute and the amount set by the President of Consumer Commission) from the interest accrued on the Consumer Welfare (Corpus) Fund, established with co-contribution from the State and the Department of Consumer Affairs.

To view the amendment guidelines, click here.