Lawyers Appearing For Client In Courts Aren't 'Service Providers' As Per Consumer Protection Act, Says Amicus; Supreme Court Reserves Judgment

The Supreme Court on Thursday (February 29) reserved judgment on the issue whether advocates can be held liable under the Consumer Protection Act for deficiency of services. A Bench of Justices Bela Trivedi and Pankaj Mithal heard the matter. On the final day, Senior Advocate V Giri, the amicus curiae in the matter, addressed the bench.The issue, which is relevant for members of the Bar, emerged from a judgment delivered by the National Consumer Disputes Redressal Commission in 2007. The Commission had ruled that the services rendered by lawyers are covered under Section 2 (o) of the Consumer Protection Act. The said provision defines Service.It was held that a lawyer may not be responsible for the favorable outcome of a case as the result/outcome does not depend on only the lawyer's work. However, if there was a deficiency in rendering services promised, for which he receives consideration in the form of a fee, then the lawyers can proceed under the Consumer Protection Act.It is against this order that the appeal was filed before the Supreme Court. Earlier, in 2009, the Top Court had stayed the impugned judgment of the Commission.Lawyers appearing in courts immune from Consumer Protection Act; but lawyers providing other services can be brought under CPA : Amicus During the course of today's hearing, Giri assisted the Court by highlighting two important aspects. At the beginning of his arguments, the Senior Counsel highlighted that lawyers who are engaged to appear before the Courts of law or before different forums may have to be treated slightly differently from lawyers who are approached for their legal services like opinions, consultations, and drafting of agreements. He then moved on to the first leg of his arguments, which was based on the proposition that the client is the principal and the lawyer is an agent. Thus, what is done by the advocate binds the Client., the Counsel asserted. To bolster this, Giri first gave the background on how an advocate can appear on the strength of vakalatnama that is executed in his favor. The Senior Counsel also referred to Order III, Rule 1 of the Code of Civil Procedure (CPC), which governs the vakalatnama requirement. When a lawyer is appointed and a vakalatnama is executed, an advocate appears, acts, and pleads on behalf of his client. Thus, an advocate acts on behalf of his client, the amicus submitted. At this stage, he also cited a case Byram Pestonji Gariwala vs Union Bank Of India And Ors., 1991 AIR 2234, that has, inter-alia, highlighted the counsel's role to enter into a compromise decree and how they act as a representative of his client. The concerned part of the cited judgment is as follows: “There is no reason to assume that the legislature intended to curtail the implied authority of counsel, engaged in the thick of proceedings in court, to compromise agree on matters relating to the parties, even if such matters exceed the subject-matter of the suit. The relationship of counsel and his party or the recognised agent and his principal is a matter of contract; and with the freedom of contract generally, the legislature does not interfere except when war- ranted by public policy, and the legislative intent is expressly made manifest.” Moving forward, Giri also cited another case of Salil Dutta V/s. T.M. and M.C. Private Ltd., 1993 SCR (1) 794, to demonstrate that an advocate is the agent of his client. “The advocate is the agent of the party. His acts and statements, made within the limits of authority given to him, are the acts and statements of the principal i.e. the party who engaged him.,” the Court had observed. In order to highlight that a lawyer is authorized to settle and compromise a claim, Himalayan Coop. Group Housing Society vs. Balwan Singh & Ors., Civil Appeal Nos 4363-4364 & others, was referred. In this case, it was also emphasized that the law of agency might not strictly apply to the client- lawyers relationship. Reasoning this, it was stated that lawyers are also fiduciaries; thus, their duties will sometimes be more demanding than those imposed on other agents. “The authority-agency status affords the lawyers to act for the client on the subject matter of the retainer. One of the most basic principles of the lawyer-client relationships is that lawyers owe fiduciary duties to their clients. As part of those duties, lawyers assume all the traditional duties that agents owe their principals and, thus, have to respect the client's autonomy to make decisions at a minimum, as to the objectives of the representation. Thus, according to generally accepted notions of professional responsibility, lawyers should follow the client's instructions rather than substitute their judgment for that of the client. The law is now well settled that a lawyer must be specifically authorised to settle and compromise a claim, that merely on the basis of his employment he has no implied or ...

Lawyers Appearing For Client In Courts Aren't 'Service Providers' As Per Consumer Protection Act, Says Amicus; Supreme Court Reserves Judgment

Gyanvi Khanna

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