Mediation as a mode of Consumer Dispute Settlement

Last updated on Jun 7, 2022

Mediation(( Section 2(25), Consumer Protection Act, 2019)) is an out-of-court settlement where the parties can decide the manner of the proceedings. It helps the speedy settlement of disputes.

The Consumer Protection Act, 2019 has introduced the provision where the relevant Commission can refer a consumer dispute for mediation, when there is a scope of settlement between the parties(( Section 37(1), Consumer Protection Act, 2019)). However, parties to the mediation are given a time frame of 5 days to accept or reject the process of mediation, as consent is vital for it(( Section 37(2), Consumer Protection Act, 2019)). Once a dispute is referred to mediation, the fee paid to the Commission for dispute redressal is refunded to the parties(( Rule 5, Consumer Protection (Mediation) Rules, 2020)).

Process of Mediation

The mediation proceeding may be conducted in the following way:

Step-1: It would be held at a ‘Consumer Mediation Cell’ which would have a panel of mediators to settle disputes. This cell maintains a list of cases and records(( Regulation 11(7), Consumer Protection (Mediation) Regulations, 2020)) of the proceedings(( Section 74, Consumer Protection Act, 2019)).

Step-2: Every mediator is expected to act fairly and judiciously while deciding the matter(( Section 77, Consumer Protection Act, 2019)). A fee is also paid to the mediator before the proceedings begin(( Rule 8(6), Consumer Protection (Mediation) Rules, 2020)).

Step-3: Mediation would be conducted in the presence of both parties(( Regulation 11(1), Consumer Protection (Mediation) Regulations, 2020)) and will remain confidential(( Regulation 12, Consumer Protection (Mediation) Regulations, 2020)).

Step-4: The parties must provide all the relevant information and documents to the mediator(( Regulation 11(6), Consumer Protection (Mediation) Regulations, 2020)).

Step-5: If the parties come to an agreement after the mediation proceedings within 3 months(( Regulation 11(2), Consumer Protection (Mediation) Regulations, 2020)), a ‘settlement report’ would be forwarded to the Commission along with the signatures of the parties(( Sections 80 (1) and 80 (2), Consumer Protection Act, 2019)).

Step-6: The concerned Commission is required to pass an order within the 7 days of receiving the ‘settlement report’ of the parties(( Section 81(1), Consumer Protection Act, 2019)).

Step-7: In case no agreement has been reached through mediation, the same is communicated to the Commission through a report of proceedings. The Commission would then hear the issues of the concerned consumer dispute and decide the matter(( Sections 80(3) and 81(3), Consumer Protection Act, 2019)).

Step-8: A dispute cannot be taken to other proceedings, like arbitration or court litigation, once it has undergone the mediation procedure(( Rule 6, Consumer Protection (Mediation) Rules, 2020)).

Complaints which cannot be settled by mediation

However, the following matters cannot be referred to mediation(( Rule 4, Consumer Protection (Mediation) Rules, 2020))

  • Serious medical negligence or one that results in death.
  • Fraud, forgery, coercion.
  • Applications for compounding of offences(( Section 96, Consumer Protection Act, 2019)) by either of the parties.  This means that proceedings about these offences can be settled between the parties upon the payment of fine unless the commission of such offence has recurred in a span of 3 years(( Sections 88 and 89, Consumer Protection Act, 2019.)).
  • Criminal offences and public interest issues. These include issues concerning the public who are not parties to the case. For example, violation of privacy in terms of electronic bank transactions on e-commerce platforms.


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