Mediation - Consumer Protection Mechanism

Consumer Protection Act, 2019 Consumer Dispute Resolution through Mediation under the Consumer Protection (Mediation) Regulations, 2020

1.     What is Mediation?

Mediation is a private dispute resolution process, where parties agree to refer their dispute to a neutral third party. The mediator will help both parties to have a mutually acceptable resolution. During the mediation, the mediator will listen to both the parties who explain the issues in the conflict.

1.     Types of consumer disputes

Consumer dispute means a dispute where a consumer makes a complaint against the seller or another person and that person denies the allegation made against him. 

There are many types of consumer disputes. A few of them are mentioned below:

  •    Quality of products and services.
  •    Claims regarding failure to provide or complete services.
  •    Non-payment of bills.
  •    Return or retention of deposits.
  •    Contract interpretation.
  •    Dissolution of partnerships.
  •    Injury, loss, or damage claims.
  •    Compliance with warranties  


Why do Parties in dispute choose mediation in their Consumer disputes?

Consumer Protection Act,2019 gave the concept of mediation as a redressal mechanism for solving consumer disputes. The parties now have an option that before going to consumer courts they can opt for mediation for solving their disputes, at any time after the admission of the complaint.

Private mediation can be used when the dispute is pending in court or pre-litigation process. Consumer Mediation Cells are introduced in Chapter V of the Consumer Protection Act, 2019 as an alternative resolution mechanism. 

Meditation helps in reducing the effect of conflict between the parties. It avoids increasing the hostility between the parties. 

Mediation can potentially cost less as compared to litigation. Especially if the parties get together early, they can engage in effective risk assessment of their respective cases. 

Consumer Protection Mediation rules 2020 came into force on 20th July 2020. In mediation, a “neutral person” becomes a mediator and helps the parties to resolve the conflict. There are few Consumer mediation rules. 

They are:

 A settlement agreement shall not be discharged by the death of any party thereto and shall be enforceable by or against the legal representative of the deceased party.

   Nothing in this rule shall affect the operation of any law by virtue of which any right of action is extinguished by the death of a person.  

    There are many benefits of mediation. 

     Some of them are: 

   Mediation gives the control to the parties to resolve the conflicts between them, whenever the mediation process is carried it's confidential, and both the parties voluntarily accept the process of mediation.

    The main goal of mediation is to narrow the dispute to such an extent that it makes sense for both the party. If an agreement is reached and both the parties agree then it will be kept but if it is not set a trail will be kept. 

   Mediation is needed because parties lack conflict resolution skills, so it is needed to solve the dispute.

     Procedure for Mediation

   The procedure for conducting mediation proceedings by mediation cell is written in Section 79 of the Consumer Protection Act, 2019. 

   It is made clear that mediation shall be held in the consumer mediation cell attached to District Commission, State   Commission, or National Commission, as the case may be. 

   The mediator is bound to complete the proceedings in a limited time frame of three months by Consumer Protection (Mediation) Rules, 2020. 

    Suppose a party does not participate in the mediation process, then the consumer district can ask the party to appear for the proceedings.

 The mediator will be guided by natural justice and fair principles. They won’t be bound by the provisions of Indian Evidence Act, 1872 or the Code of CivilProcedure, 1908. 

   The proceeding record shall be drafted by the mediator on a daily basis and should be signed by the parties, attorneys, chosen counsel, or authorized representatives. 

      The agreement which is executed by the concerned parties will be submitted to the consumer district with cover, along with a forwarding letter.

In case no agreement is executed by the concerned parties within the time limit allotted to them, the mediator will bring the problem to the consumer dispute commission. This will be done without revealing anything in the process of mediation

In a scenario where an agreement is not reached between the parties within the specific allotted time, or the mediator believes that the settlement is impossible, he will make his report accordingly and submit it to the relevant commission appointed. 

1. Which section of the Consumer Protection Act 2019 explains Mediation.

In Consumer Protection Act, 2019, Section 37, 49, and 59 empowers the consumer to refer the case to the mediation cell attached to it. Chapter V of the Consumer Protection Act, 2019 has introduced the provision of Mediation as an alternative resolution mechanism for any consumer dispute. 

Chapter V contains all provisions relating to the establishment and working of Mediation cells. The mediation cells are attached to each tier of the consumer redressal forum. 

They are:

A. District Level- District Consumer Mediation Cell

B. State Level- State District Consumer Mediation      Cell

C. National Level- National District Consumer               Mediation Cell

1.  ODR method is good in resolving             consumer disputes

    Online Dispute Resolution is the mode of resolution of disputes between the parties through the use of technology and different methods like mediation, arbitration, and many more things. 

  The Information Technology Act, 2000 along with the Arbitration and Conciliation Act, 1996, aid in the recognition of Online Dispute Resolutions. 

    There are many advantages of online dispute resolution like it helps in settling a wide variety of problems through online mode. It also covers various types of business models like consumer to consumer or business to consumers.


The mediation process is effective in creating both time savings and cost savings. The meta-analysis shows that mediation results in improvements of at least 16% or 17% in perceptions of time and cost savings, which is supported by documented savings in the areas of time and cost.