Consumer Protection and Healthcare Sector

Exclusion of Healthcare Sector from the Definition of Services

Consumer Protection and Healthcare Sector
Consumer Protection and Healthcare Sector

Consumer Protection is a socio-economic activity which needs to be accomplished by both government as well as businesses, with the prime interest and foremost objective of providing satisfaction to the consumers. By consumers, we understand individuals to whom goods and services are marketed, a transaction has been initiated between him/them and the retailer and the ultimate recipients or beneficiaries or users of particular goods or services. According to Father of Nation, Mahatma Gandhi, consumer is the one who gives the opportunity to the businessman to serve him. He is also the ultimate purpose of the business. However, dealers and manufactures’ profit motive exploits consumers through immoral and deceitful market practices. Thus, safeguarding the interest and rights of the consumers through formulation of suitable administrative framework, laws and polices is the prime responsibility of the government.

The exigency of ensuring basic rights to consumer welfare has long been globally recognized through legislations. In international context, the guidelines for consumer protection was adopted by the United Nations General Assembly on 9th April, 1985. A comprehensive policy framework was developed which outlined prerequisites for the governments in promoting consumer protection. Consequently, in accordance with the guidelines mentioned in the United Nations Guidelines on Consumer Protection (UNGCP), the Consumer Protection Act was enacted by the Union Government of India in 1986 for safeguarding the interest of the consumers. The preamble of the Consumer Protection Act 1986 says, “An Act to provide for better protection of the consumers interest and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith.”

The Present Scenario

The enactment’s popularity lies in its avowed objectives of promoting and preserving the rights of the consumers, safeguarding the rights and interests of the consumers through consumer protection councils instituted at state and national level, providing speedy, simple and cost-effective redressal mechanism through quasi-judicial machinery set up at Central, State and District level and providing for penalties in case of non-compliance of the orders stated by the quasi-judicial bodies. The Act guarantees six rights to the consumers which includes right to consumer education, right to seek redressal, right to informed, right to be heard, right to safety and right to choose.  The Act is applicable on all goods & services unless specifically exempted by the Government of India. It covers all three sectors i.e. private, public and co-operative. The Act provides protection against deficiency in service, defective goods, unfair trade practices and restrictive trade practices. This 1986 Act is backed by Consumer Protection Rules of 1987 and Consumer Protection regulation of 2005.

Over the years the Consumer Protection Act has been amended several times, first being in 1991 followed by 1993, 2002, 2010 and most recently in 2019 which came into effect in July 2020.  The Consumer Protection Act 2019 aims at strengthening the interest of the consumers and instituting regulatory authority for timely, speedy and effective administration and redressal of consumers’ dispute. Among other key features, one of the most important aspect about this Act is the removal ‘healthcare’ from the list of services. Here, it is pertinent to that the draft of the Consumer Protection Bill was originally introduced in the Lok Sabha in 2018 which included “healthcare” under section 2(42) of the Bill. Though it was passed in the Lok Sabha, it got lapsed in the Rajya Sabha because of ceaseless demands from numerous medical organisations, communities and professionals for removal of “healthcare” among other issues. The removal was demanded because they was apprehension among them that if healthcare remains included in the list of services, it would be misused by the consumers against them. Subsequently, the draft bill was ‘technically amended’ and in its current form, the Consumer Protection Act (CPA) 2019, excludes “healthcare” from section 2(42) where “service” is defined.

Thus, according to CPA 2019, “service” means service of any type or description that is accessible by potential consumers or users and includes, but not limited to, the provision of facilities in connection with transport, insurance, processing, financing, banking, supply of electrical or other energy, housing construction, entertainment, telecom, amusement or the purveying of news or other information, boarding or lodging or both, but excludes the rendering of any free of cost service or contractual personal service.  Here it needs to carefully noted that although “healthcare” has been excluded from the list of services mentioned in the Act yet it keeps the window for judicial interpretation open as while defining “service” it mentions the phrase “but not limited to” before listing the names of services.

Here, let’s find out what pronouncement had been made by the Hon’ble Supreme Court in the past on Protection of Consumer Rights in the context of ‘healthcare’ sector.

Supreme Court on Protection of Consumer Rights in ‘Healthcare’ Sector

After the 1957 case of Bolam v. Friern Hospital Management Committee, the so called “Bolam Test” is followed as the thumb rule to decide the cases of medical negligence. This test is done for ascertaining if there is a breach of duty in providing care to a patient by a doctor or any other medical professional. However, the professional is not considered to be negligent if he possesses the stipulated set of skills and exercises the skill in the required circumstances with plausible degree of care and caution.

In the case of Indian Medical Association v. V.P. Shantha, Supreme Court had reiterated that if medical practitioner renders a service to patient (except for the cases of free of cost service) by way of diagnosis, consultation or treatment including both surgical as well as medicinal, would fall under the ambit of “service” as defined under Section 2(1) (o) of the Consumer Protection Act. This concludes that medicinal practitioners can be held liable for their lack of services under the Act.

Later in Jacob Mathew v. State of Punjab, the Supreme Court while deciding on the criminal negligence of doctors under the Indian Penal Code held that an act has to be of very high degree for it to amount to criminal negligence. However, despite this caution expressed in the Jacob Mathew case by the apex court, the rise in the count of cases filed against doctors continued.

More recently, while pronouncing the judgment in the case of Maharaja Agrasen Hospital and others v. Master Rishabh Sharma and others, the Supreme Court stated that a hospital can be vicariously held liable for any act of negligence committed by the doctors empanelled or engaged for providing medical assistance. The Supreme Court asserted this as commonly it is seen that a patient chooses a hospital on account of its reputation and with the hope of receiving due and proper care from the medical staffs of the hospital. Thus, if a doctor or any other medical professional fails to discharge their duties, it is the hospital that can be held liable and needs to justify the acts of omission or commission on behalf of their doctors.

Rationale behind inserting “healthcare” in 2018 Draft Bill

In 1986, when the original Consumer Protection Act was passed by the Parliament, medical profession was not included in the list of services nor was it envisaged to be included. It was in 1994 after the verdict given by the Supreme Court in Indian Medical Association vs. P.Shanta case that medical profession was brought under the purview of CPA. From this time onwards, medical practitioners were legally held liable for providing inadequate service to the patients under the CPA. However, despite bringing medical professionals under the ambit of CPA, instances and reports of negligent acts committed by doctors kept rising. It was observed that owing to the commercialization of medical profession and health care sector, the profession has run out of faith. Although, there was law but it was not enforced to penalize all professionals attached to the healthcare sector. It was concerned with the acts of negligence but not concerned about those professionals causing injuries to the patient. Additionally, it was also observed that despite the number of cases being registered against medical practitioners increased significantly since the Act was enforced, there was still a poor level of awareness among dental and medical professionals. Hence, it was essential to bring the entire “healthcare” sector under the ambit of Consumer Protect Act to ensure and safeguard consumer rights, internalize quality-assured health standards in routine professional duties of medical professionals, ensuring robust relationship between doctors and patients which consequently be beneficial for the doctors, patients and the society at large in years to come.

Arguments Against inserting “healthcare” under Consumer Rights

Eversince the Consumer Protection Bill got passed in the Lok Sabha, the medical fraternity expressed strong apprehension and continued opposing it. For the medical professionals, the Consumer Protection Bill was itself a horror-instilling phenomenon, but a sense of panic was observed with introduction of the new amendment due to its various features which included enhancement of penalty powers. The 2018 Bill which included “healthcare” in the list of services did not clearly clarified the ways of dealing cases which were highly specialised in nature. Unless mentioned, by the definition of “service” it would mean that the entire healthcare sector was under the purview of the Bill. Below are the five major arguments brought to oppose the Consumer Protection Bill of 2018.

Lack of requirement of Expert Opinion: As there is a continuous rise in the number of cases being filed on the grounds of medical negligence, hence, it is crucial to properly determine which case is a case of medical negligence and establish before a compensation is awarded to the ‘victim’ by the court. The medical fraternity demanded a set protocol which an expert panel would follow while analysing a case before declaring it to be a case of medical negligence and compensation to the ‘victim’ is not just given on sympathetic or emotional grounds. Currently, if civil case comes before consumer forum, the members of the commission usually decides upon their whims if there is any requirement for opinions from experts or not. The demand for setting up a protocol is viable for determining which is an actual case of negligence and is eligible for compensation and no doctor is unnecessarily harassed in the name of CPA.

Major Arguments Against Inclusion of “Healthcare” Sector Info 1
Major Arguments Against Inclusion of “Healthcare” Sector

Lower Fora having high compensation powers: The 2018 Bill had increased the compensation amount prodigiously which all foras could award. According to the Bill, upto ₹1 crore compensation could had been awarded by the District consumer redressal while State Consumer Commission could award upto ₹10 crores and the National Commission would look into cases of above ₹10 crore. According to the doctors, if there remain clauses of awarding such sky-scraping denominations then there would also be a simultaneous enormous spike in number of complaints being registered.

The Commission might comprise of Non-judicial members: According to the 1986 Consumer Protection Act, such a person will head the Commission at various levels who will possess the qualifications of being a judge. But the 2018 Bill scrapped such requirements and rested the entire appointment powers in the hands of the central government. While others fear that there will be a violation in the principles of separation of powers between the judiciary and the executive, medical professionals are frightened of the fact that their fates in medico-legal cases might be decided by someone no knowledge of medicine or of law.

Provision for Consumer mediation cells: The 2018 Bill inserted a provision through which parties can settle disputes through mediation. According to the doctors, as there is an involvement of high level of compensation, Consumer mediation cells would be used as a tool for blackmailing and harassing the doctors.

No mention of penalties against vexatious and frivolous complaints: There were provisions for dismissal of vexatious or frivolous complaints with addition to penalty imposition under Section 26 of the 1986 Consumer Protection Act. However, instead of increasing the amount of penalty in frivolous complaint cases, the 2018 Bill did not mention any such clause. Doctors said, without the above-mentioned clause there would be no fear of counteraction and subsequently vexatious complaints would be used against doctor to blackmail them for huge number of rupees.

Pros & Cons

Keeping the “healthcare” sector included under the Consumer Protection Act would have had changed the entire system of medicine and healthcare. However, by mentioning the phrase “but not limited to” before listing the names of services, the Act has kept the window for judicial interpretation open. Here, let’s look at the pros and cons if “healthcare” sector would remain included in the Consumer Protection Act of 2019.


Firstly, if CPA 2019 would not exclude “healthcare” sector then patients would had definitely reaped the benefit of quick grievance redressal provision in case of genuine negligence.

Secondly, the Act would had forced to bring in improvement in the medical systems as there would had been pressure of reducing errors and court cases, thus it would enhance the quality of care.

Thirdly, although doctors always search how to achieve better results yet the inclusion would had made this process more official and formal. Hence, it would have had led to a better introspection by medical professionals.

Fourthly, the medical fraternity would view the decisions given by the courts very carefully which subsequently improved polices and protocols. Moreover, decisions made by the court would have opened the eyes of the medical professionals. It would clear the difference between medical law and medical science provide medical professionals an idea on how medical treatment in looked upon through the lens of law.

Fifthly, it would had increased the stress on documentation. There are several instances and evidences where everything was done by the doctors but there were not documented. As documentation is the key to save themselves, medical professionals would give more stress on documentation.

Pros & Cons Info 2
Pros & Cons


Firstly, inclusion of the “healthcare” sector under the ambit of Consumer Protection Act would promote use of defensive medicine. As, if doctors would look at every patients as potential litigant, then out of fear, they might prescribe more drugs and antibiotics and even might refuse treating sick patients in emergency situations. Simultaneously, there would be no surprise if there is non-availability of doctors during critical hours of a patient.

Secondly, the doctor-patient relationship is not at all like a buyer and seller. It is built on mutual trust and respect. Hence, in case of not actual act of negligence or prejudiced notions where a doctor would have to confront court’s proceedings, a sense of mistrust will grow among other patients which subsequently will erode the doctor-patient relationship.

Thirdly, there would have been a sudden spike in the cost of care as the practice of defensive treatment will lead to documentation of everything which will lead to inflated medical cost. The vicious cycle of need for insurance, rising cost of treatments, medicolegal suits and fees of lawyers would go unbated. Consequently, all these will increase the overall cost of health care.

Fourthly, the inclusion would subsequently heighten the level of insecurity and anxiety among medical professionals. They would remain in a constant fear thinking which patient will prove to be his bane and completely put an end to his career. This might also lead to media trials or professional hangings.

Other than these inclusion of “healthcare” sector into the list of services under the Consumer Protection Act would also have had led to increased paper work due to excessive documentation which in turn would lead to more time consumption, doctors being used as scape-goats for revenge, doctors being distracted from primary point of intention due to the headaches of medico-legal cases & punishments, doctors becoming reluctant to do emergency or risky jobs, delay in treatment at emergency circumstances, an hostile environment for young  doctors and last but not the least doctors will be subject to continuous blackmails.


The recent alteration and removal of the term “healthcare” from among the list of services have created a surge of anxiety among common citizens as this have put them on tenterhooks with the abstraction that CPA 2019 has put the blanket of exclusion of “healthcare” form the definition it gave on the term “service”. However, if we carefully interpret the definition of “service” mentioned in the CPA 2019, we will see that paid medical services are still under the purview of CPA 2019. According to the Act, a complain on deficiency of service will not be sustained only if the service has been provided at free of cost. Even here also, if there is a severe miscarriage of consumer justice in the free of cost service being provided then it again come under the ambit of judicial scrutiny.  Stress needs to be given on the phrase “includes, but not limited to” mentioned under Section 2(42) of the CPA 2019 which directly points clarifies the fact that “healthcare” is not completely excluded and can be interpreted under the said section. There are no such intentions in the new law put a blanket on the deficient health service provided by a doctor to a patient – a dampener for malpractice and medical negligence. The law heavily comes on unfair trade practices, which ultimately opens the door of the private hospitals to go through rigorous consumer auditing. Simultaneously, there is an utmost necessity to frame guidelines and for a judicial review of the Consumer Courts as it is considerably ill-equipped for judging complex medico-legal litigation which eventually arises questions on equity in public health delivery systems and health care services. The Consumer Protection Law must not be seen through the prism of medical negligence blind law, on the contrary it establishes the tone for patient-oriented and ethical medical professionalism to curb undue enrichment and unfair medical practices.



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The Consumer Protection Bill, 2018

Healthcare Sector & Consumer Protection


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