M J Antony: Unfair treatment

OUT OF COURT

Consumer law favours patients who can afford to pay at a private hospital.

Some of the bitter legal battles in consumer law have been fought over the basic definition of a consumer. The definition provided in the Consumer Protection Act is wide enough to include not only goods but also services, bought or hired, for consideration.

More than a decade ago, professionals like doctors and lawyers argued that their services should not be included in the definition. The Supreme Court said no, and ruled that they would be liable to pay compensation for negligence in providing services.

The most persistent professionals who tried to avoid liability were the doctors. In 1995, the Supreme Court in Indian Medical Association vs V P Shantha, held that medical practitioners, government hospitals, nursing homes and even private hospitals which rendered service without any charge would not be included in the consumer protection law.

That was because there was no 'consideration' and the service was free. According to the definition of a consumer, the service should be given for a consideration to bring it within the law. According to the Supreme Court, even the token amount for registration charged by government hospitals would not change the situation, and therefore, such institutions are not liable to pay compensation in cases of medical negligence.

This resulted in certain anomalies. If a patient has a complaint against a government hospital, he has no remedy under the consumer law. However, if he had gone to a private hospital and paid a hefty fee for medical care, he could move a consumer forum.

The liability of the doctors and the hospitals changed according to the management of the hospital. The reasoning in the Indian Medical Association judgement was that the patient had not paid any consideration to the government hospital. It is a different matter that the government hospital is maintained by the tax-payers.

There has been a significant shift in this view of the Supreme Court in one of its recent judgements, Kishore Lal vs Chairman, ESI Corporation. In this case, Kishore Lal complained that the ESI hospital in Sonepat had diagnosed and treated his wife wrongly, thereby causing her immense agony. The ESI Corporation contended that since the service provided to her in its hospital was free of charge, Kishore Lal was not a consumer as defined in the Act.

Therefore, consumer forums had no jurisdiction to deal with his complaint and demand for compensation for medical negligence. The district consumer forum agreed with the corporation and relied upon an earlier judgement of the Haryana state consumer commission to dismiss the petition. Therefore, he moved the Supreme Court.

He won the case in the Supreme Court which ruled that the ESI hospital was liable for the consequences of the negligence. The corporation is required under the ESI Act to establish and maintain hospitals and dispensaries. The services rendered by them are not free as the institutions are financed by the contributions made to the insurance scheme by the employers and the employees.

"The person availing of such services under the insurance scheme of medical care, whereunder the charges for consultation, diagnosis and medical treatment are borne by the insurer, such services would fall within the ambit of 'service' as defined in Section 2(1)(o) of the Act," the judgement said.

A judgement delivered by the Supreme Court last year, in Laxman Thamappa Kotgiri vs GM, Central Railway, also took a similar view in the case of railway hospitals. The wife of a railway employee died due to negligence of the railway hospital. The state commission cited the Indian Medical Association decision to deny compensation.

However, on appeal to the Supreme Court, it took the view that the service rendered to the employee was not free. The judgement explained that since it was not in dispute that the medical treatment was given to employees and their family members as part of the conditions of service and the hospital was run and subsidised by the employer, namely the Union of India, the husband would be entitled to compensation for medical negligence.

Thus, the rights of consumers of service are expanding, especially in the field of medical negligence. Discrimination against common people who are victims of negligence in public hospitals is a serious lacuna in the law. It has kept away a vast majority of patients from legal remedies.

The law-makers have not given serious attention to this aspect, though the definition of consumer has been amended in other respects. Therefore, the court has to interpret the existing definition beneficially to render justice in medical negligence cases equitably.