The Punjab government’s decision to shut down 17 consumer courts has sparked a vigorous debate among legal experts, consumer rights activists, policymakers and the general public. The move is intended to address the financial and operational inefficiencies. However, the decision has raised important questions about the future of consumer protection in the region and the broader implications for access to justice.

The courts in question have seen relatively low utilisation over the past few years. 8,381 cases registered in the courts over a three-year period. The cost of operating these courts has reached nearly Rs 1 billion. This amounts to an average of Rs 117,167 per case. This figure has prompted government officials to raise the question whether the resources allocated to consumer courts might be better deployed elsewhere within the justice system.

Critics of the closure say that these courts serve as an essential mechanism for protecting consumer rights. They contend that the existence of dedicated consumer courts sends a powerful signal about the government’s commitment to ensuring fair practices in the marketplace. In an era where consumers face increasingly complex challenges, ranging from substandard products and services to deceptive marketing practices, special court offer the necessary expertise and procedural focus required to resolve disputes quickly and effectively. Removing these courts, they warn, could make consumers more vulnerable. This will be particularly true of those who are less knowledgeable about their rights or unable to navigate the often cumbersome processes of general courts.

Proponents of the decision, on the other hand, emphasise the need for fiscal prudence and administrative efficiency. They point out that the low number of cases being filed indicates a significant underutilisation of these courts, suggesting that the dedicated institutions are not meeting the expectations placed upon them. Instead of operating expensive, special courts for a relatively small number of cases, it is argued, consumer disputes could be managed within the broader framework of civil courts. This integration, supporters maintain, will not only reduce redundant expenditure but also encourage a more streamlined and accessible judicial process, as general courts are already well-established and experienced in handling a wide array of cases.

International experience too offers valuable insights into how consumer protection can be maintained without incurring exorbitant costs. In the United Kingdom, the Financial Ombudsman Service has emerged as a successful model for resolving disputes between consumers and financial service providers. Rather than resorting to lengthy and expensive court proceedings, the UK system provides an independent body that offers fast, cost-effective alternative for dispute resolution. This approach not only reduces the burden on the traditional court system but also builds consumer confidence by ensuring that grievances are addressed promptly and fairly. Similarly, Australia has established tribunals such as the Victorian Civil and Administrative Tribunal to manage consumer disputes. VCAT emphasises mediation and conciliation, practices that allow for quicker resolutions and lower costs compared to conventional litigation. These international examples suggest that alternative dispute resolution methods can provide effective means of consumer protection while minimizing the financial strain on government resources.

Beyond these models, the European Union has taken significant strides in consumer protection by instituting regulatory frameworks that govern fair business practices across member states. The EU’s proactive stance in monitoring and investigating companies for practices such as misleading pricing or unfair contract terms demonstrates a commitment to consumer rights that transcends individual national jurisdictions. Such initiatives not only protect consumers but also promote a level playing field for businesses, ensuring that all market participants adhere to high standards of fairness and transparency. The success of these international systems lies in their ability to balance cost efficiency with robust consumer safeguards, an approach that could serve as a blueprint for reforms in the Punjab.

However, the potential consequences of shutting down consumer courts in Punjab extend beyond immediate savings. The removal of these special judicial bodies could lead to a significant shift in how consumer complaints are managed, with far-reaching implications for public trust in the legal system. In regions where consumer courts have historically played a vital role in mediating disputes, their closure may create a vacuum that general courts are ill-equipped to fill. General courts, while capable, often lack the specialised knowledge required to fully understand the nuances of consumer law. This gap could result in longer wait for case resolution, increased backlogs and outcomes that are less favourable for consumers who are already at a disadvantage when dealing with large, more powerful commercial entities.

Moreover, the perception that consumer rights are being de-prioritised can have a chilling effect on market behaviour. Businesses that might otherwise be deterred from engaging in unscrupulous practices could feel emboldened in the absence of a dedicated judicial watchdog. In an environment where consumer protection mechanisms are weakened, there is a risk that unethical practices may become more widespread, ultimately undermining consumer confidence and negatively impacting the overall economy. Such a scenario will not only harm individual consumers but could also diminish the reputation of the jurisdiction on the international stage, where consumer protection is increasingly viewed as a marker of a fair and progressive legal system.

In light of these challenges, it is essential to consider alternative remedies that do not involve the outright closure of consumer courts. One viable approach is to modernise and consolidate existing consumer protection mechanisms. This could involve investing in public awareness campaigns to educate citizens about their rights and the avenues available for seeking redress. Increasing public knowledge is crucial, as a significant factor in the underutilization of consumer courts is the lack of awareness among consumers about how to file complaints and what to expect from the process. Enhanced outreach efforts could lead to a higher volume of cases, thereby justifying the continued operation of special courts while ensuring that consumer grievances are heard.

Another alternative is to harness technology to improve accessibility and efficiency. Establishing user-friendly digital platforms for lodging complaints and tracking case progress can make the process more convenient for consumers, particularly those in remote or underserved areas. Such platforms can also help reduce the administrative burden and expedite case resolution. Additionally, integrating alternative dispute resolution (ADR) mechanisms, such as mediation and arbitration, into the consumer protection framework offers a hybrid model that leverages the benefits of both special courts and general judicial procedures. ADR provides a less adversarial and more cost-effective means of resolving disputes, allowing consumers to settle issues without the protracted timelines often associated with traditional litigation.

Drawing lessons from international experience, it is evident that a combination of modern technology, public engagement and alternative dispute resolution can provide a robust and sustainable framework for consumer protection. The experiences of the United Kingdom, Australiaand the European Union underscore the importance of adopting flexible and adaptive strategies that do not rely solely on expensive, dedicated courts. Instead, a more integrated approach that leverages existing judicial infrastructure while supplementing it with innovative dispute resolution mechanisms may offer the best path forward for the Punjab. This balanced strategy can preserve the essential function of consumer protection while addressing the concerns of fiscal responsibility and administrative efficiency.

Ultimately, the decision to close consumer courts in the Punjab represents a critical juncture for consumer rights in the region. While the financial rationale behind the move is understandable, the broader implications for access to justice, public trust and market fairness cannot be ignored. By exploring alternative measures that enhance rather than diminish consumer protection, policymakers can ensure that the rights of consumers remain safeguarded without incurring unsustainable costs. The examples of the UK, Australia and the EU provide compelling evidence that innovative and flexible approaches to dispute resolution can yield positive outcomes. It is imperative that any reform of the consumer protection framework in the Punjab be guided by a commitment to preserving access to justice, fostering public confidence and promoting ethical business practices. The challenge lies not in choosing between fiscal responsibility and consumer rights, but in finding a path that harmonises the two essential objectives for the benefit of all stakeholders.

The writer is a chartered accountant and a business analyst