Long road to compensation

The proposed law is inadequate to assuage the agony of road accident victims

Though one person dies in road accident every three minutes, which is up from 15 deaths every hour in 2010, the law of compensation has moved little in the past quarter century. Inflation and the rising cost of litigation are not seriously recognised by motor accident claims tribunals and the appellate courts. According to the transport ministry, the average claim for road fatalities between 2010 and 2016 was Rs 300,000 to Rs 500,000.

There have been four amendments to the Motor Vehicles Act 1988, and the latest is still pending because of objections from several states raising questions of federalism. Its fate hangs in balance with the government’s term ending soon. The new amendment bill bundles several issues into one, such as the idea of a national transport policy, movement of goods between states, regulating transport aggregators and several other technical aspects that have come up in this fast-developing field.

The subject of compensation is not adequately dealt with as it is lost in the jungle of other considerations. The Supreme Court has observed that a road accident victim is doubly unfortunate; first in getting involved in an accident, and second, in not getting any or adequate compensation after years of litigation. Some categories of victims are left with little remedy, like fatalities in hit and run cases (22,962 deaths in 2016) who are proposed to get Rs 200,000; or those knocked down by vehicles which do not have licence cover; and gratuitous passengers in goods vehicles and pillion riders. Even if the driver or owner is held liable, chances of recovery of compensation is remote as his capacity to pay is generally low or the cleverer ones would have transferred their assets to escape the burden.

There is practically no provision for immediate medical or monetary relief, leaving widows and dependent children at heaven’s mercy after the bread-winner’s demise. The order on compensation comes too late, after the guilt or negligence is decided by the tribunal. Even if there is an order in their favour the full compensation amount may not reach the victims and their families, particularly those who are uneducated or ignorant. The menace of ambulance chasers is persisting and the weaker sections are still vulnerable to the trickeries of these lawyers. They make the claimants consent to a ‘contingency agreement’ by which they promise to fight their case ‘free’. But if an award is made, a major part will be taken away by the lawyer.

The attitude of insurance companies has not been sympathetic to the victims, inviting admonition from courts. They do not investigate and assess the loss on their own but wait till the tribunal passes its award. Since they have a large litigation fund and a panel of lawyers eager at their doors, the appeals are filed up to the Supreme Court. This is in contrast to foreign firms that pay the undisputed amount first and later decide the actual damages.

Victims who want quick financial relief resort to a ‘no-fault’ scheme. The Act provided a schedule to help calculate the compensation. But this chart was riddled with arithmetic errors and it has been mercifully scrapped this year after inflicting havoc for two decades. The new rule limits the compensation to Rs 500,000 for death and Rs 250,000 for grievous hurt, with yearly increment. Even this will be taken away if the claimant accepts any other compensation. A time limit of six months has also been introduced, which cannot be relaxed by tribunals under any circumstances. 

But those who want to get higher compensation have to approach the tribunal raising several grounds. Since the principle of compensation aims to put the claimant as much as possible as s/he was in the position before the accident, several factors count like the age of the victim, the degree of injuries, the capacity to earn, the number of dependents, future prospects and loss of consortium of the spouse — and now loss of ‘hedonistic pleasures’ is being added in western countries. These are not quantifiable and there would be an element of subjectivity. There are no guidelines in the amendment bill to reduce uncertainty on this count.

The law on compensation should have been separated from the rest of the transport issues and dealt with comprehensively. It could have been a model in other cases of torts also, like the Employees’ Compensation Act and the Public Liability Act that provide for measly amounts. If the new law ever comes into effect, the intensely human aspects of compensation will be lost in the legal jungle where the insurers and the ambulance chasers would rule the field as before.