Computation of damages by judges is still subjective and inconsistent.
Assessing the value of life or limb lost in a mishap for calculating compensation is an intricate task, whether it is a mass disaster like the Bhopal gas tragedy of 1984 or a contract labourer’s death. Law-makers have tried to codify the losses in pecuniary terms, but not with remarkable success.
For example, under the Workman’s Compensation Act, the employer shall, in case of death, pay 50 per cent of the monthly wages multiplied by the years of service. The amount decreases for total permanent disablement, partial permanent disablement, temporary disablement and so on, all listed in a schedule. The Motor Vehicles Act has a schedule of payment under various circumstances, which the Supreme Court described ten years ago as “abounding in anomalies.” The little-known Public Liabilities Act, which deals with industrial accidents, is no better in quantifying human tragedies in financial terms.
In the uncodified field of compensation law, the computation of damages is subjective and inconsistent. The litigant would get one amount in the civil court, another in the high court and yet another from the Supreme Court. One court might find that he was not entitled to damages at all.
Therefore, eyebrows were raised last fortnight when the Supreme Court awarded a record Rs 1 crore to an IT engineer who was paralysed in his lower limbs following a botched surgery (Nizam Institute vs Prasanth Dhanaka). Earlier, the National Consumer Commission awarded only Rs 15 lakh on the same facts.
Prasanth was 20 years old when the operation was done. He battled for 20 years in courts to get the compensation. He argued, in person, the medical and legal technicalities while sitting in a wheel chair, assisted by his father. As a person earning Rs 28 lakh a year, he claimed around Rs 10 crore as damages from the reputed hospital.
The judgement explained the dilemma faced by the courts in such matters. “The court has to strike a balance between the inflated and unreasonable demands of a victim and the equally untenable claim of the opposite party saying that nothing is payable. Sympathy for the victim does not, and should not, come in the way of making a correct assessment.”
One common formula applied by the courts to determine damages is the ‘multiplier’ method. This is most often used in the case of road accidents and other compensation claims like electrocution caused by negligent power suppliers. One recent Supreme Court case, Sarla Verma vs DTC, illustrates this. The monthly income of the deceased was Rs 3,400. It was assumed that one-third of this was spent on himself. The rest was the loss to his family, which was around Rs 27,000 a year. He was 38 years old, and would have retired at 60. So the annual loss was multiplied by the years lost. The multiplier was thus 22. The tribunal, thus, awarded Rs 5.94 lakh to the dependents. The Delhi High Court raised it to Rs 7.19 lakh, taking into account future prospects like promotions and pay revisions, reducing the personal expenses factor to one-fourth. On appeal to the Supreme Court, the last factor was further reduced to one-fifth; the multiplier was also lowered to 15 but the total came to Rs 8.84 lakh because of other factors added.
The unpredictability of judicial view is inevitable in such cases. Claims based on revised pay scales and promotion should be set against the eventuality of early death by illness, loss of employment, other calamities or unforeseen disadvantages. The court itself acknowledged the imponderables: “Life is akin to a ride on a rollercoaster where a meteoric rise is often followed by an equally spectacular fall and the distance between the two is a minute or a yard.”
The variation in the judicial approach was glaring in the two recent judgements of the Supreme Court: In the Sarla Verma case above, the court assessed funeral expenses at Rs 5,000 whereas in the same week, in another judgment (Rani Gupta vs United Insurance Co), the court granted Rs 15,000 on the same count. Death is not a great leveller, as some poet thought.
In the Nizam case, the hospital wanted the Supreme Court to apply the multiplier formula. The court rejected the application of this principle in medical negligence cases. On the other hand, it laid down the principle of “adequate compensation”. It admitted that it was a “rule of thumb measure”. Ultimately, the award was based on factors like the need for a life-time of personal assistance, nursing, medical care and physiotherapy, loss of future earnings and the pain and suffering he had undergone. Admittedly, these are shifting guideposts, varying according to the composition of the bench. One bright spot in recent cases is that courts have begun to notice inflation and are more liberal in doing their sums.
