SC relief for self-employed, salaried road accident victims:

SC relief for self-employed, salaried road accident victims:

Context

• The Supreme Court has held that the ‘future prospects’ of a road crash vict­im must be taken into account while computing the amount of compensati­o­n due to him under the Motor Vehicles Act.

How was the compensation rewarded earlier?

• Compensation is awarded by the Motor Accidents Claims Tribunal based on the victim’s income, personal living expenses and other factors at the time of death.
• The courts would only take the actual income drawn by the victim at the time of death
• The courts would only take the actual income drawn by the victim at the time of death. A departure could be made only in “rare and exceptional cases involving special circumstances.”

What is the verdict?

• The Supreme Court modified the guidelines to include the possibility of future increases in the victim’s income as well as improvement in his living standards.
• Irrespective of whether the victim is salaried, their future prospects must be considered while deciding the amount
• The Constitution Bench fixed guidelines for computing motor accident claims for self-employed and salaried persons.

What are the new rules for a salaried victim?

• If the road accident victim had a permanent job at the time of his or her death in a road accident
• 50% of his actual salary will be added towards future prospects if his age is below 40 years
• 30% if the age of the victim is between 40 to 50 years
• 15% if the age is in the 50-60 brackets

What are the new rules for a self-employed victim?

• Similarly if the victim was self-employed or on a fixed salary
• 40% will be added to his established income if his or her age was below 40 years at the time of death
• An addition of 25% if the victim was in the 40-50 age brackets
• 10% if he or she was between 50 to 60 years.

Interpreting Section 168 of the Act

• Interpreting Section 168 of the Act, it must be ensured that the compensation amount is ‘just’ and has been determined on the foundation of fairness, reasonableness and equitability.
• To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust