Caping Compensation for Road Accidents – Impact on Victims

CAPING COMPENSATION FOR ROAD ACCIDENTS – IMPACT ON VICTIMS

Sivakumar. B

Professor and Head

Department of Civil Engineering

Eranad Knowledge City Technical Campus, Cherukulam

Manjeri, Malappuram (Dt), Kerala, India

Email: bsivakumar007@gmail.com 

Word count:  3,337 words text + 9 tables x 250 words (each) = 5,587 words

Submission Date: 30-07-2015

ABSTRACT

Road traffic crashes are one of the major causes of death, injuries and disabilities all over the world. It’s after effects are very severe in developing countries like India.  It not only adversely affects the national economy but also worsens the social status.  All road crash cases in India are tried at the Motor Accident Claims Tribunal (MACT), constituted under the Motor Vehicle Act, 1988.  This study examines the sufficiency of the amount of compensation awarded to the victims of road traffic crashes by the MACT.  It takes a long time after the crash incidence, to finalise the verdict and award the compensation. This is because nobody seems to understand the plight of the persons injured or the plight of the family whose member has died in a crash.  In all verdicts, the final compensation awarded comes only to about 50% of the actual expenditure/claim of the victim or his family.  This is mainly because of insufficient proof of income/job or because concerned doctors were not available to record their statements. Many low income families in India get economically paralysed in the process of treating the accident victims and this affects the future education and career opportunities of the other family members.  This scenario necessitates immediate revisions/udating of the rules and procedure for valuing crash cases.  

Keywords: Cost, Fatality Crash, Major Injury Crash, Court Compensation

INTRODUCTION

Rapid urbanisation and tremendous increase in the number of vehicles show the implication of economic advancement in a society, but at the same time it carries high risk to humans and resources. Road Traffic Crashes (RTC) is a major cost in all communities and the number of road traffic casualties increase day by day. Road traffic crashes which involve fatalities, loss of life and properties, in turn affect the economic resources. Crashes not only cause death and injuries to people but also have other social and economic costs including grief, hardship, property damage and administration costs, enormous death toll, high hospital costs and large number of non-hospitalized injured persons.  

The World Health Organisation (WHO) has identified that more than half of the people who die in traffic crashes are between the ages of 15 to 44 years (1).  Unfortunately this is the most productive and economically active age group in the society and hence leads to drain of the economy.  As road crashes mainly affect the young section of the society, it also has much sever impact in terms of the life years lost.  Most of the victims of the road traffic casualities are poor people walking on the road or riding on bicycles/scooters.  It is a catastrophic situation when the main bread winner of a family turns to be a victim of a road crash.  Individual crash victims and their families, friends and employers and society as a whole are affected by motor vehicle crashes in many ways.  Significant costs are associated with the lost productivity experienced by an individual and others when the victim dies prematurely or experiences a short or long-term disability. There is immediate economic hardship to the victim’s dependents in the loss of the victim’s income and other contributions; society also suffers by the necessity to support the victim or their dependents and through foregone contributions to the nation’s productivity.

Like other developing countries, road crashes are a major social evil in India too.  Every road crash involves pain and suffering and monetory costs in terms of untimely death, injury and loss of future income.  Each year more than one lakh people die and lakhs of people are seriously injured due to road crashes.  National Crime Records Bureau reports 377 deaths per day and 1287 injuries per day due to road traffic crashes (2).  In their report Ministry of Road Transport and Highways (MoRTH) shows 4,97,686 road crashes for the year 2011 which involve 1,21,618 fatal cases (24.40%) resulting in 1,42,485 deaths and 5,11,394 injuries (3).  It shows a crash severity of 28.6 persons killed per 100 crashes.      

Evaluation of traffic crash cost is a big challenge especially valuing the components such as loss of life, quality of life etc.  Methods being used and costs calculated have invited a great deal of debate worldwide, in particular, putting monetary values on pain and suffering.  There were only few studies in India which tried to cost the traffic crashes, over the past decades.  But all theses studies followed very simple economic models in calculating the costs.  On the other hand financial implications of accidents to the road crash victims are being estimated by Courts to decide on the compensation to be awarded.  Here, the sums awarded by the Courts/Tribunals to the surviving dependants of those killed or injured as a result of traffic crashes can be regarded as an indication of the cost that society associates with the road crash or the value that it would have placed on its prevention.  All road crash cases in India are tried at the Motor Accident Claims Tribunal (MACT), constituted under the Motor Vehicle Act, 1988.  Compensation is estimated, considering the value of productive output of people over the remaining lifetime.  It is fixed on the basis of a fomula that takes into account the age of the victim, his income status and position.  In the case of a fatality, the main parameter is loss of future earnings of the victim. In incidents where a road crash leaves the victim with a disability, compensation is calculated on the basis of either permanent total disability or permanent partial disability.  

In all verdicts, the final compensation awarded comes only to about 50% of actual expenditure/claim of the victim or his family.  It is observed that for the study period, 2010-2013, the average compensation awarded per fatality comes to Rs. 7,60,140 and for major (serious) injury it was Rs. 2,61,619 per injury. But at the same time the claims of victims fall in the range of Rs. 9.3 lakhs to 21 lakhs for fatality with an average of Rs. 15,25,696 and Rs. 4.3 lakhs to 6.3 lakhs with an average of Rs. 4.62 lakhs for major injury crash.  This is mainly because of insufficient proof of income/job or unavailability of concerned doctors to record their statements.  

Many low income families in India get economically shattered in the process of treating the accident victims and this affects the future education and career opportunities of family members.  This paper discusses the defficiency of the Court compensation to the road crash victims and the need of updating the rules and procedures followed in valuing the compensation awarded by the Court.  The following section, first, describes classification of road traffic crashes and how the crash costs are calculated in Court and finally a comparison of the actual expenditure as reported by the victims and the compensation awarded by the Court is given.

CLASSIFICATION OF ROAD TRAFFIC CRASHES

It is standard practice to classify road crashes by the severity of the injury as fatal, major and minor (4).  A Fatal RTC is the one in which one or more persons are killed as a result of the crash within 30 days.  A Major RTC will not be including any death, but one or more persons are seriously injured.  RTC in which there are no deaths or serious injuries, but atleast one slightly injured person is called a Minor RTC.  If there is no personal injury, but just damage to vehicle/property, the crash falls under Property Damage Only (PDO) crashes.  

DATA COLLECTION AND METHODOLOGY

Leading insurance companies providing third party/full cover insurances for vehicles and lawyers dealing the MACT cases were approached for getting details of the awarded Court trials regarding road traffic crashes.  Based on the detailing given in these Court verdicts, individual victims were contacted for getting their openion about the sufficiency of the amount awarded by the Court for their claims.  Data collected were analysed and outlayers were removed.  

CALCULATION OF CRASH COSTS

In this study, sums awarded by the Courts to surviving dependants of those killed or injured as a result of traffic crashes were analysed.  Only crashes involving fatality and serious injury were brought before the MACT for trial.  Different components that the Court had identified for fatality and serious injury are given in Table 1.  Coasting of each of the injury components were done according to the latest standards given by the Honourable Supreme Court of India in order to maintain uniformity and consistency in assigning monetary value for each of the road traffic crash case (5 and 6).  Value to each component is assigned by the court, based on the proof submitted for each.  If the victim fails to submit solid evidence/documents as proof, a nominal value for each component is decided by the court.