Accident claims: SC to formulate norms on 'future prospect'

The Supreme Court today said it would lay down guidelines on considering the principle of "future prospects" of a person killed in a road accident while computing the compensation to be paid to the dependents.
A five-judge Constitution bench headed by Chief Justice Dipak Misra said it would mull over the issue whether "some standard threshold" amount can be fixed under the head of "future prospect" while awarding compensation to the dependents of the accident victims under the Motor Vehicles (MV) Act.
The bench, which also comprised justices A K Sikri, A M Khanwilkar, D Y Chandrachud and Ashok Bhushan, reserved the verdict on a batch of 27 petitions, including one filed by the National Insurance Company Ltd against an order of the Punjab and Haryana High Court.

The High Court, in 2013, had applied principle of future prospect while granting Rs 10.82 lakh compensation to the family of 30-year-old man, who was running his own company and had died in an accident involving his car and a truck.
During the hearing, the bench said that keeping in mind the changes like rise in the average life expectancy and career prospects in private sector also, there was a need to lay down principles on consideration of future prospect of victims, who are either self employed or in the private sector, in awarding accident claims.
"Take the example of lawyers. Their future prospects go up during the age of 50 to 70 years and they are self- employed. You cannot say that in case of death (of self- employed or private sector employees), the future prospect principle would not be considered. Same applies with Chartered Accountant and doctors...," the bench observed.

The apex court said there was a need to standardise the minimum amount under the head of future prospect in case the victim was either self-employed or working in private sector.

"In case of law teachers, they retire at the age of 60 years in government colleges. Even after retirement, they get employed in private law colleges on two-three times more salary and can continue up to the age of 70 years," it said, adding that additional evidence may be led before the Motor Accident Claim Tribunal (MACT) while seeking enhancement on the ground of future prospect.
Senior advocates Rakesh Khanna and Jayant Bhushan, appearing for insurance firms, said the existing "multiplier" system of computing the compensation in accident cases takes care of the future prospect principle as well.

"We would see whether anything more needs to be added in the existing system or principle," the bench said, adding "we have to fix a minimum threshold of compensation (under future prospect) and then further evidence can be led."
The bench was dealing with questions including whether the principle of future prospect would apply to private employment and self-employed persons also.
The MV Act provides for award of compensation to be paid by the insurance firms to the victim or his or her family in accident cases by using the methodology provided in the statute itself.
In the claim plea, the family members have to establish the age and income of the deceased and the number of dependents.

The MACT awards compensation after determining issues like income of the deceased, the deduction to be made towards the personal living expenses of the deceased and the multiplier to be applied with reference to the age of the deceased.