Two kinds of damages in vehicle injury cases
A person injured in a motor vehicle accident can claim two types of damages: one is non-pecuniary damages (general damages) and the other is pecuniary damages (special damages), in Motor Accident Claim Tribunal (MACT) cases.
The non-pecuniary damages (general damages) are the damages which cannot be calculated in terms of money. They are pain & suffering, shock, loss of amenities, disfigurement, loss of expectation in life etc.
The Pecuniary damages are those damages which the victim has actually incurred and are capable of being calculated in terms of money. They include compensation for loss of earning capacity, other specific damages relating to property, expenses for medicine and special diet, expenses for attendance etc.
Heads for granting compensation in accidents
The detailed heads of compensation in motor accident cases are listed out in para 5 in the SC judgement in Rajkumar v Ajay Kumar [(2011)1 SCC 343], and reaffirmed in Divya v The National Co Ltd & Anr delivered on 18th October 2022, and they are the following:
Pecuniary damages (Special Damages)
(i) Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure.
(ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising:
(a) Loss of earning during the period of treatment;
(b) Loss of future earnings on account of permanent disability.
(iii) Future medical expenses.
Non-pecuniary damages (General Damages)
(iv) Damages for pain, suffering and trauma as a consequence of the injuries.
(v) Loss of amenities (and/or loss of prospects of marriage).
(vi) Loss of expectation of life (shortening of normal longevity).
Compensation in routine injury cases
In routine personal injury cases, compensation will be awarded only under heads (i), (ii)(a) and (iv) as detailed above and they are:
(i) Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure.
(ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising:
(a) Loss of earning during the period of treatment;
(iv) Damages for pain, suffering and trauma as a consequence of the injuries.
Heads of compensation allowable
It is only in serious cases of injury, where there is specific medical evidence corroborating the evidence of the claimant, that compensation will be granted under any of the heads (ii)(b), (iii), (v) and (vi) relating to loss of future earnings on account of permanent disability, future medical expenses, loss of amenities (and/or loss of prospects of marriage) and loss of expectation of life.
Assessment of pecuniary damages under item (i) and under item (ii)(a) do not pose much difficulty as they involve reimbursement of actuals and are easily ascertainable from the evidence.
Award under the head of future medical expenses – item (iii) — depends upon specific medical evidence regarding need for further treatment and cost thereof. Assessment of non-pecuniary damages –
Award under items (iv), (v) and (vi) — involves determination of lump sum amounts with reference to circumstances such as age, nature of injury/deprivation/disability suffered by the claimant and the effect thereof on the future life of the claimant.
Assessment of the loss of future earning
What usually poses some difficulty is the assessment of the loss of future earnings on account of permanent disability – item (ii)(a).
What constitute disability and permanent disability?
Disability refers to any restriction or lack of ability to perform an activity in the manner considered normal for a human-being.
Permanent disability refers to the residuary incapacity or loss of use of some part of the body, found existing at the end of the period of treatment and recuperation, after achieving the maximum bodily improvement or recovery which is likely to remain for the remainder life of the injured.
Temporary disability refers to the incapacity or loss of use of some part of the body on account of the injury, which will cease to exist at the end of the period of treatment and recuperation.
Permanent disability can be either partial or total. Partial permanent disability refers to a person’s inability to perform all the duties and bodily functions that he could perform before the accident, though he is able to perform some of them and is still able to engage in some gainful activity.
Total permanent disability refers to a person’s inability to perform any avocation or employment related activities as a result of the accident.
Permanent disabilities are wider than those in disability act
The permanent disabilities that may arise from motor accidents injuries, are of a much wider range when compared to the physical disabilities which are enumerated in the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (`Disabilities Act’ for short).
But if any of the disabilities enumerated in section 2(i) of the Disabilities Act are the result of injuries sustained in a motor accident, they can be permanent disabilities for the purpose of claiming compensation.
Percentage of disability does not match with that of whole body
The percentage of permanent disability is expressed by the Doctors with reference to the whole body, or more often than not, with reference to a particular limb.
When a disability certificate states that the injured has suffered permanent disability to an extent of 45% of the left lower limb, it is not the same as 45% permanent disability with reference to the whole body. The extent of disability of a limb (or part of the body) expressed in terms of a percentage of the total functions of that limb, obviously cannot be assumed to be the extent of disability of the whole body.
If there is 60% permanent disability of the right hand and 80% permanent disability of left leg, it does not mean that the extent of permanent disability with reference to the whole body is 140% (that is 80% plus 60%). If different parts of the body have suffered different percentages of disabilities, the sum total thereof expressed in terms of the permanent disability with reference to the whole body, cannot obviously exceed 100%.
Consider effect & impact of the disability on earning
Where the claimant suffers a permanent disability as a result of injuries, the assessment of compensation under the head of loss of future earnings, would depend upon the effect and impact of such permanent disability on his earning capacity.
The Tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss or loss of earning capacity. In most of the cases, the percentage of economic loss, that is, percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability.
Percentage of disability differs from percentage of earning
Some Tribunals wrongly assume that in all cases, a particular extent (percentage) of permanent disability would result in a corresponding loss of earning capacity, and consequently, if the evidence produced show 45% as the permanent disability, will hold that there is 45% loss of future earning capacity. In most of the cases, equating the extent (percentage) of loss of earning capacity to the extent (percentage) of permanent disability will result in award of either too low or too high a compensation.
Assess permanent disability on the earning capacity
What requires to be assessed by the Tribunal is the effect of the permanently disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it has to be quantified in terms of money, to arrive at the future loss of earnings (by applying the standard multiplier method used to determine loss of dependency).
In some cases, on appreciation of evidence and assessment, the Tribunal may find that percentage of loss of earning capacity as a result of the permanent disability, is approximately the same as the percentage of permanent disability.
Further reading
- Rajkumar v Ajay Kumar [(2011)1 SCC 343]
- Divya v The National Co Ltd & Anr [ 2022 SAR(Civ) 1177]
