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Accident compensation claims to be settled via mediation, Supreme Court told
The GIC, an umbrella body of 43 public and private insurance firms, was on October 26 included as a party to the court proceedings. It supported the mobile app suggestion and agreed to launch it
The Union government and insurance companies have agreed to settle payment of compensation to victims of road accidents through mediation that may at best take over three months, the Supreme Court was told last week.
A report on the proposed mechanism of mediation suggested that “trained mediators” engage both the claimant and the insurance company to arrive at a “just and reasonable” compensation and ensure an amicable settlement.
The report, prepared by additional solicitor general (ASG) Jayant Sud, was presented before a bench of justices Sanjay Kishan Kaul and MM Sundresh on October 26. The court will consider the suggestions during the next hearing on November 16.
The court was informed about the proposed mechanism at a time it was considering passing directions for speedy resolution of cases pending under the Motor Accidents Claims Tribunal (MACT). As per the National Judicial Data Grid, nearly 25% of over 7.36 lakh MACT cases remained in the trial stage for more than three years. Of the total, at least 650 have been delayed for over two decades.
In his report, Sud highlighted how the alarming situation of pendency of motor accident claims has choked the entire justice delivery system.
“...further directions may be passed for not only speedy disposal of motor accident claims but also to ensure that the award amount reaches the victims expeditiously and without any deductions,” the report said.
The report suggested that the insurer files the offer for settlement before MACT within 30 days of receipt of the detailed accident report from police or MACT.
“Within a week after receiving the offer, the Tribunal shall refer the claimant and insurer to the Motor Accident Mediation Cell or Online Dispute Centre to consider the insurance company’s offer,” it said.
Following this, trained mediators shall engage both the claimant and the insurance company to arrive at a “just and reasonable” compensation based on the principles for computing compensation as laid down by the courts in the past, it added.
The report said the Mediation Cell or Online Dispute Centre will have to submit a report to MACT within 30 days, indicating the consent of parties and the justification for arriving at the proposed compensation. The parties will also have the option to refuse the offer during mediation.
If the parties arrive at an amicable settlement, the MACT will act upon the Mediation Cell’s report and pass an order, recording consent of both parties before closing the case, the report said.
From the time the insurer gets details of the case to make a settlement offer till the final decision by MACT, the process is expected to take less than three months, provided the time-frame under the suggested scheme is scrupulously followed.
The suggestions can be implemented after the court’s approval, it added.
Sud also said that a framework must be prepared by the law ministry to appoint mediators and decide on the fees payable to them.
“Till the time such framework is made, one-half of fees prescribed as per the Fourth Schedule of Arbitration and Conciliation Act, 1996, can be considered,” the ASG told the court.
The report also proposed that the mediation fees shall be paid by the insurance firm if the settlement amount is below ₹25 lakh. In cases involving amounts over ₹25 lakh, the burden of fees shall be borne jointly by the claimant and insurance firm, it added.
The top court had earlier allowed the General Insurance Council (GIC) to launch a mobile application where first information reports (FIRs), detailed accident reports and photographs can instantly be uploaded by police and MACTs across the country. The mechanism will allow uniform access to insurance companies for speedy processing of claims.
The GIC, an umbrella body of 43 public and private insurance firms, was on October 26 included as a party to the court proceedings.
“Settling dispute through mediation is an excellent thing but you need trained mediators who can provide ‘fair and just compensation’, a requirement under Section 168 of the Motor Vehicles Act. It should not be an attempt to coerce people into accepting whatever the insurance company has to offer. For this, there is need to create a pool of retired trial court judges which can inspire confidence in the mediation process,” Supreme Court advocate Gaurav Agrawal said.
