[Motor Accidents] Multiplier method for compensation applicable to serious injuries also and not just deaths: Kerala High Court

The Kerala High Court recently held that the multiplier method must be applied while calculating compensation in motor accident claim cases resulting in serious injuries as well and not just in cases of motor accident deaths. [The Oriental Insurance Company Ltd v Abdul Khader].

Justice C Jayachandran emphasized the purpose of adopting the multiplier method is to achieve uniformity and consistency while assessing compensation in motor vehicle accidents, regardless of the nature of injury.

The judge recounted that the method was proposed by the Supreme Court in the case of Sarla Verma v Delhi Transport Corporation, and has since been reiterated in a host of other cases.

“The very purpose of adopting the multiplier method in Sarla Verma (supra) is to do away with the considerable variation and inconsistency in assessing compensation and also to bring uniformity and consistency," the High Court said.

Justice Jayachandran further noted that the Supreme Court had opined that following the multiple method would subserve the cause of justice and avoid unnecessary contentions before tribunals and courts in motor vehicle accident cases.

"If this be the logic for adopting the multiplier method, can any change in the legal position be conceded for the reason that the result of the accident is an injury - especially in cases of serious injuries as available in the present case - instead of a death? The answer to the above question is surely negative, in the estimation of this Court, having regard to the logic and purpose behind adopting the multiplier method," the Court added.

The High Court made the observation while dealing with two appeals filed against a verdict of a Motor Accident Claim Tribunal (MACT) in a case where an insurance claimant had been granted about ₹ 5.4 lakhs as compensation for injuries suffered after his scooter collided with a bus.

Notably, the MACT had calculated the compensation using the split multiplier method, and not the multiplier method.

The split multiplier method involves using one multiplier up to the date of retirement and another multiplier for the period after retirement.

The High Court noted that in various cases, the multiplier method was used where accidents have resulted in deaths. However, the Court has now opined that the multiplier can be applied to serious injuries as well.

Justice Jayachandran further noted that the Supreme Court itself has frowned upon the use of the split multiplier method by courts and tribunals.

Therefore, the High Court concluded that the MACT was wrong in applying the split multiplier method in this case.

Rather, Justice Jayachandran opined that a standard multiplier of “14” has to be used to calculate compensation, instead of using a multiplier of “9” for the pre-retirement period and “5” for the post-retirement period.

After examining the merits of the case, the High Court proceeded to enhance the compensation payable to the claimant under the heads of loss of amenities, pain and suffering and extra nourishment, while applying the multiplier method.

As a result, the compensation payable was enhanced to about ₹ 7.6 lakhs.

The High Court partly allowed the claimant’s appeal in these terms and dismissed the insurance company’s appeal.

The insurance claimant was represented by advocates PS Geetha Kumari and TR Sugunan.

The insurance company and the owner and driver of the bus were represented by advocates VPK Panicker, Lal George and Preethy R Nair

[Read Judgment]