HC establishes compensation guidelines for parents of minors killed in accidents

NT Correspondent Bengaluru: The Karnataka High Court recently delivered a significant ruling regarding the compensation owed to parents of minor children who die in motor vehicle accidents. In a detailed judgement issued last month, Justice N.S. Sanjay Gowda stated that parents cannot be denied compensation simply because they were not financially dependent on their child at the time of the accident. This landmark decision lays down a standardised method for calculating compensation for parents of deceased minors, emphasising the principle of “future dependency,” as reported by Bar and Bench.

Justice Gowda explained that courts and tribunals must consider the potential for future financial dependency, acknowledging that parents may not rely on their children for financial support initially but might do so in their old age. He asserted that this approach is essential for delivering justice and equity, recognising the emotional and financial impact of a child’s death on parents. To establish a fair compensation amount, the Court prescribed a method that averages the compensation calculated through the multiplier method and the lump sum method. The multiplier method assesses a base notional income, adjusting for inflation and personal expenses, while the lumpsum method is used for compensations under the Railways Act. This dual approach aims to create a balanced and just quantum of compensation as per the Bar and Bench report. In a progressive move, the Court directed that all insurance companies must provide a basic insurance cover of Rs 10 lakh for parents of deceased minors.

Insurers are permitted to offer additional coverage options at the parents' discretion. The Court noted, “The best way would be to take the average of both the sums and make that sum to be the compensation payable.” This ruling came in response to appeals from parents challenging the compensation awarded by the Motor Accident Claims Tribunal (MACT). The tribunal had previously assumed that, as minors, the deceased children did not cause any loss to their parents. However, the High Court held that the death of a minor does entail financial loss, including immediate expenses incurred for hospitalisation and the loss of future support. Advocate K.V. Shyamaprasad represented the parents.