Motor Vehicle Act Amendments: Extended Limitation Period and Faster Resolution of Compensation Claims

The Motor Vehicles Act is set to undergo significant changes, with new provisions aimed at improving the efficiency of compensation claims for road accident victims. Among the most important amendments are the modifications to Sections 166 and 168, which deal with the limitation period for application of compensation and the completion of trial by the Claims Tribunal. These changes are expected to have far-reaching implications for both victims seeking compensation and insurance companies managing these claims.

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Key Amendments in Sections 166 and 168

Section 166(3) – Application for Compensation?

Old Provision: Victims had a strict six-month window from the date of the accident to file for compensation. No applications were accepted after this period. (interpretation of this sub clause was whole different debate)

New Provision: The six-month limit remains, but with a new grace period. The Claims Tribunal may now accept applications for up to twelve months after the accident, provided the applicant can show sufficient cause for the delay in filing.

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Section 168 – Award of the Claims Tribunal?

Old Provision: The Claims Tribunal was responsible for holding an inquiry, issuing an award for compensation, and ensuring the insurer or vehicle owner deposited the amount within 30 days of the award. However, there was no set time frame for the Tribunal to resolve the claim itself.?

New Provision: A crucial change in Section 168 mandates the Claims Tribunal to handle claims expeditiously, with an expectation that all cases be disposed of within twelve months. If a claim takes longer than this, the Tribunal is required to provide written reasons explaining the delay.

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Implications of the Amendments

For Accident Victims:

- Extended Time for Filing Claims: The amendment to Section 166 provides much-needed flexibility to accident victims who may have missed the initial six-month filing window due to medical recovery or other unavoidable reasons. With up to an additional six months available to file claims, victims who were previously excluded now have a chance to seek justice, provided they give a valid cause for delay.

- Faster Compensation Process: The changes to Section 168 will significantly reduce the time it takes for victims to receive compensation. The new twelve-month deadline for resolving claims creates a structured timeline, ensuring that victims aren’t left in limbo for years while waiting for their cases to be heard. This also adds accountability to the Claims Tribunal by requiring them to justify delays beyond the one-year period.

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For Insurance Companies:

- More Claims Due to Extended Filing Period: The amendment to Section 166 will likely increase the number of compensation claims, as victims now have up to twelve months to apply for compensation. Insurance companies will need to prepare for a higher volume of claims, especially from those who were previously barred by the strict six-month deadline.

- Faster Payouts and Settlements: The push for quicker resolutions under Section 168 will put pressure on insurers to settle claims more swiftly. Insurance companies will need to streamline their internal processes to ensure they can meet the thirty-day payout deadline once the Tribunal issues an award. Failure to comply could lead to legal repercussions or penalties.

- Cost Implications: Insurance companies will be able to avoid the huge payouts they have to give in form interests for cases with longer litigation period. Companies will need to allocate more resources for timely investigations and settlements.

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Broader Impact:

- Legal Framework Strengthened: By providing an extended filing period and pushing for faster claim resolutions, the government aims to create a more victim-centric compensation system. This amendment shows responsiveness to the needs of accident victims who may face difficulties in navigating the legal system immediately after an accident.

- Court Backlog Reduced: The mandatory one-year timeline for claim settlements could help reduce the backlog in Claims Tribunals, which have been notorious for long delays. With this legal framework in place, the Tribunals will be more focused on efficiency, thus ensuring that accident victims are not stuck in drawn-out litigation processes.

- Government’s Push for Approval: These amendments come in response to mounting pressure, especially after the Supreme Court inquiry on whether an LMV (Light Motor Vehicle) license holder can operate a goods transport vehicle under 7,500 kg. The government is pushing for swift parliamentary approval to address concerns and modernize India’s road safety and compensation framework.

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Conclusion

The proposed amendments to Sections 166 and 168 of the Motor Vehicles Act are a significant step towards enhancing the rights of accident victims and ensuring faster access to justice. By extending the time for filing compensation claims and setting a clear deadline for case resolution, the government aims to streamline the compensation process and reduce delays. For insurance companies, these changes represent both a challenge and an opportunity: while they must prepare for more claims and faster payouts, they can also benefit from a more predictable claims environment and huge savings on the interests.

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As the amendments move closer to parliamentary approval, the public and insurance sector alike will be watching closely to see how these changes shape the future of road accident compensation in India.