New Delhi: With close to 12.4 lakh motor accident claim cases pending in tribunals and High Courts across the country, the Supreme Court’s Mediation and Conciliation Project Committee (MCPC) has urged all insurance companies to choose mediation over litigation and settle claims at the threshold.
Sources told ThePrint that MCPC chairperson Justice Vikram Nath held a meeting with senior representatives of insurance companies a fortnight ago and impressed upon them to opt for mediation. The secretary, Department of Financial Services (DFS), Union Ministry of Finance, also participated in the meeting and highlighted measures to incorporate the settlement culture in motor accident claim cases.
Motor accident claim cases are those where victims of road accidents or their family members move the court, asking for compensation from the car driver/owner. Usually, the insurance company with which the offending vehicle is insured pays the compensation amount, as decided by the court. Often these cases get dragged over the quantum of the compensation amount, even though a formula to calculate the same exists.
Based on the discussions with Justice Nath, the sources told ThePrint, the General Insurance Council—the apex body for insurance companies—shall prepare a draft Standard Operating Procedure (SOP) for invoking mediation at the threshold level to clear the claims. For this, the Council shall take assistance from MCPC and the DFS. This SOP would be applicable to non-life insurance companies.
At the meeting, the insurance companies agreed to get at least one senior-level officer from their non-life branch in each state to undergo MCPC’s 40-hour training programme.
Concurring with the suggestion to mediate a claim, the insurance companies said they would undertake in-house due diligence to identify cases in which there is a chance of compromise. A list of these cases will be provided to the registrar general of each High Court, with a copy to the MCPC and DFS. In case of any bottleneck or difficulty, the insurance company can share them with MCPC and DFS.
“Under the law governing road accident cases, every insurance company is supposed to have a nodal officer in every district. Our endeavor is to make sure that a road accident victim gets the payment from the insurance company during the golden hour period, when their treatment is on, in case of an injury,” one of the sources told ThePrint, explaining the objective behind such an exercise.
“This can be done easily once the nodal officer gets a Detailed Accident Report (DAR). The proposed SOP will cover this aspect of expeditious disbursal of an interim amount so that the victim or the family does not have to wait for the final decision of the tribunal.”
Insurance companies were told to nominate a nodal officer for each state to liaise with the MCPC, High Courts and the Motor Accident Claim Tribunals during the ongoing Mediation for Nation drive for maximum settlement of accident claim cases.
The Mediation for Nation drive is part of the MCPC’s ongoing efforts to popularise mediation as an effective alternative dispute redressal mechanism. District courts and High Courts have been tasked to identify potential cases with a possibility of a settlement and refer them for mediation.
“Each non-life insurance company has been told to fix a realistic target for settlement in this special drive and hold review meetings with its state unit regularly,” said another source.
A review meeting with the MCPC and all the stakeholders from the industry would be held in mid-March. Meanwhile, the Committee will coordinate with the National Legal Services Authority (NALSA) to impress upon it and the state legal services authority to hold special lok adalats for accident claim cases only.
Upon the suggestion of insurance companies, the DFS was told to look into the desirability of amendments for uniformity in levying interest on claim amounts.
(Edited by Tony Rai)
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