compensation – the myLaw.net blog

Medical negligence: Supreme Court rejects rigid formulae, demands nuance in calculating compensation

The Supreme Court’s judgment in Dr. Balram Prasad and Others v. Dr. KunalSahaand Others, on appeal from a decision of the National Consumer Disputes Redressal Commission, addressed key issues related to the payment of compensation in medical negligence cases.

The brief facts are in this report. Liability per se had already been decided by the Supreme Court in a previous round of litigation in 2009.The Court had then directed the Commission to arrive at a just figure of compensation. This time round, in a 210-page judgment, the Court increased the compensation awarded — from the Rs. 1.55 crore awarded by the Commission to Rs. 6.08 crore, perhaps the largest ever in such a case.

The Court’s observations on the ‘multiplier method’ are a key takeaway from the judgment. The multiplier method calculates compensation based on the estimated future income of the deceased. It depends on the age of the deceased at the time of death, since it multiplies the estimated figure of annual income by the estimated number of years the deceased would have been earning for. Tracing the history of this method to the concept of no-fault liability under the Motor Vehicles Act, 1988, the Court relied on precedent (para 65) to note first, the need for flexibility in its application generally and the inappropriateness of its strict application in the context of medical negligence where fault has been established (since the method was specifically designed for redressal of no-fault liability claims). After that, the Court re-evaluated the compensation for loss of future income of the deceased. Here, the judgment once again extolled the need for a case-by-case approach, and added a thirty per cent to the projected future earnings to account for possibilities of future advancement and the ‘future potential’ of the deceased.

While substantively, the Court has decided the case based on existing law, three points stand out. Firstly, there is a constant emphasis on flexibility, context, and regard to the overall circumstances and an eschewal of calculation methods based on rigid formulae. Secondly, rather than relying on doctrine alone, the Court adopted a consequentialist approach. It was comfortable ‘getting its hands dirty’ and addressed issues of inflation adjustment, interest from the date of filing the claim, and even adjusting projected income with currency fluctuations. The emphasis appeared to be on an effective decision rather than on precedent and legal rules alone, an attitude that I would think is laudatory, and particularly appropriate for consumer law.

Despite the private law context of the judgment, I believe it serves the policy objective of demanding due care and attention from the medical community. The nuance and attention in the judgment to context and consequence are also notable.

(Prateek Andharia is a final year law student at NALSAR University of Law, Hyderabad.)

Namita Wahi: New land acquisition law is a step towards creating a “culture of justification”

Land acquisition is always a controversial issue in countries with aspirations of rapid economic growth, where land is scarce. A few weeks ago, India came closer to replacing the 119-year-old Land Acquisition Act, 1894 (“the 1894 Act”) with the Land Acquisition (Resettlement and Rehabilitation) Bill, 2013 (“the Bill”). The Bill has cleared both houses of Parliament and will soon become law. Namita Wahi, a Fellow at the Centre for Policy Research and an S.J.D. Candidate at Harvard Law School, spoke with us about the Bill.

Ms. Wahi said that the Bill was a step towards creating a culture of justification during the government’s forcible acquisition of property. Even though the Bill shifts the balance of power between the competing interests involved, the struggle amongst them will continue even after the Bill becomes law.

She spoke of the shifting political, economic, and legislative contexts in which the 1894 Act operated, the main drawbacks of that law, and how the Bill has tried to remedy these problems. The Bill tries to expand the number of persons who are recognised to have interests in the land being acquired, limit the reasons for which government can acquire land, limits the government’s ability to invoke “urgency” and bypass the safeguards under the law, and provides for higher compensation. She also identified the exemption granted to the laws applicable to several sectors such as electricity, railways, coal, and mines from the provisions of the law as a major drawback and cautioned that the layers of bureaucracy proposed by the Bill may have unjust outcomes.

Ms. Wahi’s doctoral dissertation is on “The Right to Property and Economic Development in India”. She has written extensively on the Land Acquisition Bill and the history of the fundamental right to property, including here, here, here, and here.