In the ambit of the Law of Torts, compensation is paid for damage suffered by the plaintiff due to a tortious act of the defendant for which the latter is held liable. The purpose of this is to redress the wrong done to a person and return the plaintiff to his original position before the wrongful act took place.
Compensation can be claimed by filing a suit against the wrongdoer, or tort-feasor, before a judicial body. This can a court of law, or a specific tribunal, depending upon the tortious act committed. There are certain acts that dictate where the suit must be filed for compensation.
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For instance, Motor Vehicles Act, 1988, created tribunals specific to motor vehicle accident claims, called Motor Accident Claims Tribunal, for cheaper and speedier remedy to the victims of accident of motor vehicles. Thus, for claiming compensation for a motor vehicle accident, a suit must be filed with these tribunals.
There is also a provision under the Public Liability Insurance Act of 1991 that incorporates the principle of strict liability, stating that where death or injury to any person (other than a workman) or damage to any property has resulted from an accident, the owner shall be liable to provide compensation for the same.
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Section 3 of the Workmen’s Compensation Act of 1923 creates a provision for compensation for injuries arising out of and in the course of employment, and this compensation is not for negligence on the part of the employer but is a sort of insurance to workmen against certain risks of accidents, to be compensated by the employer.
Where the injured party is employed by a governmental authority, compensation can also be obtained by filing a suit against the state. The State also provides compensation in cases where there is no alternative method for the victim to obtain rightful compensation, and where a suit cannot be filed.
For instance, Section 164 of the Motor Vehicles Act provides for creation of a Motor Vehicle Accident Fund by the Central Government, which is used, inter alia, to provide compensation to victims of hit and run accidents, or their dependents in case of death.
When compensation is due, it must be complete, meaning that all damage caused to the complainant must be repaired or compensated without impoverishing or enriching the compensated complainant. The payment of an amount of money (damages) to the plaintiff to compensate and repair his damage or legal injury is the most commonly used method of compensation.
Since tort law is uncodified and judge made, there is no fixed amount to be paid as compensation for commission of a tort. It varies from case to case upon the discretion of the judge, depending upon the facts of the case and degree of damage caused. For instance, if the same accident causes only a minor injury, the compensation would be lesser than if the accident had caused a major injury such as paralysis or even death of the injured party.