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Nepal: Accident Victim Compensation in Disarray

(Dec. 2, 2007) Street justice, in the form of obstruction of vehicular traffic to press for higher compensation, has in recent months come to determine the amount paid to "third party" victims, as a result of contradictory provisions in Nepal's laws on compensation for accident victims. Reportedly, "the more pressure the victim's party is able to exert in the street, the more compensation they are likely to receive from vehicle owners." (How Much Compensation for Accident Victims, EKANTIPUR.COM, (last visited Nov. 20, 2007).)

In the last seven months, according to police officials, the number of obstruction incidents have spiked, with the protests resulting in compensation amounts as high as Rs800,000 (about US$12,550) for the deceased's family. While the Vehicles and Transport Management Regulation 2054 BS (VTMR) mandates that vehicle owners must have insurance coverage of Rs300,00 (about US$4,710) to cover persons run over by their vehicle, the Vehicle and Transport Management Act 2049 BS calls for a maximum compensation of Rs67,000 (about US$1,050) to be paid to a third party when an uninsured vehicle is involved. The confusion was compounded by a directive of the Home Ministry issued to all district administration offices on June 28, 2007, in response to the growing demands for exceptionally high compensation, not to make vehicle owners pay more than Rs75,000 (about US$1,180) in the case of uninsured vehicles. Victims' families have been demanding at least Rs300,000 in compensation, the amount set forth in the VTMR. Thus, according to traffic officials, "[t]he government, on the one hand, has made it mandatory for vehicle owners to have insurance cover [sic] worth Rs 300,000 for third party victims, while on the other, it has issued a directive not to make vehicle owners pay more than Rs 75,000." Moreover, they argue, the compensation amount of Rs67,000 provided by law "is far less than in the past if the value of today's currency is taken into account." (Id.) In the view of a senior metropolitan traffic police official, "the government should review the compensation amount, besides introducing some measures to ensure accountability on the part of drivers" (Id.)