Report No. 85
IV. Compensation Systems-varieties of
3.17. Various systems of compensation for harm.-
We do not propose to go into details of the different compensation systems in force for providing benefits to victims of accidents. But it is important to bear in mind that several systems for the compensation of harm exist. Their very existence shows that the law has not hesitated to adopt a special approach, wherever special reasons seemed to justify It. These special reasons would, of course, include considerations of social justice and the practical necessities of the situation.
3.18. As to the variety of systems, there may be1-(1) a pure system of negligence law (this is the traditional common law rule), or (2) a system of negligence law supplemented by liability insurance (i.e. the position under the present Motor Vehicles Act in India)2. Then, there may be (3) a system of strict liability (but without insurance covering the liability), or (4) strict liability, also supplemented by liability insurance3. In these cases, the tort-feasor remains liable and his liability constitutes the initial basis of actionability-though the liability can be shifted to the insurer, or may even be required by law to be so shifted.
(5) Besides these systems, there may be a "loss-insurance" system, such as the workmen's compensation law. In the systems just now referred to, the victim provides for himself for the future (or is made to so provide).
(6) Finally, there may be a system of social security. The primary liability in such a scheme is on the State or on another agency officially created.