How compensation is worked out, and what a lawyer can chargeमुआवज़ा कैसे तय होता है, और वकील क्या ले सकता है

The formula (death cases)

Five steps, in this order.

Step 1. Income

For a salaried person: the actual salary, less income tax. For someone self-employed or on a fixed wage: the established income, less tax.

If there is no proof of income at all, the tribunal uses a notional income. You do not need documents for this. The Supreme Court has said the minimum wage of your state is the floor. This applies to homemakers too: running a household has an economic value and it is counted.

Source: National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 · Kirti v. Oriental Insurance Co. Ltd., (2021) 2 SCC 166 · Sidram v. Divisional Manager, UIIC (2022)

If you have a salary certificate, produce it. In February 2026 the Supreme Court corrected a tribunal that had assessed a man's income at ₹6,000 a month when his salary certificate and his employer's affidavit both said otherwise. A court cannot pick a figure lower than your documents show without a reason.

Source: V. Pathmavathi v. Bharti AXA General Insurance Co. Ltd. (6 February 2026)

Step 2. Future prospects

The person would have earned more over their working life than on the day of the accident. A fixed percentage is added for this.

This is not optional. The Supreme Court held in February 2026 that adding future prospects "is not a matter of judicial discretion but a mandatory legal requirement." Tribunals still leave it out. If yours did, that alone is a ground of appeal. Future prospects also apply in injury cases where the injury caused permanent disability.

Source: Pranay Sethi, para 61(iii)-(iv) · V. Pathmavathi (2026) · Sidram (2022)

Step 3. Deduct what the person spent on themselves

The family lost what the person contributed to the household, not the whole income. So a share is deducted for what they spent on themselves. If the person was married:

If the person was unmarried, 50% is normally deducted, and usually only the mother is counted as a dependant. If a large family depended on them, such as a widowed mother and younger non-earning brothers and sisters, the deduction can drop to one-third.

Source: Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, paras 30-32

Step 4. Multiply by the age figure

What is left is multiplied by a number fixed by the age of the person who died. It is their age that decides the multiplier, not the age of the family members claiming.

Source: Sarla Verma, para 42 · Pranay Sethi, para 61(vi)-(vii)

Step 5. Add the fixed amounts

Three fixed heads are added on top:

• Loss of estate
• Loss of consortium, the loss of the company and support of a husband, wife, parent or child
• Funeral expenses

The Supreme Court set these at ₹15,000, ₹40,000 and ₹15,000 in 2017, and said they should rise by 10% every three years.

The exact amounts today are unsettled, and you should know that before anyone quotes you a figure. Different courts apply the increase differently. In August 2026 the Supreme Court awarded ₹48,400 for consortium, the 2017 figure raised twice, but in the same judgment awarded the un-raised ₹15,000 for funeral expenses and ₹15,000 for loss of estate. So expect something in this range:

There is a second open question. In August 2026 the Supreme Court awarded consortium separately to each family member: a widow and each of three children got ₹48,400 each. In March 2023 a different Supreme Court bench held the opposite, that the amount is a single total shared by the family. Both decisions stand. For a family of four this is a difference of about ₹1.45 lakh.

If your tribunal takes the lower view on either point, that is arguable. It is not certain.

Source: Pranay Sethi, para 61(viii) · Sameem Begum v. K. Venkat Swamy, 2026 INSC 864 (14 August 2026) · Shri Ram General Insurance Co. Ltd. v. Bhagat Singh Rawat (27 March 2023)

A worked example

A man aged 35 dies in a road accident. He earned ₹25,000 a month in a permanent job. He leaves a wife and two children.

1. Income. ₹25,000 × 12 = ₹3,00,000 a year. At this level no income tax is payable, so nothing is deducted.
2. Future prospects. Under 40, permanent job, so add 50%. ₹3,00,000 + ₹1,50,000 = ₹4,50,000
3. Personal expenses. Three dependants, so deduct one-third. ₹4,50,000 − ₹1,50,000 = ₹3,00,000
4. Multiplier. He was 35, so the multiplier is 16. ₹3,00,000 × 16 = ₹48,00,000
5. Fixed heads. Three claimants.
   • Higher view: consortium ₹48,400 × 3, plus estate ₹18,150, plus funeral ₹18,150
   • Lower view: consortium ₹48,400 once, plus estate ₹15,000, plus funeral ₹15,000

So: roughly ₹48 to ₹50 lakh.

If he had been self-employed instead, the addition at Step 2 would be 40% rather than 50%, and the dependency figure at Step 4 would be ₹44,80,000 instead of ₹48,00,000.

And this is what a mistake costs. If the tribunal leaves out future prospects, which happens often, Step 4 produces ₹32,00,000 instead of ₹48,00,000. That single omission is worth about ₹16 lakh in this example.

Work through your own numbers this way before you accept anything. You do not need a lawyer to do the arithmetic.

For injuries, not death

If the victim survived, the heads are different.

For money already spent or lost

• Treatment, hospital, medicines, transport, special diet
• Earnings lost during treatment
• Future earnings lost because of permanent disability
• Future medical expenses
• Attendant charges, if you need someone to care for the injured person

For the harm itself

• Pain, suffering and trauma
• Loss of amenities, what the person can no longer do
• Loss of expectation of life

In a routine injury case, only treatment costs, lost earnings during treatment, and pain and suffering are awarded. The larger heads, future earnings, future medical expenses and loss of amenities, need a disability certificate and evidence from the treating doctor. Get both. Without them those heads are usually refused, and they are the big ones.

Attendant charges are calculated the same way as income: monthly cost × 12 × the multiplier. In one case the Supreme Court awarded ₹4,500 a month × 12 × 18, after both the tribunal and the High Court had awarded nothing at all.

Source: Sidram v. Divisional Manager, United India Insurance Co. Ltd. (16 November 2022) · Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343

What a lawyer can charge you

A lawyer may charge you a fee. A lawyer may not take a share of your compensation.

This is not about the percentage being too high. Any percentage is barred: 5%, 10%, 40%, all the same. The rule bans the arrangement itself.

The Bar Council of India puts it plainly on its own website:

"An advocate should not charge for his services depending on the success of the matter undertaken. He also shall not charge for his services as a percentage of the amount or property received after the success of the matter."

Source: Bar Council of India, Rules on an Advocate's Duty Towards the Client, item 10

The formal rule is Rule 20 of Part VI, Chapter II, Section II of the Bar Council of India Rules: "An advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof."

Source: Bar Council of India Rules, Part VI Chapter II, full text

This has been decided in a motor accident case

A woman's husband died in a road accident in 1998. She claimed at MACT through an advocate. The tribunal awarded compensation. She paid him ₹10 lakh in fees.

He then made her sign a cheque for another ₹3 lakh, though she told him she had no money in the account. He emailed her saying his fee was 16% of what she had received. When the cheque bounced, he prosecuted her criminally.

The Supreme Court threw out his case in 2017. It held that a fee claimed as a percentage of the award is against public policy and is serious professional misconduct. When his lawyer tried to withdraw the complaint mid-hearing, the Court refused to let him.

Two things in that judgment protect you directly:

• A cheque you signed does not prove you owe the money. If you dispute the fee, it is the advocate who must prove there was a lawful agreement.
• A percentage-based fee claim cannot be the basis of a cheque-bouncing prosecution.

Source: B. Sunitha v. State of Telangana, (2018) 1 SCC 638 (5 December 2017)

This is not a one-off. In July 2025 the Supreme Court upheld a three-year suspension of an advocate who had sent a fee notice of ₹2.3 lakh to a woman who received ₹5 lakh from MACT for her brother's death. The Court called it gross misconduct and said it was considering increasing the punishment rather than reducing it.

Source: Supreme Court order dated 21 July 2025

What to do instead

Agree a fixed amount in rupees, in writing, before you sign the vakalatnama. A lawyer may charge a fixed fee for the work whether the claim succeeds or not. That is lawful, and putting it in writing protects you more than it protects them.

Never sign a blank cheque.

Ask for receipts. A lawyer is required to keep accounts of your money, what was received, what was spent, what was taken as fees, with dates, and to give you a copy if you ask.

If a lawyer has taken a cut

You can complain to the State Bar Council where the lawyer is enrolled. You do not need another lawyer to do this, and there is no court fee.

The State Bar Council must refer a complaint of professional misconduct to its Disciplinary Committee, which can reprimand the advocate, suspend them, or remove their name from the roll. The Committee has one year to decide. If it does not, the case transfers automatically to the Bar Council of India. Cite this if your complaint is sitting untouched. You can appeal to the Bar Council of India within 60 days, and from there to the Supreme Court.

What to attach:

• The vakalatnama
• Anything in writing that mentions a percentage: an email, a WhatsApp message, a fee note
• The cheque or receipt
• The MACT award

The email saying "16%" is what decided the 2017 case. Written proof of a percentage is the strongest thing you can have.

Source: Advocates Act, 1961, sections 35, 36B, 37 and 38

There is no going rate. You may hear that lawyers "usually take about 10%." We looked for a source for that figure, in court judgments, bar council guidance, legal aid material and news reporting, and found none. What the reported cases show is 16% in one and about 46% in another, and in both the lawyer was found to have committed misconduct. Do not treat any percentage as normal, because none of them is lawful.

Free legal aid

You may not have to pay a lawyer at all. But check which ground you qualify on, because it changes what you need to prove.

Being a road accident victim is not, by itself, a qualifying ground. These are:

• A woman, regardless of income. A widow claiming for her husband qualifies on this ground alone.
• A child under 18, regardless of income.
• A person with a disability. This covers many people seriously injured in an accident.
• A member of a Scheduled Caste or Scheduled Tribe, regardless of income.
• An industrial workman.
• Anyone whose annual income is below the state limit, ₹3,00,000 in most states. It is lower in some: ₹1,00,000 in Gujarat, West Bengal, Nagaland, Arunachal Pradesh, Ladakh and Puducherry; ₹1,50,000 in Bihar, Chhattisgarh and Tripura; ₹2,00,000 in Madhya Pradesh. The full list is on the NALSA page below.

So in most families someone qualifies without an income test. Start there.

Source: Legal Services Authorities Act, 1987, section 12 · NALSA, Legal Aid

Where to go

The District Legal Services Authority, at the District Court. Every DLSA has a front office. There are also Taluk Legal Services Committees at taluk courts, and High Court and Supreme Court Legal Services Committees for cases at those levels. See Help near you to find yours.

Helpline: 15100.

How to apply

In person, by post, by email to nalsa-dla@nic.in, or online. A written request on a plain sheet of paper is enough. If you cannot write, say so: a paralegal volunteer or an officer must fill the form for you, and you sign or give a thumb impression.

Apply online: scourtapp.nic.in/lsams

What it costs, and what to expect

Nothing. Not the form, not the filing, not the lawyer. Process fees, drafting, typing and the panel lawyer's fee are all paid by the legal services authority, during the case and after it.

A decision within 7 days. For the income ground, an affidavit stating your income is normally enough; you do not need a certificate. You may ask for a particular lawyer from the panel by name.

If you are refused, appeal to the Chairman or Executive Chairman of the same legal services institution.

If the lawyer they give you is not doing the work, complain in writing to the authority that assigned them, or email nalsa-dla@nic.in. The authority can take the case away from that lawyer at any stage and remove them from the panel. Say clearly what the problem is.

One warning: if you are granted legal aid and then hire a private lawyer instead, the aid can be withdrawn. You can apply at any stage, including on appeal, even if you had a private lawyer earlier.

Source: NALSA, Legal Aid

Before you sign anything

These are protections you already have. You do not have to ask for them.

A vakalatnama does not let your lawyer settle your case

Signing it lets a lawyer appear for you. It does not let them accept a settlement on your behalf. Your lawyer needs your express authority to compromise the claim, and you are not bound by admissions made without it. The Supreme Court has set aside compromises entered by an advocate without the client's authority.

So: never sign a blank or partly blank vakalatnama. Keep a photocopy of everything you sign.

Source: Himalayan Cooperative Group Housing Society v. Balwan Singh, (2015) 7 SCC 373

You get 30 days to answer an insurance company's offer

The law sets out how an insurer makes an offer. It must appoint an officer to handle the claim. That officer may make an offer to you before the Claims Tribunal, with the details set out. If you accept, the tribunal records it and the company must pay within 30 days. If you are not ready to answer, the tribunal must give you time, up to 30 days.

Two things follow. An offer belongs in front of the tribunal, so if someone arrives at your house or the hospital with papers to sign, that is not this process. And nobody can require an answer on the spot.

Before you accept, run the offer through the five steps above. Check that it includes future prospects, consortium for each family member, and, in an injury case, future medical expenses and attendant charges. These are the heads most often left out.

Source: Motor Vehicles Act, 1988, section 149

There is no "full and final" form to sign in a MACT claim

Compensation comes from a tribunal award. A settlement has to be recorded by the tribunal. There is no discharge voucher or receipt you are meant to sign to release the money.

If anyone asks you to sign a "full and final settlement" outside the tribunal, do not sign it. Take it to the DLSA first.

Do not take the ₹5 lakh no-fault payment if you have a real claim

There is a fixed no-fault payment under section 164: ₹5 lakh for death, ₹2.5 lakh for grievous hurt, without proving anyone's negligence. But accepting it makes the full claim petition lapse. The two are alternatives, not additions. For the 35-year-old in the worked example, taking ₹5 lakh would mean giving up roughly ₹49 lakh. If you are offered a quick fixed payment, ask whether it is under section 164, and speak to the DLSA before you sign.

Source: Motor Vehicles Act, 1988, sections 164 and 165 · Gazette notification S.O. 859(E), 25 February 2022

The documents are yours by right, and there is a timetable

The investigating officer must give you a statement of your rights within 10 days of the accident. The First Accident Report goes to the tribunal within 48 hours, the Detailed Accident Report within 90 days. You are entitled to copies of all of it, plus the FIR, the MLC and the post-mortem report. The tribunal's inquiry is meant to finish within 12 months of the accident.

A family that knows these dates is in a much stronger position than one that does not. See the documents page.

Source: Gohar Mohammed v. Uttar Pradesh State Road Transport Corporation, (2023) 4 SCC 381 · mact.hcnlservices.in

When to file

File within six months of the accident if you possibly can. If longer has passed, file anyway and say why you were delayed. Do not assume you are out of time. See the compensation page.

Source: Motor Vehicles Act, 1988, section 166 · Gazette notification S.O. 859(E), 25 February 2022

Find someone who has done this before

Somewhere in your extended family or your neighbourhood is a person who has been through a MACT claim, or a lawyer, or someone who works at a court. A cousin. A neighbour's son. Someone from your village who moved to the city.

Ask them.

Not because you cannot handle this. You can. But someone who has sat in that corridor knows things no page can tell you. Which clerk actually finds the file. Whether the tribunal sits in the morning. What the delay usually is in your district. Whether the DLSA office is where the sign says it is.

An hour on the phone with someone who has done it once is worth more than a week of reading. Most people are glad to help and are never asked.

If there is nobody, the DLSA is that person. That is what they are there for, and it costs nothing.

Sources used on this page

Law

• Motor Vehicles Act, 1988, sections 149, 164, 165, 166, 168
• Legal Services Authorities Act, 1987, section 12
• Advocates Act, 1961, sections 35, 36B, 37, 38
• Bar Council of India, Rules on an Advocate's Duty Towards the Client
• Bar Council of India Rules, Part VI Chapter II, full text
• Gazette notification S.O. 859(E), 25 February 2022

Judgments

• National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680
• Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121
• Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130
• Sidram v. Divisional Manager, United India Insurance Co. Ltd. (2022)
• Gohar Mohammed v. UPSRTC, (2023) 4 SCC 381
• Shri Ram General Insurance Co. Ltd. v. Bhagat Singh Rawat (27 March 2023)
• V. Pathmavathi v. Bharti AXA General Insurance Co. Ltd. (6 February 2026)
• Sameem Begum v. K. Venkat Swamy, 2026 INSC 864 (14 August 2026)
• B. Sunitha v. State of Telangana, (2018) 1 SCC 638
• Supreme Court order on advocate's suspension, 21 July 2025
• Himalayan Cooperative Group Housing Society v. Balwan Singh, (2015) 7 SCC 373
• Kirti v. Oriental Insurance Co. Ltd., (2021) 2 SCC 166

Official portals

• NALSA, Legal Aid
• Apply for legal aid online
• Gauhati High Court Kohima Bench, Motor Accident Claim Portal