Does Basic Protection Compensation Affect a Damages Claim?

Families sometimes hesitate to accept the fixed payment for fear of prejudicing a larger claim, and sometimes assume that having received it there is nothing more to seek. Both assumptions are wrong.

Section 25: preserved, then deducted

Section 25(2) adds that the Act does not affect the operation of the Motor Vehicles (Third Party Insurance) Act, the Workers’ Compensation Act or the Wrongs (Miscellaneous Provisions) Act. The scheme is therefore cumulative: the fixed sum first, the damages later, with the fixed sum credited against the damages.

How the deduction works in practice

The courts deduct the Basic Protection payment from the assessed damages after any reduction for contributory negligence. In Nolnga v MVIT [1991] PGNC 68; [1991] PNGLR 436 damages of K14,566.72 for the death of a wife were reduced by the K1,500 Basic Protection payment to K12,366.72. In Kopon v MVIT [1992] PGNC 29; N1084 the dependency figures were reduced by 60 per cent for the deceased pedestrian’s own negligence and then by the K2,000 already paid, leaving K3,379.89. Because the deduction is made from the total, it does not matter which dependant received the fixed sum; but a court dividing the award among dependants will notice if one of them has already had the whole Basic Protection payment.

The deduction is only of Basic Protection Compensation. Section 30 of the Wrongs Act forbids deducting life insurance, superannuation, social service benefits, friendly society benefits or any “benefit or gratuity, in cash or in kind, received, as a result of the death”. Customary compensation from the driver’s relatives is, on the cases, treated differently and deducted, as in Kosam v MVIT [1993] PGLawRp 557; [1993] PNGLR 481.

Notice: not needed for one, evidence for the other

Section 54(2) of the principal Act provides that the section 54 procedure “does not apply to a claim for damages made under” the Basic Protection Compensation Act. No notice of intention to claim is required before asking an assessment officer for an inquiry, and the six-month period is irrelevant to it. For the damages claim, however, the section 54(6) notice is still mandatory. Here the fixed payment helps: in Motor Vehicles Insurance Ltd v Pojari [2005] PGSC 25; SC799 the Supreme Court majority held that correspondence between the parties and MVIL’s payment of Basic Protection Compensation together constituted notice of the dependency claim. A family that has claimed the fixed sum promptly has, in effect, told MVIL that a death claim exists; it should still send a written notice within six months, but the payment is a fallback.

Children’s money

Where the Basic Protection award is made to or for children, the National Court expects to see that it reached them. In Tapie v MVIT [1986] PGNC 28; [1986] PNGLR 78 an assessment officer had ordered K2,000 to be divided among a widow and infant children; a later settlement of the damages claim was put to the court for approval, and the court refused it “in the absence of any evidence that the infant children ... had received the benefit of the money paid to them under the Compensation Act, or that the money was held in trust for them”. The court suggested that the bulk of infants’ settlements be paid into court. A family administering a Basic Protection award for children should keep a record of how it was spent or held.

Timing: two different clocks

The Basic Protection claim has its own limit: the death must occur within 90 days of the accident (section 3). The damages claim has the Wrongs Act’s three years from the death. A death after 90 days loses the fixed payment but not the damages claim; a family that receives the fixed payment and then waits more than three years loses the damages claim, as in Lama v MVIL [2025] PGNC 461; N11612, where the baby died a year after the accident and the application came eight years later.

Why families should claim both

For a villager’s death the fixed K10,000 may exceed what a court would award: dependency for a subsistence family has been assessed at a few kina a week, producing totals under K10,000 in Elewai (K5,143) and Aure (K9,374). For a wage earner’s death the damages claim is worth far more — K58,604 in Jack, K100,000 in Collins — and the fixed sum is a small advance. In either case the Basic Protection claim costs nothing, needs no lawyer and no proof of fault, and should be made first.