What Happens If My Damages Exceed the MVIL Limit?

Serious injuries — paraplegia, quadriplegia, severe brain damage — are regularly assessed at several hundred thousand kina. MVIL’s liability stops at K150,000. What happens to the rest depends on steps the claimant must take before trial.

The cap and what it covers

Section 49(2)(a) limits MVIL’s liability to K150,000 for the death of or injury to any one person, and K750,000 for any one accident or series of accidents arising out of one event. The limit applies to damages only. Kerr v MVIT [1979] PGLawRp 676; [1979] PNGLR 251 held that costs are outside it, and MVIT v Reading [1988] PGSC 23; [1988-89] PNGLR 236 held that interest is too. The modern cap cases follow that pattern: in Yakupi v MVIL [2006] PGNC 214; N2981 a paraplegic pedestrian’s damages were assessed at K412,000, MVIL was ordered to pay K150,000, and interest of K11,103.20 and costs were added; in Kupo v MVIL [2002] PGNC 55; N2282 damages of K174,891.93 for a young woman with a 95 per cent loss of use of a foot were reduced to K150,000 plus interest and costs.

Section 54(5): awarding the excess

The subsection is the safety valve for the driver’s and owner’s immunity in section 54(1). Up to the cap, the claim is against MVIL alone; above it, the ordinary tort liability of the people at fault revives, and the court may enter judgment against them for the balance. In Kerr the Supreme Court awarded K200,524.90 to a paraplegic, the first K100,000 (the cap at that time) against the Trust and the balance against the owner. In MVIT v Payne [1981] PGLawRp 572; [1981] PNGLR 114 the excess over the then K30,000 limit, K96,100.35, was awarded against the State as owner of the government vehicle. In Westcott v MVIL [2008] PGNC 207; N3565 a motorcyclist with compound fractures of the femur, tibia, fibula and hand recovered K125,449.18 from MVIL, and the excess — US$476,291.80 and A$5,705.36 — was awarded against the truck driver and his employer, which was vicariously liable.

You must plead the excess and join the owner or driver

Section 54(5) does not operate automatically. In Pickthall v MVIT [1991] PGNC 73; [1991] PNGLR 113 the court held that on a claim under the Act “the plaintiff’s only entitlement to damages in excess of the maximum ... is to plead specifically the excess allowed by s 54(5) and to seek an award of the Court”. The owner or driver against whom the excess is sought must be a party, because the award “operates as a judgment against that person” and no judgment can be entered against a non-party. Pierce v MVIT [1989] PGLawRp 53; [1988-89] PNGLR 480 allowed joinder after the limitation period had expired where the owner had been served with a copy of the claim under section 55 within time, but a claimant should not rely on that: join them at the start.

The determination must be made “at the time when it makes the award”. A claimant who obtains judgment for K150,000 against MVIL and later realises the injuries were worth more cannot return for a second determination against the driver.

A settlement at the cap kills the excess

In Gigmai v Motor Vehicle Insurance (PNG) Ltd [2004] PGSC 26; SC750 a paraplegic plaintiff compromised his claim against the insurer at the then limit of K100,000 and sought to pursue the owner for the excess under section 54(5). The Supreme Court held that a compromise is not an “award of damages made by a court”; the subsection was not engaged, and the excess claim failed. The same logic appears in Wallace v MVIT [1991] PGNC 84; [1991] PNGLR 341, where a quadriplegic accepted K100,000 in settlement and the court was left only with interest and costs to deal with. A claimant whose damages clearly exceed the cap must therefore choose: accept MVIL’s limit and abandon the balance, or go to judgment against MVIL and the owner or driver together.

Is the excess worth pursuing?

Only if the owner or driver can pay. A judgment for K250,000 against a PMV driver is worth nothing; against a company, a government body or an insured employer it may be worth everything. In Westcott the excess was recoverable because the employer was a substantial company; in Payne because the owner was the State. Section 58(1)(b) requires MVIL to indemnify the insured person for the costs of the proceedings, but only up to the same K150,000 limit, so above the cap the owner and driver are on their own. The question of whether they carry any other insurance — a commercial fleet policy, an employer’s liability policy — is one to investigate early.

The K750,000 per-event limit

Where one accident produces many claims, MVIL’s total liability for the event is K750,000, however many claimants there are. A bus crash that kills seven and injures nineteen, as in Anton v MVIL [2021] PGNC 422; N9194, can exhaust the per-event limit well before every claimant has received K150,000. No reported case has yet had to work out how the fund is shared among competing claimants; the practical answer is that claims settled or adjudicated first are paid first, and later claimants look to section 54(5). The site’s general articles on default judgment and garnishee orders explain the enforcement steps that follow any judgment.