Analytical Review of Body Damage Compensation Fund in Article 10 Third Party Insurance

  •  Majid Abkhiz    
  •  Dawood Nassiran    
  •  Reza Abbasian    


Body Damage Compensation Fund subject to Article ten of Law for Responsibility of Owners of Motor Vehicles is relatively a new legislative installation in Iran; it has been effective since 1968 in relation to victims under Article ten of the Law. Up to 2008, the Fund had not a significant role in due to lack of sufficient resources the subjects’ compensation. With the replacement of Amendment to Law on Third Party Insurance in 2008, the legislators have increased the amount of commitments in addition to paying a particular attention to Fund’s sources of income under Article 4 of this law. It resulted in gradual increase in the effective role of the Fund among other installations such as Public Treasury Fund. Despite the passage of about 40 years from the installations of this fund in Iran, the legal community, particularly judges and lawyers and legal experts are still unfamiliar with nature, role, and tasks of the Fund. The legal nature of the fund has not been discussed yet and its position has not been compared to other resources. Due to poor structure, insufficient financial resources, limited obligations, and lack of covering all damaged persons, the compensation fund had not been effectiveness until 2008. Its explanation is not only useful for juridical system and important for issuance of sentences but also it is helpful in the recognition of the obligations. In addition to taking into account the definition of the fund, this article ties to compare the Iranian version to one of the most developed systems in the world, New Zealand. It will show that the fund is responsible for the damages and it is regarded as a complementary means for compensating the damages having been imposed on innocent victims while its place is clear among other institutions.

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