The damages are ordered to be paid by the defendant – i.e. the person you sue. However, in the vast majority of cases the person you sue is the driver or owner of a motor vehicle. In such cases the Compulsory Third Party Insurer is the body that pays the damages on behalf of the named defendant.  In most TAC common law claims, the TAC itself is the organisation that pays the common law damages.

All Victorian motorists who pay registration fees on their car effectively pay an insurance premium to the TAC.  A component of the vehicle registration fee is paid into the TAC fund and all payments are used to fund the Transport Accident Scheme.  As such, TAC becomes liable to pay an injured transport accident victim their relevant entitlements out of the fund and on behalf of any owner or driver of a Victorian registered motor vehicle who has paid their registration fees.