Motor Vehicles (Third Party Risks and Compensation) (Amendment) Bill – MP Sylvia Lim

by Sylvia Lim, MP for Aljunied GRC and Chairman of Aljunied-Hougang-Punggol East Town Council
[Delivered in Parliament on 11 Nov 2013]

I have some concerns about Clause 5 of the Bill which will reduce the Public Trustee’s role as the guardian of victims of motor accidents in cases where the claim is settled out of court.

Under Clause 5, Section 6 of the Act will be amended in two key ways.

First, for claimants who are represented by lawyers, settlement sums offered by the Defendants or their insurers will no longer need to be approved by the Public Trustee. This means that it will be left to the claimants’ lawyers to be the gatekeepers to ensure that their clients get adequate compensation for their injuries and losses. On the one hand, we would expect lawyers to obtain a fair settlement for their clients as it is their duty to do so; this is also logical, as there is generally a link between the compensation obtained and the fees lawyers will be entitled to charge. On the other hand, there is the risk of lawyers who may occasionally settle matters quickly due to workload or other considerations. It should be remembered that the clients we are talking about in such accident cases include persons who may not know their rights and rely entirely on professional advice. The current situation of having the Public Trustee as the gatekeeper of compensation adequacy has always added a layer of comfort and protection for such accident victims. From the lawyers’ standpoint, too, there is one advantage: retaining the Public Trustee’s approval on settlement sums protects lawyers from unjustified complaints that the claimants were shortchanged. With the amendments in this Bill, are we not compromising on these aspects?

Secondly, under the amendments, the Public Trustee will no longer be receiving and disbursing compensation sums and legal costs where the claimant is represented by a lawyer. Instead, the insurer / owner of the vehicle which caused the accident will directly pay to the claimant the compensation sum due to him, and will also directly pay the legal costs to the claimant’s lawyer. The Public Trustee, who used to receive and make the payments, will no longer be involved. This by-passing of the Public Trustee theoretically carries with it the increased risk that the payments meant for the victim and his lawyer may not be received e.g. where the vehicle owner or insurer fails to effect the payments accordingly or delays the payment. Does the Ministry intend to put in place any safeguards to minimize the risk of non-payment or delayed payment?