PROBLEMS SURROUNDING CLAIMS FOR DAMAGES IN ACCIDENT CASES
MEDICAL DISABILITY AND ASSESSMENT OF DAMAGES SEMINAR
6 – 7 July 2013
It is nice to have so many doctors and lawyers around you at the same time, especially when the doctors are not treating you and the lawyers are not defending you. Otherwise, you must be in serious trouble. The worst thing that could happen to any person is, after the doctor has messed up his (the patient’s) treatment, the lawyer messes up his (the client’s) case. That is “double jeopardy” at its worst.
However, today, I am very happy to see doctors and lawyers getting together, sitting together and discussing together, in order to find ways to overcome the problems faced by those unfortunate patients/clients.
When I received the invitation to speak at this Seminar, I searched for the justification for me to do so. Looking at the name of the seminar and the organizers, I thought I had some justifications. First, I am ageing even though I cannot claim to be in the best of health. Secondly, I am disabled, as least I am unable to run and to swim anymore. Thirdly, as a Judge at all levels of court, I did have some experience in assessment of damages in personal injury claims. Fourthly, I have sufficient personal experience as a patient. Fifthly, as a mark of gratitude to Allah s.w.t. who has given me back my voice for the second time, I think I should use it to make whatever little contribution I could, to mankind. Surprisingly, I receive more invitations to speak now than even when I was Chief Justice.
You will be surprised that, in my 40 years in and around the court, I missed medical negligence cases. None came to me, somehow. I do not know whether it is because there were really so few incidents of medical negligence (which is difficult to believe) or that the cases were settled out of court (which is good) or that the cases were “covered up” somehow (which I hope is not the case). I am not talking about risk. Every patient should be aware and accept it when it happens. But, it is a different thing when things turn for the worse because of negligence in the course of the treatment. Imagine, having undergone through untold pain and suffering, inconvenience and hardship for the family especially those with small children, may be losing job and all lifesaving, you end up a vegetable or paralyzed. It is really painful, even to see. Let us pause for a moment and think of them and of what contribution we could make to alleviate their suffering and hardship.
One of the subjects of this Seminar is assessment of damages in claims for personal injuries arising from road accidents. Before going into it, let us look at the main cause of road accidents first. Accidents are accidents. Nobody wants an accident to happen to himself, especially after it has happened. But, are the Malaysian road users doing enough to try to reduce accidents from happening? I am not going to trouble you with statistics. We all see it every day and we all know it.
Look at the attitude of the drivers and the motor cyclists on the road. With newfound prosperity and handed-down subsidies and gifts (and promises to reduce car prices in the last general Election) many people are now able to buy cars and motor cycles. However, their sense of responsibility does not seem to increase correspondingly. There is a false pride in the newfound status, making them react arrogantly and irresponsibly on the road. Professional drivers seem to care more for their trips than the safety of other road-users. Look around the village or residential area where you live. You will find that, in the afternoon, children as young as eight or nine years, go about in group on their parents’ motor cycles, without helmets, without license and without care and attention. What do their parents do? Those children are the ones who would end up as “Mat Rempit”, “drug addicts” and what follows. When something goes wrong, they blame the Police and the Government. Unfortunately, in this country, we still do not have the culture of respecting the law that we see in Japan and some Western European countries. Some people even feel that they are “great” and “clever” when they break the law without being apprehended.
But, what can we expect from the common folks when cameras put up by the lawful authority to track traffic offenders are openly vandalised by opposition political supporters? What can we expect from the common folks when an “Honorable” Member of Parliament bites the ear of a Policeman on duty? What can we expect from the common folks when “Honorable” Members of Parliament are instigating the nation to break the law and the citizens to turn lawless? What can we expect from the common folks when self-proclaimed watchdogs of human rights, transparency, rule of law, equality, freedom, justice and so on, show no respect for the law when it suits their purpose?
The insurance and takaful industry has its problems too. I am told that the current motor insurance and takaful tariff have remained unchanged for the last 33 years since 1978. It has been a financial pressure to all players in the insurance and takaful industry especially from the stakeholders.i The industry believes that unless dramatic actions are taken to restructure the motor insurance and takaful business in a holistic and comprehensive manner, the motor business itself will become unsustainable. The industry has exhausted many alternative solutions to curb the inadequacy of the existing tariff such as increasing loadings, but yet still continue to suffer poor underwriting results.
Contributing factors affecting the deteriorating results of the motor insurance and takaful sector are:
- The increase of spare parts prices, repair costs, legal fees, adjustors’ fees, cost of claims administration, etc.
- Increase in vehicle thefts. The total number of stolen vehicles has increased significantly from 8,869 cases in 1997 to 40,284 cases in 2009, an increase of 454% in 13 years whilst the quantum of claims escalated from RM135 million to RM606 million in 2009, an increase of 448% in the same 13-year period. You will notice that the percentages of the increase are about the same.
- Fraudulent claims. These are fabricated or inflated claims perpetrated by syndicates or various parties to insurance claims or even ordinary law-abiding citizens who take opportunity to defraud insurers.
- Risk Based Capital Framework requires that each insurer maintain a capital adequacy level that commensurate with their risk profiles and was implemented from Jan 2009. Insurers are generally required to provide for additional capital or risk charges for their business risks. Inadequacies in premium ratings must be supported by higher capital requirements and this is the scenario that many motor underwriters are experiencing in the light of the deteriorating motor insurance financial performance.ii
Time does not permit me to dwell more on what is happening in claims for damages to motor vehicles. I strongly urge all of you to read the most shocking revelation of the activities of tow-truck-operators-cum-repairers in the article titled “Accident victims and their plight” by the most authoritative lawyer on accident claims in the country, Mr. K. Siladass published in Infoline January 2011. (For easy access, with Mr. Dass’s permission, I have uploaded it on my website www.tunabdulhamid.my as an Appendix to this speech.)
The claim ratios for the third-party bodily injury and death have exceeded 200% since 2006. For the year 2012, the premium received by the insurance and takaful industry for third party bodily injury is RM832.6 million while claims amounted to RM2.02 billion which gave the claim ratio of 242.1%.iii
Under the present system, a victim of road accident is, to a large extent, at the mercy of the lawyers or, more correctly, touts. On touting, I am quoting Mr. K. Siladass who knows best what is happening on the ground:
“In almost more than ninety-nine per cent of accident cases it is the touts who wield extraordinary influence over the accident victims and convince them to appoint solicitors of the tout’s choice.
The network to lure accident victims to retain a solicitor is well-oiled and indeed very effective. The touts whether they are acting independently; or, are representing a firm of solicitors calls for a detailed investigation. When an accident occurs and a person is injured, a battery of touts converge on the victim to secure his signature or thumb-print to the warrant to act; meaning, retaining a firm of solicitors to handle his claim for damages.
These touts who purport to have strong links with solicitors’ firms carry with them stacks of warrant to act from more than one firm. There is a sinister motive behind this. By securing the accident victim’s signature on more than one firm’s warrant to act, the tout places himself in a strong bargaining position with the solicitor to reap the best remuneration for himself……….
Strictly speaking, the Legal Profession Act 1976 prohibits dividing the professional fee with unauthorized persons..….. Rule 52 of the Legal Profession (Practice and Etiquette) Rules, 1978 provides that it is unprofessional and improper conduct to divide costs or profits with an unqualified person.
There is another group of solicitors who see there is lot of money to be made by lending money to accident victims who have signed up as their clients. The size of the loan would depend on the nature of the injuries the client had suffered, and the solicitors’ security is the anticipated compensation. They lend money to accident victims from time to time charging exorbitant interest and by the time the claim is settled, the victim will be left with a small amount, the interest having eaten up a large portion of the money received by way of compensation. Not surprisingly, one victim was unsure as to who had suffered the injury; himself or the solicitor; for the solicitor took more than sixty percent of the claim which apparently represented the professional fees, principal lent and the interest added thereon.
There is indeed a statutory provision which allows interim payments to be made to accident victims especially when the injuries are of very serious nature. Section 25A of the Courts of Judicature Act 1964 is a benevolent provision, the objective of which is to assist accident victims who have suffered severe bodily injuries…… Unfortunately no one seems to be interested in this interim payment provision. This is due to the fact that insurance companies generally do not fancy the interim payment provision as it means paying a sum in advance when liability is undecided or uncertain. Some solicitors do not see this victim-friendly provision as an advantage; because, the solicitor-cum-money lender prefers to lend money to the accident victim on interest which would be more advantageous with better returns. In this kind of a situation the solicitor gets his fee as well as interest on the lending, therefore, going through the cumbersome process of applying for interim payment is not for his own benefit.”iv
I would like to add that the new Rules of Court 2012 which is applicable to the Subordinate Courts where such cases are heard provides for interim payments to be made – see order 22A. It is hoped that lawyers will resort to these provisions instead of practising as illegal money lenders as well.
I hope that the Bar Council will redirect its focus, even for a while, from finding faults of others and preaching good governance, transparency, fairness, human rights, rule of law etc. to others and look inward into the practices of their own members: whether they themselves are practising what they preach to others.
Sad to say, in this industry, there is too much “corruption” and “cheating”. (I am using the word “corruption” and “cheating” in the wider sense, not as defined in criminal law.) But, because they are done by business people and professionals in the private sector, not by members of the government and government servants, they are accepted as a “normal part of business”. There is clearly a double standard here.
Lawyers and judges may know the principles of law of tort on negligence. But they do not know what particular act or avoidance is normal, usual or reasonable and which constitutes negligence. Actually, it is only the doctors or the surgeons who really know what particular act or avoidance should or should reasonably be done or avoided. So, the lawyers will have to depend on the doctors to brief them and make them understand for them to submit to the judges to make them understand to enable them to decide. If the lawyers themselves do not understand, they would not be able to make the judges understand. If the judges do not understand, they would not be able to make the correct decision. Expert witnesses, quite often cause more confusion in the minds of the judges. They give evidence according to what is favorable to the party calling them as witnesses. The Judge, at the urging of the lawyers who are equally partisan, are left to try to come to the “correct” judgment, when he himself is not sure what is the correct judgment. The best that he could do is to give his honest judgment based of the evidence before the court and the relevant law, at the same time hoping that if he is right he is clearly right so that he could confirmed and/or followed or if he is wrong he is clearly wrong so that he could be corrected. That is the system we have to work in. It is not perfect but unless someone can produce a better and workable system, we will have to work within the system. Until then, only experience, professionalism and honesty will help.
In an adversarial system, lawyers and witnesses take sides, the side of the party paying them, to put it bluntly. So, even where there is no outright concocting of evidence or misleading of the court, there is always some element of not telling the whole truth, at the very least. Is there a way to improve the situation? Could not the Medical Association come up with some rules of ethics for their members to comply or be made to comply, failing which some form of disciplinary actions could be taken against them, somewhat similar to the Advocates’ and Solicitors Etiquette Rules? I am not saying that lawyers are more ethical than doctors. But, such rules might help.
Order 40, Rules of the High Court 1980 provided for the appointment of Court experts. Unfortunately, even at the time when the High Court was still hearing personal injury claims arising from road accidents that provision was hardly ever resorted to. Parties and lawyers were too engrossed with the adversarial system and Judges were too busy to intervene at the pre-trial stage. That provision became irrelevant in personal injury claims arising from road accidents when all such cases were transferred to the jurisdiction of the Subordinate Courts as, there was no similar provision in the Subordinate Courts Rules 1980. Now that Order 40 has been re-enacted in the new Rules of Court 2012 and is applicable in the Subordinate Courts as well, with Judges taking more active role in case management, I hope that parties and their lawyers will resort to that provision. Even if they don’t, the Court, on its own motion should direct such an appointment. It does appear that the procedure would reduce costs, speed up trial and reduce the adversaries.
Doctors are busy people. The good ones should be spending their time in the operation theatre or in their clinics, not sitting in the witness room in court waiting to be called as witnesses. As far as possible, parties should agree to dispense with their physical presence. Where, it is unavoidable, there should at least be some arrangement whereby they could be called at short notice, only when they are really required to be in the witness box, without causing too much disruption to their schedule. I am sure such an arrangement could be made.
We see that the problem is not merely how to determine the fair amount of compensation to be paid to the victims, to ensure that they get what they should get and as soon as possible. It is not merely the issue of the need on the victim. There is a much bigger problem surrounding it. Everything is so inter-connected with each other and a holistic approach is needed.
You cannot solve the problems just in one seminar. Neither can you change the world overnight, especially for the better. During these two days I hope that you will focus on the area that you have set to discuss, while noting that it is not an isolated problem but is a part of a bigger “rot” or “corruption” in a wider sense. Hopefully, you will be able to find a lead to a better system in the limited area that you focus on. If you don’t, I hope you will find some ways to improve the existing system. Still, if you don’t, I hope you will be able to reemphasize the professional ethics in the people involved. Quite often, irrespective of the system, man could make a difference.
i Shareholders want profits; Insured / participants demand accessibility of cover at reasonable cost, claims process efficiency (i.e. turnaround time); Regulator expects financial soundness, operational efficiency and good market conduct. – Azli Munani, CEO/Ececutive Secretary, Malaysia Takaful Association.
ii Azli Munani, CEO/Ececutive Secretary, Malaysia Takaful Association.
iii Azli Munani, CEO/Ececutive Secretary, Malaysia Takaful Association.
iv K. Siladass “Accident victims and their plight”, Infoline January 2011