Launch of the FIDReC-NIMA Scheme, Wednesday, 14 May 2008
Speech by Mr Goh Joon Seng, Chairman of FIDReC
The Honourable Judge of Appeal, Justice Chao Hick Tin, Vice-President of the Court of Appeal, Distinguished guests, ladies and gentlemen.
1 Good morning and welcome to this launching ceremony for the Financial Industry Disputes Resolution Centre Non-Injury Motor Accident Scheme, also known as the FIDReC-NIMA Scheme.
2 The Financial Industry Disputes Resolution Centre (more popularly known as “FIDReC”) was launched on 31 August 2005 by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore. It is an independent and impartial institution set up for the resolution of disputes between financial institutions and consumers.
3 FIDReC provides an affordable and accessible one-stop avenue for consumers to resolve their disputes with financial institutions. To date, more than 400 financial institutions have subscribed to FIDReC and have agreed to submit to the jurisdiction of FIDReC in adjudicating complaints brought against them by consumers.
4 In the 31 month period from its launch until 31 March 2008, the total caseload dealt with by FIDReC is 3,865. This comprises 1,299 complaints, 500 cases managed via case management and 2,066 inquiries. This translates into approximately 124 cases per month.
5 These figures are firm testimony of the confidence reposed by parties in FIDReC as an independent and impartial alternative dispute resolution institution. They also attest to the efficacy of FIDReC’s dispute resolution process. The establishment of FIDReC has brought clear benefits to both consumers and financial institutions. The easily accessible and affordable avenue for dispute resolution provided by FIDReC has resulted in significant savings in terms of cost, time and energy on the part of all parties to the dispute and, in some cases, restored frayed relationships.
6 In a further endorsement of the credibility gained by FIDReC, financial institutions have been voluntarily submitting to the jurisdiction of FIDReC to handle and adjudicate claims in excess of its jurisdiction of S$100,000.00. The biggest claim handled and adjudicated by FIDReC so far is a claim for S$729,000.00.
7 FIDReC has also gained recognition outside Singapore. It has played host to numerous foreign delegations including
- The Mizuho Financial Group, Japan (one of the three mega banking groups in Japan)
- The Head of Consumer Protection Planning of the Financial Supervisory Service (FSS), Korea (the Korean Financial Regulator)
- The Steering Committee and the Chairman of the Indonesian Insurance Mediation Bureau (IIMB)
- The Head of the Bureau of Insurance, Ministry of Finance, Indonesia
- The Securities Commission, Malaysia
- The Financial Services Agency, Government of Japan (JFSA)
- Professors from the Hitotsubashi University and the Meijo University, Japan
These foreign visitors were interested in FIDReC’s dispute resolution processes and its extensive experience and expertise in mediating and resolving financial disputes.
8 The launch of the FIDReC-NIMA Scheme represents another important milestone for FIDReC. In addition to being a major expansion of its operations, the Scheme signifies that FIDReC has gained the trust and confidence of our Judiciary.
9 The FIDReC-NIMA Scheme is set up in collaboration with the Subordinate Courts, the Monetary Authority of Singapore (“MAS”) and the General Insurance Association of Singapore, in consultation with the Law Society of Singapore. It has also received funding support from the Singapore Academy of Law.
10 The FIDReC-NIMA Scheme requires all third party non-injury motor accident claims (“NIMA claims”) below S$1,000 to be first heard by FIDReC before court proceedings could be commenced.
11 Since its launch, FIDReC has all along been handling NIMA claims where the consumer, though not compelled, opted to lodge his complaint with FIDReC. The jurisdiction of FIDReC is up to S$100,000 per claim where the dispute is between the insured and his insurer and up to S$50,000 per claim where the dispute involves a third party claim.
12 With the implementation of the FIDReC-NIMA Scheme, consumers would now have to first lodge their claims with FIDReC and the FIDReC dispute resolution process has to be completed before any court proceedings could be commenced.
13 The FIDReC-NIMA Scheme came into effect on 17 March 2008 by way of the Subordinate Courts Practice Direction No.1 of 2008. The first batch of cases falling within the FIDReC-NIMA Scheme is expected to be lodged with FIDReC sometime in May 2008.
14 As with all disputes lodged with FIDReC, all parties involved in cases falling within the FIDReC-NIMA Scheme will present their own case and legal representation will not be allowed. This practice serves to keep costs affordable at FIDReC for all parties.
15 Another key feature of the FIDReC-NIMA Scheme is the opportunity given to the insurance company to inspect the damaged motor vehicle before repairs are carried out. It is anticipated that this measure will aid in the mediation and resolution of disputes between consumers and insurance companies.
16 The adjudication awards of FIDReC have also been accorded judicial support under the FIDReC-NIMA Scheme. The award continues to be binding on the insurer but not on the consumer. The consumer may therefore choose not to accept the award and proceed to commence legal proceedings in court. However, the Court may impose cost sanctions on the consumer if he or she obtains a court judgment which is less favourable than FIDReC’s award.
17 On behalf of the Board let me assure the public and the industry that FIDReC will discharge to the best of its ability the responsibility entrusted to us. It remains for me to thank each and every one for your support and taking time to join us and other stakeholders this morning. It is now my pleasure and honour to invite The Honourable Judge of Appeal, Justice Chao Hick Tin, Vice-President of the Court of Appeal to come on stage to address us.