Speech by The Honourable Judge of Appeal, Justice Chao Hick Tin, Vice-President of the Court of Appeal, the Guest-of-Honour at the launch of FIDReC-NIMA Scheme at the Subordinate Courts on Wednesday, 14 May 2008
First, let me say how very pleased I am to have been invited to preside over this launch of the FIDReC-NIMA scheme.
Since its launch on 31 August 2005, FIDReC has established itself firmly as an affordable and accessible one-stop avenue for consumers to resolve their disputes with financial institutions. I commend Mr Goh Joon Seng, Chairman of FIDReC and his team for successfully streamlining the dispute resolution processes across the entire financial sector of Singapore. The occasion today marks another new chapter for FIDReC as it embarks upon a new journey in the management and resolution of low-value non-injury motor accident claims in collaboration with the Subordinate Courts.
Court Dispute Resolution (CDR) as an alternative to litigation in NIMA cases
Ladies and Gentlemen, the Subordinate Courts have, in recent years, endeavoured to change the community’s expectations about litigation as ‘the method’ to resolve disputes. This was done firstly, by encouraging mediation as an alternative means of dispute resolution. To this end, the Subordinate Courts established a unique court dispute resolution (CDR) mechanism by which mediation is court-directed with a judge being the mediator and playing a proactive role. The CDR process is available for all civil actions filed in the Subordinate Courts, including NIMA cases. In NIMA actions, the judge-mediator gives a neutral evaluation so that the parties can assess the prospects of their respective positions before incurring any further costs of proceeding to trial. Since its introduction as a pilot scheme in 1994, the CDR process has proven highly successful in resolving a large number of NIMA cases filed in the Subordinate Courts. For the past 5 years, the average settlement rate was more than 93%.
The NIMA Pre-action Protocol
It is most gratifying to note that the Subordinate Courts are constantly mindful of the necessity to evolve the court processes to meet the needs of individual litigants by providing customized solutions. Recognizing that different cases require different approaches in case management, the Subordinate Courts instituted a Pre-action Protocol for NIMA cases. The NIMA protocol established relevant norms for the robust management of NIMA cases and their costs. Since its introduction on 1 January 2002, the protocol has been the starting point for all NIMA cases where court proceedings are contemplated. The NIMA protocol provides a guide for better and earlier exchange of information and documents. By facilitating pre-writ negotiations, the protocol seeks to enhance the prospects of settlement even before a writ is filed. Where a writ is issued, the protocol prescribes adherence to a structured case management programme. In particular, the CDR process is initiated by the courts at the earliest possible stage of the proceedings, thus creating a proper opportunity for parties to settle their cases without escalating costs.
The FIDReC-NIMA scheme and FIDReC Pre-action Protocol
The Honourable the Chief Justice Chan Sek Keong noted at last year’s Subordinate Courts Workplan Seminar that, and here I quote him:
“NIMA claims form 26% of all civil Magistrate’s Court claims in the Subordinate Courts. Out of all NIMA claims 13% involves a quantum of $1,000 or less. In 2006, there were 1,176 such cases or about 98 per month. Although the nature of NIMA disputes is simple and essentially revolves around issues of fact, the amount of judicial resources required to adjudicate NIMA cases is disproportionate. Further the cost of litigation is often higher than the quantum of the claim itself. This leads to a net loss for all involved.”
Responding to the need to strategically and operationally reshape the management of low-value NIMA claims, the Subordinate Courts worked with the Monetary Authority of Singapore, FIDReC, the General Insurance Association and the legal industry to create an innovative regime for the management and resolution of such cases by FIDReC. On 17 March 2008, we witnessed the implementation of the FIDReC protocol. Low-value NIMA claims, currently pegged at below $1,000, will first be managed by FIDReC through its twin processes of mediation and adjudication, before court proceedings can be commenced. This process ensures that such claims are settled at the earliest moment and costs are reduced to a minimum. This, in essence, is the FIDReC-NIMA scheme. Like the NIMA pre-action protocol, the FIDReC protocol encourages early exchange of information and negotiations without resorting to proceedings.
Where proceedings are contemplated, the claimant is not denied his right to litigate his claim in court; the effect of the FIDReC protocol is that the claimant should first lodge his claim with FIDReC for mediation and adjudication. Lawyers will have their part to play in the FIDReC-NIMA scheme. While proceedings at FIDReC will be conducted without legal representation, it is envisaged that parties will continue to engage lawyers for advice and assistance in preparation for those proceedings. I am pleased to note that FIDReC’s panel of adjudicators comprises lawyers and retired judges. Apart from optimizing the use of finite court resources, the FIDReC-NIMA scheme will ensure that the parties involved have an affordable means of redress with no compromise as to the quality of the outcome.
To remain relevant, effective and responsive, our civil justice system should have a varied menu of dispute resolution processes along with court adjudication. Cases should be dealt with fairly, speedily and effectively. Procedures and costs should be proportionate to the nature of the issues involved as well as the magnitude of the claim. The FIDReC-NIMA scheme demonstrates the Subordinate Courts’ commitment in upholding these basic principles. We are grateful for FIDReC’s invaluable support and partnership in this FIDReC-NIMA scheme, which I have no doubt will be greatly welcome and appreciated by users.
It is now my pleasure to launch the FIDReC-NIMA scheme.