NON-INJURY MOTOR ACCIDENT DISPUTES TO BE NOW RESOLVED BY THE FINANCIAL INDUSTRY DISPUTES RESOLUTION CENTRE
MOVE WILL RESULT IN THE RESOLUTION OF MOTOR CLAIMS IN AN AFFORDABLE, EXPEDITIOUS AND IMPARTIAL MANNER
SINGAPORE, 14 MAY 2008. From 17 March 2008, Non-Injury Motor Accident (NIMA) disputes between consumers and insurance companies have to be first heard by the Financial Industry Disputes Resolution Centre Ltd (FIDReC) before court proceedings can be commenced. This new scheme is known as the FIDReC-NIMA Scheme.
NIMA disputes are motor accident disputes which do not involve any bodily injury. The FIDReC-NIMA Scheme applies to NIMA claims below $1,000 where consumers claim against an insurance company which is not their own insurer. Prior to the commencement of the Scheme, about 1,200 such claims below $1,000 were filed in Court annually.
FIDReC was officially launched on 31 August 2005. It is an independent and impartial institution specialising in the resolution of disputes between financial institutions and consumers. FIDReC provides an affordable and accessible one-stop avenue for consumers to resolve their disputes with financial institutions viz banks, finance companies, life and general insurance companies, capital market licensees, licensed financial advisers and insurance intermediaries.
The FIDReC-NIMA Scheme was put into effect by the “Pre-action Protocol for the Management of Low-Value Non-injury Motor Accident Cases by the Financial Industry Disputes Resolution Centre Ltd (FIDReC)” issued by the Subordinate Courts in March 2008.
It represents a significant and important expansion in the role of FIDReC and would result in consumers being able to resolve their NIMA disputes in an affordable, expeditious and impartial manner.
Mr Derek Teo, President of the General Insurance Association of Singapore (“GIA”) said: “GIA supports the launch of the FIDReC-NIMA Scheme. This will help go towards controlling escalating claims cost which will ultimately lead to lower motor premiums for consumers.”
President of the Consumers Association of Singapore (CASE) Mr Yeo Guat Kwang noted: “We expect consumers to benefit from this new scheme. Instead of incurring high legal fees, they now have an affordable alternate route to handle their motor accident disputes. FIDReC’s panel of Adjudicators comprises experienced and qualified professionals such as judges, senior counsel, lawyers and retired industry professionals. We are confident that consumers’ disputes will be treated in a fair and impartial manner.”
Chairman of FIDREC, retired Supreme Court Judge Mr Goh Joon Seng said: “FIDReC welcomes the trust and confidence reposed in us by the Honourable the Chief Justice and the Courts. We will do our best to live up to this trust. We are always ready to do our part to contribute to the benefit of society. The move to devolve NIMA disputes from the Subordinate Courts to FIDReC reaffirms FIDReC as the recognised alternative disputes resolution body for all financial matters.”
KEY FEATURES OF SCHEME
1. The consumer presents his/her own case and legal representation is not allowed. This is in keeping with the current practice of FIDReC where all complainants in all FIDReC cases present their own cases. This practice serves to keep costs affordable at FIDReC for all parties
2. The disputes resolution process of FIDReC comprises two stages. The first stage is Mediation where FIDReC case managers mediate the dispute with a view to resolving the claim in an amicable and fair manner. The majority of all FIDReC cases are settled at the mediation stage. Where disputes are resolved by mediation, FIDReC’s services are free-of-charge to the consumer.
3. If settlement cannot be reached at mediation, the claim would proceed for adjudication by an Adjudicator appointed by FIDReC.
4. The award of the Adjudicator is binding on the insurer but the consumer is free to choose whether to accept the award or to pursue his claim through other avenues.
CASE FEES PAYABLE BY THE CONSUMER
a. Fees for Mediation: free-of-charge
b. Fees for Adjudication for all third party claims:
(i) The consumer pays $250 per claim and the Financial Institution pays $500 per claim.
(ii) If the Adjudicator finds in favour of the consumer and awards an amount equivalent to 50% or more of the claim, then the consumer would be refunded $200 per claim. This effectively means the consumer only pays $50 per claim at the Adjudication stage.
(iii) If the Adjudicator dismisses the claim or awards the consumer less than 50% of the claim, the Financial Institution would be refunded $200 per claim.
c. Fees for Adjudication for all non third party claims: the consumer pays a flat case fee of S$50 per claim and the Financial Institution pays a flat case fee of S$500 per claim. No rebate would be given to the consumer or the Financial Institution.
FIDReC Chief Executive Officer Mr Ng Wee Jin said: “The case fee structure encourages both parties to give serious and careful consideration to the prospects of settlement of the dispute at the mediation stage. Disputes which proceed to adjudication are disputes which are genuinely incapable of settlement at mediation.”
He added: “It is to the benefit of both parties to settle their dispute at mediation whenever possible as the case fees are substantially lower. In fact, where disputes are resolved by mediation, FIDReC’s services are free-of-charge to the consumer.”
Chairman of FIDReC Mr Goh further added: “The case fees payable by the consumer and insurance company are substantially lower than the legal fees which would be incurred by them in the event that legal proceedings are commenced in Court. The case fee structure of FIDReC is fair and transparent. It balances the legitimate interests of all parties and serves to ensure that FIDReC’s available resources are deployed in a way which benefits all parties.”
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