Guidelines needed to stop ‘ambulance chasing’ by lawyers

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BANDAR SERI BEGAWAN

THE Attorney-General's Chambers (AGC) has been urged to be more transparent in providing guidelines on contingency rules for insurance companies and third-party claims to avoid unnecessary large payouts.

State Legislative Council (LegCo) member Pehin Kapitan Lela Diraja Dato Paduka Goh King Chin raised the need for a review of the Legal Profession Contingency Rules 1994, Section 65, under the Legal Profession Act during yesterday's afternoon session of the LegCo meeting.

Under the contingency rules, Pehin Dato Goh said the courts decided that a lawyer will obtain 30 per cent of an awarded claim, and 70 per cent for the injured party. These third-party claims have become a "major business" in Brunei because lawyers were focusing on such claims, putting motor insurance companies in a "dilemma".

Pehin Dato Goh cited "ambulance chasing" an example. "When a person has been in an accident and is still in the hospital, a lawyer's staff will be by the bedside before he/she has recovered because there is an informer at the hospital. The lawyer's staff will then try and help the injured person make a claim from the insurance company," he said.

Pehin Dato Goh cited a recent case in Brunei which involved the highest payout in Asia, where the courts awarded $3.6 million for a child who was injured in a car accident.

"Insurance companies have no objection in paying out the claims, but in this case, we need transparency in division awards. The courts must state how much the lawyer and the injured party are obtaining."

Pehin Dato Goh said large amounts of claims were awarded because there were parties that hired overseas "service experts" such as doctors, to check the injuries before making a claim.

"I suggest that only Bruneian doctors be used as service experts to evaluate the causes of injuries," he said.

The LegCo member was concerned that payouts could increase due to the time the courts take to evaluate the claim. "For example, if an accident occurred in the year 2000, and the decision for an award was made in 2008 where the court was awarded $300,000, the insurance company also has to pay an interest on top of the total amount for the period of eight years.

"If the interest is eight per cent, the insurance company has to pay 64 per cent of interest on top of the costs, which is $192,000 out of the total $492,000 that is awarded," he added.

Pehin Dato Goh told The Brunei Times: "This is not the insurance company's fault, but because the court was slow in making the decision."

He added: "The act must be reviewed because the insurance company should not be paying (the interest)." Pehin Dato Goh explained that due to provisions in the contingency, various motor insurance companies were hesitant about giving out insurance, unless they were provided with specific terms and conditions.

In that regard, the LegCo member said the Attorney General's Chambers must have a guideline for practising lawyers, so they do not only focus on third party claims. "If possible, the Attorney General's Chambers must set up a committee to study the contingency rules. If a lawyer abuses the act, then action must be taken."

Second Minister of Finance Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abd Rahman Hj Ibrahim responded that the ministry has already been holding discussions with insurance companies, the Land Transport Department, Attorney General's Chambers and other stakeholders.

However, he agreed that based on the current laws, "the liability is unlimited".

The Brunei Times