Compensation for Traffic Accident

In 2006, about 8,400 accidents happened on the roads involving injuries to people. 190 people died, 104 were seriously injured and 9,600 suffered other injuries.

How do the victims claim for compensation for their medical expenses, loss of wages and permanent disablement?

In most cases, the victim has to look for an lawyer to submit the injury claim. The case can take many years to settle. The legal fees can take away about one third of the total compensation.

Some insurance companies offer to make direct settlement with the injured person. However, there is a suspicion that the compensation may be inadequate. The victim may prefer to engage a lawyer to settle the claim on his or her behalf.

Is there a better way to handle the settlement of injuries caused by traffic accidents?

Sweden has operated an alternative system for about 70 years. The results have been quite satisfactory.

A person who suffers injury caused by a traffic accident can claim for compensation according to the Swedish Traffic Damage Act.

To ensure that the compensation is reasonable and as just and uniform as possible, the law required the insurance company to consult the Swedish Road Traffic Injuries Commission for an advisory opinion before reaching a final settlement with the claimant.

The commission issues its opinion on compensation for personal injury and also for loss of support (i.e. compensation to family on death of the breadwinner).

Where the case is taken to court, the commission will, on request, issue its opinion concerning personal injury.

The courts, lawyers and insurance companies regularly complied with the practice of the commission. About 5,300 cases are tried by the commission in 2006.

It is compulsory for the insurance companies to consult the commission on compensation for loss of support, for loss of income where the medical disability is 10 per cent or more or has exceeded a certain sum or compensation for the personal injury and associated costs.

If the case is to be heard by the commission, the insurance company supplies the commission with the complete dossier, all available documents and a brief summary including the standpoints of both parties. The claimant can look at the summary and is free to add any further commentary to the views.

The majority of the cases are presented to the commission by a legal advisor employed by the commission. If different opinions prevail in a case, the commission’s opinion is given after voting. The commission has access to highly qualified medical experts who may be consulted on medical matters.

The commission’s opinion in a case is sent to the insurance company which in turn forwards it to the claimant. As the opinion is only advisory the parties may settle the case in accordance with the commission’s recommendation, agree on some other solution or bring the case to court.

In more than ninety per cent of the cases that have been tried by the commission the parties agree to settle in accordance with the commission’s recommendation.

The rules regarding the commission and changes to the rules have been approved by the government. The chairman of the commission is appointed by the government and the other members are appointed by the Swedish Financial Supervisory Authority.
The chairman or deputy chairman chair meetings of the commission. They are highly qualified lawyers from the judiciary. They may not be employed by an insurance company.
Twelve members of the commission are laymen representing professional organizations and another twelve members represent the insurance companies. A representative of an insurance company may not participate in the discussion or vote in a case in which his company is involved.
Normally the commission meets with six members; two members from each member category. Less complicated cases may be decided by one member from each member category. In a few cases one chairman alone may decide what the commission’s recommendation should be.
The insurance companies covers the costs of the commission.

The system has worked very well over a long period of time. Some of the advantages are:

- Makes court proceedings unnecessary in most cases
- Provides earlier settlement of the compensation
- Establishes a uniform standard of compensation
- The claimant has access to an independent professional opinion, free of charge

The Swedish system of compensation is based on “no-fault”. The injured persons are entitled to receive compensation without having to prove the fault of the driver of the vehicle. This has helped to simplify the settlement of the compensation.

The Commission operates with a set of tables. Compensation is based on such parameters as degree and type of disablement, age, income and other factors. The Commission does not make public the average amount they have awarded.

The findings of the Commission are generally slightly higher than the amount offered by the insurance company. In 2006, the Commission awarded the same amount in 74% of the cases, up to 10% more for 10.4% of cases, 10 to 25% more for 9.5% of cases, and less for 6.1% of the cases. There proportions have remained quite steady in recent years.

If a claimant is not happy with the outcome, the claimant can still have the option to go to court.

I hope that the award of compensation for traffic accidents in Singapore can be reviewed to provide payment to accident victims more promptly and at lower legal cost. It will provide relief to the victims and the family members. This can be based on the model in Sweden.

Tan Kin Lian

The writer was the former chief executive of NTUC Income.