Singapore:Landmark court decision for uninsured foreign third party

Uninsured passengers who are injured in Malaysian-registered vehicles that are found to be liable in accidents in Singapore can claim for damages through the Motor Insurers' Bureau of Singapore (MIB) which does not have to pay the claimants until it is paid by insurers.

The High Court made the landmark ruling last month in what is seen as a test case involving a Malaysian insurer that centred on the different rules in Singapore and Malaysia.

Under Singapore law, no vehicle can be driven without compulsory insurance cover for causing injury or death to a third party from negligent use of that vehicle. But there is no compulsory comprehensive cover for passengers under Malaysian law for Malaysian-registered vehicles entering Singapore, reported The New Paper.

That means if the rider of a Malaysian motorcycle is liable for an accident on Singapore roads, his uninsured injured passenger would not be compensated by the rider's Malaysian insurer.

"Malaysian vehicles driven into Singapore must be insured by an insurer which has entered into such an agreement with MIB in order to be exempt from the statutory requirements relating to compulsory insurance," said Justice Quentin Loh.

This was the basis of the case heard by the High Court, in which Malaysian Koo Siew Tai sued for serious injuries sustained when she was a pillion rider on Malaysian Liew Voon Fah's motorcycle. She was awarded $788,057 (US$600,000) in compensation in the High Court here in February 2011.

But Mr Liew's Malaysian-registered motorcycle was insured by Malaysian AM General Insurance, which did not cover passenger liability in Singapore.

In 2013, she sued the MIB for the sum, but the bureau argued it was entitled to be reimbursed by AM General based on a cross-border agreement with Malaysian insurers. The agreement specifies conditions under which the insurers are liable to compensate accident victims.

Both parties suspended the suit in 2015 and they jointly sued AM General in 2016 to settle the judgement sum.

The insurer cited a Malaysian court case to support its stand that the bureau had to first pay Madam Koo before the AM General would be obliged to pay up.

But Justice Loh disagreed with that and ordered AM General to pay S$788,057 to the bureau plus interest from February 2011. He said the MIB is legally obliged to award $788,057 for Madam Koo's benefit.