Insurers Should Automatically Compensate Crash Victims Apex Court
The Federal Court ruled today that victims of road accidents should automatically be given compensation without having to sue insurance companies.
According to Free Malaysia Today, judge Abdul Rahman Sebli ruled, in his 140-page judgement, that provisions in the Road Transport Act 1987 should be construed to protect all motorists, including victims of road accidents.
He added that in enacting the act, Parliament also intended to protect innocent third-party road users.
Abdul Rahman said this in a judgement that allowed eight appeals involving different motorists, seven of which had been injured in accidents.
Five out of these eight appeals involved Pacific & Orient Insurance Co Bhd, AmGeneral Insurance Bhd, Allianz General Insurance Company (M) Bhd and Malaysian Motor Insurance Pool.
Abdul Rahman, who led a three-member bench that comprised Hasnah Mohammed Hashim and Rhodzariah Bujang, awarded RM150,000 in costs to each of the successful parties in the appeal.
The decision was delivered last week.
Abdul Rahman elaborated that the law requires insurance coverage on vehicles, and failure to do so will result in a non-issuance of road tax by the Road Transport Department.
He said if a vehicle owner had insurance coverage, the insurance company would automatically step in and indemnify the victim without the victim having to sue the insurer.
Rahman said that two competing interests have to be balanced by the Road Transport Act - first, protecting innocent third parties against these risks and second, protecting an insurance company from being victimised by fraudulent claims.
Citing the principle laid in an Indian Supreme Court case, British India General Insurance v Capt Itbar Singh, 1959, the Federal Court ruled that the act decided the loss should be borne on the insurer.
The accident victims filed a negligence suit in the Sessions Court against the owners of the involved vehicles.
They appealed after the insurance companies obtained a High Court declaration to nullify policies of motorists due to allegations of misconduct by the vehicle owners, denying monetary compensation to the victims.
The road victims were represented by lawyers Ganavathy Naidu, Harjeet Singh Sidhu, Rajan Ayapan, Siva Subramaniam, Adrian Thambyrajah, Manoharan Veerasamy, G Ravichandran, BP Jayaprathap and GK Ganesan.
The insurers were represented by RK Nathan, Vinod Kamalanathan, Silva Velu, Reuben Netto, VK Dasaratha Raj and R Ratha Davi. - Mkini
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