New Practice Directions on Non-Injury Motor Accident Claims

From 1 January 2002, all non-injury motor accident claims must comply with the Practice Direction 2 of 2001.

The new Practice Direction applies to non-injury cases only. Injury cases should continue to observe the requirements of pre-action notices to the defendant's insurers under the Motor Vehicles (Third Party Risk and Compensation) Act, Cap 189.

The Practice Direction is introduced to improve efficiency and cost-effectiveness of non-injury motor accident cases. It promotes pre-action settlement, simplifies the litigation process and allows certainty, consistency and transparency of the litigation costs.

Promoting Pre-Action Settlement

Prior to commencement of the proceedings, the claimant (or his lawyer) is required to send a letter of claim each to the potential defendant by way of certificate of posting and his insurer by way of AR Registered mail or by hand. The letter of claim must set out the full particulars of his claim together with the following supporting documents (if available):-

GIA reports and type-written transcripts of all persons involved in the accident, including a sketch plan;

repairer's bill and evidence of payment;

surveyor's report;

excess bill/receipt;

vehicle registration card;

COE/PARF certificates;

names and addresses of witnesses;

original or coloured copies of scanned photographs of damage to all vehicles;

original or coloured copies of scanned photographs of accident scene;

rental agreement, invoice and receipt for rental of alternative vehicle;

supporting documents for all other expenses claimed.

After delivery of the letter, the claimant or his lawyer must withhold his action in the next 14 days for the potential defendant or his insurer to consider the claim.

Within these 14 days, the potential defendant or his insurer must reply to the claimant in order to stop the litigation clock ticking again. Otherwise, the claimant is entitled to commence legal proceedings without any sanction by the court.

In the reply to the claimant, the potential defendant or his insurer should consider the following matters:-

He should assess the claim. If he is ready to take a position on the claim, he should state so in his reply (e.g. making a without prejudice offer on liability or quantum or both; or denying the claim with reasons and supporting documents).

If he is not ready to take a position, he still needs to reply with an acknowledgement of the claim. Having done so, he will be entitled to a further period free from proceedings of at least 6 weeks (see below) to carry out further investigation and/or make proposal to the claimant.

In whichever way, the potential defendant or his insurer should consider whether...