THE EFFECTS OF THE CLA 1956 ON JUDICIAL DISCRETION, QUANTUM OF DAMAGES AND INTEREST ON DAMAGES IN PERSONAL INJURY AND FATAL ACCIDENT CLAIMS ARISING OUT OF MOTOR VEHICLE ACCIDENTS : A CRITICAL APPRAISAL NAZLI BINTI MAHDZIR THESIS SUBMITTED IN FULFILMENT OF REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN LAW INSTITUTE OF GRADUATE STUDIES UNIVERSITY OF MALAYA KUALA LUMPUR 2014 i UNIVERSITY OF MALAYA ORIGINAL LITERARY WORK DECLARATION Name of Candidate : Nazli Binti Mahdzir Registration No : LHA 090003 Name of Degree : Doctor of Philosophy Title of Thesis : The Effects of the CLA 1956 on Judicial Discretion, Quantum of Damages and Interest on Damages in Personal Injury and Fatal Accident Claims Arising Out of Motor Vehicle Accidents : A Critical Appraisal Field of Study : Insurance and Personal Injury Law I do solemnly and sincerely declare that: 1. I am the sole author / writer of this Work; 2. This Work is original; 3. Any use of Work in which copyright exists was done by way of fair dealing and for permitted purposes and any excerpt of extract form, or reference to or production of any copyright work has been disclosed expressly or sufficiently and the title of the work and its authorship have been acknowledged in this Work; 4. I do have actual knowledge nor do I ought reasonably to know that the making of this Work constitutes an infringement of any copyright work; 5. I hereby assign all and every rights in the copyright to this Work to the University of Malaya (UM), who henceforth shall be the owner of the copyright on this Work and that any production of use in any form or by any mean whatsoever is prohibited without written consent of UM first had and obtained; i 6. I am fully aware that if in the cause of making this Work I have infringed any copyright whether intentionally or otherwise, I may be subject to legal action of any other action as may be determine by UM Candidate Signature Date ……………………………… ……………….. Subscribed and solemnly declared before, Witness Signature Date ……………………………… ………………... Name: Designation: ii ABSTRACT Sections 7, 8 and 28A of the Civil Law Act 19561 are enacted to regulate the assessment of damages for personal injury and fatal accident claims arising out of motor vehicle accidents. The provisions aim to control the quantum of damages being meted out by the courts. Despite the good intention of the legislature, the provisions have been viewed with disfavour by many as a legislative attempt to reduce the quantum of damages and/or fetter or worst still, to divest the judiciary of their discretion in the assessment of damages. The actual impacts on judicial discretion and the quantum of damages are however yet to be fully worked out. Therefore, this research is to be welcomed as it seeks to critically appraise the actual effects of sections 7, 8 and 28A of the CLA 1956 on the exercise of judicial discretion and the quantum of damages being awarded by the courts. The same critical appraisal is also extended to section 11 of the CLA 1956, the court rules relating to the assessment of interest on damages as well as the provisions relating to the assessment of damages in Singapore and Brunei. This research applied both the descriptive and analytical approach. Malaysian data have been collected from primary and secondary sources together with interviews with legal practitioners and representatives from several Malaysian insurance companies. This research began with the proposition that despite the provisions in the CLA 1956 and court rules, judges in Malaysia still retain their discretion (albeit with statutory interventions) in assessing damages and interest on damages for personal injury and fatal accident claims arising out of motor vehicle accidents. It concluded that sections 7, 8, 11, 28A of the CLA 1956 and Order 42 Rule 12 of the Rules of Court have resulted in mixed effects on the judges’ discretionary power; total abolition of discretionary power, maintaining the discretionary power as it was before the 1984 amendments, maintaining the discretionary power but with restrictions and mere codification of existing practices. The research also provides several suggestions for statutory amendment in order to rectify the problems with sections 7, 8, 11, 28A of the CLA 1956 and Order 42 Rule 12 of the Rules of Court 2012. The suggested amendments are also necessary to ensure damages and interest awarded for personal injury and fatal accident claims arising out of motor vehicle accidents is consistent, fair and reasonable to the claimants while affordable to the insurance industry. 1 Act 67 (of Malaysia). Hereinafter referred to as “the CLA 1956”. iii ABSTRAK Seksyen 7,8 dan 28A Akta Undang-Undang Sivil 19562 digubal untuk mengawalselia penaksiran ganti rugi bagi tuntutan kecederaan diri dan kemalangan maut yang diakibatkan oleh kemalangan jalanraya. Peruntukan-peruntukan ini pertujuan untuk mengawal kuantum ganti rugi yang boleh dianugerahkan oleh mahkamah. Di sebalik niat baik pengubal undang-undang, peruntukan-peruntukan ini telah dilihat oleh banyak pihak sebagai usaha pengubal undang-undang untuk mengurangkan jumlah ganti rugi dan mengongkong atau lebih buruk lagi melupuskan kuasa budibicara kehakiman dalam penaksiran ganti rugi. Kesan sebenar pindaan ini ke atas budi bicara kehakiman dan jumlah ganti rugi bagaimanapon masih belum dapat dikenalpasti sepenuhnya. Oleh itu, kajian ini sangat dialu-alukan kerana ia bertujuan membuat penilaian kritis kesan sebenar seksyen 7,8 dan 28A CLA 1956 terhadap pemakaian budi bicara kehakiman dan jumlah ganti rugi yang dianugerahkan oleh mahkamah. Penilaian kristis yang sama dilanjutkan kepada seksyen 11 CLA 195, peraturan-peraturan mahkamah berkaitan penaksiran kadar bunga bagi gantirugi dan peruntukan-peruntukan berkaitan penaksiran gantirugi di Singapura dan Brunei. Penyelidikan ini menggunakan pendekatan deskriptif dan analisis. Data dari Malaysia diperoleh daripada sumber-sumber primer dan sekunder serta temu bual bersama pengamal undang-undang dan wakil daripada beberapa syarikat insurans di Malaysia. Kajian ini bermula dengan cadangan bahawa walaupun terdapat peruntukan di dalam CLA 1956, hakim-hakim di Malaysia masih dapat mengekalkan kuasa budi bicara mereka (walaupun dikawal oleh peruntukan undang-undang) dalam penaksiran ganti rugi dan kadar bunga bagi ganti rugi untuk tuntutan kecederaan diri dan kemalangan maut yang diakibatkan oleh kemalangan jalanraya. Kajian ini menyimpulkan bahawa seksyen 7, 8, 11, 28A dan Aturan 42 Kaedah 12 Kaedah-kaedah Mahkamah 2012 menyebabkan beberapa kesan terhadap kuasa budi bicara kehakiman; penghapusan kuasa budi bicara secara total, pengekalan kuasa budi bicara seperti keadaan sebelum pindaan tahun 1984, pengekalan budi bicara tetapi dengan sekatan-sekatan tertentu serta sekadar pengkanunan amalan-amalan yang sedia ada. Kajian ini turut menyediakan beberapa cadangan untuk pindaan undang-undang bagi mengelesaikan masalah yang terdapat dalam seksyen 7, 8, 11, 28A CLA 1956 dan Aturan 42 Kaedah 12, Kaedah-kaedah Mahkamah 2012. Pindaan-pindaan yang dicadangkan adalah juga perlu untuk memastikan gantirugi dan kadar bunga untuk tuntutan kecederaan diri dan kemalangan maut yang diakibatkan oleh kemalangan jalanraya kemalangan kenderaan bermotor adalah konsisten, adil dan munasabah untuk pihak-pihak menuntut manakala berpatutan untuk industri insurans. 2Akta 67.Selepas ini dirujuk sebagai CLA 1956. iv ACKNOWLEDGEMENT It was often said that PhD is a lonely journey. It is true. It is a journey that can be completed by no one else other that one self. I however am blessed throughout my journey I has been accompanied by so many people who have made significant contributions towards the completion of this thesis. It is difficult to mention all of them individually, but there are some whose immense contributions deserve special acknowledgment and appreciation. I would like to express my sincerest gratitude to my supervisor, Associate Professor Dr Gan Ching Chuan. His constructive criticism, advice, knowledge and support from the very early stage of this research has given me strength and direction for the thesis yet allowing me to work in my own way and at my own pace. I also appreciate the financial, academic and technical support provided by the College of Law, Government and International Studies, University Utara Malaysia and the Faculty of Law, University of Malaya. The dedication and commitment shown by the academic members and staffs have greatly assisted me in my study. Special thanks go to Ila, Anis, Wana, Ainul, Ani Munirah, Dr Syarifah Saedah, Dr Rosmawani and Dr Zubir for being the best friends I could ever hope for. I will be forever grateful to them for unselfishly allowing me to be part of their life and sharing my laughter, worries and tears. My apologies go to my friends and colleagues whom I could not personally name here. Your contributions toward the completion of my thesis do not go unnoticed. There is no word sufficient enough to convey my gratitude to my family especially Baba and Mama, the two pillars of my world. Although they did not fully understand what I was doing, the fact that they are always there for me eased up the load off my shoulders. Their love, prayers and undying confidence in me made me believe that everything is possible. This thesis is only a small part of my PhD journey. What matters most are the experience gained, the knowledge shared and the people I’ve met along the way. v DEDICATION To my parents HJ MAHDZIR BIN SHARIFF and HJH OMAI KALSOM BINTI HAMID I dedicate this work