Insurer fails in bid to reject claim for foreign worker’s medical expenses

In a decision[1] welcomed by employers and employees alike, the Singapore Court of Appeal (“CA”) has rejected an insurer’s argument and allowed the appellant’s claim for medical expenses arising out of a road accident in which the appellant (a foreign worker) and other local and foreign workers were injured due to the driver’s undisputed negligence.

The negligent driver’s insurer raised a curious but not unintelligent challenge to the claim for medical expenses, on the argument that since the appellant was a foreign worker and his employer is obliged under the law (namely the Employment of Foreign Manpower Act (“EFMA”) read with the Employment of Foreign Manpower (Work Passes) Regulations 2012 (“EFMR”) (collectively, “the Rules”)) to pay for the medical treatment of the foreign worker, then even in an accident scenario the employer must bear the medical expenses and cannot claim against the driver’s insurer.  The insurer further argued that allowing the claim would lead to double recovery.

In our view, the CA rightly disagreed with the insurer at various levels, of which we will highlight just two.

(1) The CA distinguished between the employer’s obligation under the Rules to pay for medical treatment in ordinary situations where there is no tortfeasor vs situations where the injury or need for treatment arises out of a tort.  Surely, in the latter scenario, the employer or the employee must be entitled to pursue its claim against the tortfeasor.  The Rules are not intended to abridge the recovery of medical expenses as between a tortfeasor and a victim, It could not be the case that the effect of the Rules would be to exonerate the tortfeasor of his common law obligation to pay for the victim’s medical expenses notwithstanding his negligence.

(2) There is no material risk of double recovery.  Whether the employer is able to claim reimbursement from his EFMA insurer is a matter between employer and insurer. If there were fraud or falsification of claims on the employer’s part, other consequences including criminal liability may follow. As between employer and employee, there can be a non-recourse loan agreement which obliges the employee to turn over to the employer any expenses recovered from the tortfeasor).

In conclusion, although it remains the broad and uncompromising duty of the employer to make payment of its foreign employees’ medical expenses even if these were occasioned by a third party tort, this does not preclude the foreign employee/his employer from recovering such expenses from the tortfeasor. This, we say, ought to be the case.

The CA also took the opportunity to opine that in a situation where the victim-foreign employee is not in a financial position to bring a suit against the tortfeasor, maintenance and champerty would not be obstacles to the provision of litigation financing by the employer insofar as the employer having made the payments for the medical expenses, would have a genuine and substantial interest in the enforcement of the claim.  This is music to the ears of many an injured foreign employee worried about the cost of enforcement.

[1] Minichit Bunhom v Jazali bin Kastari and another [2018] SGCA 22

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