Contingency fee system

I discussed with a law professor in a local university. Is it good for Singapore to adopt a contingency fee system for legal practice?

We came to the conclusion that it is useful under certain circumstances and for the following reasons:

(a) Where the litigant cannot afford the legal fees to take up a case against a large organisation

(b) Where the lawyer is in a better position to judge the merit of the case and should take the risk of the outcome.

If more cases are tried in court, it will lead to a better understanding of the law. This will be good for the society.

Tan Kin Lian

The Standard:Minibond anger directed at Donald Tsang

About 850 angry Lehman Brothers minibond investors yesterday called for Chief Executive Donald Tsang Yam-kuen to step down for failing to help them.

The Alliance of Lehman Brothers Victims claimed 3,000 protesters, wearing red headbands bearing the Chinese character for angry, joined a march from Causeway Bay to the central government offices.

Among the group were some Singapore and Taiwan investors who also urged the Hong Kong government to handle the issue faster. The protesters vented their anger by hitting a drum, pasted with Tsang's photo, outside the government headquarters.

A Singapore investor said her government has resolved 70 percent of about 8,000 cases through judgment. "It seems the Singapore government is more reactive. It takes too long here [Hong Kong] and the compensation is too little," she said.

Alliance chairman Peter Chan Kwong-yue criticized the authorities for not carrying out their responsibilities and hit out at the Securities and Futures Commission for allowing banks to sell the minibonds, and police and the Department of Justice for not following up the complaints.

Chan was angry over Tsang's silence. "He has not showed concern to the investors since October. It is so disappointing," he said.

Democratic Party lawmaker Kam Nai-wai said he hopes Financial Secretary John Tsang Chun-wah will explain the incident to the Legislative Council.

A government spokesman said it has requested the Hong Kong Monetary Authority and the Securities and Futures Commission to seriously handle the complaints.

"We note that two SFC-licensed minibond distributors have agreed with the SFC to make a voluntary offer to purchase from their eligible clients all outstanding Lehman Brothers minibonds at a price equal to the principal amount invested.

So far, there are about 6,000 cases in which voluntary settlements have been reached or are soon to be reached with the banks concerned."

Where are the jobs?

The unemployment rate in USA is now at 8.5% and is expected to increase to 10%. The unemployment rate in many countries Europe has been over 10% for many years. 

The unemployment rate in Singapore may appear low by international standards, but it is seriously under-reported. Due to the lack of employment benefit, many people do not bother to report that they are looking for work.

Minister of Manpower Gan Kim Yong advised graduates to take any job, rather than sit at home. But, where are the jobs? There are insufficient jobs for the large number of people looking for work. Those with jobs work long hours, to justify their cost to the employer. This is the outcome of the free market system.

If we continue to believe in the free market and in globalisation, it will take a long time for a solution to be found. The free market system has finally broken down, and yet economists and  policymakers do not want to face the reality that it is a failed system.

We need a better system (other than the free market) to distribute the work among the people in the world in a fair manner. This will give a better quality of life to all people. 

Tan Kin Lian

Bonus cut on life insurance policies

Dear Mr. Tan,

I received a letter fror my insurance company that they are cutting my bonus. I know that the global economic situation is bad, but I feel that there is no need for a big cut. After all, the insurance company made big profit last year, and they did not increase their bonus rate by much. Is it fair?

REPLY

I agree with your views. There is lack of transparency in the manner in which the bonus has been cut. Some policies have a bigger cut in bonus compared to other policies. It seems that the old plans have bigger cut compared to the newer plans, as the insurance company hopes to sell their new plans. 

It is important that insurance companies should treat all policyholders fairly and that the bonus must be distributed fairly based on the actual experience of the insurance fund. It is not fair for an insurance company to withhold profits in good years and make a big cut in bad years.

If you wish to provide feedback on the bonus cut on your policy, you can give details here. It will be kept in confidence.