I was reading this
article on the Philippine Daily Inquirer about a construction crane that fell from a building and hit a car below on Topaz Road near Robinson's Galleria almost killing the passengers which included an infant and a grandmother.
The only protection for the construction was a catchment net to protect passing vehicles and pedestrians from falling debris.
The company who was running the crane offered to pay to replace the damaged car.
The writer goes on to say how this kind of settlement shows how primitive the state of the tort liability law of the Philippines and its enforcement. He also said that the measly settlement was an insult to the victims and the public.
In the US, if something like this happens, the settlement would have been in the millions. The lawsuit would have been for criminal negligence and punitive damages.
Based on what the writer said, the problem the Philippines doesn't have a stronger tort law is the fear that the Philippines might become what is happening in the US like in the case of the woman who spilled coffee on herself and sued McDonald's and won $2.7 million in punitive damages.
The fear is if this was the case, local businesses may not be able to survive and that only the insurance companies would benefit.
While that may be true up to a point, the fact is, businesses and companies insure themselves exactly for this type of liabilities. In the US, most business generally buy liability insurance in the event they are proven to be negligent of their duties. Either in product liabilities or failure to provide a proper service.
For example, a US doctor buys malpractice insurance in the event he provides a bad service. The insurance protects the doctor from financial loss and the patient is protected financially in the event of a medical malpractice.
Now, the insurance company gains for making money when the doctor pays the premium. But the insurance company is also at risk in case they were to insure a doctor who is totally negligent. So the insurance company who of course wants to profit will make sure the doctor is competent and is doing industry standard procedures to protect themselves from loss.
In the event that the doctor has made several claims, his rates will increase to the point it will hurt or he will be declined coverage by his insurance company. In which case, he can no longer practice medicine as by law, doctors are required to have malpractice insurance before they can practice.
It's the same with companies selling products. Like when Ford had that problem with tires blowing up in their SUVs. Their insurance companies paid for the claim and not necessarily Ford itself.
I can just imagine, if the Philippines had a stronger tort law. We wouldn't have vehicles parked on the sidewalk since they pose an obstruction. If a pedestrian were to get into an accident because he can't use the sidewalk, he can sue the pants of the owner of the vehicle. I'm sure after that, nobody is going to park on the sidewalk again.
Another would be stupid traffic lights that don't work where you get into an accident because of that and road constructions where there are no signs or people directing traffic.
There also wouldn't be cases of double dead meats being sold on the market and companies will be more careful in how they do business like the oil spill by Petron.
I for one support a more robust insurance industry in the Philippines as insurance provides a wonderful service to individuals and businesses in transferring some financial risk to the insurance companies.
Think about it, there will be no business if there is no insurance. Why? Who would want to risk transporting billions of dollars of oil across the ocean if one single calamity where to sink the ship and wipe you out financially? No one. But by paying a small premium compared to the amount of risk involved, you'd be willing to risk transporting that oil.
How about we put it on a more personal level. If you invested hundreds of thousands of dollars in buying your house. Would you insure it? Of course! If that house burns down, do you have hundreds of thousands of dollars lying around to rebuild the house? Of course that, that would be crazy. And that's why you buy home insurance to protect you in case that happens. How much did it cost you? No more than a few hundred or a thousand a year.
It's about time for the Philippine insurance industry and the Philippine law to wake up. There is a big and undeserved market that needs changes and new regulations. Enough of the cutthroat, underpricing sales tactics that does nothing for the insured and move into the 21st century.
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