Speech by Senior Minister of State for Law, Indranee Rajah, during the Committee of Supply Debates 2013

8 Mar 2013 Posted in [Parliamentary speeches and responses]

Legal Services

1. Madam Chairperson, Mr Hri Kumar asked about the Qualifying Foreign Law Practices (QFLPs).

2. From 2008 to 2011, the value of legal services exported from Singapore increased by 51.8 per cent, from S$363 million in 2008 to S$551 million in 2011. This growth has been catalysed by our calibrated liberalisation of the legal services sector, mainly through the QFLP scheme. In 2008, the first six QFLP licences were handed out. The six firms have done well – 80 per cent of their gross revenue comes from offshore work, work that would otherwise have been done overseas. Last month, we awarded a second round of QFLP licences, to four top international firms. We will continue to monitor the QFLP scheme, to ensure that it continues to contribute to the strength and diversity of our legal sector.

Making Singapore an Intellectual Property Hub

3. Mr Fong had asked about making Singapore an intellectual property (IP) hub.

4. Madam Chairperson, today, the development and exploitation of IP has become a key driver of economic growth globally. The importance of IP will continue to increase. Transactions in IP will become a business in itself, and Singapore must ride this wave.

5. A vibrant IP marketplace in Singapore will support high value jobs and business opportunities for Singaporeans. It will also enable Singapore businesses and innovators to commercialise and exploit their IP. We therefore set up the IP Hub Steering Committee last year to formulate a Master Plan to guide Singapore’s development in this area.

6. The Committee has submitted its findings and recommendations to the Government. It identified three strategic outcomes that we should work towards:
   1. Singapore should aim to be an international hub for IP transactions and management, so that companies will use Singapore as a base for regional and international IP transactions, and manage their IP portfolios from Singapore.
   2. Singapore should aim to be a hub for quality IP filings for companies all over the world. These companies can tap on our IP service providers and infrastructure, and use Singapore as a gateway to secure IP protection in key markets all over the world.
   3. Singapore should also become a choice venue for IP dispute resolution, by leveraging on our efficient, cost-effective and high-quality judicial system, and alternative dispute resolution methods such as arbitration.

7. To reach these strategic outcomes, the Committee has recommended:
   • That Singapore develop skilled IP professionals, networked to the region and beyond, to effectively serve the international needs of companies; and also
   • That we build a conducive and progressive environment to encourage IP players worldwide to bring their IP activities to Singapore and thus create a thriving IP ecosystem in Singapore, entrench our status as an IP hub, and position us to assert thought leadership in the field.

8. We are in general agreement with the recommendations of the Committee, and we intend to aggressively develop Singapore into a regional and international IP Hub. Detailed announcements will be made over the next few months on this front.

9. Mr Fong also asked about a review of Section 34 in the Patents Act, commonly referred to as the National Security Clearance (NSC) provision which is meant to safeguard the disclosure of information prejudicial to national defence interests and public safety. Patent agent professionals are aware of the requirements, and the clearance process at the Intellectual Property Office of Singapore (IPOS) is simple and quick. Information about NSC is available at the IPOS website, but IPOS will study how to further raise awareness of the provision among companies.

10. On Mr Fong’s suggestion to set up a DIY facility, it is already possible today for companies to file IP like patents and trademarks on their own, but most still seek IP service providers for professional assistance. Companies can enjoy a 400 per cent tax deduction, or 60 per cent cash payout, on IP registration under the Productivity and Innovation Credit scheme, and this can include the associated fees paid to professional service providers.

The Small Claims Tribunal

11. On the Small Claims Tribunal (SCT), legal costs for proceedings are minimised as the process is simple and parties appear in person. Money orders are enforced through the Magistrate’s Courts through the Writ of Seizure and Sale (WSS). And the filing fee for a writ of execution to enforce a Tribunal’s order is $105, which is 30 per cent lower than the fee for a case not under the Tribunal. Incidental costs of enforcement, such as Bailiff and auctioneer fees, may also bring the total cost of the enforcement to about $400 to $600. However, the Court will generally order the losing party to bear all enforcement costs, so that the successful claimant may not need to pay.

12. We are conscious of the cost factor in our on-going review of the Small Claims Tribunal Act together with the Subordinate Courts, and will ensure that the SCT stays true to its purpose of providing effective and swift redress for small claims.

Consumer Protection

13. Mr Patrick Tay had asked about consumers’ recourse against errant companies who fold up and set up as new companies. A person who uses the corporate form for fraud can be made personally liable for the debts of the company. He may also be guilty of a criminal offence. If the person is a director, he can also be disqualified from holding directorships. In terms of public education, Accounting and Corporate Regulatory Authority (ACRA) has collaborated with Consumers Association of Singapore to develop a guide for consumers dealing with business entities. That guide shows consumers how to use ACRA’s information services to conduct background checks on business entities before deciding on whether they should deal with them.

Criminal Procedure

14. On criminal procedure, Ms Sylvia Lim had raised a question on the disclosure regime under the Criminal Procedure Code.

15. In launching the disclosure regime, we determined a body of predicate offences to be included. The Prevention of Corruption Act (PCA) is not included in this list. Corrupt Practices Investigation Bureau (CPIB) investigations under the PCA therefore are excluded from the disclosure regime. However, CPIB investigations of predicate offences included in the regime will observe the same disclosure requirements. The Police have introduced measures over the years to improve the quality of their investigation processes, and these practices are shared among the Government’s investigation communities, which includes the CPIB. The Ministry of Law (MinLaw) will convey the Member’s comments to the CPIB and this will continue to be reviewed. In the meantime, for cases not covered under the statutory regime, the common law will still apply as the Court of Appeal made clear in KADAR.

Video Recording

16. Both Ms Lim and Mr Hri Kumar raised the issue of video recording. The issue of video recording is an operational matter relating to police investigations and it comes more directly under the purview of the Ministry of Home Affairs (MHA). However, MinLaw understands from MHA that there are currently no plans to introduce video recording for the taking of statements. MHA’s position is that the issue of video recording as well as other operational issues should be looked at in the following manner: there should be a fair system which seeks to ensure that crimes are solved, and the system should also seek to ensure that the rights of the accused are protected. If an accused wishes to challenge the statement given by him, there are clear avenues available today.

17. On the question of whether this regime can be re-thought. Over the years, MHA has introduced a number of changes, and it is MHA’s intention to continue to look at the processes.

18. I think the Government recognises the rationale behind the suggestions made by Mr Kumar and Ms Lim. This, and other rationale will be considered in the light of evolving circumstances when MHA further reviews the processes.

Legal Aid

19. I think Mr Hri Kumar also raised the issue of legal aid, and he had made three suggestions for consideration: whether we could have ad-hoc practicing certificates for retired practitioners or people who can come in to help with legal aid, also using law students for pro bono work, as well as what can be done for accused person who are unrepresented. As I had mentioned previously, I am currently chairing a committee on the promotion of pro bono work. We will take these suggestions to the committee and consider them and see what can be done.

Arbitration

20. On a slightly broader note, because Mr Kumar also mentioned what the Law Ministry has done over the past year, if I may just say a few words on the legal sector in general. The legal sector has grown, as mentioned by the Minister. If I may just add that the arbitration sector in particular, has also seen stellar growth. Singapore is now recognised as the leading international arbitration hub in Asia.

21. A 2010 White & Case International Arbitration Survey found that we are clearly the most popular Asian seat. And worldwide, we are the third most preferred seat by companies, together with Paris and Tokyo, and after London and Geneva.

22. The growing caseload of the Singapore International Arbitration Centre reflects our rising stature in international arbitration. The number of new cases handled rose from 99 in 2008 to 235 in 2012. The total value of disputes reached a record high of S$3.61 billion in 2012, well in excess of the total for 2010 and 2011 (S$2.67 billion) put together.

23. This growth is the result of the aggressive and holistic approach we have taken to develop the arbitration sector over the years.
    • We have a completely open regime for international commercial arbitration.
    • Parties engaging in arbitration in Singapore have the freedom to engage lawyers of any nationality and to use any governing law.
    • We have also introduced tax incentives for arbitrators and arbitration work.
    • And we have established Maxwell Chambers, which offers world class arbitration facilities. The Global Arbitration Review called Maxwell Chambers’ opening one of the “Best Developments” in the arbitration industry.
    • Our Courts, too, have been strongly supportive and pro-arbitration.
    • We have a supportive legislative framework in the form of the International Arbitration Act, which we continually update in consultation with academics and practitioners.

24. Our coming of age was evident when the International Council for Commercial Arbitration held its Congress here. The Congress was attended by the who’s who of the international arbitration community, and had the largest participation rate in its history, of more than 1000 attendees.

25. Concurrently, we have seen the growth of arbitration expertise in the local Bar, at all levels. This will enable Singapore to continue to be the arbitration centre of choice for the region as well as internationally.

26. I would encourage younger Singaporean lawyers to deepen and extend their arbitration skills and knowledge to take advantage of this growth area so that, in the years to come, we will continue to have a strong pipeline of Singapore lawyers who will be able to serve the local, regional and international markets for arbitration.

27. We also hope to see the continued growth of strong Singapore law practices and hope that they will take advantage of some of the available incentives. These include:
    • The Development and Expansion Incentive for International Legal Services, a concessionary tax rate for firms which do international work from Singapore; and
    • A tax incentive for international arbitration work culminating in hearings in Singapore.

28. In addition, agencies such as Economic Development Board, SPRING, and International Enterprise Singapore provide a variety of general incentives for capability building that the Singapore law practices can tap on.

Dispute Resolution

29. For dispute resolution, as the Chief Justice announced at the Opening of the Legal Year, Justice V K Rajah and I will lead a committee to study the proposal for creating a Singapore International Commercial Court, and this will further expand our dispute resolution offerings.

30. Mediation is also a priority. In the coming year, we will build on earlier efforts by the Singapore Mediation Centre to strengthen our services for international commercial mediation.

Conclusion

31. Madam Chairperson, the development of the legal services will be a source of growth in itself, and more importantly, a vibrant legal services sector supports growth in other sectors of the economy which requires sophisticated legal support.

Last updated on 13 Mar 2013