Speech by Senior Minister of State for Law, Indranee Rajah, during the Committee of Supply Debate 2014

5 Mar 2014 Posted in Parliamentary speeches and responses

Madam Speaker,

1. I will deal with the remaining cuts.

Opportunities for Singapore Law Practices and Singapore lawyers

1. Singapore Law Practices (SLPs)

2. Mr Hri Kumar asked how MinLaw is supporting our Singapore Law Practices (SLPs) venturing abroad. SLPs are an important pillar of our legal services sector. SLPs employ more than 90% of Singapore-qualified lawyers. Through their practice, legal knowledge and skills, they:
   1. facilitate access to justice and the rule of law;
   2. uphold our legal system;
   3. contribute to the development of Singapore law and jurisprudence;
   4. drive the development of our legal profession; and
   5. support the growth of our economy.

3. We want our SLPs to do well and to grow not only in terms of depth and breadth of expertise, but also to expand regionally. There are good growth opportunities for SLPs locally as well as in the region.

Supporting Internationalisation

4. We would like to help SLPs who are looking to capture opportunities overseas to grow and become regional leaders. The market for legal services in Asia is expected to grow with the increase in trade and investments in this part of the world. Our SLPs are in a good position to compete successfully. Our top four SLPs are already the largest law firms in ASEAN. There are existing incentive and assistance schemes in place to support SLPs:
   1. IE Singapore’s Double Tax Deduction for Internationalisation (“DTDI”):
      Under this scheme, SLPs may deduct against their taxable income,the expenses for overseas business development trips and overseas investment study trips.
   2. “Development and Expansion Incentive for International Legal Services” (“DEI Legal”) administered by EDB:
      Law firms which are structured as companies and which provide international legal services from Singapore can get a 10% concessionary tax rate for income derived from such services under this incentive scheme, subject to EDB’s approval.
   3. There are other schemes administered by IE Singapore and EDB, depending on needs and strategy of different SLPs.

5. And so, I would encourage the Singapore law firms to take advantage of such schemes. Any expansion into regional markets must of course be done in accordance with their laws. The key is to understanding those countries’ rules in terms of allowing foreign firms to do business in their jurisdictions. Some may allow law firms to operate through different vehicles such as partnerships, corporations or joint ventures. Others may do so through licensing regimes.

6. It is not always necessary to have a physical presence or office in a foreign country. It is possible for SLPs to provide legal services out of Singapore to regional clients. In this scenario, what is important is access to potential clients and having a strong Singapore legal services brand so that such clients will automatically think of SLPs when they need legal services.

7. MinLaw is helping SLPs better understand markets in the region through various means. For example with respect to Myanmar, which is a growing and potential market, we invited the Director-General of Myanmar’s Union Attorney-General’s Office to speak at a seminar co-organized with the Law Society of Singapore. SLPs were briefed on Myanmar’s legal and business landscape, as well as the legislation regulating foreign investments. We are now also working with the Law Society to plan seminars in Yangon and Nay Pyi Taw. These will be useful opportunities for SLPs to meet potential partners and clients in Myanmar.

Improving Productivity; Developing Capabilities

8. In addition, we will continue to support efforts of SLPs to improve productivity and develop new capabilities for domestic and regional growth.

9. In his Budget speech, DPM Tharman announced the extension of the Productivity and Innovation Credit (PIC) Scheme for another three years. The PIC extends to law firms as well. Law firms can utilize the PIC:
   1. for their training of lawyers; and
   2. to acquire systems or technology which improve their productivity or to run their practices more effectively,for example IT systems, document management systems, accounting systems, client relationship management system and other automation systems. This would also include, for example, information technology devices such as iPads.

10. In 2012, over 230 SLPs benefitted from PIC, obtaining more than $20 million worth of PIC enhanced deductions. We encourage SLPs to leverage on this scheme, as well as other schemes administered by SPRING Singapore to support their growth.

2. In-house Legal Counsel

11. Besides the SICC, SIMC and schemes to support SLPs, we are also looking at ways to develop the in-house legal counsel sector in Singapore, especially where such jobs carry regional responsibilities. The in-house legal counsel sector creates good jobs and provides alternative career pathways for Singapore-qualified lawyers. As the interface between business and the legal service industry, the in-house legal counsel sector creates spin-offs to our legal services industry, including SLPs.

12. In 2012, we amended the Evidence Act to extend legal professional privilege to in-house legal counsel. In-house counsel may enjoy this privilege if they are employed for the purpose of giving legal advice, and the communication for which privilege is claimed relates to matters of legal advice. This has made it more attractive for international companies to establish their regional in-house legal departments in Singapore.

13. In June this year, MinLaw will also be supporting the Singapore Corporate Counsel Association to organize the In-house Counsel World Summit. This will be the first time that this event is held in Asia. The event will provide a platform for in-house counsel worldwide to discuss the latest global trends and legal issues that affect business activity, particularly in the Asia Pacific. It will be an important platform for networking and connecting.

14. We will continue to study other ways to expand the in-house counsel community in Singapore.

Enhancing Singapore’s legal framework to strengthen our society

15. Our moves to strengthen the local legal scene in Singapore have also been about ensuring even better access to justice, better protection for the vulnerable, and equitable outcomes for all.

1. Moneylending Landscape

16. Mr Lim Biow Chuan and Mr Zainal Sapari highlighted concerns over the moneylending landscape in Singapore, particularly excessive borrowing and excessive borrowing costs. In regulating the moneylending industry, we have to maintain a balance between allowing borrowers reasonable access to credit, and providing them, especially those with lower income, with adequate protection. We are cognizant that some borrowers turn to moneylenders in desperation and this makes them vulnerable to exploitation. To this end, there are various safeguards in the law such as borrowing caps for unsecured loans as well as interest rate caps.

17. The existing borrowing caps for unsecured loans from moneylenders protect borrowers earning an annual income of up to $120,000, while the existing interest rate caps for moneylending loans apply only to borrowers earning less than $30,000 a year. When we set interest rate caps, there are competing considerations involved. If the cap is set too low, it would be commercially unviable for licensed moneylenders to service borrowers with high credit risk. This would force borrowers to turn to loan sharks to meet their financial needs. If the cap is too high, borrowers will be overcharged by moneylenders. It is therefore necessary to find the right balance.

18. At present, moneylenders may also charge a variety of fees, if the borrower had agreed for these fees to be charged at the time the loan is taken. Such fees include fees for late repayment of principal or late payment of interest, and fees for early redemption or termination of the loan. However, these fees can escalate for the borrower. My Ministry is reviewing the moneylending regime. We are considering measures to address the issues raised by Members. To this end, we are reviewing the interest rate cap and considering whether there should be further restrictions on the charging of fees by moneylenders.

19. As for borrowing caps for unsecured loans from moneylenders, the current regime only regulates the amount that an individual can borrow from each moneylender. We intend to establish a central credit bureau that will enable tighter controls over the total amount of unsecured credit which an individual can borrow from moneylenders, i.e. a “universal cap”.

20. Mr Zainal asked about restrictions in the number of moneylenders in any given housing estate. At present, we have not imposed any limits on the number of moneylenders in any geographical location. But this is something that we are studying. We are looking at the statistics on the concentration of lenders and borrowers. However, geographical restrictions may have limited effectiveness in a small country like Singapore. Our size is such that travelling costs may not deter borrowers from going to moneylenders in different parts of the island. As part of our review, we intend to consult key industry stakeholders, including organisations that provide counselling to distressed borrowers and the moneylending industry, amongst others.

21. I cannot overstate the importance of striking the right balance, and we will announce the measures in due course.

2. Simplifying crime victims' civil claims

22. Turning to Ms Sylvia Lim’s cut, she had suggested reforms to allow victims of crime to attach civil compensation claims in criminal proceedings so that separate civil suits need not be filed, although I think that, in this case, Ms Lim did accept that for complex matters, or things where there are issues heavily in dispute, those would be suitable for civil claims. I think that is in line with the judgment of Chief Justice Chan Sek Keong as he then was in PP v AOB [2011] 2 SLR 793.

23. At the current time, Section 359 of the Criminal Procedure Code allows for claim for compensation in a criminal proceeding. That section makes it mandatory   for a court convicting a person of any offence to consider whether a compensation order should be made, and the court will make such compensation orders where appropriate.

24. I think Ms Lim’s point was whether or not one could have a simple joining procedure where you could attach a civil claim to that criminal case. There is some difficulty in attaching a civil claim to a criminal case because it is not just a simple matter of tagging a civil claim on. There are issues that have to be thought through carefully, and relevant considerations would include:
    1. the different purposes that civil and criminal proceedings generally serve;
    2. the different burdens of proof in such proceedings;
    3. the different legal and factual issues that may arise in criminal proceedings from those in civil proceedings and vice versa; and
    4. the different type of evidence that may be required to establish the civil compensation claim and the criminal offence.

25. I think what is key here is that the law, as it currently stands, gives the victim the right or the ability to claim for compensation in the criminal proceedings. Our Courts are actually required in every case to consider whether compensation should be given. I think Ms Lim’s concern really is the ease with which the victim can claim and whether or not the victim is able to have the issues put before the Court in a way that would enable the claim for compensation to be determined. We will certainly look and see whether more can be done to enable victims to make claims under the existing Section 359 of the Criminal Procedure Code. In fact, our approach of requiring the Court to consider whether compensation should be ordered in the criminal case, in some ways makes it even easier and better for victims.

3. Review of the Coroner's Act

26. Finally, Mr Pritam Singh called for a review of the Coroner’s Act. The purpose of a Coroner’s Inquiry into the death of a person is to inquire into the cause of and circumstances connected with that death. The crux of the issue raised by the Member is this: Should a Coroner’s Inquiry be forced to continue in certain cases, without the Coroner having any discretion on the matter, even though a finding has already been made in criminal proceedings as to the cause of and the circumstances connected with that death?

27. The Coroner’s Act was enacted in 2010 and came into effect in 2011. Section 39 of this Act gives the Coroner the discretion to discontinue proceedings before him if he determines that the Inquiry is no longer necessary to determine the cause of and circumstances connected with the death, i.e. the Coroner can decide whether to continue the proceedings or discontinue the proceedings. In exercising his discretion, the Coroner may have regard to the wishes of the next-of-kin of the deceased. In practice, if counsel for the next-of-kin is present, the Coroner would take the views of the next-of-kin on board, through counsel. So, a discretion is given to the Coroner, and if counsel for the next-of-kin agrees to the discontinuance, then the question arises: How is the public interest served by insisting that the Coroner must continue with the Inquiry, particularly when all the facts have come across? It does not make sense, in such a situation, to take away the Coroner’s discretion and to force him to continue with the Inquiry.

28. So, the question is, should we trust the Coroner to consider what is appropriate in each case? Or do we make it mandatory for the Coroner to continue? I think we should trust the Coroner and let it be discretionary. Our position is generally similar to that in the United Kingdom and New South Wales, Australia.

Conclusion

29. Madam, in conclusion, I would say the Ministry of Law advances access to justice and the rule of law through all that we do. We will continue to review and enhance our laws to safeguard the rights of Singaporeans, strengthen the people’s trust in Government, and the global community’s trust in Singapore.

Last updated on 14 Mar 2014