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Following is a question by the Hon Ng Leung-sing and a reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (October 23):

Question:

Under the Motor Vehicles Insurance (Third Party Risks) Ordinance, the Government is not required to insure its vehicles against third party risks. Regarding claims relating to traffic accidents involving government vehicles, will the Government inform this Council of:

(a) the total amount of compensation for deaths and injuries paid to third parties in traffic accidents involving government vehicles, and the number of claims for third party deaths and injuries rejected by the Government as well as the reasons for rejection, in each of the past three years;

(b) the justifications for stating, in its reply to a question raised in this Council in June 2000, that it was more cost effective for the Government to take on directly the compensation liability arising from traffic accidents involving its vehicles than to pay premium for third party insurance; and

(c) the arrangement for awarding compensation and ex-gratia payments to third parties or their families for deaths and injuries caused by traffic accidents involving government vehicles driven by unauthorized persons; whether it has compared this arrangement to that for traffic accidents involving non-government vehicles driven by persons without the consent of the vehicle owners, and assessed if the arrangement in respect of government vehicles is fair to the victims concerned?

Reply:

Madam President,

The first part of the question seeks information on the total amount of compensation for deaths and injuries which Government paid to third parties in traffic accidents involving government vehicles in each of the past three years. The respective figures for the compensation are as follows -

       1999                 $19 million 

       2000                  $4.24 million

       2001                  $4.81 million

Except for cases which are being processed, Government has settled all claims for compensation in traffic accidents involving government vehicles.

The second part of the question requests the Government to explain the basis for stating, in response to a question raised by a Member in June 2000, that it was more cost effective for the Government to take on directly the compensation liability arising from traffic accidents involving its vehicles than to pay premium for third party insurance. The Government arrived at that view after comparing the actual amount of compensation paid by the Government in relation to claims involving traffic accidents with the amount of premium that it would have to pay if it were to take out third party insurance from the private sector.

Specifically, the average amount of compensation paid by the Government to third parties (including compensation for personal injuries and property damages) in relation to traffic accident claims is on average $10.3 million a year. On the basis of 6 922 vehicles of various types in the government fleet, the average compensation pay-out for each vehicle works out to be about $1,500 a year. This is lower than the insurance premium for third party risks which would normally have to be paid to insurers. The Government recognises that some discounts may be obtained from bulk purchase of third party insurance. Nonetheless, it should also be noted that almost half of the government fleet consists of vehicles for law enforcement and emergency purposes, such as police cars and fire engines, and insurance premium for these vehicles would be relatively high.

Part (c) of the question asks what arrangements Government has for awarding compensation and ex-gratia payments to victims or their families for traffic accidents involving government vehicles driven by unauthorized persons, and whether such arrangements are fair to the victims as compared with those for traffic accidents involving non-government vehicles driven by unauthorized persons.

It is the Government's practice to bear the third party risks of its vehicles. When a government vehicle is involved in a traffic accident in the course of its normal official use, the Government would, as appropriate, compensate the victim according to the relevant law and after taking into account the circumstances of the case.

As for traffic accidents involving unauthorized use of government vehicles, the Government attaches equal importance to protecting the interests of the victims and would handle each case with due regard to the principle of reasonableness. As a matter of fact, unauthorized use of government vehicles is extremely rare. Except for one case adjudged by the High Court earlier this month, there have never been any similar incidents. Taking into account the practice of the insurance industry in similar circumstances, the Government has proposed to offer ex-gratia payment to the victim. The Department of Justice is now following up on the details. We are reviewing our arrangements and will devise a mechanism to better ensure that the Government's practice is commensurate with that of the insurance industry and that the victim will be given considerate and reasonable recompense should such incidents occur again.

End/Wednesday, October 23, 2002

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