Administration of Justice (2)

On the issue of the credit linked notes, someone made a comment in my blog that, under the law, if you agree to a disclaimer to absolve the distributor from liability, you do not have any case - even if the distributor is negligent or fraudalent. He quoted with a purported knowledge of the law, as applied in Singapore.

I disagree with his comment. I believe that fraudalent acts, including the intent to cheat, cannot be covered by such disclaimers. I also believe that negligent acts, cannot be covered by such disclaimer, if they cover matters that the distributor, as a financial adviser, ought to know.

For example, if I see a doctor, I expect that the doctor ought to know that certain drugs are dangerous and unsuitable to be prescribed to a patient. The doctor cannot get away by asking the patient to agree a general disclaimer to absolve the doctor from liability.

The challenge to the consumer, in the case of the credit linked notes, is in finding the money to take a legal case against the distributor who gave wrong advice. The consumer does not have the means to challenge a financial institution, who has access to the top lawyers in town.

In many countries, the consumers can depend on the following avenues to uphold justice:
a) The regulator - who has the duty to enforce the law
b) The consumer association - who takes up the matter to protect the interest of consumers.
c) The politicians - who speak and act for the ordinary people to win their votes
d) Lawyers - who takes the risk under a contingency fee system

Take a look at what happens to similar cases in America or Hong Kong. Action has been taken by some of these parties.

Unfortunately, these channels are not available to consumers in Singapore. It is a sad state of affairs here.

Tan Kin Lian