Mirror of Justice

Long Term Disability Claims and Lump Sum Awards

July 18th, 2009 at 03:00am Under Disability Law

For the uninitiated, Mr. Coombs and Constitution have been litigating entitlement to weekly income benefits arising from a motorcycle accident in June, 1974, since 1976. The amount in dispute is a weekly benefit in the amount of $70. I won’t continue with the history of the litigation but will instead move on to the substantive question behind whether this case is “dead or alive”.Does a declaration of entitlement to weekly or periodic benefit payments bring the matter to a close? Coombs has answered this with a resounding no.In litigation arising out of Long Term Disability contracts (”LTD”) or Statutory Accident Benefits disputes in automobile accidents, courts have declined to order or award a lump sum amount in lieu of the declaration of ongoing entitlement (with a discount for present value calculations of future entitlements, reduced by relevant contingencies, such as prospects for future employment, life expectancy, and other factors). The courts have just not seen fit to cross the line into the murky area of substituting their judgment, for the ongoing scrutiny of insurance companies. The basis for denying the lump sum award appears to be the constraints of the LTD contract, or legislation providing for disability and other benefits. Payments are only due for so long as the claimant can establish varying degrees of disability, although most of the litigation focuses on permanent, total or partial disability.Recent case law indicates that Coombs is very still very much alive.1 The cases noted here all have upheld the concept that only declaratory relief is available with respect to future disability benefit payments. In Richardson v. Great-West Life,2 Justice Holmes stated the following at paragraph 29:Counsel for the plaintiff argued that the plaintiff should be entitled to terminate the L.T. contract of insurance and receive as damages the present day value of the plaintiff’s future benefits to age 65. I agree with representations made on behalf of the defendant, however, that where as here there is some uncertainty as to the permanence of the plaintiff’s disabilities and the policy allows the insurer to require the plaintiff to submit to ongoing physical examinations as well as for offsets with regard to receipt of other benefits, a lump sum award for future benefits would not be appropriate. Nevertheless, the plaintiff is entitled to a declaration directing the defendant to pay the plaintiff continuing monthly benefits after April 15, 1996, until such time as she reaches the age of 65 years or dies or is no longer totally disabled within the provisions of the L.T. policy.While damages in lieu of a declaration may not always be preferable, the possibility of such an award would certainly add a strong weapon to the plaintiff’s arsenal. On the basis of the Richardson case, the court has opened a very small window of opportunity in cases where there is certainty as to the permanence of the plaintiff’s disability. Tendering evidence with this type of standard may prove to be fruitless in the realm of establishing entitlement to a lump sum award, but it seems to be all that we’ve got, or is it?Some of these same recent cases may assist in putting forth more forceful arguments for a lump sum award in the future. Where the plaintiff has had their benefits terminated and has suffered significant mental stress, financial uncertainty and general hopelessness, an argument can be advanced that what is needed is an end to the relationship between plaintiff and defendant insurer.In the Coombes decision rendered in 1993, 3 the problem of the potential for litigation in perpetuity, was acknowledged at paragraph.Coombe and Constitution have been battling in court over the payments since 1976 and it appears to me that only the demise of Coombe will bring litigation between these two protagonists to an end.Disability insurers, including accident benefit automobile insurers, have the right to require ongoing proof of disability and to periodically scrutinize claimants with respect to claims of permanent and total disability; however, recent cases have shown that a relationship of utmost good faith is frequently anything but.The Clarfield4 case, which resulted in an unprecedented finding for the plaintiff of aggravated and punitive damages, still did not result in a lump sum award for future benefits. The type of conduct under discussion in that case clearly points to the need for an end to the relationship between claimant and insurer, yet even in those circumstances the Court did not see fit to cross over the line into uncharted territory.In order to compel our Courts to award a lump sum in these cases, one of two things will have to happen. Either disability contracts or legislation will be amended to contemplate such an outcome in applicable circumstances, or, we need to return to first principles to try and apply existing case law to permit the Courts to make such an award where they are inclined to do so but feel constrained by precedents that do not appear to allow this.Perhaps we should look into other areas of the law for assistance. For instance, in a rather old case, Zdan v. Hruden 5 the Court upheld a lump sum award in lieu of contract for payment of support. The obvious distinction from disability claims is that in Zdan the contract was for lifetime payments without any obligation to establish ongoing entitlement by virtue of financial need or disability, however, the brief reasons for judgment do raise the spectre of the possibility of a lump sum award.When the defendant, for example, absolutely refuses to perform such a contract after the time for entering upon the performance has begun, it would be a great hardship to compel the plaintiff to be ready at all times during his life to be supported by the defendant, if the defendant should at any time change his mind and to hold that he must resort to successive actions from time to time to obtain his damages piecemeal’sThe reference to this case was derived from another case, which upholds the notion that a lump sum award in disability claims is not permissible (see Cram v. Great-West Life ). There the Court’s answer to concerns about leaving the plaintiff to the whim of the insurer is that other remedies exist, such as aggravated and punitive damages, which would act as a deterrent to terminating benefits in the future without the strongest evidence of cessation of disability. We are left wondering as to what Justice Williamson would have said had the history of Coombe v. Constitution been provided during the course of the Cram action.Despite efforts to find more compelling case law to support the argument in favour of a lump-sum award in these cases, there does not appear to be anything else to unearth, save and except for authorities in other jurisdictions. Clarfield points to a willingness by our courts to broaden the scope of aggravated and punitive damages. Accordingly, particularly in cases where insurer conduct is so severely impugned, it seems that lump sum awards cannot be far away. However, for the present time, Coombe v. Constitution is very much alive.

From A Consumer To A Producer

July 18th, 2009 at 02:56am Under Consumer Law

FROM A CONSUMER TO A PRODUCER

First Stages of the US Federal Law

July 18th, 2009 at 02:56am Under Constitutional Law

During 17th and 18th centuries, all colonies of Great Britain had a Constitution or an organizing Royal Charter. As soon as in 1776the United States became an independent country, thirteen states approved their specific constitutions, while the other two, Connecticut and Rhode Island, stayed under the imperial charters. According to the legitimate governments contract theory which was created to give explanation for English revolution of 1688, people of the United States trusted that there was a definite necessity to both limit and define the powers of legislative branches in Constitution. That way, the major importance on written form of Constitution was embedded in legal practice of England, while the necessity for Constitution was a result of the recently received independence.
The major advantage of English legal system was the privilege not to be taxed with no complaint in the taxing legislature and that factor was absent in the United States. Such rights became protected in America only in 1776; nevertheless, the assertion on addition of them to the Declaration of Independence finally made them essential to U.S. society’s basic rights.
All the way through the history of development and during the initial years of independence, the United States of America experienced two limits of nationwide government strength. From one prospective, Articles of Confederation guaranteed very little security of liberty and property rights, because administration was decentralized and, therefore, was powerless to offer the needed stage of security. Americans made a mistake by considering that democratically chosen distinct governments in all states in place of monarchy would guard both liberty and property rights. From the other prospective, the colonial regime of England was a faint imperial domination which deprived American population of basic liberty. After some time, U.S. federal law with its’ crucial foundation – Constitution of the U.S. – appeared as an answer to striking the right stability between the degree of order and freedom

Delay and Disruption in Construction Contracts, 3rd Edition – Bharatbook.com

July 18th, 2009 at 02:55am Under Construction Law

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Delay and Disruption in Construction Contracts is a highly practical and helpful volume which gives you real and practical solutions to problems you are likely to face – whether as a construction industry professional or an adviser to the industry.

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Tony Francis, Fenwick Elliott, Construction Industry Law Letter

“For anyone charged with the responsibility of determining the rights and liabilities of the parties with regard to delay and extensions of time, this book is essential reading”

Architects and Surveyors Institute Journal

Acknowledged internationally as the leading authority on delay and disruption

Provides an update to the practice of change management in construction and civil engineering contracts combined with the practice and law of proof of causation in delay and disruption related claims

This new edition has been extensively updated to include :

New and expanded sections on :

Acceleration

Time at large

Conditions precedent to entitlement

Contemporaneous analysis

SCL Protocol

Change management

Global claims

Identifying delay in the absence of a programme

The use analytical techniques in tort

Choosing a method of analysis float, concurrency, extensions of time, prolongation and disruption

Explains in detail the approach to :

Programming

Delay and disruption

Extensions of time and compensation for delay and disruption in the latest versions of a number of standard forms of contracts including:

FIDIC suite of Contracts

JCT 98, JCT Major Projects Form and JCT with Contractors Design Form

MF/1

I/Chem.E.

PFE change management supplements to the JCT standard forms

Comments on another forms used in other countries including those from Australia, Singapore, Hong Kong and USA

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Computer Peace of Mind

July 18th, 2009 at 02:54am Under Computer Law

Four years ago I made a website about protecting computers from viruses because, quite honestly, I just felt sorry for someone.

It all started when my sister-in-law’s personal computer at home was being infected by one form of virus or another at the rate of about once a month. That was almost tragic because of the amount of data that was being lost, time wasted and money being needlessly spent on computer repair. In most of the virus infection incidents, her hard disk had to be reformatted not to mention some of the other hardware components were being damaged.

A lot of instances, the virus infection could have been prevented. At that time, her computer was running on Windows 98 and she never upgraded the browser, Interent Explorer version 4, to begin with. She was also using the Outlook Express program that came with Win 98 for her emails and never upgraded it. She or maybe someone in her family was fond of carelessly forwarding “chain” emails like jokes and prayers. Needless to say, all that junk mail that was being dumped on others came back to haunt her. She started receiving emails with attachments that were actually viruses. And using an unpatched Outlook Express on those kinds of email is like leaving the doors and windows of your house wide open. Sooner or later, something bad is bound to happen.

Some of her children were also fond of using internet relay chat (IRC) and/or using some form of file sharing software like Kazaa or somesuch. Using these kinds of programs are an invitation to disaster as well.

The clincher, as you would have guessed by now, is that she never installed any form of anti virus program on her computer.

Therefore, drawing from real-life experience motivated me to create a website of this nature. It is indeed amazing and perhaps sad to a certain extent that some people do not take computer protection seriously. Not that the world is going to end unless you secure your computer, but if something like what was just described happened to you, you would probably have saved yourself a lot of grief if any sort of precaution was taken.

For more than a year now, my sister-in-law’s computer has been working without any more troubles after heeding the advice of a brother-in-law. She’s updated her browser and email software and installed an anti virus program. As for her kids, they had to take the bitter medicine—no more online chats and file-sharing software. I never asked her, but I’m sure in the back of her mind she must have thought that all the headache and needless expenses could have been avoided if she had only taken some simple steps to protecting her computer.

The Tryanny of Experts (part Ii) – Experts and Civil Society

July 18th, 2009 at 02:54am Under Civil Rights Law

Experts are valuable, necessary contributors to our diverse and specialized society. But they cannot and should not be used to constitute or replace civil society. Indeed, the idea that anyone can claim to be a civil society expert is troubling. Civil society needs to be composed of a broad and diverse array of people throughout our societies. The internet offers us an opportunity to radically expand civil society, to debate all of the ideas and ideologies that shape the world, and to publish our speech around the world. We cannot abandon this field to experts, particularly not the much vaunted experts of civil society.

What is an expert? Experts and expertise are usually recognized through degrees earned, publications, experience and notoriety. There are good reasons for each of these things. But each of them can also be troubling. If degrees and titles make experts, then we need to carefully, critically examine the curriculum, the quality, and the ideological biases of our degree offering institutions. If publications make experts, we need to be aware of the obscurity or audience of journals and the public and private funding sources for research. Experience is very valuable; but there are plenty of rich political donors who have become consular officials without a shred of expertise. Notoriety is the most troublesome of the signs and symbols of expertise. Famous experts are often assumed to be better experts – false. Famous people and celebrities often mistake themselves for experts and think we ought to care what their expert pronouncements are – really false! In addition, experts tend to congregate together and pat each other on the backs by awarding one another fellowships, grants, distinctions and prizes. The Ivy League is the country club of expertise. The longer you hang around, the more your expertise will be burnished, brightened and expanded by all of your expert pals who slap you on the back. Finally, success begets success. People who gain degrees, earn awards, grants and fellowships will earn more of them. If you have not broken into this club by the first year of graduate school, you are unlikely to join it later. Civil Society Experts

A wide array of civil society experts are called in to analyze, explain and advocate prominent policy issues. From the scientist and the statistician, to the economist and the literature professor, to the historian and the constitutional lawyer, to the retired general and the retired ambassador; there is no shortage of experts to tell us how to think and act and vote in this complicated world of ours. Now we even have technocrats – those elite experts who blend modern technological training with state power to produce utopia in developing nations like China and Chile, well, eventually maybe. Then there are the experts who are not experts. Politicians and rich people, reporters and pollsters get tired of having to ask the experts or hire the experts or hunt around for someone with an advanced degree to advocate their position. So they step up to the mike themselves and are transformed into pundits. But in the end, none of these civil society experts provide us with civil society, or solutions to the problems we must work together to solve.

In the last generation we have seen the rise of a new expert – the technocrat. This is the ultimate melding of expertise with power. Now instead of simply elevating the powerful to power, we elevate (powerful) experts to power. Hey, I love meritocracy. But let us not confuse engineering, business or science degrees with the ability to lead nations and states. Scientists, engineers and CEOs are no better or worse than anyone else at voting with principle, debating important issues, or leading communities.

Perhaps most prominent among civil society experts are scientists and statisticians. Statistics is an important tool for making valid conclusions based on small data sets. But statistics is also undoubtedly the most commonly misused tool for lying in politics, the media and civil society. Next, scientists are specialized professionals who master specific tools and methods for investigating specific, narrow questions. They arrive at provisional, evidence-based answers to those questions. They do not claim to discern truth, morality, wisdom or sound public policy. If you hear a scientist claiming any of these latter findings, then you are listening to a person, who happens to hold a PhD, who also holds an opinion that may or may not be informed, effective, wise or true. Scientists and scientific research are also very expensive, and so they are paid by someone or other. The sources of funding do not determine scientific results, but they can reflect policy analysis and advocacy.

Social scientists form a lower tier of civil society experts. These can include – Political scientists: who analyze politics and may try to tell you how to vote. Economists: who analyze the economy and may try to predict the future (with predictable results). Sociologists: who may or may not perform experiments on small groups of people, then tell you what is wrong with your society and what to do about it. Historians: who analyze the past then complain that you do not know about your past and that everything you think you know about the past is wrong. Anthropologists: who used to study remote cultures and now study ritual in any culture and will tell you how your culture is oppressing some other culture. And so forth. In related fields, literary and cultural critics abound in English, foreign language, and comparative literature departments. Scholars of literature and the arts consider themselves the primary experts on culture, mediators of high culture, and interpreters of all discourse, rhetoric and cultural expression. As a historian myself, I love social scientists and scholars of the humanities. They are often passionately devoted to civil society. But that does not make them experts on civil society.

Lawyers, constitutional lawyers, and law school professors form another common array of civil society experts. These people are trained to think critically, to read and write carefully, and to debate with acumen and rhetorical skill. Lawyers are legal experts, and so if you have legal problems, they come highly recommended. But in other circumstances the society of lawyers tends to make communication incomprehensible, extremely expensive, combative, and fraught with hidden landmines (read any small print lately?). The central problem with trusting a lawyer-expert is that you can find a lawyer who will argue any position. They may believe passionately in it, or they may simply believe in the virtue of arguing for their client. In short, lawyers are useful people to pay to support your position; but that does not make them civil society experts.

Finally, former government officials and diplomats are ubiquitous civil society experts. Former domestic or foreign policy advisors-now pundits, former generals and military officers-now private contractors or military advisors, former ambassadors-now think tank fellows, former congressmen-now lobbyists, former spies-now novelists, former bureaucrats-now whistleblowers. These people may or may not have done effective service for their governments in the past. They may indeed have garnered very useful experience. But you may be sure that these particular civil society experts certainly cultivated well placed friends, political favors, and public notoriety. Listen to such experts with care. Experts who aren’t

There are a variety of people who by virtue of their professions or positions voice their opinions and ideas with great authority – as if they should be listen to, believed and followed. Many of these experts are not experts at all.

First, politicians – Politicians are experts of campaigns and fund raising. They may be statesmen or stateswomen; they may be wise or principled; they may be experienced or expert in some field; but they are not necessarily any of these things. Generally, politicians (as politicians) are not experts. Elected government officials deserve respect on two levels. First, they have succeeded at communicating their ideas, marshalling personal and monetary support, and managing a campaign in order to attract democratic votes. This is a real achievement; but it does not make them a civil society expert. Second, successful politicians eventually accrue a great deal of experience in the halls of government. This is a mixed blessing in that these politicians have opportunities to contribute toward functioning governance and to help solve societal problems; but they just as frequently take those opportunities to perform bad governance, to fail to solve societal problems, and occasionally to become part of the problem. Few politicians are experts.

Rich people and celebrities – wealth, power and notoriety do not grant expertise. Celebrities are almost never experts and should not speak any louder than anyone else. Rich people are able to buy and broadcast louder speech, but it does not make them experts. (And then there is the stray expert who somehow gains celebrity. Expert-cum-celebrities sometimes deserve their notoriety. Some of them have gained celebrity through a lifetime of achievement crowned with high awards – Nobel Prizes, medals, honors, etc. These people mark an exception to the celebrity rule, but their celebrity is usually fleeting. How many Nobel Prize winners for the sciences can you name?)

Reporters and pundits – the press has become increasingly openly ideological. As the media has opened its ideological content, journalists, columnists, news analysts and pundits of all kinds have proliferated and expressed their opinions in ever increasing volume. Reporters and pundits are often widely informed by virtue of their interviews and reportage; they are also often very good rhetoriticians. Personally, I believe that open, honest, ideological expression by the press is much better than veiled or even unconscious bias contained in misleading headlines or buried ledes. But being published in print or being broadcast on cable does not make anyone an expert.

Pollsters – the ultimate non-experts. These are people who are paid to ask a representative sample of regular people what they think, then to use statistics and their analytical powers to discern what everyone thinks. Well, polls can be interesting; they might even in some cases be beneficial to policy makers or civil society. But how any of this makes pollsters experts is beyond me. Nevertheless, pollsters have become increasingly common media experts who provide journalists and pundits with a window into the mind of the common woman on the street. Where is the expert here? Wizard of Oz, we see you behind your curtain!

Finally, there is the all too common spectacle of the expert parading in public who establishes their credibility by lambasting their field of expertise – the expert insider critic or expert whistleblower. Have you seen the accredited psychologist who attacks the field of therapy or psychoanalysis right before lathering their audiences with a thick layer of relationship advice? What of the conservative scholar (tenured) who bravely eviscerates academia from within? Or the anti-medicine MD? How about the government civil servant whose civil rights (and political views) were so trampled that he had to give hundreds of media interviews to show how reactionary the government is? We could multiply examples. These experts are remarkable because they attack the root of their expertise, while all the time utilizing the same expertise to convince us we ought to trust and listen to them. Most remarkably, the slickest exploiters of the expert-insider-critic shtick actually manage to make us trust them more than other experts, even as they savage the root of their expertise. Your Civil Society

One of the major critiques of new media on the Internet is that it accumulates much noise and little substance – too much riff raff and too few experts. Wouldn’t it be better to gather quietly at the feet of wise experts, rather than sift through all of the shouting, competing voices in new media echo chambers? Oh, I have heard elderly reporters wax lyrical as they recalled the days when everyone listened to Cronkite and read the New York Times, because back then we knew that was the way it was. This common, elite meme argues that we actually need fewer media broadcasters, fewer experts, fewer points of view, and a lot fewer people speaking. But to the contrary, our civil society needs more people to be more engaged, to speak more openly, to broadcast their voices further, to test and debate more ideas, new ideas.

If Ideology Forum is to succeed in helping strengthen our civil society, together we need to enable a very wide range of people to thoughtfully engage one another about as many ideas and principles and movements and causes as possible. Doubtless, some will criticize saying that regular people – common internet users – lack the expertise to make newsworthy, publishable, original contributions to the big issues and debates that shape our world. In other words, ‘Shut up and listen to the columnists, pundits, politicians, professors, scientists – the experts.’ But civil society must be broad and inclusive; it ought to be active and democratic; the Internet makes that increasingly possible; and Ideology Forum strives to make that civil society real. We need more people to throw off the tyranny of experts and speak.

Suggestions on How to Win Child Custody

July 18th, 2009 at 02:53am Under Child Custody

The Importance of Business Attorneys When Starting a Business

July 18th, 2009 at 02:53am Under Business Law

In California, many enterprising people engaged in business armed with bright ideas, a fairly enough sum of money and a handful of people as workers and staff. Talented ones succeed; many others fail. What some of them do not realize is that starting a business is not an easy undertaking.

Managing a business involves many concerns, especially in areas such as taxes, debts and finances, employees issue, contracts, etc. To concentrate your attention in managing your business, you will need someone to handle other matters. A California business law attorney can help you focus on all other considerations of managing a business:

1. Liability – Engaging in business can put your property and assets at risk. An attorney can help you avoid situations or reduce risk.

2. Taxes – A lawyer knows that different business forms have different tax advantages and disadvantages. He is more experienced than you in this particular area.

3. Autonomy – In most states, they adopt “Uniform laws”. These rules and regulation govern business entities as a “fill-in” for gaps in charter or by-laws. Business lawyers know some of these rules, which you do not even know, exist.

4. Variety of entities – An attorney has better knowledge of business entities and the options that determine such things as double taxation, liability for partners, etc.

5. Capital – A business has to raise money, keep records of income and distribution, and behave in a fiscal manner.

6. Conformity – To ensure security and protection, a business has to conform and follow business laws. A lawyer can see to it that the law governing business is enforced and obeyed.

7. Multi-state business – A business that operates in different states is governed by laws of each state where each one is located. A legal counsel knows which law applies in each state where a business operates.

8. Control – Choosing a business form not suited to your interest can pose future problems with employees or partners.

9. Registering, licensing and permits

10. Contracts – A business enterprise engage in many contracts, agreements and deal. A business law attorney can explain to you the details of the documents and help you decide which contract is beneficial to the company.

If you plan to establish a business in California, you have to undergo certain procedures to be able to conduct business and operate legally in the state. To be able to accomplish this, you will need the help of an experienced lawyer to assist you in the preparation and processing of documents.

Registering your Business

In some states, you register your business name with the state agency or the Secretary of State. But in California, like in most states, you register your business name with the county. Each county has its own form and fees for registering a name. To know the details of registering a name in a certain county, you must contact the county secretary about this.

The requirements for registration, permits and licenses will all depend on the kind of business you plan to set up. If you intend to hire more employees, you have to register as an employer with the California Employment Development Department. On the other hand, if you want to practice your profession as business form, you would have to obtain licensing with the California Department of Consumer Affairs.

In nearly all aspects of starting a business in California, you will need the services of a business attorney to help you gain foothold in the competitive state business. In this case, a skilled and competent attorney who specializes in business concerns will assist you in starting a business.

For your other concerns regarding the legalities of doing your business in California, log on to our website and seek our professional attorney services. We provide free case evaluation for our clients.

Are You Confused About Bankruptcy Laws?

July 18th, 2009 at 02:52am Under Discrimination Law

Unless you are a lawyer, the odds are that you have not spent much time studying bankruptcy laws. If you are someone who is experiencing financial trouble personally or with your business and you find yourself in unmanageable debt, then you need to find out more about bankruptcy and ways to avoid it if possible.

At first, bankruptcy may seem like an attractive option. The goal of US bankruptcy provisions was to help the individual in debt be released from these obligations so that he can start over completely. The creditors are paid immediately but only as much as what the bankruptcy court can make after selling all the debtor’s non-exempt property and goods. Therefore, the creditors get money right away but, in all likelihood, they will not be repaid in full. Once you file for bankruptcy, you are absolved of your debts and your creditors can no longer harass you or sue you for the money. This reason is why many creditors would prefer you do not file bankruptcy in the first place, they want to receive their money back in full even if it does take longer than was originally agreed upon.

Even though Chapter 7 bankruptcy absolves your debt and allows you to start over, you are starting over with almost nothing. All of your non-exempt assets have been sold off and you have most likely lost many friends who trusted you with their hard-earned money. Your credit score also collapses. Depending on the state in which you live, the fact that you filed for bankruptcy will show up on your credit report for at least ten years if not longer. It is very difficult to start over again when you have no funds and cannot borrow money without incurring very large interest rates.

Therefore, you want to avoid filing for bankruptcy at all costs. If you feel as though you are sinking deeper and deeper into debt, you need to talk to a financial expert. They might be able to help you negotiate new contracts with your creditors so that they receive their payments in full and you can avoid the liquidation of all your assets.

Banking and Finance Regulations of the Kingdom of Thailand

July 18th, 2009 at 02:52am Under Banking Law

The banking industry in Thailand forms an essential segment of the nation’s financial services industry. In other words, banking sector in Thailand is well-established. The history of Thai banking dates back to 1865, when the Hong Kong and Shanghai Bank appointed its agents in Bangkok. Accordingly, the HSBC established a branch in Bangkok, thereby becoming the first bank to open a branch in the country.
Following the establishment of HSBC branch, many European as well as business banks opened their branches. As a result, foreign banks became the dominant players in the nation’s banking industry. In order to counter the supremacy of foreign banks, Siam Commercial Bank – the first Thai bank – was established in 1906. Later, more Thai banks were opened to trade with Asian countries, as a result of the Second World War, when majority of the foreign banks were forced closed.
After the world war, the Thai government introduced a protective policy in order to promote the growth of Thai banks in the country, which included limiting the operation of foreign banks to one branch office. As a result, foreign banks became less dominant players in the banking sector of Thailand. Since 1960, many innovative economic as well as social development plans have been introduced in the country, which in turn has led to rapid expansion of banking sector in Thailand’s provinces, resulting in banks numbering more than 3000 throughout the country.
Thailand’s modern banking system is made up of a variety of financial institutions including commercial banks, special purposes bank, and Government Savings Bank. Commercial banks are perhaps the most popular among the banks in Thailand. Commercial banks include both local and foreign banking institutions.
Being the biggest financial institutions in the country, Thai commercial banks render an array of services including acceptance of time savings as well as demand deposits, lending money via overdrafts, discounting of bills, and leasing. Their activities also cover fee-based services like custodian services, syndication of loans, feasibility studies, and consultations for mergers as well as acquisitions. Apart from these, in some instances, these banks issue negotiable instruments of deposit, apart from underwriting and issuing of debt instruments.
Commercial banks in Thailand, consisting of branches as well as representative offices of foreign banks, are functioned in accordance with the Thai laws and regulations formulated by the Ministry of Finance (MOF) and the Bank of Thailand (BOI.) Formed in 1875 by the Ministry of Thailand, the Ministry of Finance initially acted as an agency of the government to administer national finance, collect revenues, and disburse royal funds.
In 1933, it got its present name and status as a result of the passing of the Civil Service Reform Act. With eight departments and 16 state enterprises under its control, MOF’s major duties include supervision of matters in connection with operations of Government monopolies, property, and treasury. Additionally, it has power to provide loan guarantees for financial institutions, government agencies, and state enterprises.
Bank of Thailand started its operation in accordance with the formulation of the Bank of Thailand Act, on April 28, 1942. Among its duties are devising of monetary policy and supervision of financial institutions.
Now we will discuss banking regulation with regard to bank licensing. As per the Commercial Bank Act, first of all an application, containing particulars as entailed by the Ministry, must be filed with the Ministry of Finance in order to set up a commercial bank in Thailand. On the approval as well as the obtaining of a license from the Ministry, a commercial bank is opened as a limited public company.
However, a foreign bank has to comply with regulations formulated by the Thai government in order to open a branch in the country, such as the money should be brought from its head office. When comes to investment, Thai government permits foreign banks to hold 100% shareholding for up to a period of 10 years. After a period of 10 years, they are not required to divest their shares. But, in case, if they hold more than 49 percent of shares sold, they are not allowed to acquire additional shares.
In addition, the Commercial Banking Act has put forward certain laws and regulations for the maintenance of capital funds and reserves. As such, the commercial banks are required to maintain certain amount and types of the assets in the country.
Special purposes banks are state-owned financial institution whose activities are administered by the Thai government. However, they deal with only specific clients or projects. Included in the special purpose banks are the Bank for Agriculture and Agricultural Cooperatives, the Government Housing Bank, and the Government Savings Bank. When comes to the Government Savings Bank, it consists of an extensive network of branches throughout the nations.
Banking and financial sectors in Thailand are further categorized into: Asset Management Companies, Credit Froncier Companies, Finance and Securities Companies, and International Banking Facilities (IBF.)