As published by the Philippine Daily Inquirer on June 12, 2023
MANILA -The Dutch, German, Nordic and Norweigan chambers of commerce are pushing for an escrow provision in the Magna Carta bill for seafarers, signaling a growing support from foreign businesses for the inclusion of this safeguard in the proposed legislation.
The joint maritime committee of these business chambers on Friday expressed “deep concern” regarding the removal of the escrow provision in Senate Bill No. 2221, the version of the proposed legislation in the upper chamber.
“The exploitation of the seafarer compensation system has been identified as a major obstacle to the employment of Filipino seafarers,” European Joint Maritime Committee Chairperson Tore Henriksen said in a statement.
“This is primarily attributed to the flawed system requiring shipowners to pay in full before cases are finally settled in the judicial system,” he added.
The committee noted that the version of the proposed bill at the House of Representatives includes an escrow provision, citing it was designed to protect workers and employers from “ambulance chasers.”
Ambulance chasing is the act of encouraging workers, in this case the seafarers, to seek monetary damages against their employers as compensation for work-related injuries.
These seafarers are persuaded to seek large monetary settlements by these “ambulance chasing” lawyers who ask for large percentages of the compensation that they will receive.
However, such awards from the National Labor Commission (NLRC) and the National Conciliation and Mediation Board (NCMB) could be overturned by the Court of Appeals (CA) or the Supreme Court (SC), meaning that the primary complainant would need to give back the full amount previously awarded.
These unscrupulous lawyers, on the other hand, are able to walk away with huge sums of money.
With the escrow provision, the monetary award would temporarily be deposited in a third-party account and would only be granted after the final decision from the high court has been issued.
According to the Association of Licensed Manning Agencies (ALMA), more than P2.5 billion worth of claims awarded by the NCMB alone from 2018 to 2022 have been reversed by either the CA or SC, illustrating the magnitude of the problem.
“The seafarers were ordered to restitute the amount to the shipowners but were unable to do so because more than half of the claims that they got already went to ambulance chasers whom they contracted to file and claim on their behalf,” (ALMA) chairperson Iris Baguilat said in a recent statement.
Other industry and stakeholders, including the Associated Marine Officers’ and Seamen’s Union of the Philippines (AMOSUP), the United Filipino Seafarers (UFS), and the Filipino Association for Mariners’ Employment (FAME), have also called for the inclusion of an escrow provision in the bill.