NTUC Income has come to the rescue of teacher Jonathan Lock, who faces a hefty legal bill over a $188 accident case he had won.

Its CEO Tan Suee Chieh met Mr Lock and his wife on Friday and agreed to waive the bill that the primary school teacher has to pay NTUC Income, the insurer of Ms Jessiline Goh, whose car collided with Mr Lock's motorbike in 2004, sparking a long-drawn and costly legal battle.

Mr Tan said his company has also asked Mr Lock's lawyers to release the items in his flat that had been earmarked for seizure to recover the awarded costs.

On top of these, Mr Tan said NTUC Income would also help to fund $25,000 of his legal bills, presently estimated to be about $80,000.

"This is our way of helping a policyholder who has found himself caught in the middle of a protracted and unnecessary legal process," said Mr Tan in a statement on Friday.

Mr Tan said he was compelled to make a statement because there had been a lapse of "our own internal process of management" and he wanted to take corrective actions so that such incidents would not happen again.

He added: "I believe our lawyers and we may have been over-zealous in pursuing the legal process to establish a principle in law, without regard to practical business and personal considerations.

"The consequences have been totally disproportionate and unintended by NTUC Income."

He said that while the company had been right in each step of the way and this were justified by the outcomes in court, it "does not mean that the interests of our enterprise and customers have been best served."

Mr Lock, on his part, through his lawyer Joseph Chen, is withdrawing the Court of Appeal hearing on the case set for Oct 2.

He is also withdrawing an application against seizure of his belongings. The case was due to be heard in the High Court on Sept 27.

The controversial case started with a hearing in the Primary Dispute Resolution Centre (PDRC) in March last year to settle the November 2004 accident between him and Ms Goh.

Mr Lock was awarded $188, while Ms Goh was asked to pay $1,200 in costs.

When he got his cheque for that amount, he thought the matter was closed.

However, his lawyer at the time, Mr Andrew Hanam, extracted a court order and took out a writ of seizure against Ms Goh to enforce payment of the $1,200 costs.

This move by Mr Hanam - now a talking point among lawyers - set in motion a series of events that ended with a $45,000 bill at his client's door.

In response to the seizure, NTUC on Ms Goh's behalf through lawyers from Assomull & Partners went on to fight the decision through three levels to the High Court.

From a minor traffic scrap, the legal tussle ballooned into a huge liability for Mr Lock.

But he can put all this behind him, with NTUC Income's help.