Allen & Overy Reports on the Timely Introduction of Civil Justice Reform in Hong Kong

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Angus Ross, an Allen & Overy Partner working in China, reports on civil justice reform in Hong Kong.

Angus Ross, an Allen & Overy Partner working in China, reports on civil justice reform in Hong Kong.

Quick and efficient civil justice is to be welcomed in the current environment. The economic downturn has prompted a deluge of litigation which may continue for some time. For many of the parties involved so far, the stakes couldn't be higher. In some jurisdictions this will be viewed with apprehension; Court systems are already struggling with increasing delays, procedural complexity and legal costs.

Timely then, that the Civil Justice Reforms (CJR) are about to be introduced in Hong Kong (from 2 April 2009) after nearly a decade of debate. The principal aims of the CJR are to reduce delays, improve the cost-effectiveness and the fair allocation of court resources and to facilitate the early settlement of disputes.

The Hong Kong CJR are closely modelled on the English Woolf Reforms (the existing Hong Kong rules are virtually identical to the English rules which existed before the Woolf Reforms). However, rather than slavishly following the Woolf Reforms, Hong Kong will adopt only those amendments which are thought to have worked well in England. Thus, not all the English case law which has emerged from the Woolf reforms will be relevant in Hong Kong following the implementation of the CJR; careful comparison will be required to ensure that the differences between the two systems are understood.

One of the principal aims of the Hong Kong CJR will be to encourage parties to settle disputes at an early stage and to deter unnecessary litigation. According to statistics in England, the number of cases issued in the English courts declined rapidly following the introduction of the Woolf Reforms in 1999. It has to be said that Hong Kong has also experienced a steady decline in the number of cases during the same period. Nevertheless, the consensus appears to be that the Woolf Reforms changed for the better the culture and approach of civil litigation in England.

One of the key changes in Hong Kong will be the increased powers given to the Court to manage cases. The courts will be empowered to make sure that issues are identified early in proceedings and that excessive delays are avoided by closer monitoring of the progress of cases. The increase in the court's case management powers will involve a different role for the judiciary in Hong Kong. Training is currently underway to assist them in adapting to the proposed amendments and in understanding their role under the CJR. Increased powers of case management are thought to have been one of the main successes under the Woolf Reforms, with evidence showing that cases are better prepared and much more efficiently conducted as a result.

The costs related protection given to parties who make reasonable offers to settle will also be enhanced. If an offer is not accepted and is not ultimately bettered in the litigation, the offeree can be made liable for the offeror's legal costs regardless of the offeree winning the case. The amendments under the CJR will give both defendants and the plaintiffs protection on costs if they make an offer to settle (currently only defendants are able to benefit from this). This change is considered to be one of the most successful parts of the Woolf Reforms. Evidence suggests that it has facilitated the opening up of discussions between parties at an earlier stage in the proceedings and, even where offers have not been accepted, the resulting discussions between the parties has led to more negotiation and thus more settlements.

After 2 April, Hong Kong plaintiffs will need to be better prepared before they commence court proceedings. They will be expected to be more forthcoming about the basis for their claim; the new rules will make them more accountable for the accuracy and completeness of the facts and evidence they put forward. Defendants will need to be more assiduous in responding to proceedings for similar reasons since bare denials will no longer be a sufficient response to the claims made against them. All parties will also need to bear in mind that the progress of the proceedings - and thus the rate at which costs are incurred - will be more closely monitored by the courts under their new case management powers.

Further information
Find out more about Allen & Overy's global litigation and dispute resolution practice.
If you have a query about this article please contact Sharon Fung, sharon.fung (at) allenovery.com or tel: +852 2974 7091.

Notes to editors

Allen & Overy is an international law firm with over 5,500 staff, including some 500 partners, working in 31 major centres worldwide.

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