The Civil Justice Reform in Hong Kong

Following the implementation of the Woolf Reforms in England in late 90s, in February 2000, the Hong Kong Chief Justice appointed a working party (“Working Party”) “to review the civil rules and procedures of the High Court and to recommend changes thereto with a view to ensuring and improving access to justice at reasonable cost and speed.” (“HK Reform”).¹

On 21st November 2001, the Working Party published an interim report and consultative paper (“Interim Report”) to seek and gather public opinion. After consultation, it was concluded that the HK Reform should be implemented by making amendments to the current Rules of the High Court (“RHC”), rather than adoption of an entirely new code of civil procedure, as in England and Wales. It was considered that (a) this would be less disruptive and demanding; and (b) only the reforms which had proved to be beneficial and successfully implemented in England were to be adopted.² A final report (“Final Report”) was published on 3rd March 2004. Amendments to the relevant legislation have been gazetted and will come into force in Hong Kong in April 2009. The following is an introduction to the civil justice reform in Hong Kong and some of the significant amendments to the RHC, which are applicable to the general cases, as well as cases in special lists, including Admiralty List.

The Objectives

The main objectives of the Woolf Reforms were to ensure the parties were set on an equal footing, to reduce costs, and to improve speed. These are stated as the “overriding objectives” in rule 1.1 of the English Civil Procedure Rules (“CPR”). The use of the word “overriding” is significant. It allows the English Courts to take a pro-active approach to deal with a case justly and expeditiously. The English Courts give considerable weight to these objectives in exercising their power and interpreting the CPR.

However, the main objective of the HK Reform is to facilitate access to justice at reasonable costs and speed. O.1A r.1³ of the new RHC provides:

“The underlying objectives of these rules are –

a. to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;
b. to ensure that a case is dealt with as expeditiously as is reasonably practicable;
c. to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;
d. to ensure fairness between the parties;
e. to facilitate the settlement of disputes; and
f. to ensure that the resources of the Court are distributed fairly.”

(collectively referred to as the “Underlying Objectives”)

The objectives are described as “underlying”, rather than “overriding”, to avoid excessive proactiveness, which may lead to absurd results.⁴ The Working Party stated that:

“It would be wise to avoid suggesting that any such rule has an ‘overriding’ character, to avoid encouraging over-elaborate and misguided reliance being placed on it. It should be made clear that such a rule merely makes explicit what are implicit objectives which ‘underlie’ specific rules of the RHC, supporting the internal logic of such rules. Such specific rules should accordingly continue to demand intelligent application informed, but not overridden, by the underlying principles.”⁵

Case Management Powers

The Court, assisted by the parties, has a duty to further the Underlying Objectives by actively managing the cases.⁶ The case management powers, which are presently within the Court’s inherent jurisdiction and administrative power, are being set out in O.1B of the new RHC. Apart from these general powers, the Court can “require a party or a party’s legal representative to attend the Court” and “exclude an issue from consideration.” ⁷ The Court can also by its own motion make an order, without first hearing submissions from the parties, although the parties may subsequently apply to have it set aside, varied or stayed.⁸

Any non-compliance of the rules or orders may be penalised by a payment of a sum of money into court. The money will become security for any sum payable by that party to any other party in the proceedings.⁹ As a safeguard, upon a party’s application for relief from this sanction, the Court shall consider all the circumstances, including the interests of the administration of justice, whether the default was caused by the party or his legal representative, whether there is any good excuse, and the effect of the default, etc.¹⁰ Interestingly, where the defaulting party is an unrepresented litigant, the Court should also consider “whether he was unaware of the rule or court order, or if he was aware of it, whether he was able to comply with it without legal assistance.” ¹¹ This is not found in the corresponding rule in the CPR.

A lawyer who has court experience will agree that the general lack of knowledge of the procedural and substantive law of unrepresented litigants poses problems to the judicial system. Most of them may not be able to comply with the rules and define the issues in dispute clearly, which results in a waste of time and costs. They might also have a sense of being disadvantaged and unfairly treated.¹² In order to alleviate the problems, the Hong Kong Judiciary has set up resource centres to provide legal resources and assistance to the unrepresented litigants. The Hong Kong Law Society and Bar Association are also considering to extend their pro bono legal services to these parties. The special consideration given to unrepresented litigants is a demonstration of the Court’s sensitivity to these parties.¹³ Hopefully, it will not be used by some sophisticated unrepresented litigants to their advantages to create “judicial irritation”¹⁴ to the opposing parties.

Pleadings

Under the new RHC, the time allowed for the filing of defence and reply has been extended from 14 days to 28 days.¹⁵ That is, after a plaintiff serves a statement of claim within 14 days of service of the writ, the defendant will have 28 days to serve a defence. The plaintiff may then serve a reply within the next 28 days. The pleading stage is deemed to be closed at the expiration of 14 days after service of the reply.¹⁶

As time for the service of pleadings has been extended, in light of the Underlying Objectives, the Court will not allow amendments to the pleadings, unless it is of the opinion that it is necessary either for disposing fairly of the cause or matter or for saving costs.¹⁷

Under the current practice, the Court will generally agree to grant an order for the first application for a time extension for the service of pleadings. This practice may not be sustainable under the new RHC.

Another feature of the new RHC is that a pleading and its particulars must be verified by a statement of truth, to be signed by the relevant party or his legal representative, confirming the party’s belief that the facts stated in the pleading are true.¹⁸ In current practice, a party quite often pleads inconsistent alternative cases. Although O.18 r.12A of the new RHC makes room for this, the title “statement of truth” is disturbing.

Within 28 days after the close of pleadings, each party is required to complete a questionnaire,¹⁹ setting out the position of the legal action and the matters which are outstanding in order to bring the action to trial. The parties are also required to advise the Court whether attempts have been made to resolve the dispute by mediation. A party who fails or refuses to mediate must give an explanation.

Case Management Conference

In order to expedite the legal action, the parties should cooperate and try to reach agreement on the matters raised in the questionnaires.²⁰ The plaintiff should then take out a summons for a case management conference. ²¹

In the case management conference, the Court will (a) determine the outstanding matters, (b) give directions relating to the management of the case, and (c) fix the timetable for the steps to be taken in the case.

Unlike the present checklist review hearing, the case management conference is important and should not be taken lightly. The Court has power to provisionally strike out a party’s claim, if he fails to attend the conference. The dates fixed for a case management conference,²³ a pre-trial review, and the trial are called milestone dates, which cannot be varied, unless there are exceptional circumstances justifying the variation.²⁴

Tight time schedule leads to front-loading of legal costs, which has been a major problem – criticism encountered in the implementation of the Woolf Reforms.²⁵ In order to ameliorate this problem, it is suggested that more time should be given between the milestone dates. The Courts should also take a more flexible approach, so that the parties will have sufficient time to pursue settlement negotiation.

Assessment of Legal Costs

Proportionality and reasonableness are the keys to costs under the new RHC. It is anticipated that the Courts will be more ready to make a wasted costs order against a legal representative, disallowing the costs as between the legal representative and his client, and directing the legal representative to be personally responsible for payment of the costs incurred by the other parties.²⁶

Under the current practice, where a bill of costs does not exceed HK$100,000, the taxing master may make provisional assessment of the legal costs, without requiring the parties to attend a taxation hearing.²⁷ A party who objects to the provisional assessment may apply to the taxing master for an appointment for a taxation hearing. As the present limit is too low, this procedure is only applicable in small claims. Under the new RHC, the limit has been increased to HK$200,000.²⁸ This will allow the parties to employ the procedure more often, so as to facilitate the costs assessment process.

Conclusion

Equality, simplicity, clarity, and affordability are the lubricants to the operation of a judicial system. It is therefore always an objective, amongst others, of a civil procedure reform of improving the cost-effectiveness and efficiency of the court rules. The system of civil procedure should be updated, along with the social and technological changes and the increased complexity in legislation and case law.²⁹ The question is–are these the main reasons for the failure of the present civil procedure rules? Or is this a problem of the litigation culture? Perhaps this is the price we need to pay to support an adversarial litigation system.

1. Paragraph 1 of Final Report dated 3rd March 2004.
2. Paragraph 10 of the Executive Summary to the Final Report.
3. Reference to Order 1A rule 1 of the Hong Kong Rules of the High Court. Same notation will be used in this essay. For example, see Michael G S Law v. St. Margarets Insurances Ltd. [2001] EWCA Civ 30 (18 January 2000).
4. Paragraph 100 of the Final Report.
5. O.1A, r.3 and r.4 of the new RHC.
6. O.1B r.1(2)(c) and (j) of the new RHC.
7. O.1B, r.2(4) and (5) of the new RHC.
8. O.2, r.3 of the new RHC O.2, r.5(1) of the new RHC.
9. O.2, r.5(1)(g) of the new RHC.
10. Paragraphs 864 and 865 of the Final Report.
11. O.2, r.5(1)(g) of the new RHC and Paragraphs 864 and 865 of the Final Report.
12. The wording “judicial irritation” was originally used in paragraph 855 of the Final Report to refer to the (misconceived) perception of unrepresented litigants that they are being considered as such by the legal community.
13. O.18, rr.1, 2 and 3 of the new RHC.
14. O.18, r.20 of the new RHC.
15. O.20, r.8(1A) of the new RHC O.18, r.20A and O.41A of the new RHC. Apart from a pleading, a witness statement and expert report also require verification by a statement of truth (see O.41A, r.2 of the new RHC).
16. O.25, r.1(1) of the new RHC.
17. O.25, r.1(1A) of the new RHC.
18. The time for taking out the summons would be specified in the relevant practice directions (see O.25, r.1(1B)(b) of the new RHC). If the plaintiff fails to do this, the defendant may take out the summons or apply to the Court for an order to dismiss the action (see O.25, r.1(4) of the new RHC).
19. O.25, r.1A of the new RHC.
20. O.25, r.1C of the new RHC.
21. O.25, r.1B(1), (2) and (3) of the new RHC.
22. Paragraph 16 of the Final Report.
23. O.62, r.8 of the new RHC.
24. A taxation hearing is a hearing for assessment of legal costs.
25. O.62, r.13 and r.21B of the new RHC.
26. Paragraph 9 of the Interim Report.
27. A taxation hearing is a hearing for assessment of legal costs.
28. O.62, r.13 and r.21B of the new RHC.
29. Paragraph 9 of the Interim Report.