D. EXPENSE AND THE HONG KONG CIVIL JUSTICE SYSTEM

D1. Perception as major barrier to legal access

38.	Where the cost of litigation becomes too high, whether when compared with the resources of potential court users or relative to the amount of the claim, it endangers one's rights, putting them out of reach if they become too expensive to enforce. It also increases inequality between the wealthier and the poorer litigant, the former being able to use his deeper pockets as a strategic or tactical advantage.
39.	Lord Woolf said of the English system :-

		"There is no doubt that the expense of litigation is one of the most fundamental problems confronting the civil justice system." (Note 37)

	In his Final Report, his Lordship explained why :-

		"Costs are a significant problem because :-

		(a)	litigation is so expensive that the majority of the public cannot afford it unless they receive financial assistance;
		(b)	the costs incurred in the course of litigation are out of proportion to the issues involved; and
		(c)	the costs are uncertain in amount so that the parties have difficulty in predicting what their ultimate liability might be if the action is lost."

40.	It is clear that most people consider that the same can be said of Hong Kong. There is a widespread perception that litigating in Hong Kong is prohibitively expensive because lawyers charge fees that are unaffordably high, often disproportionate to the amounts in dispute, and uncompetitive when compared to fees charged in comparable jurisdictions.
40.1	This is persistently the flavour of reporting in the local press. To take a few recent examples (which, it should be stressed, the Working Party does not endorse for their accuracy, but refers to as an indication of public concern) :-

	(a)	In March 2000, Mr Mark Bradley, a solicitor and Council Member of the Hong Kong Law Society, launched an attack on the level of barristers' fees on the basis of his experience in the Law Society's Claims Committee, alleging that local counsel most in demand "are now charging something like four times as much as their equivalents in the UK." (Note 38)
	(b)	On 20 July 2000, Sing Tao Daily discussed competition between Hong Kong lawyers, referred to "opinions that Hong Kong's lawyers were ...... charging exorbitant fees" and called for improvements in the variety of services provided by the legal sector.
	(c)	In her published election platform in the 2000 Legislative Council elections for the Legal Functional Constituency, the Hon Ms Margaret Ng stated: "Prohibitive litigation cost obstructs access to justice and gives lawyers a bad name." (Note 39)
	(d)	An article in the South China Morning Post entitled "Justice comes with a hefty price tag", (Note 40) refers to parties being prepared to: "...... fly a barrister out first-class from London, put him up at the Mandarin for a few weeks and fork out HK$8,000 an hour than hire a 'costly' Hong Kong counterpart." It adds: "Lawyers may charge breathtaking fees, but the system perpetuates the exorbitant price of going to court." This, it suggests, is because the system "leaves everything in the hands of lawyers" (quoting a partner from a City firm), giving little incentive for lawyers to cut costs and resulting in "lengthy cases and time-consuming applications which do not achieve much."
	(e)	An article in the SCMP Business News (Note 41) on a "magic circle" of senior counsel referred to them as "Hong Kong's highest-paid elite, pocketing millions of dollars and maintaining one of the SAR's longest-running cartels." It continued :-

			"Exactly what the fees are remains the privileged information of the inner sanctum. Solicitors are another source of knowledge, however. One partner at a leading international law firm cites figures of HK$6,000 to HK$12,000 an hour charged by elite barristers. When the case goes to trial there will be "refresher fees" of HK$60,000 to HK$120,000 a day. By comparison, a junior barrister might charge HK$2,500 an hour and HK$25,000 a day. Those in the middle range - senior juniors - would cost in the region of HK$4,000 to HK$5,000 an hour and HK$40,000 to HK$50,000 a day."

	(f)	In a study completed in March 2001 on "The Manpower Needs of the Legal Services Sector of Hong Kong" conducted by GML Consulting Limited for the Education and Manpower Bureau as part of the review of legal education and training in Hong Kong, interviews were conducted with some of the findings summarised as follows:-

			"All interviewees commented that the leading barristers in Hong Kong are expensive and the majority considered them too expensive, of good quality but too few and too slow. Numerous interviewees mentioned that when they used barristers they would instruct or be instructed to go straight to barristers in London." (Note 42)
			"The overall opinion we have discerned from our interviews is that the levels of fees being charged by a number of solicitors and barristers are declining but the overall cost of using the courts or obtaining an opinion solely in Hong Kong is still out of reach of the majority of the population unless they are eligible for Legal Aid. This is a serious issue for many people and smaller businesses. We have been told that if it is not addressed effectively, there will be a decline in the number of people resorting to the providers of legal services or the courts to assist in solving their problems. With that decline, it is suggested, will come a diminishing respect for the Rule of Law, reducing its effectiveness." (Note 43)

40.2	Use of an internet search engine on Hong Kong lawyers' fees shows a like perception in the articles posted (although again, it should be stressed that the Working Party does not seek to endorse their accuracy). These include articles purporting to give guidance on doing business in Hong Kong. Some examples, with their authorship as posted on the internet footnoted, are as follows :-

	*	"Attorneys fees are very high, very little pro bono." (Note 44)
	*	"The principal concern remains the cost of arbitration in Hong Kong, which can be substantial on account of legal and other professional fees." (Note 45)
	*	"Cost would appear to be a just complaint; the leading silks in Hong Kong have been known to charge up to HK$200,000 (US$26,000) per day and certainly quotes in excess of HK$100,000 per day are frighteningly common. But the simple fact is that because there are so few of them, competition for the best advice is steep and therefore the best advice doesn't come cheap." (Note 46)
	*	"...... the average solicitor in Hong Kong charges more in two hours than the average worker earns in a month. In three hours, legal advice can cost as much as a month's salary of a well paid university graduate - who still has to live with his parents in order to make ends meet. If a case does go to court, the legacy of the colonial legal system requires instructing a barrister, who, typically may receive instructions and give advice only through the solicitor - a practice which not only doubles the expense but also creates opportunity for misunderstanding in relaying the facts. Even big business, we are told, finds it cheaper to bring in leading barristers from London, and put them up in hotels during their stay here (in what were, until the Asian financial crisis, among the highest priced hotel rooms in the world) than to hire counsel in Hong Kong." (Note 47)

40.3	It is fair to state that, because they occupy the obvious, high-profile position in litigation, the preponderance of adverse comment has been directed at the Bar (often by solicitors). That is not however to say that the Bar is necessarily either solely or even mainly the branch of the profession contributing to the perception of disproportionate charges. It is easier for media stories to focus on allegedly exorbitant brief fees or daily refreshers than on the build-up of solicitors' time charges over the life of a case, yet experience suggests that the solicitors' charges may significantly exceed those of the barrister in a particular case.
40.4	Published comment has however been critical of the Bar Association's rules precluding transparency in the fees charged by different barristers, making it difficult to "shop around" in the legal services market.

	(a)	Thus, in April 1996, in commenting on the Attorney General's Report on Legal Services, the Hong Kong Coalition of Service Industries published as its Recommendation 26, that :-

			"The Bar Association should actively encourage the dissemination of information about the services offered and fees charged by barristers."

		The Coalition added :-

			"The issue of transparency is so important that mere encouragement by the Administration does not suffice. Instead, the public should have a role in contributing to client education and in monitoring transparency of the legal process."

(b)

However, the restrictive rules remain in place. Three successive motions sponsored by the Bar Council under two successive Chairmen to liberalise present professional restrictions on the dissemination of information on fees and services were defeated at General Meetings of the Bar Association.

 

Notes

37	WIR p 8, §12.  <back>
38	Hong Kong Lawyer, Viewpoint, March 2000. In June 2000, the Hong Kong Bar Association published income figures in relation to junior barristers and referred to "the falsity of wild accusations that Hong Kong Silks are charging three to four times the fees of London silks". <back>
39	She added: "Yet high legal fees may only be part of the cause. Cumbersome procedure is likely to be a major culprit. I believe objective facts and analyses are essential if the issue is to be properly addressed and resolved", with a following reference to this Working Party.   <back>
40	SCMP, 18 April 2001, by Jane Moir.  <back>
41	"Magic circle of $ilk" SCMP, Business 2, 5 June 2001, by Jane Moir. Mr Alan Leong SC, Chairman of the Bar Association, is quoted as supporting a change permitting barristers to publicise their fee rates if they wish to do so.  <back>
42	Final Report, p 18. <back>
43	Final Report, p 6. The consultants however did not fully support that view. As they saw it: "...... there is an issue of costs for individuals but, more importantly, the issue is the provider demonstrating the value that has been added for a client using that provider's services. At the moment, that is not happening in all cases but the changing nature of clients' demands and their greater sophistication (plus opportunity to be better informed) than 20 or even 10 years ago mean that there has been progress in this area in recent years." (Ibid)  <back>
44	Travis A Wise, of Pricewaterhouse Coopers LLP in California, describing the Hong Kong legal system.  <back>
45	Arbitration in Hong Kong after the Handover, by Darren FitzGerald, Esq, Senior Associate, Coudert Brothers, Hong Kong, an article promoting the virtues of arbitration in Hong Kong. <back>
46	International Centre for Commercial Law in association with The Legal 500, article on "The Hong Kong Bar."  <back>
47	Orlan Lee, Hong Kong University of Science & Technology, in "Media Alarm and the Handover: The 'Right of Abode' Cases and Constitutional Crisis in Hong Kong" October 2000, Humboldt Forum Recht (<http://www.humboldt-forum-recht.de/10-2000/Drucktext.html>). The author was adopting a "going rate" of about HK$4,000 per hour, stated to be "almost double the average US rate". In a postscript to the article, the author reports challenges by colleagues to the views expressed regarding restricted legal access but maintains those views, arguing that high litigation costs mean that "......the better off party knows that if he outspends his adversary on legal fees, he can either recover them in costs if he wins - or he may deter the other party from continuing his case at all."  <back>