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  • Dec 29, 2014
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Jake's View
PUBLISHED : Thursday, 04 April, 2013, 12:00am
UPDATED : Thursday, 04 April, 2013, 3:35am

This city's legal system courts disaster for the poor

By criminalising lawyers who work on a no-win, no-fee basis, Hong Kong maintains justice as the exclusive preserve of those who can afford it


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

A barrister was sentenced to 3½ years' jail yesterday for what a judge said were "obnoxious" deals to buy into his clients' lawsuits and gain more than HK$1.6 million from their damages payments.

SCMP, March 27


Oh, how disgusting. And what made it particularly obnoxious, said the judge, is that this barrister had dealt directly with the five clients involved instead of telling them to approach him through a solicitor.

How unspeakably repugnant. He dared to eliminate a needless step in litigation and thus deprived a professional colleague of fee income that could have been extracted from these clients for no real service to them. And he was only sentenced to jail for it? Bring back the noose.

This, remember, was piled on the even more heinous offence of champerty - representing litigants for a share of the proceeds of the action rather than for a fee.

Yes, indeed, we can but shake our heads in dismay. The prosecution could find only one other case in the whole world of proceedings against champerty: a local solicitor whose conviction was quashed by the Court of Final Appeal last year, but we know the truth of the matter.

It is, as District Court Judge Amanda Woodcock pronounced last week, that this criminal barrister's conduct "posed a genuine risk to the court process". There you have it, a genuine risk to the court process, no less.

My goodness. If this corrosion of court process continues, pretty soon barristers will no longer wear those funny hats of bleached horsehair or black gowns of the sort once favoured by teachers to protect their clothes from chalk marks in the days that blackboards and chalk were still found in classrooms.

Yoo-hoo, down there. Knock-knock, anyone awake? Smell the coffee. We're in the 21st century, here. It's safe for you lawyers to come up out of the 17th now.

I shall stake out my position. In my book champerty is not an offence but a reform opportunity to extend the benefits of civil justice to millions of people who cannot at present afford it and must suffer injustice without redress.

We shall thus give champerty its proper name - contingency fee. Let lawyers take on the risk of a lawsuit if they think it has a good chance of success. If they win, they take a share of the winnings. If they lose, the litigant pays nothing.

We should adopt one other reform at the same time - class action lawsuits. Let anyone join his or her lawsuit to that of someone else who has exactly the same grievance. With these two reforms, we will have justice for all at last.

But look at those heads shaking in the legal community. No, no, no, can't have that. It will never work. You don't understand. You're an outsider.

Have you ever noticed that the best way of getting a unanimous opinion out of any group of people is to threaten their income? You will see an immediate case of it whenever you mention contingency fees to lawyers. Let's take just two of their putative objections. I don't have space here for more.

The first is that we already extend the benefits of justice to the poor through making legal aid available to them.

Yes, that's one way of looking at it. The other way is that legal aid is a means by which the criminal justice system speeds up the convictions process. It's not possible to make a decent living from vigorously defending people on legal aid fees. Far easier just to fit into the process and shovel them quickly along although you don't want to tell them so. 'Nuff said.

The second is that people will have time for nothing but suing each other if we adopt American-style ambulance chasing with contingency fees and class action lawsuits.

This assumes that the ambulance chasing is entirely vexatious. I'm not so sure. It may be initiated by lawyers in many cases but it also indicates a good deal of legitimate grievance that merits a hearing in court.

Let the experts decide the question, however. If the lawyer thinks there is a good chance of success, let him take that chance. If he's wrong, he pays the costs. If he's right, the poor get justice.

Hurrah for champerty!



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This article is now closed to comments

John Adams
Well spoken Jake. I was also amazed about the report of Louie Mui's conviction.
"...only one other case in the world" ? And that one case was in HK ! That says a lot about the tiny world which HK has created for itself where the whole government is of the rich , is run by the rich, and is only for the rich ( and their obedient servants : the bankers and lawyers)
And how may years that ‘contingency fee’ and ‘class-action suit’ have been in practice in US? Longer than I can remember – two decades? So what is the problem in Hong Kong? Again if one scratch over Hong Kong a bit, we will find the ‘world city’ is very much a world of its own as others progress forward. From political structure, law practice, taxation, education to working hours all still in the feudal system of colonialism – the mass is to serve the master and privileged few. I will not be deceived that Hong Kong will not go through a class struggle if the city wants to be a ‘world city’ if reforms can't be had.
Anything that can’t be understood by common sense for our life is a suspect. No professional or specialist should sway me otherwise. The defense with ins and outs why the legal system which is not serving everyone in Hong Kong particularly to the educated (middle class?) is really a perfunctory act that manipulated by those who can make a good living out of other's misery and complain. They are distracting us from the common sense. I am glad Jake stumbled on the topic that can be discussed in the context of justice for all in Hong Kong. Jake’s piece has gone beyond about free market for justice. We all should all be thankful for this moment that his central interest becomes more for all of us.
The obedient servants should also include local architects -- just look at those uninspiring buildings everywhere and how degrading of our built environment.
In weighting affordable justice against frivolouse lawsuits, the former is more valuable and the latter is controllable. Law without practice is no law. No? US would have long abandoned those practices. You shouldn’t put Hong Kong on the path of exceptionalism – be a global member when comes to justices at least – justice for all, not just for the rich?
Regardless of the facts surrounding the Mui case, Hong Kong's law on champerty and class actions is certainly long due for reform. Jake makes excellent points in that 1) champerty should be properly renamed to contingency fee arrangements; 2) champerty is perfectly reasonable given the high cost of litigation--it reduces the chance that someone can be safe merely by virtue of their deep pockets--and; 3) class action lawsuits must be recognized. With respect to the quality of life for the typical American, it appears quite well despite a highly litigious environment supposedly replete with ambulance chasing via contingency fees and class action lawsuits.
As for reform allowing for contingency fee arrangements and class action lawsuits go, the potential winners are clearly the non-privileged and non wealthy--majority of Hong Kong, whereas the potential losers would be the privileged and wealthy-minority of Hong Kong. It is therefore understandable why the privileged would be so opposed to any such reform.
"the mass is to serve the master and privileged few.".....Well Said. Hong Kong is run by those privileged.
You obviously do not know that the legal action started by Mui and another was incompetently commenced outside the time limitation period and failed, but never let the facts get in the way of a good piece of popular prejudice, eh Jake?
You might also be surprised to learn that there are more lawyers out there than you think who would like to see justice available to all, provided there is merit in their cases. To be sure, there are unscrupulous lawyers, but not all are cynical and greedy as you assume.
Legal Aid could be greatly extended to more people who do not come within the means test under the existing Supplementary Legal Aid Scheme (SLAS) where the legal aid fund takes a modest cut of the damages recovered, but it isn't being expanded in this way because of bureaucratic and / or political obstruction. Why don't you ask the Government, not the legal profession, why this is?
Jake, you should not be simply shooting from the hip on a subject as complex as this one. At least, before mouthing off, you ought to find out if what you say is factually correct, which it isn't. For starters, the legal aid system does not involve particularly low-rate briefs to solicitors and barristers. Your characterisation of legal aid is completely divorced from fact and is confused with the Duty Lawyer Scheme. The gravest flaw in our legal system is that about 90% of our community cannot get proper representation at all not because the legal aid system doesn't function well but because the government fails to fund it adequately. Only the most wealthy and the poorest in our community get full representation. Everybody else might as well solve their disputes in other ways(!) or just keep their traps shut.
Back to contingency fee systems, the 2007 Law Reform Commission produced a huge, carefully reasoned report some years ago with good proposals to reform fee systems but, as usual, the government has done nothing. The LRC proposed a Conditional Legal Aid Fund which would "engage private lawyers on a conditional fee basis while CLAF would charge clients on a contingency fee basis". They also proposed a general Conditional Fee scheme in principle but said it was not practical because no-one was willing to plump up the capital required to kickstart insurance to back it up. Duh, someone has $1 trillion-odd socked away. Do something useful with it, Tsang!
@"The second is that people will have time for nothing but suing each other if we adopt American-style ambulance chasing with contingency fees and class action lawsuits.
This assumes that the ambulance chasing is entirely vexatious. I'm not so sure."
Well it is!
If Hong Kong goes this route there will be community regrets all round later and people like you, Jake, will be to blame for encouraging it. Perhaps a class action against you?
Litigation, class action or otherwise, is typically undertaken only if there is a reasonable chance of financial return. I would find it hard to believe the majority of citizens would be remotely targeted given the negligible financial incentive.


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