Why 'no win, no fee' is no go for Hong Kong lawyers

In Britain, the United States and Australia, they call it "no win, no fee" litigation. A lawyer takes on a case for no upfront fee in return for a slice of whatever the client wins. It's considered a vital way to give those without the means to mount an expensive legal action a shot at justice.

In Hong Kong, a lawyer taking on such an action risks falling foul of a law dating back to medieval England. It's known as champerty, and for lawyer Louie Mui Kwok-keung, it's led to a 3½ year jail sentence. Champerty is an archaic piece of common law which prohibits parties with no direct interest in a legal action from encouraging and supporting litigation in return for a share of the proceeds from successful lawsuits or favourable out-of-court settlements.

It has remained valid even after most other common-law jurisdictions have legalised so-called conditional or contingent fee arrangements - a point Mui's counsel made in his defence at the District Court last month.

But Judge Amanda Woodcock was not convinced, telling the court: "The fact that [champerty] is ... no longer an offence in other jurisdictions is not a factor that would attract leniency."

Mui, the first barrister to be convicted of the offence in Hong Kong, was jailed for what Woodcock said were "obnoxious" deals to buy into his clients' lawsuits and pocket more than HK$1.6 million from their damages payments.

In 2009, Winnie Lo Wai-yan, 40, was the first solicitor in Hong Kong to be convicted of conspiracy to commit champerty and maintenance - where litigation is assisted by a person with no legitimate interest in it. She was given a 15-month sentence but her conviction was quashed in the Court of Final Appeal last year, with the court saying it was wrong of the trial judge to draw inferences about her participation in the lawsuits.