A solicitor and a consultant colluded over six years to pocket some HK$1.5 million from 26 accident claimants, a judge concluded yesterday.
Lawyer Gary Yeong Yun-hong, 44, was convicted of 25 charges and Ip Hon-ming, 60, of 26 charges of champerty - an old piece of common law that prohibits parties with no direct interest in a legal action from encouraging and supporting the litigation in return for a share of the proceeds from successful lawsuits or settlements.
"Yeong and Ip's acts posed a general risk to the judicial system," Judge Amanda Woodcock told the District Court, noting that champerty was a criminal offence in Hong Kong.
Sentencing was adjourned to tomorrow.
Another solicitor, Yeong's wife Juliana Lo Yuen-ching, 49, was acquitted of five champerty charges. The judge said there were doubts in the evidence presented to show Lo's involvement in the scheme.
Accident victims can apply for legal aid to claim compensation instead of relying on recovery agents - unqualified people who offer to help them get the money.
In May 2005, the Law Society issued a circular to its member solicitors asking them to advise accident victims to seek legal aid if they were aware that those claims were being financed by recovery agents.
Ip operated a company called Quickway Professional Consultants, in which Lo's mother was a shareholder, the court heard in January. He referred clients who were seeking accident payouts to Yeong's solicitor firm so it could prepare lawsuits for them. The claimants signed authorisation letters and agreements that let Quickway levy a 20 per cent charge on their payouts if their claims were successful.
The contracts stated they could seek help from the Legal Aid Department. But those terms were only a "disguise", Woodcock found. The claimants did not complain or argue as the contract details were not explained to them, she said yesterday.
Ip and Yeong were "working together" when they received the claims between 2001 and 2004, she said. All the cases were settled or ended around 2006 and 2007.
Prosecutor Neil Mitchell requested a court order for Ip and Yeong to compensate the claimants as he found the pair were not entitled to take their money.
Barrister Cheng Huan SC, representing Yeong, said his client did provide legal services to the claimants and no evidence showed he had charged more than he should get.
Cheng also said Yeong stopped accepting clients from Ip after receiving the 2005 circular.
The circular said a solicitor who assisted the litigation of a client financed by a recovery agent "will have committed professional misconduct" but not a "criminal offence", Cheng noted.
He argued against imposing a custodial sentence on Yeong.
Ip's lawyer, Albert Luk Wai-hung, said Ip had no intention of cheating people but merely wanted to help those in need.
The 26 claimants were injured in traffic or workplace accidents between 2000 and 2004. They got about HK$7.8 million in all.
The society's vice-president, Stephen Hung Wan-shun, said the circular was released in the wake of a surging emergence of recovery agents who helped people launch litigation while charging them a fee, which was contrary to the law.