A solicitor and a consultant who illegally pocketed HK$1.5 million in fees by offering their services to accident victims on a "no win, no fee" basis have received suspended jail sentences - after a judge ruled the charge they were convicted on was so old that even legal professionals might be unaware it was a crime.
Solicitor Gary Yeong Yun-hong, 44, and Ip Hon-ming, 61, were convicted at the District Court of 25 and 26 counts respectively of champerty - taking a cut of a payout in a lawsuit - a charge under an archaic law aimed at preventing frivolous litigation.
Between 2001 and 2004 the pair had helped victims of traffic and workplace accidents claim about HK$7.8 million in compensation in return for 20 per cent of their payouts.
Judge Amanda Woodcock sentenced Yeung to 15 months jail but suspended the term for two years. She sentenced Ip to 12 months jail but suspended the term for 15 months.
Neither man was ordered to pay compensation.
Passing the sentence, Woodcock said "champerty" was an offence under an old law and that the charge had been used only twice before. "There is no evidence of cheating, deceiving, defraud or misrepresentation to the claimants in this case," the judge said, adding that their motive was purely financial.
She noted that Yeong and Ip offered their services to the claimants before May 2005, when the Law Society issued a circular reminding its members that champerty was a criminal offence.
The circular warned lawyers against taking cases from "recovery agents" - unqualified persons offering to assist accident victims in compensation claims.
Prior to the circular Ip's company Quickway Professional Consultants had referred clients seeking accident payouts to Yeong's firm so it could prepare lawsuits for them. Claimants signed authorisation letters granting Quickway 20 per cent of any successful claim.
The judge said there was no evidence Yeong continued to receive claimants from recovery agents after the Law Society circular, while Ip had ceased his business in 2006 and become a taxi driver.
"It is a strong mitigation factor," the judge said.