THE REGISTRAR OF Companies Gordon Jones is obviously a man who sets great store by that commendable virtue of hope. He says that one objective of a corporate governance tribunal for the protection of minority shareholders is to give them a fairly fast and hopefully inexpensive way of resolving reasonably straightforward disputes. He has, however, also put his finger on one of the key difficulties of this proposal: 'There are major practical problems such as finding people who would be prepared and have the actual professional expertise to sit on the tribunal.' Exactly. Why should anyone who has the required professional expertise bore himself to tears on a low-paid government tribunal when he could make many times as much money putting that expertise directly to work, perhaps even in the cause of the people called to defend themselves in front of the tribunal. Poachers do not turn gamekeeper in this game. Gamekeepers rather turn poacher. Perhaps the tribunal could attract them to take an occasional break from poaching by paying them huge fees that would upset any civil service pay-scale but then there goes that 'hopefully inexpensive' part of Mr Jones' proposal. The part about 'reasonably straightforward disputes' is a forlorn hope from the start. I get occasional complaints from minority shareholders who want me to espouse their causes and I have yet to see one that is straightforward. Truly egregious cases can go straight to the fraud squad and what is left mostly boils down to convoluted whinges on the theme of 'I lost money and I don't like it'. I know what will happen if this tribunal is set up. It will ask for these whinges and it will get them. Each will have to be treated with due respect, which means every detail minutely examined by clerks (and clerks they will be) who are really not up to this job and must resort to paper shuffling to disguise their inadequacies. Voila, another Office of the Ombudsman or Equal Opportunities Commission, a bureaucrat's heaven of documents and document processors swelling in size every year so that it is not itself accused of negligence in its job of offering a shoulder for the chronically tear-stricken to cry on. And our chief secretary wants to cut civil service staffing? Well, if your hopes are not dashed on this rock, Mr Jones, they will be dashed on the other that any such tribunal is a paper tiger unless it has the power of criminal sanctions. To grant them, however, is to create a huge jurisdictional mess with the cops and the courts. But I shall give you your due, sir. As you yourself said, this proposal will obviously have to be looked at in the context of any judicial reforms that may arise from a recent consultation paper on civil justice. In tandem with these proposed reforms, the Department of Justice has mooted one of the obvious solutions to mistreatment of minority shareholders. It is to allow conditional fees for civil lawsuits - you agree with your lawyer to pay him if you win, perhaps a share of the winnings, but pay him nothing if you lose. There will be difficulties in adapting Hong Kong to this too, of course, but it gets to the nub of one big problem. The lawyers will sift the wheat from the chaff. They will take a case on only if they think it has merit and the plaintiff will then have better assurances than hope alone of an inexpensive route to justice. Put this reform together with the other obvious one of allowing class-action lawsuits - all the minority shareholders in the case can sign up for it behind the first one - and we can dispense with the idea of a corporate governance tribunal to protect them.
