Editorial | Proposed legal fee changes will increase access to justice

The principle that lawyers should not have a financial interest in the outcome of cases has long been upheld in Hong Kong. The idea conjures up images of ambulance-chasing attorneys in the US pocketing a large slice of their clients’ damages. But in the area of arbitration, at least, “no win, no fee” agreements between lawyers and their clients have become common around the world. Hong Kong is one of the last jurisdictions where such arrangements are not allowed.

The commission recommends allowing lawyers to claim “success fees” if they win a case, usually at a higher level than their normal fees. Another proposal would allow them to receive up to half the financial award won by their client in a successful case. A broad and flexible approach is advocated, giving parties a range of options as to how their fees are structured.

This is attractive for clients as it will usually mean they pay lower fees or nothing at all should they lose the case. As the report says, clients increasingly want their lawyers to share the risk of proceedings and have “skin in the game”. If these options are not available in Hong Kong, companies may decide to settle their disputes elsewhere.

But care must be taken to ensure there are sufficient safeguards against abuse and that clients are not exploited. The commission recommends excluding personal injury cases from the scope of the new arrangements, for the time being. This will, perhaps, ease any concerns about ambulance-chasing lawyers.

There is a need for these new fee arrangements to be clearly defined, so clients understand what they are agreeing to. A cooling-off period of at least seven days is also recommended.

The government supports the proposals, which will be the subject of further consultation. If implemented, with adequate safeguards against abuse, they will allow Hong Kong to move with the times and increase access to justice.