People power on the cards for legal action

Class-action lawsuits, which have become common in some Western countries, will be easier to mount in Hong Kong if a mechanism proposed by the Law Reform Commission is accepted.

Patsy Moy Friday, November 06, 2009

Class-action lawsuits, which have become common in some Western countries, will be easier to mount in Hong Kong if a mechanism proposed by the Law Reform Commission is accepted.
The mechanism would allow "small people" of similar backgrounds to take collective action through one of them being the spearhead when seeking damages.

Not only would people have access to justice but businesses and corporations could be protected from further lawsuits by individuals if cases were combined, according to senior counsel Anthony Neoh, chairman of the commission's Class Actions Subcommittee.

In a 314-page document entitled "Class Actions" that was released yesterday for a three-month public consultation, the commission suggests the government considers injecting more funds into the Consumer Legal Action Fund or widens the scope of legal aid to cover group litigation.
"There are many cases which are very small in terms of damages and subject matter," Neoh said. "They may also involve small people who may not have the ability to litigate or, in fact, they do not want to spend the time and energy to litigate."

Food-poisoning cases and litigation in the Lehman minibond saga could fit a class-action suit.
"Bear in mind that it would not do any good to a listed company if it is uncertain when litigation against it would end," Neoh added. "But under the arrangement of class actions, companies would at least know the result instead of court cases coming back year after year."
The subcommittee suggests the class-action mechanism start with civil cases before it is expanded to judicial review.

The panel also favors an approach that would see people in similar situations automatically covered by group litigation unless they choose to opt out and pursue court cases individually. And overseas-based parties could opt in through an online procedure.
Litigation fund companies, which would pay legal costs then share in awards when actions are successful, could also be considered.

But Neoh admitted this was controversial as it could violate the principle that lawyers should not have such an interest in the results of court cases.

The proposals also include judges deciding if a group action should proceed, with five major considerations as a way to minimize the chance of abuse.

The basic requirement is to have enough people of similar backgrounds pursuing a case. The court then decides if one party in a class action can represent the interests of others. The parties should have a common interest and backgrounds, and their cases enough merit to be pursued.
Finally, judges would determine if group litigation is the best option.