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Class Actions
(HKLRC Consultation Paper)

The Law Reform Commission's Class Actions Sub-committee published on 5 November 2009 a consultation paper proposing the introduction of a mechanism for multi-party litigation in Hong Kong.

Under the current law in Hong Kong, the sole machinery for dealing with multi-party proceedings in Hong Kong is a rule on representative proceedings under the Rules of the High Court which was criticised as restrictive and inadequate by the Chief Justice's Working Party on Civil Justice Reform in its Final Report in 2004.

Some jurisdictions have adopted a procedure known as a "class action", which enables the claims of a number of persons against the same defendant to be determined in a single court action. In a class action, a representative plaintiff' sues on behalf of himself and all the other persons ("the class") who have a claim in respect of the same (or a similar) alleged wrong, and whose claims raise the same questions of law or fact.

The sub-committee believe that the introduction of a comprehensive regime for multi-party litigation would enhance access to justice and would provide an efficient, well-defined and workable mechanism. The sub-committee are well aware of the risk that a class action regime might unduly encourage litigation and are conscious of the need for caution.

In line with that approach, the sub-committee recommend that in order to filter out cases that are clearly not viable, class action proceedings should only be allowed to continue as collective proceedings if they have been certified by the court. In addition, the new regime should be introduced first in the Court of First Instance and its extension to the District Court should be deferred for at least five years until a body of case law on the new procedures has been established. Once extended to the District Court, District Court judges should be given the power to transfer complex cases to the Court of First Instance.

The sub-committee recommend that the new class action regime should adopt an "opt-out" approach. In other words, once the court certifies that a case is suitable for a class action, any member of the class, as defined in the order of court, would be automatically bound by the subsequent litigation, unless he "opts out" of the class action within the time limits prescribed by the court order. Where the proceedings involve parties from outside Hong Kong, an "opt-in" procedure should be the default position (that is, persons will not be included in the class litigation unless they take active steps to "opt in" to the litigation), with a discretion given to the court to adopt an "opt-out" procedure if the particular circumstances of the case warrant it.

The recommendations in the consultation paper are intended to facilitate discussion and do not represent the sub-committee's final conclusions. The sub-committee would welcome views, comments and suggestions on any issues discussed in the consultation paper, and in particular on the questions set out in Chapter 10. The consultation period will last until 4 February 2010.

Press Release (PDF) (MS Word)
Executive Summary (PDF) (MS Word)
Consultation Paper (PDF) (MS Word)

Important Notices