Introduction

As reported in a previous update, the Judiciary Administration in Hong Kong has proposed to increase the monetary jurisdiction limits for civil claims in the District Court. The proposals were recently considered by the Legislative Council Panel on Administration of Justice and Legal Services, further to a report of the Judiciary Administration.(1) The proposals appear to have broad agreement among different stakeholders and, subject to the passage of a necessary resolution in the Legislative Council, look likely to be implemented sometime in 2018. The proposals are important given the District Court's reputation as a busy court centre in the heart of 'downtown' Hong Kong.(2)

Recap

To recap, among other things, it is proposed to increase the District Court's monetary jurisdiction limits for:

  • general civil and equity claims from HK$1 million to HK$3 million; and
  • land-related equity claims from HK$3 million to HK$7 million.

It is also proposed to increase the monetary jurisdiction for claims in the Small Claims Tribunal to HK$75,000 (from the current limit of HK$50,000) to offload some of the District Court's workload.

Expected impact and resources

The Judiciary Administration Report states that judiciary staff have conducted "some analysis and indicative projections" using data gathered from January 1 2013 to December 31 2016 to estimate (among other things) the likely impact on the workload of the District Court, following the proposed increase in the monetary jurisdiction limits.(3)

According to the analysis, it is estimated that the aggregate impact of the proposals will be to increase the number of civil cases in the District Court by approximately 5%, after taking into account the corresponding proposed increase in the monetary jurisdiction limit for claims before the Small Claims Tribunal. This estimate is rather surprising in some respects, because it appears to be slightly less than the Judiciary's Administration's previous projection in a 2015 consultation paper (approximately 6%), which some stakeholders considered at the time to be on the low side.(4) The analysis in the recent report also suggests that the projected increase in the District Court's caseload is expected to be more significant for mortgage actions and personal injury claims.

According to the report, the Judiciary Administration appears to be confident that the District Court is capable of handling the increased workload. That confidence is stated to be based on (among other things) the District Court's experience (since the last increase in monetary limits in 2003) and on additional resources proposed to cope with the extra workload.(5) For example, the report notes that:

  • the District Court has built up substantial experience in handling more substantive civil claims;
  • the District Court has developed a professional 'masters' (judicial officers) system, which began in 2000, modelling that of the High Court;
  • the civil procedure rules of the District Court are comparable with the High Court rules as a result of the revamp of the District Court's rules in 2000 – indeed, aside from certain specialist areas, such as employee statutory compensation claims or matrimonial financial dispute resolution and family matters, much of the civil litigation process in the District Court is similar to that of the High Court;(6) and
  • in particular, of the two case types that are expected to see a significant increase as a result of the proposed changes (mortgage actions and personal injury claims), the relevant procedural rules are essentially the same as those applicable to the High Court.(7) With respect to those mortgage actions expected to be offloaded from the High Court to the District Court, the Judiciary Administration appears to consider that the nature and complexity of these cases is similar to those currently handled by the District Court.

As part of the overall proposals to enhance the District Court resources, the Small Claims Tribunal (which used to share one of the floors in the same building as the District Court) relocated to the new West Kowloon Law Courts Building in September 2016. As a result, it is envisaged that an additional seven courtrooms could become available for use by the District Court in 2018. This will necessitate a corresponding increase in the recruitment of judicial officers.(8) This is unlikely to be an easy task.

Implementation

The proposed increases to the monetary jurisdiction limits of the District Court are intended to be implemented by a resolution of the Legislative Council, pursuant to Section 73A ("Amendments of limits of jurisdiction and other amounts") of the District Court Ordinance (Cap 336). This should not be a complicated legislative process, even in the sometimes frustrating environment of Hong Kong's legislative chamber. The timing of the resolution is probably also (in part) dependent on logistical and resourcing issues.

The Judiciary Administration Report suggests that implementation is intended for early 2018 (although there could be some understandable slippage).

Comment

An increase in the District Court's civil monetary jurisdiction should not of itself be controversial. The last increase was almost 15 years ago and, at the time, it was probably not envisaged that the next increase would take quite so long.

However, the current proposals do raise significant resourcing issues, the knock-on effects of which are still being managed and thought through. The Judiciary Administration and the respective chief judges of the District Court and High Court are acutely aware of these issues, given the profile of the District Court in an important, but geographically concentrated, jurisdiction such as Hong Kong.

Arguably rather conspicuous by its absence in all of this is the fact that in the District Court an order for the recovery of a winning party's general legal costs is limited to no more than two-thirds of the amount allowed in the High Court.(9) The situation is made worse by the fact that High Court costs recovery rates have themselves (incredible as it seems) been frozen for some 20 years.

If the 'two-thirds costs recovery rule' in the District Court is considered sacrosanct (as appears to be the case, for now, given the court's role in access to justice for many litigants), then a greater focus is put on increasing the High Court costs recovery rates, in order to end the widening discrepancy between the costs that a successful claimant pays its lawyers and the costs that a losing party is generally ordered to pay – this discrepancy raises equally valid access to justice concerns for all civil court proceedings in Hong Kong.

For further information on this topic please contact Jonathan Cary or Sumarsono Darsono at RPC by telephone (+852 2216 7000) or email (jonathan.cary@rpc.com.hk or sumarsono.darsono@rpc.com.hk). The RPC website can be accessed at www.rpc.co.uk.

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Endnotes

(1) Report of Judiciary Administration to the Legislative Council titled "Review of the Civil Jurisdictional Limits of the District Court and the Small Claims Tribunal", April 24 2017 (www.legco.gov.hk/yr16-17/english/panels/ajls/papers/ajls20170424cb4-817-5-e.pdf). The report also makes for an interesting high-level review of changes in certain economic indicators since the last increase to the District Court's principal monetary jurisdiction in 2003 (from HK$600,000 to HK$1 million).

(2) For further details please see "District Court's civil monetary jurisdiction set to treble". The judiciary takes the role of the District Court in Hong Kong very seriously given its busy workload. The District Court is located on several floors of one building in downtown Hong Kong. District Court users come from a broad range of socio-economic backgrounds (not untypical of a 'people's court').

(3) Supra note 1 at paragraph 15.

(4) For example, see the Law Society of Hong Kong's submissions, December 9 2015, at paragraph 11 (www.hklawsoc.org.hk/pub_e/news/default.asp). The Law Society's practitioner members have full rights of audience in the District Court and many are very familiar with the court's procedures and characteristics. For the previous consultation paper, see endnote 1 of previous update (supra note 2).

(5) Supra note 1 at paragraph 9.

(6) Indeed, longer-term plans in Hong Kong have mooted the idea of a combined High Court and District Court building but, such are the constraints of space in a central location and of government budgets, this idea appears to be on hold for the time being.

(7) For example, Practice Direction 18.1 on the personal injuries list in the High Court applies to the District Court (with necessary adaptations – see Practice Direction 27, "Civil Proceedings in the District Court", paragraph 27).

(8) Supra note 1 at paragraphs 34 to 35. An extra courtroom is also envisaged for Hong Kong's already impressive Family Court (from which many other jurisdictions in the region seek to learn – for example, with respect to mediation and financial dispute resolution).

(9) Supra note 4, paragraph 17. Order 62, Rule 32 of the Rules of District Court (Cap 336H).

Warren Ganesh assisted in the preparation of this update.