On 2 April 2009 the long awaited and much talked about Civil Justice Reform (CJR) will come into force in Hong Kong. The CJR seeks to initiate a complete change in approach and attitude towards litigation. It is hoped that this will result in a more efficient procedural system that reduces delay and expense and enables parties to achieve just resolutions of their disputes.

The fundamental change in approach and attitude will be carried through and reflected in all stages of the litigation process. Below are some of the changes that you should know about.  

Underlying objectives

The six underlying objectives of the CJR are to:

  1. increase cost effectiveness;
  2. deal with cases expeditiously;
  3. promote a sense of proportion;
  4. ensure fairness between the parties;
  5. facilitate the settlement of disputes; and
  6. ensure the fair distribution of the courts’ resources.

The courts will be obliged to take into account and give effect to these objectives. Amongst other things, we will likely see the courts taking a greater control over litigation proceedings to help ensure that orders are complied with and only necessary applications are made. In doing this, the courts will recognise that it is important to have a sense of proportionality in relation to the economies of a case.

A revamped litigation process

The underlying objectives are common themes which underpin all key areas of the reform and will be reflected in all stages of the litigation process. For example:  

Active case management

A key area of change will be in relation to the new case management system which imposes obligations on the courts and provides them with wide-ranging powers to manage the flow of civil litigation. The new case management system will involve:  

  • Timetable directions and case management conferences: Generally speaking, early on in the litigation process the parties will file timetabling questionnaires with the courts proposing deadlines for the key stages in the litigation process (e.g. discovery and the exchange of witness statements). Where the parties reach agreement on the proposed timetable, the court may adopt their suggestions without the need for the parties to attend court. Where the parties fail to reach agreement in relation to the proposed timetable, or if the courts think necessary, a case management conference will be convened.

In addition to setting timetable directions at the case management conference, which it is hoped will help to secure the timely progression of the case, the courts may, amongst other things, review the steps which parties have taken in the preparation of the case, ensure that all admissions that can be made and all agreements that can be reached are made and recorded, and ascertain any attempts by the parties’ to settle the matter or any intentions to undergo alternative forms of dispute resolution. As an added layer to ensuring that a matter efficiently progresses to trial, the courts are able to adjourn the case management conference to a later date or to hold pre-trial reviews to ensure that the parties are complying with all timetable directions set.

The dates for the case management conference, the pre-trial review and the trial date (or trial period) are labeled ‘milestone dates’, which will effectively be immovable and, accordingly, should seek to deter parties from engaging in tactical litigation to delay matters. All other dates will be known as ‘non-milestone dates’. We expect to see greater intervention by the courts and stricter controls over directions and orders made including harsher sanctions where a party fails to comply with any such orders.

  • Streamlining and cost cutting procedures: Through case management conferences and pre-trial reviews, the courts will encourage the parties to co-operate and identify issues which warrant full investigation at the trial, and will summarily dispose of those which do not. To help the parties to identify issues at an early stage in the litigation process, the parties will no longer be able to include in their pleadings a blanket denial of a matter in issue. Rather, any such denials will need to be supported by reason.

Where practical, parties may be excused from attending court on pretrial applications to help save time and money. This feature will be particularly helpful in multi-party claims where a lot of time is spent trying to match the parties’ schedules.

  • Encouragement of settlements: A key aim of the CJR is to encourage parties to cooperate and to settle their disputes as quickly and as economically as possible. The courts will, therefore, prompt parties to consider alternative dispute resolution mechanisms, such as mediation, where appropriate. Contrasted with civil trials which are mostly open to the public, mediation allows the parties to resolve their differences in a confidential and private setting. In mediation, the mediator is a neutral third party who plays a facilitating role and helps the parties explore each other’s positions and to discuss alternative basis upon which to settle the matter. The parties are free to decide the terms of any settlement and the mediator does not make any binding determination. The courts may view parties who do not attempt to settle matters and/or to actively participate in alternative forms of dispute resolution unfavorably and those parties may face adverse costs orders being made against them.

Pre-action discovery

The courts will have the power to order parties to the dispute, as well as third parties, to disclose documents which are “directly relevant” to the issues in dispute (i.e. those documents that would likely be relied on by the parties at trial or affect the parties’ positions) to each other before the commencement of court proceedings. There will be additional reforms in relation to discovery aimed at streamlining the litigation process.  

Statements of truth

All pleadings, witness statements and witness reports will have to be verified by statements of truth. A statement of truth provides that, to the best of the deponent’s knowledge, the contents of the pleadings and witness statements are true. Parties will need to be careful before making a statement of truth and will not be able to assert speculative claims in pleadings which cannot be supported by evidence. If the content of the statement is found to be false, the deponent may be found guilty of contempt of court and face fines and imprisonment. It is hoped that a side effect of this new requirement will be to do away with lengthy repetition and any bolstering of claims so that parties may focus on the key and relevant issues.  


Under the CJR, a defendant will be able to admit a claim where money is sought and propose payment terms for the plaintiff’s consideration. Generally speaking, an admission of this nature will entitle the plaintiff to enter judgment against the defendant on the basis of the admission. Where the plaintiff does not accept the defendant’s proposed payment terms, the court will have the power to assess the defendant’s proposal and to subsequently incorporate it into a court order if appropriate, or to make an alternative order as to payment terms without the need for a hearing. The desired effect is to resolve debt recovery matters in a straightforward and economic fashion.  

Sanctioned offers and payments

As already noted, under the CJR the courts will help to facilitate the settlement of disputes. In an attempt to avoid adverse costs orders, the existing rules allow defendants to make payments into court of an amount they would be prepared to pay to settle the dispute. The CJR will extend this right to plaintiffs and will, accordingly, put defendants at risk as to costs if they reject sensible offers to settle from plaintiffs. Parties are, therefore, given an incentive to reach agreement as soon as practicable. It is hoped that this will help to minimise any unnecessary tactical moves and, in turn, to reduce legal costs.  

Costs orders

Under the CJR, Judges and Masters will generally have a wider discretion in relation to costs awards and will be entitled to take into account, amongst other things, the underlying objectives of the CJR and the conduct of the parties including pre action behaviour.  

Another aspect of the CJR is that the courts may now make costs orders against third parties “in the interests of justice”. This power will be used primarily against those third parties who fund litigation and who stand to gain if the litigant they are funding wins but who are not currently liable to pay costs where that party loses. In upholding the underlying objective of ensuring fairness between the parties, the courts may also make costs orders against third parties who drive legal actions which have little chance of success.

Practical implications

In developing the CJR, Hong Kong has considered and drawn from the experiences of a number of other civil justice systems including England, Canada, Australia, New Zealand and the United States. The CJR introduces changes that will hopefully make civil litigation more accessible and cost effective. Through a streamlined process and greater court intervention, it is hoped that the CJR will encourage a commercial approach towards litigation including a sense of proportionality, the elimination of steps and applications that are unmerited, unnecessary and wasteful, and an even playing field.

A consequence of the CJR should be a greater frontloading of legal costs as lawyers will have to prepare most of the evidence relating to a case at an early stage and the parties will need to prepare all the information relating to the case as soon as possible, so that the lawyers can promptly present their case to the court. As parties will know each others’ positions at an early stage in the process and will be encouraged to cooperate throughout the process, it is hoped that more matters will settle prior to proceeding to trial, the duration of trials will be shortened and that parties will save costs in the long run.

The effectiveness of the new regime will be enhanced by a willingness on behalf of the parties to embrace the changes and, in many respects, will hinge upon the courts’ role of enforcing the new rules and procedures.