On 28 March 2012, the Law Reform Commission published its long-awaited report on the introduction of a class action regime in Hong Kong (the Report).
The Report concludes that the present machinery in Hong Kong for dealing with multi-party proceedings is inadequate and recommends the introduction in Hong Kong of a comprehensive regime for multi-party litigation.
It is proposed that at the outset the court must consider, with reference to prescribed criteria, whether a case is appropriate for the class action procedure. Further study on the class certification requirements and rules for the litigation process is recommended by the Commission.
The Report suggests that the proposed class action regime should initially cover tortious and contractual claims made by consumers in relation goods, services and immovable property, and in the light of experience gained, the regime may be extended to other cases. In addition, the Report recommends an opt-out scheme, that is to say, once the court certifies a case suitable for a class action, the member of the class, as defined in the court order, would be automatically considered to be bound by the litigation, unless within the time limits and in the manner prescribed by the court order a member opts out.
It is also proposed that the regime will first be introduced in the Court of First Instance and the extension of the District Court jurisdiction to hear class actions should be deferred for a period of five years until a body of case law on the new procedures has been established.
The proposed regime, if adopted in Hong Kong, is likely to have significant effect on resolving product liability disputes and claims for the mis-selling of investment products. The Government of Hong Kong is considering the Report and any legislative changes that may be required and it is therefore unlikely that the proposed regime will be established soon.
We will continue to monitor developments on this proposal. For further details regarding the Report, please click here.