Civil Litigation / Legal Costs / Contingency Fees Agreement

In Hong Kong, payment of legal fees to solicitors is normally pre-determined prior to the commencement of legal proceedings and the professional legal fee charged should never be dependent upon the result of any such proceedings. In other words, solicitors could not enter into any “conditional” or “contingency” fee arrangement to act in any contentious business.


Legislation

Section 64 of the Legal Practitioners Ordinance (Cap159) provides that the power to make arrangements as to remuneration and the provisions for the enforcement of these agreements do not give validity to “any agreement by which a solicitor retained or employed to prosecute any action, suit or other contentious proceeding stipulates for payment only in the event of success in that action, suit or proceeding.” In addition, section 101I of Criminal Procedures Ordinance (Cap. 221) states that any person attempting to disregard these rules will be liable to imprisonment for 7 years and a fine.


Professional Code of Conduct

Principle 4.16 of the Hong Kong Solicitors’ Guide to Professional Conduct, said a solicitor may not enter into a contingency fee arrangement for acting in any contentious proceedings. A “Contingency Fee Arrangement” is defined as: “…any arrangement whereby a solicitor is to be rewarded only in the event of success in litigation by the payment of any sum (whether fixed, or calculated either as a percentage of the proceeds or otherwise).”


Lawyer convicted of Maintenance and Champerty

In a recent Hong Kong landmark case, Winnie Lo v HKSAR [2012], a group of people were arrested for champerty, maintenance and conspiracy. A recovery agent in that case, Cheung Oi Ping (“Cheung”), who had assisted the accident victim on “no win no fee” basis, was found guilty of one count each of maintenance and champerty. A solicitor, Winnie Lo Wai Yan (“Winnie Lo”), was also convicted on one count of conspiracy to commit maintenance. This is the first case of its kind to be brought in Hong Kong under the criminal law of maintenance and champerty.