Maintenance, Champerty and Litigation Funding in Hong Kong

Maintenance, Champerty and Litigation Funding in Hong Kong

Hong Kong's situation is illustrated by Ribero P.J. in Siegfried Unruh v Seeberger [2007] HKCU 246

“It is … obvious that [the] access to justice category is not static. The development of policies and measures to promote such access is likely to enlarge the category and to result in further shrinkage in the scope of maintenance and champerty.” 

So, public policy excludes litigation funding in Hong Kong. The common law forms part of the laws of Hong Kong. It makes maintenance and champerty unlawful and criminal offences. There are previous cases of accused being convicted by the criminal courts for funding of civil litigations. Therefore, litigation funding by dis-interested party or third party is not practicable in Hong Kong.

On the other hand, "contingency fee"  or in mild term "conditional fee" which means basically "no win, no fee" proposition to a lawyer, has once been brought to the scene. The Law Reform Commission in 2007 released a report on "conditional fee" discussing the possibility of its introduction. The Commission concluded that although conditional fees might enhance public access to justice by enabling the ill-means persons to litigate litigation cases with good merits, it was not appropriate to introduce to Hong Kong. It has rather suggested that the Supplementary Legal Aid Scheme be increased on the coverage by relaxing the eligibility limits. Such legal aid expansion was subsequently implemented with bringing a revolutionary change to the mechanism.

However, third party funding or financing is available as a viable option in many other common law jurisdictions such as Australia, UK, New Zealand, Canada and the USA. A funding party funds all the costs in the litigation even including the legal costs that the party has to pay on loss of the case.

To sum up, litigation funding remains presently not viable in Hong Kong. Litigants bear all risks on the case results, including losing huge amount of legal costs. The results are obvious. The system discourage litigious lawsuits and encourage settlements with least intervention by the Courts.
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