The Alternative to Class Action Litigation in Hong Kong20Dec2022
Class actions are not recognised by Hong Kong Courts, so, an individual’s right of action may not be as effective as it might otherwise be. It is for this reason that jurisdictions which do not recognise class actions often have a counterbalance in strong regulation and administrative fining powers.
In Hong Kong, one mechanism in lieu of a class action is a representative proceeding, as provided for under the Rules of High Court. Representative proceedings are distinct from general multi-party proceedings (for example, where there are ten co-plaintiffs joined to a proceeding) and are used in situations where it would be infeasible to name each party joined to the proceedings. Where an individual’s claim is too small and may not be worthy of the expense and trouble of suing, under permitted circumstances they may still seek access to justice by aggregating their claim with others in a representative proceeding, provided that they “have the same interest.”
However, proceedings concerning (i) the estate of a deceased; (ii) property subject to a trust; or (iii) construction of a written instrument, are subject to a different set of rules.
To satisfy the “same interest” requirement, case law indicates that all members of the represented group must:
- have a “common interest”;
- have a common grievance; and
- the relief in its nature is beneficial to all who are represented.
The Rules do not prescribe a minimum number of persons required in a representative proceeding, however, potential applicants should be aware of the purpose of representative proceedings is to “facilitate disposition of cases where naming all parties would make the proceedings unmanageable”.
At the time of writing, there is no Hong Kong case law on the minimum number of individuals required for representative proceedings, however, it is unlikely that five persons would qualify as “numerous persons” in a representative proceeding.
Leave is not required before or after action has begun
Representative plaintiffs (i.e., a person or persons claiming to represent numerous other persons) may commence action against the defendants anytime within the limitation period by way of issuing a writ of summons together with the statement of claim. This could be done without leave of the Court. It is generally accepted that a representative plaintiff may be self-elected, and the consent of those represented is not necessary.
Usual remedies in civil proceedings available to representative proceedings
Depending on the nature of the claim, parties to representative proceedings can claim the usual remedies available in in civil proceedings.
Some examples of relief sought include:
- declaratory relief (e.g., a declaration that all members of the class represented are entitled to claim damages);
- lump sum damages paid by the defendant (where the class members have agreed to the quantum of damages or agreed to distribution of damages on pro-rata basis);
- injunction; or
- setting aside contracts on grounds of duress and misrepresentation.
In cases where a representative plaintiff succeeds in their claim for the declaratory relief sought, each member of the class will still need to bring their own action separately to prove any damages suffered by them from the date when the cause of action arose.
Future development of class action regime in Hong Kong
Over the years the Law Reform Commission has recommended an incremental approach in implementing the class action regime in Hong Kong, starting only with consumer cases (i.e. dealing strictly with actions that are within the ambit of the Consumer Council of Hong Kong) and then extending to cases in other sectors over the coming years.
Accordingly, at present, there are only a few representative cases reported in Hong Kong.
Ng Hing Yau v City Noble Developments Ltd was an action commenced by two plaintiffs, suing for their own rights and on behalf of 468 other owners (and former owners), in a proceeding concerning a mixed use residential and non-domestic building. In TND Group Ltd v Lau Chiang Chu, Vivian, the 1st defendant was the Honorary Secretary General and Treasurer of the Asian Bowling Federation, an association of members, who sued on their own behalf and on behalf of the members of ABF over a contractual dispute. In Lai Hoi Ping and Another v. Others, the plaintiffs were seeking an injunction against people occupying the street. One sued on his own behalf and on the behalf of all other members of Hong Kong Taxi Association (approximately 400 members), and the other sued on his own behalf and on behalf of all other members of Taxi Drivers and Operators Association (approximately 10,900 members).
Ian De Witt and Marthinus Steyn
If you would like to discuss any of the matters raised in this article, please contact:
Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You s