La Chap8

185
C

HAPTER

8

Legal Aid in Society

Whereas the previous Chapter identifies and considers the socio-economic factors
shaping the demand for and supply of legal aid services, this Chapter turns to the active
social environment in Hong Kong over the years as it has affected the provision and use
of legal aid services. Firstly, attention is drawn on the assumptions and operation of the
means test which draws the line on eligibility to legal aid services, in the light of the
changing perception of legal aid services. Secondly, recent social changes are
highlighted and the actual and possible responses of the institution of legal aid discussed.
Thirdly, the utilization of legal aid services by social, and even political, movements in
Hong Kong to further their causes, a recent phenomenon, ought to be mentioned and
discussed. At the end of this Chapter, the actual cases in which legal aid is provided are
discussed by subject categories to illustrate the contribution of legal aid to the proper
resolution of important and often high profile legal disputes.

A. The Evolving Conceptions of Need and Hardship

Chapter 2 outlines the beginnings and expansion of legal aid services from being an
adjunct of the Judiciary to a department of the Administration serving members of a
gradually broader qualifying public. One can discern a gradual change in perception of
the nature of legal aid services. The humble beginnings of legal aid via

forma pauperis

was charity, with the legal practitioners involvement in the arrangement being
recognized as fulfillment of their civic duty to the judicial system they served. The
decision in the late 1960s to make available of public resources for legal aid services to
be provided by legal practitioners regardless of result to qualifying members of the low
income group undoubtedly had social considerations in mind. The Attorney Generals
description of the Legal Aid Bill 1966 as an important piece of social legislation was
telling. It was perhaps believed that by making legal aid available as a form of welfare to
the low income group, greater confidence in the civility and legitimacy of the colonial
government might be gained.
Expansion of legal aid thereafter cannot however be explained merely by the welfare
perception. The availability of legal aid to defendants in criminal proceedings has more
to do with the principle of guaranteeing every defendant a fair trial through legal
representation in case he cannot afford the services of lawyers. Providing through
criminal legal aid what is in a sense a safety net satisfies a need. The principle that a
person accused of a crime ought not be punished without a fair hearing is given effect not
only by the adjudication of an independent and impartial court, and the proper
presentation of the prosecution case by a representative acting as a minister of justice, but
also by the participation of a legal professional on behalf of the defendant.

186

Legal Aid in Hong Kong

The essential nature of legal representation of a party to legal proceedings to the
fairness of those proceedings is not lost to those involved in civil proceedings. It can
easily be felt that fair play has not been done if a party to a trial in a civil cause, through
the lack of means or of sufficient means to engage competent legal counsel or to receive
proper legal advice, becomes disadvantaged in the presentation of his case before the
court. Legal aid provided in civil cases on condition of a contribution calculated on the
basis of the extent of affordability of the aided person of legal services out of his own
financial resources helps ensure legal representation at least up to a competent standard
and often with satisfactory results. A further need will be met in this manner as far as the
necessary public resources are made available.

1

A publicly funded scheme of legal aid may claim itself to be adequate if a significant
portion of the population is covered by the different components of the scheme. This
claim however rests on the assumption that the uncovered portion of the population has
the resources themselves to obtain legal representation. This assumption does not
necessarily hold as long as there are pre-determined eligibility criteria pertaining to the
means of the applicant. There is always, in an imperfect world in which publicly pooled
resources is not limitless, a gap between the upper financial limit of eligibility and the
actual or perceived level of affordable funding.
The extent to which the Hong Kong communitys need for legal aid services has been
met, may, in the absence of a comprehensive survey, be sketched by examining the
parameters of the means test of the institution of legal aid in Hong Kong.

MEANS TEST PHILOSOPHY: BASIC NEED AND AFFORDABILITY

The Government claims that the litigation based legal aid provided by the Legal Aid
Department targets litigants with

limited means

2

and specifies such litigants to be
those belonging to households in the

lower middle class and below.

3

Based on the
expectation that when a person is faced with legal proceedings, he should draw on both
his income and capital to meet his legal costs to the extent that he can do so

without
suffering undue hardship

,

4

a means test is prescribed providing for consideration of
the financial capacity of an applicant (being the aggregate of his disposable annual
income and his disposable capital). Financial eligibility limits of the legal aid scheme are
considered as being set to reflect the individuals

affordability

in taking up litigation on

1 In fact, resources were made available in the early 1980s for the so-called sandwich class
to initiate the self-funding Supplementary Legal Aid Scheme for limited categories of civil
litigation and later in the 1990s for the expansion of the scope of that scheme. See Chapter
9.
2 The Working Party on Legal Aid observed that persons of limited means was defined
solely by reference to levels of income and capital:

Legal Aid: A Report by the Working
Party

(January 1986) (the Scott Report) paragraph 2.11.
3 See Administration Wing, Chief Secretary for Administrations Office,

Legal Aid Policy
Review 1997: Findings and Recommendation

(December 1997) paragraph 10.
4 See the Scott Report, paragraph 2.18.


187

his own financial resources. Accordingly, the justification for adjusting the financial
eligibility limits is to reflect changes in litigation costs (emphasis supplied).

5

The means test attempts to accommodate the household of a legal aid applicant with a
certain standard of living. Allowances for expenditure towards such a standard of living
are to be deducted and they are set to be equivalent to the 35-percentile household
expenditure.

6

The expression 35-percentile household expenditure is defined to mean
the level of expenditure of households of a particular size, excluding expenditure for
rent, as obtained in the 5-yearly Household Expenditure Survey conducted by the Census
and Statistics Department, so that 35% of the households of that size have household
expenditure below that level and 65% of the households have household expenditure
above that level.

7

In addition, there are deducted the rent or mortgage repayments in the
case of an applicant who is a householder, or accommodation expenses in the case of an
applicant who is not.

8

Has the Administration assumed that the lower middle class and below is represented
by the bottom 35% of the households considered in terms of household expenditure? It
probably does not make such an assumption since the 35-percentile household
expenditure is adopted as the standard for deductible personal allowances in
replacement of the rates of Comprehensive Social Security Assistance.

9

When introducing

5 Administration Wing, Chief Secretary for Administrations Office,

Panel on Administration
of Justice and Legal Services: Five-yearly Review of the Criteria for Assessing Financial
Eligibility of Legal Aid Applicants

(June 2003) paragraph 54. This statement is consistent
with the Scott Report, which stated: [The] means of an individual are relative, and in
assessing eligibility for legal aid, they should be related to the cost of the legal proceedings
if the individual were to employ lawyers privately. The relevant factors should therefore be
(i) the cost of a case if a person employs lawyers privately; and (ii) a persons total financial
resources ie his income and capital: The Scott Report, paragraph 2.11.
6 Legal Aid (Assessment of Resources and Contributions) Regulations (Cap. 91 sub. leg. B)
Sch 1, Pt II, paragraph 8(1).
7 Ibid, paragraph 8(2)(a).
8 Ibid, paragraphs 6, 7.
9 See Administration Wing, Chief Secretary for Administrations Office,

Legal Aid Policy
Review 1997: Findings and Recommendation

(December 1997) paragraph 10. It should be
noted that the original recommendation was to adopt the average expenditure of the lowest
50% households as revealed in the Household Expenditure Survey (excluding rent
payments), which was roughly the 25-percentile household expenditure. This
recommendation followed the advice of the Census and Statistics Department, which was
that

if

lower middle class households are defined broadly as household living with an
average standard or below in terms of household consumer, the average expenditure of the
lowest 50% households might be considered as a sound description of the average
expenditure of [the] group (emphasis supplied): Ibid, paragraph 12. The

higher

standard of
35-percentile household expenditure was subsequently adopted as the final
recommendation and enacted; see Letter of the Director of Administration to the Chairman,
Legal Aid Services Council dated 14 July 1999. The Director of Administration wrote on 17
January 1998 to the Legal Aid Services Council that there is no direct relationship between
[] percentile points [relating to household expenditures] and the estimated coverage of the
standard legal aid scheme provided in the [1997] Consultation Paper. In ascertaining the
coverage of the scheme, we will need to consider the gross income (for assessing disposable
income), disposable capital as well as the level of the financial eligibility limit.

188


the 35-percentile household expenditure standard in 2000, the Administration indicated
that the change was to reflect more realistically the expenditure level of our target
group, i.e. households in the lower middle class, so that more people can become
financially eligible for legal aid.

10

Later, in 2004, the Director of Administration sought
to explain the rationale for adopting the 35-percentile household expenditure standard in
order to justify the Administrations rejection of the proposal of the Legal Aid Services
Council that the median or 50-percentile household expenditure be used to calculate
living allowances.

11

This standard was adopted in order to reflect more realistically the
basic need of our target group of legal aid, i.e. households in the lower middle class or
below, in terms of household expenditure level.

12

In addition, the adoption of the 35-
percentile household expenditure standard meant significant increases in absolute terms
of the deductible allowances ranging from some 60% to 140%, depending on the size of
the household to which a particular applicant belonged.

13

Further, while overseas
jurisdictions like England and Wales and New South Wales, Australia were still pegging
the deductible standard personal allowance of their legal aid applicants to their social
security rates, Hong Kong has moved on since 2000 and adopted the 35-percentile
household expenditure standard.
The Administration has indicated that the adoption of the 35-percentile household
expenditure as the standard for deduction of living allowance has not deviated from its
object of targeting the lower middle class and below to be legal aid recipients because
[the] index will on average allow 58% of the total number of households in Hong Kong
to become financially eligible for legal aid, up from 48% from the existing
arrangement.

14

The percentage coverage figures are said to have been prepared carefully
on the basis of household income data obtained in the periodic General Household
Survey, taking account of the standard personal household allowance and the average
disposable capital of applicants under the relevant legal aid schemes.

15

In February 2004,
when seeking support of the Legislative Council over a reduction of the financial


Legislative Council
Brief: Legal Aid (Amendment) Regulation 2000, Legal Aid (Assessment of Resources and
Contributions) (Amendment) Regulation 2000

(May 2000) paragraph 3.
11 Legal Aid Services Council,

Annual Report 2003-2004

, p 20.
12 Dr. Wong Hung, who assisted the Legal Aid Services Council in connection with the
proposal, later pointed out that the Governments adoption of the 35-percentile household
expenditure to reflect the basic needs of households in the lower middle class and below in
fact logically mean that

65% households in Hong Kong are upper middle class and
over

, a point that he considered to be unacceptable and absurd: Wong, Hung,

A Response
to the Legal Services Council on the Financial Eligibility Limits of Legal Aid Applicants
(Five-yearly review)

(1 December 2004).
13 Letter of the Director of Administration to the Legal Aid Services Council dated 16
September 2004, Annex (LC Paper No CB(2) 58/04-05(01)).

Legislative Council
Brief: Legal Aid (Amendment) Regulation 2000, Legal Aid (Assessment of Resources and
Contributions) (Amendment) Regulation 2000

(May 2000) paragraph 3.
15 The Scott Report cautioned in 1986 that while information on the proportion of the
population eligible for legal aid may be useful for presentational purposes, it should not
become a benchmark in setting eligibility limits for two reasons: Firstly, the percentage
selected could become inappropriate as income and legal cost rise (not necessarily in step)
over time; and secondly, meaningful data on the quantum of financial resources available to
individuals across the community, especially capital assets, were not readily available for an
accurate estimate to be made: Scott Report, paragraph 2.16.


189

eligibility limits, the Administration put forward data indicating that the percentage
coverage of households financially eligible for legal aid under the Ordinary Legal Aid
Scheme in July 2000 was 55.4% and would be 55.9% if the reduction were adopted.

16

The Governments rationale of deducting only household expenditure catering for the
basic need of the target group does appear to be the one adopted by academics. The Legal
Aid Services Council asked in 2003 for the advice of Dr. Wong Hung of the Chinese
University of Hong Kong on issues concerning the financial eligibility limits of legal aid
applicants. Dr. Wong was of the view that the 35-percentile household expenditure
standard was not an appropriate level to reflect the expenditure of the lower middle
class and below. The level should be set at the 66-percentile level instead. Working
populations occupation and employment status data collected by the Population Census
2001 show that 66.4% of the working population in Hong Kong are below the cutting
line of the upper and lower middle class. Rather, the 35-percentile household
expenditure standard, according to Dr. Wong, appears to represent the cutting line
between the underclass (defined by reason of the household head not working) and the
working class (defined by reason of the household head working). Accepting that the
household method may probably over-estimate, since some household heads not working
may have substantial assets [or have household members who are working] and should
not be classified as underclass, Dr. Wong uses instead a more conservative way of
estimation based upon the class categorization of each individual member of the working
population, which still finds the percentage of the working population of lower middle
class and below to be 66.4%.
In response, the Director of Administration asserted that the Government did not
have, as a matter of policy, a target coverage of legal aid services in terms of the
percentage of eligible households or eligible individuals in Hong Kong. The
Government took the view that eligibility of legal aid should be determined not by the
occupation of an applicant but directly by assessing the financial capability of that
person because focusing on the working population only missed out the non-working
population and an occupation class covered individuals with a wide range of income.

17

While the proposal of the Legal Aid Services Council was to use the median or 50-
percentile household expenditure to calculate living allowances in the case of applicants
under the Ordinary Legal Aid Scheme, it also proposed that the 75-percentile household
expenditure should be adopted for deducting living allowances in the case of applicants
under the Supplementary Legal Aid Scheme, said to be targeting the sandwich class
(which it considered to be the upper middle class or 26.4% of the working population).
These proposals were not accepted.
It is considered that the Government policy on deductible living allowances might
have been applied differently as between the Ordinary Legal Aid Scheme and the

16 See Letter of the Director of Administration to the Subcommittee on proposed resolution
under section 7(a) of the Legal Aid Ordinance dated 17 February 2004, Annex D (LC Paper
No CB(2)1412/03-04(01)). The corresponding coverage of the Supplementary Legal Aid
Scheme was 74.3% (as at July 2000) and 72.6% (as would have been at July 2003).
17 For example, in the occupation class of managers and administrators, the monthly income
from main employment at the 10-percentile, median and 90-percentile are respectively
HK$10,000, HK$26,000 and HK$75,000: Letter of the Director of Administration to the
Legal Aid Services Council dated 16 September 2004, Annex (LC Paper No CB(2) 58/04-
05(01)).

190


Supplementary Legal Aid Scheme. However, the Director of Administration maintained
the view that the same standard of basic needs and hence the same level of personal
allowance deductible should be applied across the board.

18

In explaining the rationale
for adopting the 35-percentile household expenses standard for the deductible living
allowances under the Ordinary Legal Aid Scheme, he stated that the 35-percentile
household expenses standard was adopted to reflect more realistically the basic need of
our target group of legal aid, i.e. households in the lower middle class and below, in
terms of the household expenditure level (emphasis supplied). The rationale in the case
of the Ordinary Legal Aid Scheme, which contains a specific reference to a target
group, was not applied across the board to the Supplementary Legal Aid Scheme,
since the Director, in declining the Legal Aid Services Councils proposal to adopt a
standard of household expenses specifically targeting at the group of legal aid applicants
to be served by that scheme, made the point that to accept the proposal would be
tantamount to accepting the notion that SLAS applicants should enjoy a higher standard
of basic needs, in comparison with that of OLAS clients, for the purpose of financial
eligibility assessment of legal aid. Our view remains that we should apply the same
standard of basic needs, and hence the same level of personal allowance deductible, to
legal aid applicants across the board, irrespective of the different legal aid schemes they
may be pursuing.

19

The Government has implicitly and explicitly indicated that

affordability

is the
idea underlying legal aid policy. The Scott Report states that in providing publicly
funded legal aid services, the Government should be guided by the principle that a
person should have access to legal representation without undue financial hardship, but
that a reasonable contribution

commensurate with his financial resources

should be
expected from him towards the cost of the proceedings (emphasis supplied).

20

By
describing legal aid as a form of financial support for individuals

whose

financial
circumstances would prevent them from taking or defending legal proceedings without
assistance with legal costs (emphasis supplied),

21

the Working Group on Legal Aid
Policy Review also acknowledges the relevance of affordability of legal services in
informing the object of publicly funded legal aid. Subsequently, the Government has
openly acknowledged that: One of the key principles underlying the Governments
legal aid policy is to provide legal aid only to those who cannot

afford

the costs of
conducting litigation on a private basis and therefore need publicly funded legal aid
services (emphasis supplied).

22

The application of the 35-percentile household expenses standard for deductible
allowance seems to assume that all legal aid applicants have the same spending needs.
The net effect of this may well be that individual spending needs may not be recognized.

18 Ibid.
19 Ibid.
20 The Scott Report, paragraph 2.12.
21 Working Group on Legal Aid Policy Review,

Consultative Paper on Legal Aid

(April 1993)
paragraph 4.

Legal Aid Policy Review
1997: Findings and Recommendations

(December 1997) paragraph 44.


191

MEANS TEST PHILOSOPHY: WHAT HARDSHIP IS UNDUE?

The adoption of the same standard of basic needs and therefore the rationale of deducting
living expenses for applicants of both the Ordinary Legal Aid Scheme and the
Supplementary Legal Aid Scheme raises the issue of how one should understand the
policy assumption of the Government that a person faced with legal proceedings is
expected to draw on his own financial resources to meet the costs incurred as others do,
to the extent that he does not suffer undue hardship, especially in respect of the element
of undue hardship. Should this element of undue hardship be referable, in the
context of living expenses, to a

minimum or barely tolerable

level of living support? Or
should it be understood to be a

level of comfort

below which it would be undue for the
living standard previously enjoyed by the applicants household to fall, as a result of the
legal proceedings drawing on the financial resources of the household?
The qualification of hardship with the word undue seems to suggest a degree of
forbearance of hardship as a result of incurring legal expenses. Nonetheless, should the
degree of forbearance be comparably less in the case of a middle class household with a
better standard of living? The fact that a middle class household has the resources to pay
for a higher standard of living and can therefore divert those resources to spend on legal
expenses does not necessarily mean that such a household would do so. Given that many
living expenses, especially those relating to the raising and education of children, are
relatively committed, it seems that only those determined to prosecute or defend the
litigation would have no qualms about diverting available but finite resources in
substantial terms to pay for legal expenses. The decline in standard of living may have
been too steep for the whole family, including the children, to endure. An across the
board living expenses deduction pegged to basic need, while easy to administer in
relation to the use of public moneys, does not adequately recognize the reluctance of the
middle class to re-allocate priorities to face litigation.
Furthermore, older persons may also have a similar reluctance in committing their
savings on litigation expenses, since poorer employment prospects and retirement
together mean that, unlike younger working persons, it is less probable for depleted
savings to be replenished so that they may live through the latter years. The possibility of
recovery of legal expenses when the case is won is not an incentive towards committing
savings, or as it is gradually the case, the pay-out from the mandatory provident fund,
since one cannot be sure of winning a case eventually and the fact that the litigant may
apply for legal aid when his financial resources dwindled below the financial eligibility
limit does not mean that legal aid would be granted to him in due course. Retired persons
simply do not have a stream of income. In relation to these respects, it can be commented
that the present civil legal aid regime favoured the young and the working. While this
may not be a significant problem at present, the dwindling birth rate illustrated in
Chapter 7 will, together with the small family units, ensue in a greater number of elderly
persons living alone or with his or her spouse, unsupported by, or with little support
from, children or other family members. The mentality of such elderly persons seems to
be to hold on to the savings in a disposable form without taking the risk of investment to
generate an income, so that when illness or death comes, there may be money to meet the
necessary expenditure.
Consideration of the difficulties of elderly persons involves an examination of
the current legal aid rules on assessing the disposable capital of legal aid applicants.

192


Schedule 2 of the Legal Aid (Assessment of Resources and Contributions) Regulations

23

provides that in the assessment of disposable capital, there would be disregarded, inter
alia, the value of the only or main dwelling apartment; and the value of capital assets the
reduction of which would cause hardship because the applicant relies upon them to
provide the principal source of his income. Bank savings, on the other hand, are not
excluded because, according to the Director of Administration, they are free for disposal
by the applicants to meet expenses incurred in private litigations

24

and such treatment is
in line with practices adopted by many overseas jurisdictions.
The Working Party on Legal Aid recommends the exclusion of capital assets that
generate the principal source of income of a legal aid applicant from legal aid eligibility
assessment on the part of disposable capital because the Working Party realizes that
where a person (for example, someone who has retired or become disabled and who
derives his income principally from capital) is required to pay for his legal costs or his
contributions towards legal aid out of capital, his standard of living will be permanently
eroded, in contrast to the temporary erosion suffered by someone paying out of current
income.

25

In this regard, therefore, the Governments reasoning with respect to bank
savings is inconsistent with the intention of the Working Party, which however is
probably relevant in the light of a growing portion of the population falling into this
category of people in need.
A usual term of an offer of legal aid is a requirement to pay a contribution calculated,
in the case of the Ordinary Legal Aid Scheme and criminal legal aid, in terms of a
percentage of the financial resources of the applicant. There is a scale of contributions
prescribed in terms of a percentage increasing in accordance with the amount of assessed
financial resources of the applicant. For example, whereas a legal aid applicant having
financial resources of HK$50,000 pays 5% or HK$2,500 as contribution, a legal aid
applicant having financial resources of HK$150,000 has to pay 25% or HK$37,500. In
the case of an applicant granted legal aid to litigate an alleged breach of the Hong Kong
Bill of Rights Ordinance

26

or an inconsistency of the International Covenant on Civil and
Political Rights as applied to Hong Kong, the ceiling rate of contribution is 67% of his
financial resources. On the other hand, between 2003 and 2005, about 79% of the aided
persons paid no contribution, about 8.5% paid HK$1,000, and 4.5% paid HK$2,000 or
below. These statistics would include those who accepted legal aid, including the
condition of payment of the specified contribution, but exclude those who decline the
offer due to inability to satisfy the contribution condition, or choose to consult private
practitioners.
Thus, financial eligibility limits to legal aid set the mark beyond which a person may
suffer undue hardship without recourse to legal aid. On the other hand, the formula in
deducting allowable living expenses irrespective of different social classes may place
persons qualifying for legal aid but at the upper end of the eligibility limit, at a

23 I.e. Cap. 91 sub. leg. B, Laws of Hong Kong.


(June 2003) paragraphs 26, 31.
25 The Scott Report, paragraph 2.26. The Working Party on Legal Aid, noting that income
generating power of capital assets would have through this recommendation been protected,
then found no justification for personal allowances to be given in calculating capital.
26 I.e. Cap. 383, Laws of Hong Kong.


193

disadvantage. Likewise, the progressive scale of contribution to costs by the aided person
apparently is aimed to favour those at the lowest social strata of the community. Finally
those with erratic income, or living on past savings will have difficulty in obtaining legal
aid.

B. Responding to Social Changes

THE ECONOMIC DOWNTURN

Hong Kong has experienced a downturn in the economy until recently. Property prices
plunged by 40% between 1997 and mid-1998. The gross domestic product for the whole
year of 1998 was down by 5.3%, a sharp reversal from the sustained growth of about 5%
each year of the last decade and a phenomenon not experienced since the 1960s.
The currency crisis and the consequential depression in 1997-98 and the collapse of
the property market in 1998 had a knock-on impact on associated industries and
occupations, resulting, over time, in business failures and laid-offs. At the onset of the
economic downturn, many businesses and corporations took measures to restructure or
re-engineer to ensure flexibility in responding to external changes. Such measures could
have been merely an acceleration of the trend of re-organization of the economic engine
of Hong Kong brought on by the re-location of manufacturing facilities to China
Mainland since the 1990s. Flexibility in managing human resources means inevitably
reduction in job security. Spurred upon by these trends, the unemployment rate rose
dramatically from 2.1% in 1997 and have stayed at a high level, reaching 7.9% during
the SARS episode in 2003. Many of the newly-unemployed were white collar workers
and even professional and management staff, many of whom left their positions
involuntarily in a sluggish labour market at mid-point in their career paths, making the
unemployment problem no longer confined to middle-aged manual workers.
Many of the newly-unemployed were also property-owners, whether the property or
properties concerned were purchased, usually with borrowing secured under a mortgage,
for owner-occupation or investment. The collapse of the property market, which at its
lowest registered a 60% decline in property prices from those in 1997, resulted in some
property-owners losing all the equity of their properties and becoming net debtors.
Many of those affected by the economic downturn relied on additional borrowings
through personal finance and credit card facilities to try to make ends meet. Default in
making repayments led to litigation pursued by the lenders, and some sought the last
option of petitioning for bankruptcy. In other cases, they became the subject of creditors
petition for bankruptcy.

IMPLICATIONS FOR PUBLICLY FUNDED LEGAL AID SERVICES

The Legal Aid Services Council, in a workshop held in early 2003 to review the direction
and strategy of the Council as part of its 2002-2003 work plan, identified that the
economic downturn of Hong Kong, as illustrated by sustained business depression,

194


consistent shortfall in Government revenue,

27

and re-alignment of Government services,

28

might be a factor having impact on the scope, type and form of legal aid services to be
provided and the funding to meet the demands and needs, while the negative or slow
growth in the economy itself would produce problems that would have to be solved
legally.

29

Wage earners suffering laid offs as a result of business failures may not be
adequately compensated and have to sue for wages and employment benefits, or seek
compensation from the Protection of Wages on Insolvency Fund. Property-owners who
defaulted their mortgages and consumers who defaulted their credit card bills are sued by
the lending institutions, and may in time have to petition for bankruptcy. Purchasers of
real property may wish to have the transaction rescinded on technical grounds in the light
of the falling market. Difficulties in employment, investment and generally planning for
the future often spill over into troubles in the family and for some, the irretrievable
breakdown in marriage. Financial difficulties and poor living conditions in an affluent
society may also lead to crime.
A number of changes to the institution of legal aid have been mooted to respond to the
social changes: (a) Inclusive treatment of negative equity in financial capacity
assessment for legal aid; (b) Adjustment of the financial eligibility criteria for legal aid;
(c) Adopting a flexible approach in setting financial eligibility limits with different
thresholds for different household sizes, or different categories of cases determined by
reference to actual litigation costs;

30

(d) Expansion of the Supplementary Legal Aid
Scheme;

31

and (e) Introducing community based legal assistance.

RESPONSES: TREATMENT OF NEGATIVE EQUITY

The authorities administering legal aid had to, in the economic downturn, address the
relevance of debts and negative equity in the assessment of the financial resources of
legal aid applicants. Applicants obviously wanted their debts and the negative value of
their properties be taken into account to reduce the amount of disposable capital. The
Legal Aid Department adopted the practice of not including debt as a deductible item in
the assessment of financial resources of legal aid applicants and to regard the property as
having no value. In the case of debts, the Government applied its reasons for not
excluding borrowed money in calculating disposable capital, i.e. that such a course will

27 Government revenue declined from the high point in the 1997/98 financial year only to start
picking up after the 2003/04 financial year; see Census and Statistics Department,

A Graphic
Guide on Hong Kongs Development (1967-2002)

(2003) Table 7.1 and

Hong Kong 2004

(Hong Kong:

Information Services Department, HKSAR Government

, 2005) p 505.
28 Government expenditure has in the light of the decline in revenue been subject to
economies and efficiency enhancing measures, in order to reduce and remove fiscal deficits
in the government budget. The Legal Aid Department was affected by such measures, both
in terms of its baseline expenditure and its establishment: Legal Aid Services Council,


, pp 53-55.
29 See Legal Aid Services Council,


, pp 29-32.
30 See Legal Aid Services Council,

Comments of Legal Aid Services Council on Legal Aid
Policy Review 1997: Findings and Recommendations

(March 1998) p 5.
31 The issues associated with the expansion of the Supplementary Legal Aid Scheme are
examined in Chapter 9.


195

be a substantial departure from our existing practice. It would penalize those legal aid
applicants who are financially prudent in managing their resources, rather than resorting
to borrowing, to support their livelihood.

32

The Legal Aid Departments approach was held to be valid by the court. In

Shem Yin
Fun v Director of Legal Aid & Anor

,

33

Chu J held that a debt, in itself, was not relevant to
the computation of the disposable capital of a legal aid applicant. Then, in

Ng Ai Kheng
Jasmine v Master M Yuen & Anor,

34

Chu J proceeded to hold that since the amount or
value of a resource that did not consist of money was, pursuant to the wording of the
relevant provision in the Legal Aid (Assessment of Resources and Contributions)
Regulations,

35

to be taken as the amount or value which that resource would realize if
sold in the open market; and, in relation to a mortgaged property, the amount that the
owner stood to get when the property were sold in the open market would be the balance
of the sale price, after deducting the outstanding indebtedness under the mortgage, the
amount or value computed for a resource consisting of property that had a market value
less than the indebtedness secured by it, would be zero.

36

RESPONSES: ADJUSTING THE FINANCIAL ELIGIBILITY LIMITS

Many would wish to have higher financial eligibility limits to broaden the coverage of
legal aid services. However, the Governments position has been that financial eligibility
limits will be adjusted by reference to economic indicators and thus fluctuations in the
economy. Since the implementation of the recommendations of the Legal Aid Policy
Review 1997 in 2000, the financial eligibility limits have been reviewed annually to take
account of inflation, with the Consumer Price Index (C) taken as the benchmark for
inflation/deflation levels.
The Administration proposed in late 2002 that the financial eligibility limits for the
Ordinary Legal Aid Scheme and the Supplementary Legal Aid Scheme should be revised

downwards

to take account of price changes so as to preserve the real value of the limits.
The Legal Aid Services Council, while accepting the Governments proposal, expressed
the concern that the proposed revision would have the real effect of reducing the number
of households eligible for legal aid and therefore suggested that the possibility of
maintaining the coverage of legal aid eligibility under the current limits be addressed by
the Government in the forthcoming Five-yearly Review of the Criteria for Assessing



(June 2003) paragraphs 31, 33.
33

Shem Yin Fun v Director of Legal Aid & Anor

[2003] 1 HKC 568 (Court of First Instance).
This was so even though the debt arose out of a hire-purchase agreement for a property
subsequently repossessed and sold.
34

Ng Ai Kheng Jasmine v Master M Yuen & Anor

(unreported, 8 March 2004, HCAL
46/2003) (Court of First Instance).
35 I.e. the Legal Aid (Assessment of Resources and Contributions) Regulations (Cap. 91 sub.
leg. B) Schedule 2, paragraph 2.
36 However, it should be noted that the case of

Ng Ai Kheng Jasmine

was a decision that
turned on the precise wording of the relevant regulation and not on the appropriateness of
the wording to the demands of the social circumstances.

196


Financial Eligibility of Legal Aid Applicants in 2003. The Council considered that
adjusting the limits mechanically to follow changes in the Consumer Price Index (C) to
reflect inflation or deflation might have its drawback, which was that CPI(C) could not
adequately reflect the change in the financial circumstances of those under cover. Thus
whereas the drop might be steep for certain expenditures (the demand for which might be
flexible), there could be hardly any drop in those expenditures where the demand was
inelastic. The end result was that while the overall index showed a drop, the benefit was
spread unevenly among the households, to the disadvantage of the lower middle class
and below. It suggested that the Government should explore the possibility of using
alternative or adjusted indices (existing or to be worked out) to reflect the change more
accurately.

37

Further, the Legal Aid Services Council proposed, in response to the Governments
Five-yearly Review, that Consumer Price Index (A) and Consumer Price Index (B)
should be used to reflect price changes in respect of the financial eligibility limits of the
Ordinary Legal Aid Scheme and the Supplementary Legal Aid Scheme respectively.

38

The Director of Administration however, was of the view that the most suitable CPI
indicator should be chosen to measure price changes and form the basis for adjusting the
financial eligibility limits by respecting the thinking that the limits should reflect the
cost of pursuing litigation in private. The Director considered CPI (C) to be an
appropriate indicator for the changes in litigation costs which are generally regarded as
high level expenditure item. In addition, noting that CPI (C) had as its component the
highest percentage of miscellaneous services, he considered that CPI (C), when
compared with the other two consumer price indices, would represent the change in the
costs of legal services, one of the miscellaneous services, more appropriately.

39

It is worth noting that: firstly, miscellaneous services is given a weight of 17.34% in
Consumer Price Index (C); secondly, legal services is one of many miscellaneous
services; and thirdly, legal services cannot possibly be a regular need of households in
Hong Kong.

40
On the other hand, the Director of Administration emphasized that CPI(C)
was the best available alternative, given that, on the basis of the experience of past
biennial reviews, litigation costs in Hong Kong was non-transparent and a litigation costs
indicator did not exist.
The accumulated deflationary pressure from 1997 to 2003 has brought the
Administration to propose and implement a downward adjustment in the financial
eligibility limits in 2004. On the other hand, the biennial reviews of actual litigation costs
have failed to conclude the existence of a meaningful drop in litigation costs undertaken
in private.
41
The net result seems to be a widening gap of affordability of legal services
37 Legal Aid Services Council, Annual Report 2002-2003, pp 21-22.
38 CPI (A), CPI (B) and CPI (C) are compiled based on the expenditure patterns of some 50%,
30% and 10% of households in Hong Kong respectively, with CPI (C) compiled as
indicative of the pattern of high household expenditure which covers approximately the
top 10% of total households.
39 Letter of the Director of Administration to the Legal Aid Services Council dated 16
September 2004, Annex (LC Paper No CB(2) 58/04-05(01)).
40 Professor Ho Lok-sang noted this point and stated that it would not make sense to limit
litigation costs to X per cent of the annual income. Rather a much higher, 10-year spending
observation is more appropriate: Principles of Public Policy Practice (Boston, Dordrecht
and London: Kluwer Academic Publishers, 2001) p 72.
Legal Aid in Society 197
caused by the receding of coverage of legal aid on the one hand and the absence of a
matching drop in actual litigation costs conducted without public funding to bring legal
services within the grasp of more households at the lower percentiles in terms of
financial resources at their disposal. The Legal Aid Services Council proposes to explore
an appropriate measure to replace CPI as the relevant indicator, in so far as the thinking
for financial eligibility limits remains that of reflecting changes in the costs of legal
services, as opposed to other rationale, such as a more general notion of inflation, the
affordability of households of legal services or the purchasing power of households
taking account of both recurrent and reserve resources.
RESPONSES: DISCRETIONARY POWER TO GRANT CIVIL LEGAL AID
One of the possible ways to address the recent social changes described above would be
seeking to target the needs for legal services through the exercise of discretion to grant
civil legal aid where established rules would not permit.
The Administration has repeatedly expressed reluctance in widening the discretion of
the Director of Legal Aid. The Working Party on Legal Aid recommended in 1986
against giving the Director the discretion to grant civil legal aid in exceptional cases,
42
where the financial eligibility limit was exceeded because personal liberty was not
normally at risk, and the financial eligibility limits recommended by the Working Party
would be sufficiently high to cover civil cases where assistance could be expected. The
majority view of the Working Party was that the recommendation was appropriate
because the persons so excluded would become eligible for legal aid if their financial
capacity subsequently fell within the financial eligibility limit.
43
The Reconvened Working Group rejected the proposal to empower the Director of
Legal Aid to waive the upper financial eligibility limit and grant legal aid to legal aid
applicants whose claims were certified to be complex because as a matter of principle,
those applicants whose means exceeded the financial eligibility limit fell outside the
target group and should pursue litigation with their own means. Further such discretion
41 See Administration Wing, Chief Secretary for Administrations Office, LegCo Panel on
Administration of Justice and Legal Services: Annual and Biennial Review of Financial
Eligibility Limits of Legal Aid Applicants (June 2003) (LC Paper No CB(2) 2581/02-03
(01)); and Administration Wing, Chief Secretary for Administrations Office, LegCo Panel
on Administration of Justice and Legal Services: Annual and Biennial Review of Financial
Eligibility Limits of Legal Aid Applicants (December 2004) (LC Paper No CB(2) 367/04-
05(01)). An exception might be in the case of matrimonial causes, which dropped
significantly as a result of a greater number of solicitors electing to charge fixed costs since
the relevant rules of court were amended in March 2000.
42 It was thought that such cases might include those where in order to establish his claim an
individual would need to obtain and call extensive expert evidence or evidence from
overseas or where his claim involved an area of law which was not settled and so would
inevitably be the subject of an appeal. Potential legal aid applicants might have been
deterred by the magnitude of the prospective costs from even contemplating litigation: The
Scott Report, paragraph 2.36.
43 Ibid.
198 Legal Aid in Hong Kong
would be open to abuse and would thus unduly increase the workload of the Legal Aid
Department.
44
The Legal Aid Services Councils Working Party on the Scope of Legal Aid
deliberated on the proposal to empower the Director of Legal Aid to grant civil legal aid
in spite of the financial resources of the relevant legal aid applicant exceeding the
financial eligibility limits. The Working Party eventually declined to recommend this
proposal to the Council in the light of the reluctance of the Director in being given the
burden of such a broad and unstructured power. It instead recommended to the Council
that one of the 6 areas that the Councils Interest Group on the Scope of Legal Aid should
follow up should be empowering judges and masters to refer unrepresented litigants in
civil cases to the Director for him to consider waiving the upper limits of the means tests
in their legal aid applications.
45
RESPONSES: UNBUNDLING APPROACH TO LEGAL ASSISTANCE AND
INFORMATION DELIVERY
The Chief Justices Working Party on Civil Justice Reform raised in its Interim Report
the concept of unbundled legal assistance as an initiative to make resources available
to litigants in person. Advice and assistance may, instead of being provided
continuously, be given at key points in the proceedings, designed to help the litigant
represent himself. Such advice and assistance may include consideration as to the
validity of a claim or defence, identification of the evidential matters needed to prove a
claim or sustain a defence, and assessment of an offer from the opposite party. In this
way, the whole bundle of work that has to be done in the course of litigation is taken
apart and selectively undertaken by the legal adviser and the litigant.
46
The Working Party did note that for schemes providing unbundled legal assistance
to succeed, the litigant must have a certain level of education and ability giving him some
prospect of properly representing himself. The dispute must also not be too complex.
47
Moreover, legal assistance, even after unbundling, might still be labour intensive and
thus not inexpensive. The Working Party accordingly sought to explore enhancing
existing systems for delivering information and assistance to litigants, particularly
through the use of information technology.
48
Different means were considered, including
websites,
49
video recordings, pre-recorded telephone tapes answering frequently asked
44 Administrative Wing, Chief Secretarys Office, Report on the Reconvened Working Group
on Legal Aid Policy Review (July 1994) paragraph 6.8.
45 See Legal Aid Services Council, Legal Aid (Issue No 8) (July 2005) p 8.
46 Chief Justices Working Party on Civil Justice Reform, Interim Report on Civil Justice
Reform (November 2001) paragraph 159.
47 Ibid, paragraph 163.
48 Ibid, paragraph 175.
49 A publicly funded legal information website called the Community Legal Information
Centre was established in May 2005. See http://www.clic.org.hk/.
questions relating to litigation;
50
law shops,
51
and electronic kiosks
52
.
RESPONSES: INTRODUCING COMMUNITY BASED LEGAL ASSISTANCE
It is undeniable that there is a need in the community for legal advice and assistance short
of legal representation.
53
Chapter 5, when discussing the Free Legal Advice Scheme of
the Duty Lawyer Service, indicates that actions have been taken to overcome the
inadequacies of that scheme. Yet the lack of follow-up of individual cases is one of the
more unsatisfactory aspects of that scheme.
There is an intermediate gap of unmet need between legal advice and legal aid by
way of representation, relating to matters not exclusively related to legal proceedings
but requiring more substantive help from lawyers than oral advice, such as writing
letters, drafting wills, preparing tribunal cases or entering into negotiations. In 1986, The
Working Party on Legal Aid accepted on balance that such legal assistance was needed,
since the foremost duty of a lawyer to his client was, if possible, to avoid the use of court
proceedings (which should only be a last resort). Legal assistance is preventive medicine
and can avoid expenditure in litigation if provided at an early stage. The Working Party
was also of the view that it was Governments obligation to provide a cheap alternative
for people who needed the service but could not afford the fees charged by private
lawyers. The Working Party examined a few options.
54
The Working Group on Legal Aid
Policy Review consulted the legal profession in April 1993 as to the feasibility of a
voluntary fixed fee interview scheme by which a member of the public might obtain
one hour of legal advice in a specified area of the law (for example, consumer action,
labour dispute or building management) at a fixed fee, with possibility for further
50 Chief Justices Working Party on Civil Justice Reform, Interim Report on Civil Justice
Reform (November 2001) paragraph 175.1.
51 Ibid, paragraph 175.2, which describes them as places where advice can be obtained,
advisory videos can be watched and reference books, leaflets, court forms, word-processing
equipment, faxes, photocopiers and so forth are made available.
52 Ibid, paragraph 175.3, which describes them as kiosks located in or near court buildings to
provide the public with user friendly, multi-media and touch screen information about legal
and court practice as well as certain limited issues of law. Such kiosks are now used in the
United States, Australia and Singapore. Preliminary guidance may in due course be
provided under this system.
53 See Working Group on Legal Aid Policy Review, Consultative Paper on Legal Aid (April
1993) paragraph 28, which reported that free legal advice and counselling were provided at
District Councillors ward offices, labour, community and womens organizations whether
generally or in respect of selected topics only. It also noted that the Womens Centre Free
Legal Advice Clinic aimed to providing free, sympathetic and accessible legal advice and
counselling to women facing matrimonial and other domestic difficulties. Most of the
counselling staff were not legally qualified and requests for further legal assistance were
often referred to the Legal Aid Department.
54 See the Scott Report paragraphs 4.27-4.29, 4.31. The options included the Green Form
scheme in England and Wales, a fixed fee interview scheme, and Law Centres. The
Working Party was of the view that the Green Form scheme (which enabled an individual
who was of limited means to consult a solicitor for two hours (i) to get initial general advice
about his legal situation and the options available; (ii) to get help to try and settle the
dispute; (iii) to seek a barrister's opinion; and/or (iv) to write letters) was a simple method
for providing legal assistance, and it might be suitable for Hong Kong once the extent of the
need was established.
interviews.
55
The Reconvened Working Group on Legal Aid Policy Review reported in
July 1994 that both the Duty Lawyer Service and the legal profession did not believe that
the proposed fixed fee interview scheme was likely to be an attractive proposition
either to clients or to the lawyers.
56
The Hon Margaret Ng and Audrey Eu circulated in March 2002 a proposal to establish
a Community Legal Services Centre (CLSC), representing the joint effort of the Duty
Lawyer Service, the Hong Kong Council of Social Services and other non-governmental
organizations (NGOs). The proposal sought to build on the existing Free Legal Advice
Scheme of the Duty Lawyer Service by giving it a new and proactive partnership with
NGOs through a matching fund approach in that the value of the time contribution in
free legal advice matched public funding, while retaining the schemes present operation
through the District Offices. It was envisaged that the advantages of NGOs in active
communication with a wide spectrum of the public, having a strong network in the
locality, and expertise in client care and case management could be harnessed in:
(a) referring clients to the CLSC, operating interview centres or walk-in specialist
clinics, and
(b) co-organizing out-reach programmes with the DLS in legal education and training
through lectures and group discussions.
57
The promoters of the CLSC project were unable to persuade the Government to accept
the first part of their proposal regarding additional interview centres or walk-in specialist
clinics. However, the Government agreed to make available, upon request, facilities at
community centres/community halls for specialist clinics and to support by way of
subvention the out-reach programme. The reasons for the rejection are unknown. One
concern may be funding priority in relation to the present public funding allocation
which is heavily concentrated upon the provision of legal representation. However, any
suggestion that such legal advice centres or law clinics provoke or generate demand for
other publicly funded legal services, such as legal aid, should be balanced against the
consideration that legal advice provided at an early stage may remove the incidence of
legal disputes and thus the need for representation based legal services.
Another concern may be the mode of operation of the legally qualified persons. If they
are to be merely persons having a law degree or going to have a law degree,
58
their giving
advice on the law on a routine basis to the visiting public may be taken as practising law,
which the Legal Practitioners Ordinance
59
prescribes at pains of criminal sanction to be
the exclusive domain of barristers and solicitors.
60
If they are to be barristers or solicitors,
55 Working Group on Legal Aid Policy Review, Consultative Paper on Legal Aid (April 1993)
paragraph 31.
56 Administration Wing, Chief Secretarys Office, Report of the Reconvened Working Group
on Legal Aid Review (July 1994) paragraph 7.7.
57 See Community Legal Services Centre: A Proposal (April 2002).
58 See South China Morning Post (13 March 2006) A1 (which reported that the Faculty of
Law of the University of Hong Kong was planning to set up a law clinic, where law
students may give advice and assistance to members of the public involved in potential
litigation).
60 If the issue concerning the prohibition of the Legal Practitioners Ordinance (Cap. 159)
against non-legal practitioners practising law can be satisfactorily resolved, the separate
concern of quality of service of such paralegals may be raised. See, in this connection,
Moorhead, Paterson and Sherr, Contesting Professionalism: Legal Aid and Nonlawyers in
England and Wales (2003) 37 Law & Society Review 765.
then their operation on an employed basis giving legal advice to the visiting public may
also generate questions regarding compatibility with the relevant code of conduct.
61
(In
fact, in 1993, the legal profession was invited to consider relaxing their restriction
regarding lawyers working for voluntary agencies as practising lawyers, so that the
agencies might employ qualified lawyers to provide free legal advisory services on a
full-time basis.
62
) The question of liability for negligent or incorrect advice will also have
to be tackled.
A further concern may be that accessibility on a day-to-day basis of legally trained
professionals to members of the public and the outreaching activities of those
professionals in exposing the public service shortcomings and representing and
organizing members of the public in remedying such shortcomings, may result in a form
of social activism unaccustomed before. This last probable concern may have been over-
blown, as community movements have been legitimately exploiting the availability of
legal aid services to further their causes in the last decade.
C. Legal aid as a way to resolve social friction
A relatively recent phenomenon is the use of legal aid services by NGOs and social
activists to further their protests, demands or expression of grievances through litigation
against the Administration or public bodies. A typical example has been the eventually
successful application by Madam Lo Siu Lan for legal aid to challenge the divestment by
the Hong Kong Housing Authority of shopping and car parking facilities to the Link Real
Estate Investment Trust by way of application for judicial review.
TAKING A SOCIAL CAUSE INTO THE COURT OF LAW USING LEGAL AID
The modus operandi of a social movement using the law to further its social objectives
can be illustrated by legal proceedings taken in furtherance of the housing movement. Ho
Kwok Leung Denny, in his study of the housing movement, has indicated that
institutional access made available since the early 1980s, with the appointment of grass
root representatives in the Hong Kong Housing Authority, meant that once inside the
political system, a new strategy was adopted, moving away from the use of single issue
protests and mobilization tactics to the use of more sophisticated and diversified tactics
based on rational arguments, researches and surveys, lobbying and elite coalition.
However, the grass root representatives in the Housing Authority found it difficult to
develop their presence inside into a strong opposition against the hegemonic position of
the pro-government and business interests. Their power is further curtailed when they
were dispersed to different sub-committees responsible for different policy areas.
61 It is possible, however, to tap into the valuable source of talent and expertise of experienced
retired lawyers, provided that their participation in the clinic is limited to a voluntary or
pro bono basis, or involves only the payment of expenses or a modest honourarium.
62 Working Group on Legal Aid Policy Review, Consultative Paper on Legal Aid (April 1993)
paragraph 32. The Reconvened Working Group reported one year later that it had not
received any views relating to the proposed relaxation of the restriction regarding lawyers
working for voluntary agencies and could only recommend a follow-up: Administration
Wing, Chief Secretarys Office, Report of the Reconvened Working Group on Legal Aid
Review (July 1994) paragraphs 7.8, 7.9(c).
External challengers found it difficult to gain access to and influence the decision-
making process.
63
.
Activist groups and persons who are excluded from administrative absorption into the
Housing Authority and whose causes fail to obtain widespread political sponsorship or
adoption may launch a legal challenge through the proxy of a fellow activist with a
tenancy of a public housing unit and thus standing to sue,
64
and eligible for legal aid.
The legal challenge itself, which could take a few years to resolve on appeal, could
develop into a sustained high profile campaign, using every court hearing or related
event as an opportunity to protest and to attract media and public attention. Every step in
the legal proceedings can possibly be interpreted as indicative of the causes legitimacy
or even on occasions a small victory, thus producing in the participants a stimulating
sense of power, and a stronger belief that a grievance can be redressed or a goal attained.
The opportunity cost of collective action is reduced in this way while the motivation for
taking such action by followers can be enhanced as the case progresses through its
stages, probably without making the compromises that such groups and persons would
have to make in the course of horizontal integration to pool resources. The odds between
the Government and the lone protester are in this way narrowed, and in the case of a
favourable ruling such as the first instance judgment in the case of Ho Choi Wan & Anor
v Hong Kong Housing Authority,
65
more than equalled, since the grass root activist
successfully intervened into the decision making process of the Government and
influenced a political outcome.
66

THE POSITION OF THE LEGAL AID DEPARTMENT
The Legal Aid Department is obliged to process legal aid applications by applying the
means test and the merits test. When processing legal aid applications for high profile
legal challenges against the Government, it faces at times criticisms for the manner in
which it considers the applications. Given the access of the activist groups and persons to
63 Ho, Kwok Leung Denny, The Rise and Fall of Community Mobilization: The Housing
Movement in Hong Kong in Chiu Wing-kai Stephen and Lui Tai-lok (eds), The Dynamics of
Social Movement in Hong Kong (Hong Kong: Hong Kong University Press, 2000) pp 186,
188, 192-193, 200.
64 Sears J noted this move in Ng King Luen v Rita Fan (1997) 7 HKPLR 281 when he
considered that the applicant in that case, a very honourable man of 74, may well be
specifically chosen because he qualified for legal aid and therefore the public are funding
this application (283H-1).
65 Ho Choi Wan & Anor v Hong Kong Housing Authority [2003] 2 HKLRD 819 (Court of First
Instance). The Court of Appeal unanimously allowed the Housing Authoritys appeal in Lam
Kin Sum & Anor v Hong Kong Housing Authority [2005] 3 HKLRD 456 and the Court of
Final Appeal, by a majority, affirmed the judgment of the Court of Appeal: Ho Choi Wan v
Hong Kong Housing Authority (unreported, 21 November 2005, FACV 1/2005).
66 The public housing movement was again successful in foundering the initial public offering
of the Link Real Estate Investment Trust, which was constituted through the divestment of
the retail and car parking facilities by the Housing Authority, by way of legal proceedings:
Lo Siu Lan & Anor v Hong Kong Housing Authority (unreported, 15 December 2004,
HCAL 154/2004) (Court of First Instance); (unreported, 17 December 2004, CACV
378/2004) (Court of Appeal); (2005) 7 HKCFAR 631 (Appeal Committee, Court of Final
Appeal); [2005] 3 HKLRD 257 (Court of Final Appeal).
the media, any difficulty the applicant encountered in obtaining legal aid could be
portrayed as not mere bureaucratic practices but an ugly attempt of the Government to
protect itself against legitimate challenges and eroding the right of the poor to have
legal aid to mount action against unfavourable Government decisions.
On the other hand, the Legal Aid Department also faces on occasions disquiet or
criticisms that public resources are misused. Questions have been raised in relation to the
approval of funding for the causes of non-Hong Kong residents such as Vietnamese
migrants,
67
right of abode seekers born in China Mainland but overstaying in Hong Kong
to claim right of abode
68
and foreign domestic helpers;
69
or the causes of social activists;
70
or the causes of a class of Hong Kong residents capable of mounting collective action
with resources like civil servants.
71
The funding statistics, however, do not support such
criticisms. The actual expenditure of the Legal Aid Department on immigration matters
remains at 2-3% of the total expenditure for civil cases between 1998 and 2002, and
although the Legal Aid Department granted more than 1,000 legal aid certificates to right
of abode claimants in 1997-1998, only four such cases were selected as test cases for
full-blown litigation. The remainder were assigned to the same firm of solicitors with the
expenditure of each case capped.
The object of publicly funded legal aid is to ensure that no one who qualifies for
legal aid is denied access to justice because of lack of means. A person having a
reasonable cause in law (and thus satisfying the merits test for legal aid) should, subject
to his or her qualifying under the means test, be provided with legal aid. Only through
this way may grievances be heard, fundamental rights protected, and illegality and
injustices exposed.
72
The Legal Aid Department, having been placed with the statutory
responsibility of administering the legal aid schemes, will have to seek to operate
independently through for example the commissioning and use of opinions from legal
practitioners in private practice and the assigning out of such cases. Such measures may
lessen concern of applicants, though not eliminating them, since the decision of approval
or disapproval of the application and the assignment of cases are vested in the officers of
the Legal Aid Department who are nonetheless civil servants. The public will have trust
67 For example, Tan Te Lam v Superintendent of Tai A Chau Detention Centre [1997] AC 97
(Privy Council).
68 For example, Lau Kong Yung & Ors v Director of Immigration (1999) 2 HKCFAR 300
(Court of Final Appeal); and Ng Siu Tung & Ors v Director of Immigration (2002) 5
HKCFAR 1 (Court of Final Appeal).
69 Raza & Ors v Chief Executive in Council & Ors [2005] 3 HKLRD 561 (Court of First
Instance).
70 For example, Leung Kwok Hung & Koo Sze Yiu v Chief Executive of the HKSAR
(unreported, 9 February 2006, HCAL 107/2005) (Court of First Instance) where Koo
obtained legal aid to fund his application for judicial review against the Chief Executives
executive order authorizing covert surveillance, while Leung, a member of the Legislative
Council, acted in person.
71 Government Park and Playground Keepers Union & Ors v Secretary for Justice
(unreported, 10 June 2003, HCAL 180/2003) (Court of First Instance).
72 Cf Kriesberg, Louis, Constructive Conflicts: From Escalation to Resolution (Lanham:
Rowman and Littlefield Publishers Inc, 1998) where it is indicated at p 6 that: conflict, if
its management is properly institutionalized, is an effective means for discovering the truth,
for attaining justice, and for contributing to the long-run benefit of a society or an
organization.
in the responsible officers in making those decisions if it is recognized by both parties
that publicly funded legal aid services are made available to a person qualifying under
the relevant scheme, irrespective of whether the furtherance of his or her cause in the
court coincides with the object of the social movement of which he or she is a member;
and that it is not an abuse of legal aid services for a qualifying and meritorious case of
any such person to be litigated in the court on legal aid.
73
Ultimately, a refusal to grant
legal aid can be reviewed by the Registrar of the High Court, and where applicable, by
the Legal Aid Review Committee in accordance with the Legal Aid Ordinance.
Safeguard is in place by law to ensure independence in decision-making in the grant of
legal aid.
D. Response from the Market? - Claims Recovery Agents
Back in the late 1970s, there was anecdotal evidence of the existence on a large scale of
personal injuries cases being handled by clerk/ interpreters on a contingency fee basis,
who took a very high percentage of the damages award as their fees, while providing a
poor service.
74
Similar, if not the successor, operations have emerged recently of persons
or companies without legal qualifications or authorization, which call themselves
claims recovery agents, offering to help victims of personal injuries with a pledge of
no win, no fee. The claims recovery agents take cases selectively, farm them out to
legal practitioners and are heard to be settling cases early for a lower amount of
compensation before charging a substantial portion of the recovered sum, ranging
between 20% to 25%, as fee for their services. Contracts between the claims recovery
agent and the accident victim are said to contain the following features:
(a) the claims recovery agent will finance the claim by paying legal fees and other
disbursements;
(b) the accident victim has to pay a share of his compensation to the claims recovery
agent;
(c) the accident victim has to appoint a lawyer of the claims recovery agents choice;
(d) either the accident victim gives full authority to the claims recovery agent to accept
any settlement, or if the accident victim refuses to accept a settlement offer, the
recovery agent can withdraw his assistance;
(e) the accident victim has to authorize his lawyer to pay the claims recovery agents
share to the recovery agent directly; and
(f) the accident victim cannot terminate the recovery agency contract until the claim is
completed.
The Legal Aid Services Council has been having consultation since 2004 with the legal
professional bodies on this problem. There is consensus that the public should be
properly informed about the pitfalls of the operation of these agents.
75
In this connection,
the Law Society of Hong Kong in May 2005 advised solicitors of the above features of
73 Legal Aid Ordinance (Cap. 91) section 26
74 OReilly Mayne, Desmond QC, Two Tier Legal Aid Suggestion (1979) in Report of the
Working Party on a Proposed Supplementary Legal Aid Scheme (1982) Annex A.
75 Legal Aid Services Council, Legal Aid (Issue 8, July 2005) p 13.
recovery agency contracts and stating the disciplinary position of a solicitor acting for an
accident victim in a legal action financed by a claims recovery agent.
76
A special committee of the Hong Kong Bar Association reported in April 2005 that
the contracts between claims recovery agents and accident victims were champertous
and could not be legally enforced. Lawyers who knowingly took part in furthering a
clients claim made pursuant to a champertous agreement were liable to be prosecuted
for the offence of aiding and abetting the crime of champerty.
77
In August 2005, the Bar
Association reminded barristers of paragraph 124 of the Code of Conduct of the Bar
prohibiting barristers from accepting a brief or instructions on terms that payment of fees
shall depend on or be related to a contingency. Barristers were further reminded that
some arrangements to fund litigation may be both unlawful and a crime because of the
existence of the champerty and maintenance (sic) in Hong Kong law.
78
The Consumer Council commented that if the services of claims recovery agents were
widely accepted by the public, that might mean that the existing legal services market
could not meet the needs of the public, bearing in mind that the major clientele of these
agents are those neither eligible to apply for legal aid nor able to afford the high legal
cost.
79
The Governments position was to keep the matter under monitoring, bearing in mind
developments in the United Kingdom on the regulation of the compensation industry,
without making any decision on how to deal with the matter.
80
On the other hand, the
Director of Legal Aid expressed the view in July 2005 that there should be greater
publicity in warning victims of personal injuries against engaging the services of
recovery agents and that legal aid offers the best solution to their problems if they lack
the means to pursue their claims.
81
E. Legal aid in action
In the final part of this Chapter, different categories of cases which best illustrate the
comprehensive object and ameliorative effect of legal aid are presented. It is hoped that
this presentation would complement the examples of significant or illustrating cases
76 Law Society of Hong Kong, Circular 05-261 (SG) (17 May 2005). The Law Society relied
on legal advice to state that such recovery agency contracts were champertous and
unenforceable and the recovery agents were liable to be prosecuted for the criminal offence
of maintenance. A solicitor who acted for an accident victim in a legal action financed by a
recovery agent would, in the Law Societys opinion, have committed professional
misconduct. He would also be in breach of the fiduciary duty of openness and fairness owed
to the client. He may, depending on the arrangement he has with the recovery agent, also
have committed the criminal offence aiding and abetting maintenance. See also Law
Society of Hong Kong, Submission of the Law Societys Working Party to the LegCo Legal
Affairs Panel Regarding the Operations of Recovery Agents in Hong Kong (25 November
2005) (LC Paper No CB(2)517/05-06(01)).
77 Hong Kong Bar Association, Report from Special Committee on Recovery Agents (April
2005) (LC Paper No CB(2)1516/04-05(01)).
78 Hong Kong Bar Association, Circular No 073/05 (22 August 2005).
79 See Department of Justice, LegCo Panel on Administration of Justice and Legal Services:
Recovery Agents (November 2005) (LC Paper No CB(2)453/05-06(01)).
80 Ibid.
81 Legal Aid Services Council, Legal Aid (Issue 8, July 2005) p 3.
shown separately in Access to Justice, the commemorative book published by the Legal
Aid Department on the occasion of its 30th anniversary.
82
HUMAN RIGHTS PROTECTION
Legal representation provided under legal aid has enabled people to protect their human
rights guaranteed under Hong Kongs constitutional documents. The Legal Aid
Ordinance empowers the Director of Legal Aid to waive means testing under the
Ordinary Legal Aid Scheme where the application involves proceedings in which a
breach of the Hong Kong Bill of Rights Ordinance or an inconsistency with the
International Covenant on Civil and Political Rights as applied to Hong Kong is an
issue.
83
From time to time, important issues on the scope of protection and the extent of
limitation of constitutionally guaranteed rights in Hong Kong have been determined by
the courts in litigation in which one or more of the parties involved were on legal aid.
The rights involved in the litigation include the right to take part in public affairs without
unreasonable restrictions,
84
the right against discrimination on the ground of disability,
85
the right of freedom to travel,
86
the right to a fair and public hearing in the determination
of ones rights and obligations.
87
CRIME
Legal aid is offered for criminal cases at all levels of court in Hong Kong to ensure, as
far as possible, that each and every person accused of a criminal charge has a fair trial.
88

82 Access to Justice: The Legal Aid Department Serving the Community for 30 Years (Legal
Aid Department, 2000).
83 Legal Aid Ordinance (Cap. 91) section 5AA. The legal merits test and other considerations
under section 10(3) of the Ordinance remain applicable. Legal aid is offered subject to the
requirement to pay a contribution assessed by reference to a percentage (up to 67%) of the
financial resources of the person concerned; see Legal Aid (Assessment of Resources and
Contributions) Regulations (Cap. 91 sub. leg. B) Schedule 3, Part I.
84 Secretary for Justice & Ors v Chan Wah & Ors (2000) 3 HKCFAR 459 (Court of Final
Appeal) where legal aid was granted to non-indigenous villagers to challenge the 1999
village representatives electoral arrangements, which excluded them from voting for the
village representative of their respective village on the ground that they were not indigenous
villagers.
85 Ma Bik Yung v Ko Chuen [2001] 4 HKC 119 (Court of Final Appeal) where the defendant
was granted legal aid to defend the claim of disability discrimination by the paraplegic
plaintiff.
86 Gurung Kesh Bahadur v Director of Immigration (2002) 5 HKCFAR 480 (Court of Final
Appeal) where the legally aided applicant successfully safeguarded his right to re-enter
Hong Kong as part of his guaranteed freedom to travel during the unexpired period of his
limit of stay in Hong Kong. The legally aided applicant in Director of Immigration v Lau
Fong (2004) 7 HKCFAR 56 (Court of Final Appeal) secured protection of the same right.
87 Re Au Kwok Hung [2001] 1 HKLRD 169 (Court of Appeal) where the legally aided
applicant sought unsuccessfully to challenge a statutory time limit for appealing against the
termination of his public housing tenancy.
88 The Duty Lawyer Service offers legal representation to defendants appearing before a
magistrate or the juvenile court, except those in answering to a summons. Criminal legal aid
is available to defendants facing trial before the District Court and the Court of First
Instance and also in respect of appeals.
Over the years, counsel appearing on a legal aid or pro bono brief have assisted the
appellate courts to consider and rule on important issues of law and procedure in criminal
matters, including the constitutionality of the mandatory penalty of life imprisonment for
the offence of murder,
89
the constitutionality of presumptions in the Dangerous Drugs
Ordinance,
90
the constitutionality of presumptions in the Firearms and Ammunition
Ordinance,
91
the nature of the offence of unlawful sexual intercourse with a girl under
16,
92
the proper terms and procedure for the making of a bind-over order,
93
and the proper
procedure for invoking the power to order loss of time in criminal appeals.
94

Two prisoners convicted of the offence of murder when they were below the age of 18
and sentenced to an indeterminate term of detention succeeded, with representation
provided on legal aid, in challenging the validity of section 67C of the Criminal
Procedure Ordinance,
95
which unconstitutionally provided for the Chief Executive to
determine the minimum term within the indeterminate term of detention that they must
serve in order to address the retributive and deterrent elements of the sentence.
96
The
Criminal Procedure Ordinance was subsequently amended in 2004 to provide for judicial
determination of that minimum term for categories of prescribed prisoners, including
those in their situation.
97
The Secretary for Justice, pursuant to the amendments, made
applications to the Court of First Instance for judicial determination of the minimum
term of the prescribed prisoners. Legal aid was granted for the prescribed prisoners
to be represented by counsel and solicitors at the hearing of the applications.
98
89 Lau Cheong & Anor v HKSAR (2002) 5 HKCFAR 415 (Court of Final Appeal).
90 HKSAR v Hung Chan Wa & Anor [2005] 3 HKLRD 291 (Court of Appeal).
91 HKSAR v Lam Kwong Wai & Anor (unreported, 6 January 2005, CACC 213/2003) (Court
of Appeal).
92 HKSAR v So Wai Lun [2005] 1 HKLRD 443 (Court of Appeal).
93 Lau Wai Wo v HKSAR (2003) 6 HKCFAR 624 (Court of Final Appeal).
94 Chau Ching Kay v HKSAR (2002) 5 HKCFAR 540 (Court of Final Appeal).
96 Yau Kwong Man & Anor v Secretary for Security [2002] 3 HKC 457 (Court of First
Instance).
97 I.e. Criminal Procedure (Amendment) Ordinance 2004 (22of 2004), commencing on 16
July 2004.
98 See, for example, HKSAR v Lai Hung Wai (unreported, 26 October 2004, HCMP
2208/2004) (Court of First Instance); HKSAR v Yeung Mok Yeh & Anor (unreported, 5
November 2004, HCMP 2209, 2211/2004) (Court of First Instance); Secretary for Justice v
Lau Man Po (unreported, 18 March 2005, HCMP 2212/2004) (Court of First Instance);
Secretary for Justice v Tang Yuk Kwan (unreported, 17 December 2004, HCMP 2213/2004)
(Court of First Instance); Secretary for Justice v Wong Tat Yau & Anor (unreported, 11
January 2005, HCMP 2216, 2217/2004) (Court of First Instance); Secretary for Justice v
Cheng Ka Man (unreported, 18 January 2005, HCMP 2218/2004) (Court of First Instance);
Secretary for Justice v Vu Thanh Binh (unreported, 19 January 2005, HCMP 2219/2005)
(Court of First Instance); Secretary for Justice v Li Man Fai (unreported, 28 January 2005,
HCMP 2242/2004) (Court of First Instance); Secretary for Justice v Chan Chuen
(unreported, 3 February 2005, HCMP 2248/2004) (Court of First Instance); Secretary for
Justice v Chan Chi Wai (unreported, 18 February 2005, HCMP 2249/2004) (Court of First
Instance); Secretary for Justice v Cheng Hing Biu (unreported, 24 February 2005, HCMP
2250/2004) (Court of First Instance); Secretary for Justice v Au Kwok Leung (unreported, 2
March 2005, HCMP 2251/2004) (Court of First Instance).
PERSONAL INJURIES AND FATAL ACCIDENT CLAIMS
Personal injuries and fatal accident claims have consistently accounted for about 40% of
the expenditure of the Legal Aid Department for civil cases. In the last 10 years, legal aid
has been granted in over 2,000 personal injuries related applications
99
annually.
Many of the important cases setting precedents or guidance on the establishment of
liability and the assessment of the award of damages for personal injuries have been
cases conducted on legal aid. Lee Ting Lam v Leung Kam Ming is the case where the
Court of Appeal laid down, in four descriptive categories, the scale of seriousness of
disablement for the assessment of the appropriate range of awards for pain, suffering and
loss of amenities.
100
Leung On & Anor v Chan Pui Ki (an infant) is the case where the
Court of Appeal reviewed the appropriateness of the conventional multiplier/
multiplicand approach for assessing damages for future loss of earnings in the light of a
challenge that such an approach undercompensated plaintiffs, reaffirmed that approach,
and rejected the rate of return approach that required reference to actuarial tables.
101
Lam
Pak Chiu & Anor v Tsang Mei Ying & Anor is the case where the Court of Final Appeal
ruled that for an award of loss of accumulation of wealth to be made in a fatal accident
claim, it was not an absolute pre-condition that a pattern of saving by the deceased must
be established. On the other hand, the calculation of an award of loss of accumulation of
wealth must reflect the real prospects, on a balanced view, of an eventual accumulation
of wealth to pass into the deceaseds estate and also the possibility that expenditure
during retirement might diminish the wealth accumulated at the end of working life.
102
Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd is the case where the Court of Final
Appeal restated the test for establishing vicarious liability of an employer for an
unauthorized tortious act of an employee.
103
Sanfield Building Contractors Ltd v Li Kai
Cheong is the case where the Court of Final Appeal explained the nature and proper
application of the mode of inferential reasoning of res ipsa loquitur and the meaning of
latent defect in the context of a claim for personal injuries compensation arising out of
an accident of an unknown cause.
104
99 The Legal Aid Department sub-divides personal injuries related applications into three
categories: running down cases, employees compensation claims, and miscellaneous
personal injuries cases.
100 Lee Ting Lam v Leung Kam Ming [1980] HKLR 657 (Court of Appeal). The range of
awards pertaining to each category has been subject to revision over time to take account of
change in value of money and of social and economic conditions: Lau Che Ping v Hoi Kong
Ironwares Godown Co Ltd [1988] 2 HKLR 650 (Court of Appeal) (which was another
legally aided case). The current ranges of awards is laid down in Leung On & Anor v Chan
Pui Ki (an infant) [1996] 2 HKC 565 (Court of Appeal) (which was yet another legally
aided case).
101 Leung On & Anor v Chan Pui Ki (an infant) [1996] 2 HKC 565 (Court of Appeal). The
same approach is to be used in the assessment of loss of dependency in fatal accident
claims. For a commentary of this case by an Assistant Principal Legal Aid Counsel, see
Stables, Andrew, Personal Injuries Awards in Hong Kong: Past, Present and Future (1997)
27 Hong Kong Law Journal 301.
102 Lam Pak Chiu v Tsang Mei Ying [2001] 2 HKC 1 (Court of Final Appeal).
103 Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (2002) 5 HKCFAR 569 (Court of Final
Appeal).
104 Sanfield Building Contractors Ltd v Li Kai Cheong (2003) 6 HKCFAR 207 (Court of Final
Appeal).
The Legal Aid Departments Civil Litigation Section has through the years handled
in-house a significant portion of the personal injuries, fatal accident and employees
compensation cases to achieve cost effectiveness. Cases where the employees
compensation claims have been handled in-house will also have their related common
law personal injuries or fatal accident action conducted by the Department. Cases
involving claims for compensation of a seriously injured plaintiff are handled in-house
(except in cases where the aided person has nominated his or her own solicitors) and the
Department often manages to recover significant amounts of damages, and costs and
expenses.
105
Efforts are made to secure the best interest of the aided person, for example,
by seeking interim payments, and by applying for Mareva injunctions to restrain
defendants from disposing of assets in Hong Kong or elsewhere.
106
The Supplementary Legal Aid Scheme has provided assistance to litigants in some
notable and complicated personal injuries actions. The Kristan Phillips case,
107
in which a
timpanist of the Hong Kong Philharmonic Orchestra successfully sued a pest control
company, the Hong Kong Philharmonic Orchestra Ltd, the Hong Kong Academy for
Performing Arts and others for damages for organophosphate poisoning of his nervous
system, began as a claim assisted under the Supplementary Legal Aid Scheme and was
transferred to the Ordinary Legal Aid Scheme subsequently as the plaintiffs means
diminished. Assistance expended in the case included admission of overseas leading
counsel and provision of expert evidence by overseas experts in sophisticated medical
and scientific disciplines. The cases of Anthony Gallagher and Nathaniel Hymer
involved two British engineers commencing legal proceedings against the Mass Transit
Railway Corporation Ltd for damages for personal injuries suffered in the form of the
occupational disease of dysbaric osteonecrosis as a result of their working in an
environment of compressed air in the 1980s when the Mass Transit Railway was
constructed in Hong Kong.
108
The litigation of the two cases drew heavily on expert
evidence of civil engineering and medicine on the work system, the pathology of the
disease and how injuries were resulted.
105 See, for example, Leung Sai Kui v F Zimmern & Co (unreported, 11 July 1986, HCA
1151/1985) (High Court) (where partial tetraplegic with severe brain damage recovered
$3.5 million in damages); and Ta Xuong v Incorporated Owners of Sun Hing Building
[1997] 4 HKC 171 (Court of First Instance) (where quadriplegic recovered over $25 million
in damages). On the other hand, the case of Kristan Bowers Phillips v Initial Environmental
Services Ltd (unreported, 31 July 1997, HCPI 580/1996) (Court of First Instance) was
assigned out to solicitors but subject to close monitoring. After trial, the plaintiff was
awarded with over $21 million in damages and most of the $30 million costs and expenses
incurred in the litigation were recovered from the defendants in party and party costs.
106 See Legal Aid Department, Annual Report 2002, pp 40-41 (referring to Wong Sau Kam &
Anor v Shum Yuk Fong & Ors (HCPI 798/1998)).
107 I.e. Kristan Bowers Phillips v Initial Environmental Services Ltd (HCPI 580/1996).
108 I.e. Anthony Gallagher v Mass Transit Railway Corporation & Ors (HCPI 986/1998) and
Nathaniel Hymer v Mass Transit Railway Corporation & Ors (HCPI 1137/1998). See also
Legal Aid Department, Annual Report 2001, p34.
EMPLOYMENT
The majority of employment disputes in Hong Kong falls within the jurisdiction of the
Labour Tribunal, as they involve a monetary claim arising from the breach of a term,
whether express or implied, of a contract of employment; or the entitlement of an
employee to severance payment, payment of wages by the principal or superior
contractor, or remedies for employment protection, including terminal payments.
109
The
Presiding Officer of the tribunal is vested with a duty to investigate all matters relevant to
the claim.
110
Legal representation is not permitted before the tribunal and the hearing of a
claim before it is to be conducted in an informal manner.
111
These provisions together
seek to ensure that the parties before the tribunal, being the employee claimant and the
employer defendant respectively, stand on a relatively equal position before the tribunal
and that the claim would be adjudicated both thoroughly and expeditiously.
However, claims before the Labour Tribunal may be transferred to the ordinary
courts.
112
A party to proceedings before the tribunal may also appeal on a point of law to
the Court of First Instance and further to higher courts on a point of law of general public
importance.
113
Where the case is litigated before the ordinary courts, the employer will
often engage legal representatives on his or her behalf and the employee, who is obliged
to either prove the claim or defend an award in his or her favour, will in turn find himself
or herself disadvantaged. The difficulties of full blown litigation arguing questions of
law and points of procedure are obvious to the employees who are often dependent upon
the enforcement of the award for livelihood and therefore simply cannot afford legal
expenses, but do not have the knowledge and skill to master the issues before the court.
The grant of legal aid in such circumstances to the employees will truly redress the
inequality of resources between the parties. Quality legal representation for the employee
will also assist the court through the presentation of all relevant issues and perspectives.
Legal aid has been granted to employees seeking compensation related to their
previous employment when their claims were transferred to the District Court
114
or the
Court of First Instance.
115
Legal aid has also been granted to employees relating to
appeals from the first instance decision. In Bachicha v Poon Shiu Ma Henry,
116
legal aid
was made available to the foreign domestic helper in an appeal by the employer against
the judgment of the District Court awarding her compensation for constructive dismissal.
The Court of Appeal set aside an agreement between the parties prior to the trial limiting
compensation to the employee on account of the marked inequality of bargaining
power between the parties, holding that the employer had secured for himself an
oppressive bargain by unconscionable means. The Court of Appeal further examined the
109 See Labour Tribunal Ordinance (Cap. 25) Schedule.
110 See, ibid, section 20(3).
111 See, ibid, sections 20, 23.
112 See, ibid, section 10.
113 See, ibid, sections 32, 35A.
114 See, for example, Law Ying Chung v Lo Chun Ku (t/a Koon Hing Plastic Factory)
(unreported, 28 November 2003, DCCJ 1071/2002) (District Court).
115 See, for example, Fernandon M Ramos Jr v La Trattoria Restaurant & Bar (o/b La
Trattoria Ltd) (unreported, 17 June 2000, HCA 6152/1998) (Court of First Instance).
116 Bachicha v Poon Shiu Ma Henry [2000] 3 HKC 452, [2000] 2 HKLRD 823 (Court of
Appeal).
law relating to quantum of damages for wrongful dismissal and for breach of the implied
term of mutual trust and confidence in employment contracts and varied the award in the
case representing these two heads of damages to reflect the foreign domestic helpers
loss of a significant and not merely speculative chance of securing alternative
employment with the permission of the Immigration Department. In Thomas Vincent v
South China Morning Post Publishers Ltd,
117
the employee was granted legal aid to
maintain a claim against his employer for terminal payments under the Employment
Ordinance
118
and a year-end bonus under the contract of employment, upon the transfer
of claim to the Court of First Instance by the Labour Tribunal. The Court of First
Instance upheld both claims but the Court of Appeal allowed the employers appeal in
part and set aside the award of terminal payments. The Court of Final Appeal dismissed
the employees appeal and ruled on the proper approach for deciding whether an
employer had shown that his intention in dismissing an employee was not an intention to
extinguish or reduce any right, benefit or protection conferred or to be conferred on the
employee under that Ordinance.
Turning to appeals from awards of the Labour Tribunal, legal aid was made available
to employees in a cleaning service company to appeal against the dismissal of their
claims of constructive dismissal by reason of the employer re-deploying them following
the termination of the employers contract with a client.
119
Employees were also given
legal aid to resist appeals by the employer against the awards of the tribunal,
120
or a
material irregularity in the tribunals procedure.
121
117 Thomas Vincent v South China Morning Post Publishers Ltd [2005] 4 HKLRD 258 (Court
of Final Appeal).
119 Wong Yin Fong & 97 Ors v ISS Hong Kong Services Ltd [2005] 1 HKLRD 648 (Court of
First Instance), where the issues were the reasonableness of re-deployment under the
mobility clauses in employment contracts and the validity of contractual deduction of the
attendance bonus from annual leave pay.
120 See, for example, New Bright Industrial Co Ltd v Wong Sau Chi & Ors [1995] 2 HKC 357
(High Court); Ng Fung Kwan & 6 Ors v Ever Brilliant Construction Co (unreported, 15
October 1996, HCLA 64/1996) (High Court); Pak Wang Kwan v Associated Tourist Coach
Ltd (unreported, 30 November 2001, HCLA 7/2001) (Court of First Instance).
121 See, for example, Alagahit v Wong Fung Lan [1996] 2 HKC 356 (High Court), where Le
Pichon J set aside an order of the Labour Tribunal requiring a claimant to provide security
for costs. In Andayani v Chan Oi Ling [2000] 4 HKC 233, counsel acting pro bono upon
referral of the Hong Kong Bar Association persuaded the Court of Appeal to order that the
employee claimants application for leave to appeal be re-heard. At the re-hearing, leave to
appeal was granted. The employee claimant, an Indonesian domestic helper, then obtained
legal aid to pursue the appeal proper. The Court of First Instance, after hearing submissions,
allowed the appeal and remitted the claim to the Labour Tribunal holding that the oral
contract said to have been entered between the parties at a salary below the minimum
allowable wage was illegal and void as being contrary to public policy and a contract for
exploitation; and that there should be implied into the de facto employment relationship of
the parties the terms of the standard contract approved by the Director of Immigration:
Andayani v Chan Oi Ling [2001] 1 HKC 252 (Court of First Instance).
LAND
Legal aid has been granted to litigants in respect of proceedings on different aspects of
land law. Defendants in actions for recovery of possession of land have used legal aid to
assert possessory title against the plaintiff developer.
122
Parties to a sale and purchase of
land have been legally aided to seek the rescission of the sale or to defend against such an
attempt in vendor and purchaser summons proceedings.
123
A notable case in this respect
is the case of Yau Chin Kwan & Anor v Tin Shui Wai Development Ltd,
124
where
purchasers of flats in Kingswood Villa in Tin Shui Wai sought, in the middle of the
falling market of 1999, to rescind the sale and purchase entered into with the developer at
earlier times by virtue of breach of implied terms relating to the completion of the
development, even though, according to the sale and purchase agreement, failure of the
developer to complete the development before the specified date would have entitled the
purchasers to rescind the sale and purchase within 28 days, after which they were
deemed to have elected to wait for completion and were also entitled to interest on the
amounts already paid. In the interesting case of Yau Wai & Ors v Mark Honour Ltd &
Ors,
125
purchasers of flats in Bayshore Apartments in Aberdeen likewise sought to
rescind the sale and purchase on the ground that the developer failed to meet extended
deadlines for completion but they were sued separately for conspiracy to injure the
developer by causing disruptions to the construction works, with the ultimate aim of
preventing the developer from completing the development on time.
The economy of Hong Kong has matured to an extent that more than half of the
territorys households are accommodated in owner-occupied premises.
126
Owner-
occupation of premises carries with it many obligations and liabilities, ranging from the
payment of rates and government rent to occupiers liability and building management
fees and contributions. Although the Government has encouraged the establishment of
owners corporations in multi-storey buildings for proper maintenance and repair of the
common parts of the buildings, it is up to the individual owners to provide the funding to
allow the owners corporations to fulfil its statutory duties, obligations under the deed of
122 See, for example, Common Luck Investment Ltd v Cheung Kam Chuen (1999) 2 HKCFAR
229 (Court of Final Appeal); Kam To Pui v Incorporated Owners of Lux Theatre Building
& Ors (unreported, 20 September 2000, HCA 646/1996) (Court of First Instance); Unijet
Ltd v Yiu Kwai Hoi (unreported, 21 June 2002, HCA13657/1998) (Court of First Instance);
Mutual Luck Investment Ltd v Yeung Chi Kuen & Ors [2003] 1 HKC 47, 90 (Court of First
Instance); Tang Tak Hong & Ors v Cheung Yat Fuk [2002] 4 HKC 475 (Court of Appeal);
(2004) 7 HKCFAR 70 (Court of Final Appeal); and Chan Tin Shi v Li Tin Sung & Ors
(unreported, 5 January 2006, FACV 7, 12, 13 & 21/2005) (Court of Final Appeal).
123 See, for example, Wong Wai Lan v Tam Fung Lan Sandra [2003] 1 HKLRD 674 (Court of
First Instance); Ip Sau Shu v Sham Lai Hing [2003] 4 HKC 528 (Court of First Instance);
Poly Type Industrial Ltd v Chow Oi Wan Monita (unreported, 25 July 2003, DCCJ
21701/2002) (District Court); Kwok Chor Shan v Empire Properties Development
Consultants Ltd (unreported, 17 July 2003, DCCJ 14764/2000) (District Court).
124 Yau Chin Kwan & Anor v Tin Shui Wai Development Ltd (unreported, 30 November 2001,
HCA 11520/1999) (Court of First Instance); [2003] 2 HKLRD 1 (Court of Appeal).
125 Yau Wai & Ors v Mark Honour Ltd & Ors [2004] 3 HKLRD 653 (Court of First Instance).
126 The relevant percentage was 53.7% as at 2004, from Census and Statistics Department,
Statistics on Domestic Households in http://www.info.gov.hk/censtad/eng/hhstat/fas/pop/
domestic_hh_index.html (accessed on 11 December 2005).
mutual covenant, and common law duty of care. Failure in discharging the duties and
obligations may result in judgment debts against the owners corporation, its winding up
by the court, and legal action against individual owners to contribute to the discharge of
the debts and liabilities of the owners corporation, which may ultimately result in the
individual owners having to part with the very asset they have saved throughout their
lives for.
127
The Legal Aid Services Council proposed in December 2003 to the
Government that owners corporation should in the long term be eligible for legal aid to
enable them to enforce legal duties to pay for and carry out maintenance responsibilities.
As an interim measure, it was recommended that legal aid should be made available
through legislative amendment to office-bearers of owners corporation to enable them
to commence legal action in their personal capacity to enforce the Building Management
Ordinance or the deed of mutual covenant on maintenance and repair of buildings.
128
The
concerns outlined above only made it more imperative for legal aid to be made available
to owners corporation.
MATRIMONIAL CAUSES
The number of divorce petitions started off in an upward trend in the 1980s, with many
cases involving men who left behind a family in China Mainland and set up another in
Hong Kong. Although in the 1990s men divorced their Hong Kong wives in order to be
with their second families in China Mainland, the upward trend remained. The crude
divorce rate, representing the number of divorce decrees granted per 1,000 of the
population, continued to rise before staying at a stable level of 1.91 since 1998. The
actual figures, on the other hand, shows that the number of divorce decrees granted
annually rose by 42% in the 5-year period between 1996, when legislative amendments
providing for more liberal grounds for divorce came into operation, and 2001 to 13,425,
fell slightly in 2002 to 12,943 and rose to 13,829 in 2003.
129
Matrimonial cases have over
the years accounted for about 30% of the expenditure of the Legal Aid Department for
civil cases. About 70 to 80% of divorce cases in Hong Kong are legally aided. The cross-
border element often features in the matrimonial cases encountered by the Department,
including divorces of cross-border marriages,
130
and cross-border divorces with one
spouse living with child in China Mainland subject to access provision.
131
Substantial
127 For examples of such disastrous cases, see Re the Incorporated Owners of Albert House
(unreported, 8 December 2004, HCCW 1046/2004) (Court of First Instance); and Re the
Incorporated Owners of Foremost Building [2005] 3 HKLRD 509 (Court of First Instance).
128 See Legal Aid Services Council, Annual Report 2003-2004, p 21. The Building Safety Loan
Scheme administered by Director of Buildings does not cover legal action to put into
motion a plan for the renovation and repair of a building, such as recovery of contributions
for repairs. The Council is also exploring the possibility of extending legal aid to owners in
mutli-storey buildings to enable them to enforce the Building Management Ordinance (Cap.
344) and deeds of mutual covenant on maintenance and repairs matters: Legal Aid Services
Council, Legal Aid (Issue No 8) (July 2005) p 8.
129 Census and Statistics Department, Demographic Trends in Hong Kong 1981-2001 (23
December 2002) and Census and Statistics Department, Hong Kong Annual Digest of
Statistics 2004 (http://www.info.gov.hk/censtatd/eng/news/new_pub/hkads2004.pdf).
130 WSM v FSY (unreported, 27 July 2005, CACV 352/2004) (Court of Appeal).
131 WKD v YL (unreported, 16 June 2005, CACV 58/2003) (Court of Appeal).
matters, including applications for adjustment of maintenance payments, are often
assigned out.
132
Over 95% of solicitors on the legal aid panel have indicated their
willingness to elect fixed costs
133
in handling matrimonial cases assigned to them.
The Legal Aid Department introduced in March 2005 a pilot scheme on mediation for
matrimonial cases, under which legally aided persons would be invited by the assigned
solicitor to make use of mediation on a voluntary basis.
134
In KGL v CKY & Anor,
135
the Court of Appeal considered an appeal from the Family
Court against an order requiring the husband to pay a monthly sum as part of
maintenance pending suit to the wife for the purpose of meeting her legal costs. The wife
applied for the provision of such a sum upon her legal aid certificate being discharged on
account of her becoming owner of a flat that she did not occupy. The Court of Appeal
considered it to be within the Family Courts discretion to order a sum to be paid to the
wife for the reasonable expenditure of legal expenses incurred as a necessary function of
prosecuting proceedings in divorce, but extracted undertakings from the wife to restrict
her use of that monthly sum and to require her to apply for legal aid and to inform the
husband when she was granted a legal aid certificate in respect of the matrimonial
proceedings.
Legal aid was granted to a deserted wife in the case of HKCB Finance Ltd v Yuen Yi
Wan & Anor
136
to defend a mortgagee action for possession of a property occupied by her
and her children which was purportedly sold by her deserting husband to a purchaser
who financed the purchase with a loan from the mortgagee bank secured by means of a
legal charge over the property. The deserted wife however was unsuccessful because
although in the matrimonial proceedings before the Family Court she was able to set
aside the conveyance to the purchaser, she did not make a similar application in respect
of the legal charge. The District Court on this occasion discussed at length the purpose
and effect of the avoidance of disposition provision in section 17 of the Matrimonial
Proceedings and Property Ordinance.
137
Where a spouse, having obtained legal aid to pursue a matrimonial cause, is adjudged
entitled to maintenance, the Legal Aid Ordinance operates to impose a first charge on the
balance of monthly maintenance payments exceeding the amount of HK$4,800 for the
132 See, for example, NLSP v NNM (unreported, 29 April 2005, FCMC 9187/1997) (Family
Court); CCS v LSM (unreported, 24 February 2005, CACV 126/2004) (Court of Appeal). In
C v C & Anor (unreported, 8 July 2003, CACV 272/2002), the Court of Appeal, in a legally
aided case, set out the correct approach for the court when hearing together an application
for ancillary relief, an application for variation and a judgment summons.
133 I.e. costs fixed under the scale of fixed costs prescribed under the District Court (Fixed
Costs in Matrimonial Causes) Rules (Cap. 336 sub. leg. F).
134 The pilot scheme on mediation for matrimonial cases was to last for 1 year, with the
evaluation of the cases involved complete by 2007; see Administration Wing, Chief
Secretary for Administrations Office, Pilot Scheme on Mediation of Legally Aided
Matrimonial Cases (December 2004) (LC Paper No CB(2) 507/04-05(01)); Examination of
Estimates of Expenditure 2005-06: Controlling Officers Reply to Initial Written Question
(CSO023).
135 KGL v CKY & Anor (unreported, 25 March 2003, CACV 406/2002) (Court of Appeal).
136 HKCB Finance Ltd v Yuen Yi Wan & Anor (unreported, 29 November 2004, DCMP
2017/2002) (District Court).
137 I.e. Cap.192, Laws of Hong Kong.
purpose of recovering legal expenses incurred in the proceedings covered by legal aid.
138
The present amount of monthly maintenance payment excluded from the Director of
Legal Aids first charge of HK$4,800 was prescribed in 1997.
139
Presumably this amount
is reckoned again on a basic needs consideration. However, the imposition of the
Directors first charge may have the effect of undermining the object for determining the
appropriate level of maintenance payments, as the first charge may prevent the spouse
from receiving the maintenance payments to attain the standard of living and to satisfy
immediate and foreseeable financial needs that those payments are designed to take
account of, at least for the duration of the first charge.
140
While the obligation of
repayment under the legal aid first charge may be suspended to take account of hardship,
this merely means that the duration of the first charge would be prolonged; and that the
date on which the spouse receiving the full amount of maintenance payments postponed.
The Court of Appeal highlighted this aspect of the operation of the Directors first charge
when dealing with an appeal against a downward variation of maintenance payments in
CCS v LSM.
141
PUBLIC HOUSING
Legal aid was granted to tenants of public housing units aggrieved of the decision of the
Appeal Tribunal under the Housing Ordinance
142
dismissing their appeals against the
termination of their tenancies by the Hong Kong Housing Authority. Successful
applications for judicial review were launched with legal aid.
143
The Legal Aid Services
Council subsequently identified for further study the extension of legal aid to hearings
before the Appeal Tribunal.
144
CONCLUDING REMARKS
The presentation above serves to some extent to illustrate not only how publicly funded
legal aid services meet the expectations of the public for full delivery of quality legal
138 Legal Aid Ordinance (Cap 91) section 18A(5)(b), (c).
139 Pursuant to Legal Aid (Amendment) Ordinance 1997 (8 of 1997) section 4, commencing on
1 May 1997.
140 See the Matrimonial Proceedings and Property Ordinance (Cap. 192) section 7.
141 See Cheng Chung Shan v Li Siu Man (unreported, 2 April 2004, HCMP 440/2004) (Court
of Appeal); and CCS v LSM (unreported, 24 February 2005, CACV 126/2004) (Court of
Appeal).
143 Kwan Shung King v Housing Appeal Tribunal [2000] 2 HKLRD 764 (Court of First
Instance); Thai Muoi v Hong Kong Housing Authority & Anor (unreported, 30 May 2000,
HCAL 155/1999) (Court of First Instance); Chan Ming Yau v Hong Kong Housing
Authority (unreported, 13 July 2000, HCAL 100/2000) (Court of First Instance); Lam Hei
Ying v Hong Kong Housing Authority & Anor (unreported, 23 January 2001, HCAL
2299/2000) (Court of First Instance); Cheung Shing Ki v Housing Appeal Panel & Anor
(unreported, 2 March 2001, HCAL 66/2000) (Court of First Instance); Lo Yuet Hing v Hong
Kong Housing Authority & Anor [2002] 4 HKC 391 (Court of First Instance).
144 Legal Aid Services Council, Legal Aid (Issue No 8) (July 2005) p 8.
services, but also how the availability of legal aid enables wrong judicial decisions to be
corrected and important points of law decided. It will be appreciated that any imbalance,
owing to limitation in resources, between the parties in the proper presentation or
argument of the issues or topics of law before the courts, may generate injustice which
under Hong Kongs adversarial system based upon the case by case development of the
common law, would, unless funding is found from a public source, have been a matter
for the whole society to endure.

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