18 April 2012
Better late than never? Amendments to Legal Aid Ordinance to expand scope scheduled for discussion in June 2012
The Chief Executive proposed in his Policy Address back in 2010 to expand the scope of the Ordinary Legal Aid Scheme (OLAS) and the Supplementary Legal Aid Scheme (SLAS) to cover a wider category of claims, although this has not been implemented. Recently, the Secretary for Home Affairs moved a motion at the Legislative Council (the LegCo) to amend Schedules 2 and 3 to the Legal Aid Ordinance (Cap. 91) (the Ordinance), which would be discussed at the Panel on Administration of Justice and Legal Services (the Panel) of LegCo in late June 2012.
Proposed Expansion of Scope of Legal Aid
1. For OLAS
A person whose financial resources do not exceed HK$260,000 is eligible for legal aid under the OLAS. Taking into account the fact that structured financial products are increasingly common in Hong Kong, it is proposed that the scope of OLAS be expanded to cover money claims in derivatives of securities, currency futures or other futures contracts (which are currently excluded), provided that fraud, misrepresentation or deception is involved in respect of the sale.
2. For SLAS
On the other hand, a person whose financial resources exceed HK$260,000 but do not exceed HK$1.3 million is eligible for legal aid under the SLAS. In terms of professional negligence claims, currently the SLAS only covers claims against medical, dental and legal professionals. It is proposed that the scope of SLAS be expanded to cover the following categories of claims or proceedings:-
a. with claim amounts exceeding HK$60,000:-
i. professional negligence claims against certified public accountants (practicing), registered architects, registered professional engineers, registered professional surveyors, registered professional planners, authorised land surveyors, estate agents, and registered landscape architects;
ii. negligence claims against insurers or their intermediaries in respect of the taking out of personal insurance products; and
iii.monetary claims against the vendors in the sale of first-hand completed or uncompleted residential properties.
b. regardless of the claim amount, representation for employees in appeals brought by either the employer or the employee against awards made by the Labour Tribunal.
3. For Both Schemes
Further amendments were proposed to the existing provisions in Schedules 2 and 3 of the Ordinance to cover incidental proceedings, proceedings for defence to counterclaims, and proceedings related to the original claim in higher courts. These amendments are said to reflect existing policies by express provisions.
While the response from the legal field and the Panel to the proposed amendments has been generally positive, some members of the Panel have suggested that the scope should be further expanded to cover claims against property developers by minority owners in respect of compulsory sales of building units, as well as claims against the sale of goods and provision of services. It remains to be seen if such further suggestions would be adopted by the Administration.
If the scope of SLAS is expanded as proposed, it is anticipated there will be a rise in professional negligence claims against other professionals such as accountants, architects, engineers, surveyors, planners, estate agents and insurance intermediaries. Professional indemnity insurers are advised to keep a close eye of developments in this regard.
In addition, people with limited means will also be able to seek legal aid under OLAS and bring claims for their investment in various products where there are allegations of fraud, misrepresentation or deception during the sale. This would cover mis-selling claims similar to those arising from the sales of Lehman Brothers-related minibonds.
For inquiries related to this Legal Update, please contact Tow Lu Lim, Carrie Tai, or your usual contacts with our firm.
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