The latest Budget was announced last Wednesday. The following day, colleagues in the Department of Justice (DoJ) joined me to meet with members of the Panel on Administration of Justice and Legal Services of the Legislative Council (LegCo) via video conferencing to exchange views and to address their concerns. As some members were tied up with work and unable to attend, I look forward to sharing with them our policies in the near future. The latest Budget points out that Hong Kong enjoys unique advantages under “one country, two systems”, a fine tradition of rule of law, and an internationalised business environment, and integrating with national development is an inevitable path for our economy. To complement the National 14th Five-Year Plan, which explicitly supports Hong Kong to establish itself as the centre for international legal and dispute resolution services in the Asia-Pacific region, the DoJ will implement the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (the REJ Arrangement) and the Outcome Related Fee Structures for Arbitration (ORFSA) as soon as practicable to enhance our competitive edge.
Since Hong Kong’s return to the motherland, we have signed nine arrangements on mutual legal assistance in civil and commercial matters. I am honoured to have represented the DoJ in signing four of these arrangements with the Supreme People’s Court in the past three years, including the REJ Arrangement. To date, eight arrangements have already come into force. In order to provide a broad coverage of mutual legal assistance in the areas of civil and commercial matters between the Mainland and Hong Kong, one of our top priorities is to strive for the swift implementation of the remaining REJ Arrangement. This Arrangement will provide better legal safeguards to residents of both the Mainland and Hong Kong in the process of economic development, further facilitating Hong Kong’s integration into the overall development of our country.
Implementing the REJ Arrangement will greatly reduce the need to re-litigate in the courts of the Mainland and Hong Kong to enforce a judgment since the arrangement will provide a simple pro-enforcement mechanism while ensuring that due process has been observed in the place of the trial. By leveraging on the advantages under “one country two systems”, we have also expanded the scope of application of the REJ Arrangement by covering contractual and tortious disputes, which goes beyond the Hague Judgments Convention1. This signifies the unwavering support of our country in establishing Hong Kong as the centre for international legal and dispute resolution services in the Asia-Pacific region. We plan to table the legislative proposal to the LegCo in the second quarter of 2022.
The Law Reform Commission’s recent report on the ORFSA recommended that the law in Hong Kong be amended to lift the prohibitions on the use of outcome related fee structures by lawyers in arbitration (which are not applicable to other Hong Kong court proceedings) taking place in and outside Hong Kong. It aims to enhance our competitiveness in arbitration by allowing us to offer what our competitors in other jurisdictions have already done. At the same time, it will also improve access to justice and respond to increasing client demand for pricing and fee flexibility, reinforcing our status as a leading arbitration centre.
Implementing the ORFSA requires amendments to two pieces of legislation, which will be submitted to LegCo by the first quarter of 2022.
At the video conferences, I was pleased to respond to the queries raised by the members and explained to them how these initiatives will enable practitioners to capitalise on their expertise in the international arena. We expect that more deals will be concluded between the Mainland and Hong Kong, thereby enhancing our competitiveness as a regional centre for legal, deal-making, and dispute resolution services. By briefly introducing support measures for small and medium-sized enterprises and policies on the development in the Greater Bay Area (GBA) as mentioned in the Budget, explanations were given to members that these measures will not only benefit small and medium-sized law firms and barristers’ chambers, but also open up great opportunities for the legal and dispute resolution sectors to expand their business to the GBA.
Looking ahead, the DoJ will continue to roll out various programmes under the Vision 2030 for Rule of Law initiative, including rule of law education. Active steps have also been taken to bring the AALCO (Asian-African Legal Consultative Organization) Hong Kong Regional Arbitration Centre into operation. We will continue to promote and reinforce our status as a centre for alternative dispute resolution mechanism in the international community. This will facilitate the growth of our legal and dispute resolution communities, hence complementing national policies and contributing to the development of our country.
March 4, 2022
1 Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters