[E-NEWSLETTER July 2013]

2nd July, 2013

Dear Friends and Colleagues,

The Legislative Council session of 2012/2013 is drawing to a close on 23 July. Time flew. Before we break for the summer, I would like to give you another round of update on the latest political and legislative developments since my last report to you in April 2013. If you have missed any of my previous reports and e-newsletters to the legal profession, you could revisit them by going to my FB page or my personal webpage.

– On 4 March 2013, I wrote to the Securities and Futures Commission and the LegCo Panel on Financial Affairs (of which I am a member) to ask them to follow up on the Apex Horizon hotel units sold by Cheung Kong. Having studied the underlying documents and consulted my friends in the financial regulatory field, I believe it constituted a collective investment scheme as defined under the Securities and Future Ordinance (Cap. 571) which required prior regulatory approval by the SFC. On 13 May 2013, the SFC announced that an agreement was reached between the Commission and Cheung Kong to unwind the entire selling scheme and that all buyers are to be put back to their previous positions before the sale. I have continued to follow up on this matter to ensure that all affected buyers are fully compensated for their losses.

– In April 2013, I first raised the questions concerning the conduct of the former ICAC Commissioner Timothy Tong at the Finance Committee in LegCo. The conduct in question involved his expenses over gifts and entertainment activities during his tenure. The more we asked, the more problems were revealed. ICAC is the defender of our core values in Hong Kong. Hong Kong must stay corruption free. This means its chief must behave in an appropriate manner, and his actions must be beyond reproach. On 8 May 2013, I invoked the LegCo procedure of petition to ask the Council to set up a select committee to investigate the matter. The petition procedure is an ancient rite whereby important public concerns were brought before Parliament for investigation. It requires 20 Legislative Councillors to physically stand in support of the petition to set up a select committee. This was the first time since the Handover that this procedure was invoked. The investigation on several fronts is ongoing. I shall further report to you once the select committee begins its work in the new legislative session.

Independent Legal Aid Authority and Legal Aid Review. The Legal Aid Services Council issued its consultancy report in March 2013 recommending against the setting up of an independent legal aid body. This is a surprising U-turn from its 1998 and 2003 reports where independence was recommended by the consultants back then. The need for independence in terms of both operation and perception is overwhelming. At the Legislative Council Panel on Administration of Justice and Legal Services Panel (AJLS) meeting on 25 June, the legal profession and almost all political parties across the board pressed the Administration on this. The issue of independence is long overdue. Any halfway measure is simply not good enough. The Administration promised to look into the matter and at the same time to review the coverability of the legal aid and supplemental legal aid schemes, and also to review the level of criminal legal aid fees within 2013. I shall continue to press the Administration on these matters.

– Party and party taxation. The party to party rates were last reviewed by the Judiciary in 1997. It is clear that another review is long overdue in order to better reflect the current market conditions of the legal profession, so that a successful party in litigation could be placed in a better position when it comes to recovery of legal costs incurred. The Judiciary is looking into the matter, and in any event, the AJLS Panel in LegCo will discuss this matter in the 4th quarter of 2013 once the Judiciary has given its response.

– Expansion of work opportunities in Taiwan and South Korea for the Legal Profession. In May 2013, I visited Seoul to attend the Opening Ceremony of their International Dispute Resolution Centre of which the Hong Kong International Arbitration Centre is a participating organisation. I represented the HK legal profession and met with many of our professional colleagues from South Korea and the Asia-pacific region. This is an important development opportunity for HK, especially in terms of our international arbitration practice and the furtherance of Hong Kong’s status as an international dispute resolution hub. There is much room for collaboration. I have urged the Administration to step up their financial assistance given to the promotion of HK’s legal system and our legal professional abilities. We are much behind other jurisdictions such as Singapore in the promotion of our legal services. We need to seriously step up our efforts on this front.

There have been some concerns about the HK legal profession’s official status in Taiwan. Right now we are not formally recognised by the Taiwanese authorities under any form. This has always been a hindrance to the development of the HK legal profession across the Straits. I have met with Taiwanese officials to discuss this matter, and a high powered Taiwanese delegation is due to come visit HK in September 2013 which would be another opportunity for the legal profession and I to follow up on this.

I wish you all a wonderful summer break! Please do not hesitate to contact me should you have any questions about my work in LegCo or if you have any issues of concerns.

Kind regards,
Dennis Kwok

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[NEWSLETTER April 2013—01] Companies Ordinance – directors’ personal data

NEWSLETTER April 2013

Dear Friends and Colleagues,

There are a few important matters that I would like to take this opportunity to report to you from LegCo.

Companies Ordinance – directors’ personal data

Working together with members of the Bar Association and the Law Society, we have successfully persuaded the Government to postpone its plans to introduce search restrictions for directors’ personal data at the Companies Registry.

The proposed new changes would have had a profound impact on many aspects of a lawyer’s practice, and Hong Kong’s status as an international financial centre. We need to take a holistic view when considering these proposals, taking into account other privacy issues under various registry regimes now already open to the public. Simply changing the existing arrangements under the CO is short-sighted and unworkable.

We welcome the Government’s decision to postpone this part of the new CO, so as to ensure that the much needed new CO would come into operation as soon as possible without too much controversy.

Again, I sincerely thank members of the profession for speaking out on this issue, and making their views known to the Government.

[NEWSLETTER April 2013—02] Milk powder export ban

Milk powder export ban

In March 2013, the Government took the unprecedented step of imposing an export ban on baby milk powder with the intention to prohibit the secondary export of milk powder to the Mainland markets. The Government also decided to adopt the “negative vetting” procedure coupled with immediate enforcement of such measures before bringing the matter to LegCo for legislative scrutiny. This is a highly unusual procedure which means legislative measures and criminal sanctions were put in place without any prior vetting by LegCo. I immediately wrote to the Chief Secretary to protest against the adoption of such procedure and asked the Government to refrain from taking such steps in future unless in cases of real emergency.

The hasty drafting of the new legislative measures meant that milk products which were not the target of the original policy are now also covered by the legislation, leading to serious confusion at the enforcement level and for members of the public.

The Government has since come up with new amendments to the legislation, on which I have submitted a further amendment to address various legal issues  concerning the definition of milk powder.

It is of paramount importance for Hong Kong that our legislations are kept to the highest standards and in line with the cardinal principles of the rule of law – clarity and certainty.

[NEWSLETTER April 2013—03] Developments at Qianhai and implications for the legal profession

Developments at Qianhai and implications for the legal profession

On 26 March, the AJLS Panel at LegCo discussed the development plans for Qianhai; a matter which I specifically raised as I understand many members are interested in its development and what it means for the future of their practice. The profession has produced a list of recommendations to the Secretary for Justice which includes, amongst others, expanding the use and applicability of the HK common law system to Qianhai, and allowing partnerships between PRC firms and HK firms operating from Guangdong. Some of these proposals are still being considered by the Mainland authorities, and there are some resistance at the political level. It is hoped that all parties will work together to foster consensus and to move matters forward. I shall keep members informed of any new developments.

[NEWSLETTER April 2013—04] Legal Aid Fees Review and the Adjustment of the Scale Rates

Legal Aid Fees Review and the Adjustment of the Scale Rates

I have repeatedly urged the Administration to review and update the criminal legal aid fees which are far too low. The Administration has promised to issue its biennial review result in the second quarter of 2013.

Separately, the rates for calculating legal costs for solicitors in a party and party taxation (the “Scale Rates”) were last revised by the Registrar of the High Court in 1997.  The Law Society has recently commissioned a review of the Scale Rates and formally endorsed the recommendations in the final report, including that the solicitors’ hourly rates be raised to better reflect the current market conditions as well as that the revised Scale Rates be adjusted annually according to an inflation linked index. I am in support of such a review to bring the Scale Rates more in line with market conditions.

I will continue to follow up on both issues through the AJLS Panel in LegCo. Please let me know if you have any views on these matters.

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