Hong Kong updates

Arbitration & ADR

ADR coming of age for financial disputes in Hong Kong
  • Hong Kong
  • November 02 2017

Hong Kong's Financial Dispute Resolution Scheme will be expanded with effect from January 1 2018 and July 1 2018 by amending the jurisdiction and terms of reference of the Financial Dispute Resolution Centre. Alongside the recent changes to allow third-party funding in arbitration, the changes to the scheme show that alternative dispute resolution is coming of age for financial disputes in Hong Kong where there is an imbalance of power between parties.


Employment & Benefits

Contributed by Howse Williams Bowers
First Conduct Rule breaches: not just anti-competitive, but illegal
  • Hong Kong
  • June 20 2018

The Competition Commission recently issued an advisory bulletin on the potential risks that could arise under the Competition Ordinance (Cap 619) in the employment context. The commission identified a number of practices between employers which are at risk of contravening the First Conduct Rule of the ordinance – specifically, wage-fixing and non-poaching agreements and the exchange of sensitive information.

With great power comes great responsibility
  • Hong Kong
  • May 30 2018

In a recent case, a senior employee was found to have acted as a de facto director of the plaintiff company as a result of her position and responsibilities within the company. Consequently, the employee was held to have breached the fiduciary duties which she owed to the company by diverting business opportunities away from it and making unauthorised use of its resources.


Insolvency & Restructuring

Key changes to winding-up and insolvency law – part two
  • Hong Kong
  • August 26 2016

The Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 introduces key changes to the administration of the winding-up process. While the ordinance aims to improve the corporate winding-up regime by increasing creditor protection and enhancing the integrity of the winding-up process, the somewhat limited changes represent a missed opportunity to modernise Hong Kong's antiquated corporate insolvency regime.


Insurance

Contributed by Howse Williams Bowers
Hong Kong Insurance Authority launches consultation on draft enterprise risk management guideline
  • Hong Kong
  • July 10 2018

The Hong Kong Insurance Authority recently released a draft guideline on enterprise risk management as part of Hong Kong's move towards a risk-based capital regime. The draft guideline considers the recent consultation and review of the relevant insurance core principles by the International Association of Insurance Supervisors and aims to nurture a strong risk culture which reflects the values, attitudes and norms of business behaviour.

Lawmakers building HK$1 million safety net for policyholders
  • Hong Kong
  • May 22 2018

Lawmakers recently met to discuss a new bill to establish a policyholders' protection scheme to protect policyholders' interests in case an insurer becomes insolvent. This safety net will cover individuals, small and medium-sized enterprises and building owners' corporations. All authorised insurers in Hong Kong will have to participate and pay an initial levy to build up the two compensation funds – namely, the life fund (for long-term policies) and the non-life fund (for general policies).

Complaint channels for insurance policyholders
  • Hong Kong
  • April 03 2018

If a policyholder is dissatisfied with the conduct of an insurer, agent or broker, there are various channels for making a complaint. One such channel is the Insurance Claims Complaints Bureau, which was recently revamped to provide Hong Kong's insurance industry with improved methods of settling personal insurance claims and disputes by providing policyholders with an alternative dispute resolution process.

'Insurtech' initiatives in Hong Kong
  • Hong Kong
  • January 30 2018

The Insurance Authority has launched two new initiatives to promote the use of 'insurtech' in Hong Kong and encourage insurers and technology companies to team up to develop innovative insurance technology in light of recent market trends. The initiatives aim to promote the development of new technologies in Hong Kong's insurance sector and maintain Hong Kong's competitiveness in the Asian market.

New insurance levy to be introduced
  • Hong Kong
  • November 14 2017

The Insurance Authority will begin to collect a levy from policyholders through premium payments to insurers from January 1 2018. Holders of life insurance policies and general insurance policies (eg, travel, motor, property and household) will be required to pay the levy; however, reinsurers, policies underwritten by captive insurers and marine, aviation and goods-in-transit businesses are exempt.


Litigation

Contributed by RPC
More dismissal of 'dormant' claims
  • Hong Kong
  • July 10 2018

Defendants should welcome the recent judgment in Fiscalink International Ltd v Yiu Yu Sum Alex, in which the court struck out the plaintiffs' claims against a majority of the defendants on the basis that the lack of progress over many years was an abuse of process such that the entire action against those defendants should be dismissed. The court's judgment is another example at first instance of a pragmatic application of the relevant principles concerning dismissal for abuse of process.

Court clarifies admissibility of mainland court judgment
  • Hong Kong
  • June 26 2018

The High Court recently analysed the rationale behind the common law principle in Hollington v F Hewthorn & Co Ltd when determining the admissibility of parts of an earlier judgment of a Beijing court arising out of criminal proceedings. The court clarified that under Hong Kong common law, the Hollington principle did not prevent the courts from admitting factual evidence referred to in an earlier judgment of another court or tribunal.

Top court rules on protective costs orders
  • Hong Kong
  • June 12 2018

A recent landmark judgment of the Court of Final Appeal confirms that in deciding whether it is fair and just to grant a protective costs order in public interest litigation, the courts should be apprised of an applicant's financial position. In the case of a corporate applicant, it is proper to inquire not only into the assets belonging to the company, but also other sources of funding to which it has access. The case is the first in Hong Kong in which the courts have extensively set out the relevant legal principles in this regard.

Court upholds privacy rights in face of disciplinary proceedings
  • Hong Kong
  • May 29 2018

The High Court recently dismissed proceedings seeking to compel the Hospital Authority to disclose confidential patient records in connection with professional disciplinary proceedings. The decision serves as a good reminder of the tension that exists between the competing interests of preserving client (or patient) privacy rights and the necessity and public interest in the proper administration of professional disciplinary proceedings.

Production of company documents to liquidators
  • Hong Kong
  • May 15 2018

A recent case involved a contested dispute over the liquidators' access to certain documents stated to be in the respondent's possession or control. At first instance, the court refused to order the respondent to give wide-ranging production of documents to the liquidators on the basis that the documents sought did not fall within Section 221(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance. This judgment was recently successfully appealed by the liquidators.