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.
The Basic Law states that "the freedom of marriage of Hong Kong residents and their right to raise a family freely shall be protected by law". This protection is understood to be limited to marriage between monogamous heterosexual couples, which has led to debate on the equal treatment of homosexual couples. The principal issue is that treating same-sex relationships differently is discriminatory. The Court of Appeal recently considered this issue from an employment perspective.
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.
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.
The Hong Kong Insurance Authority (HKIA) has achieved a consensus with the China Banking and Insurance Regulatory Commission that the latter will provide preferential treatment to Hong Kong reinsurers by reducing the reinsurance credit risk requirement under China's Risk-Oriented Solvency System for mainland insurers that use Hong Kong reinsurers authorised by the HKIA. This new arrangement should improve Hong Kong's credentials as an Asian reinsurance hub.
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 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).
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.
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.
In certain circumstances the courts in Hong Kong can extend Mareva relief against a defendant to third parties under the so-called 'Chabra' jurisdiction. In a recent case, the assets which the trustees sought to locate were not directly held by the bankrupt, but appear to have been indirectly held through a family trust and related companies. As before, the court demonstrated its willingness to extend Mareva relief under the Chabra jurisdiction in deserving cases.
A recent decision of the Court of First Instance confirms the conventional thinking that a relationship between a bank and a customer does not of itself give rise to a duty of care to advise on the part of the bank. The court dismissed the claimant investor's mis-selling claim against the bank on the basis that neither the terms of the relevant contracts entered into with the bank nor the circumstances of the case suggested that there had been an assumption of a duty to advise by the bank.
There are no statutory provisions empowering the Hong Kong courts to provide assistance and recognition to foreign insolvency office holders. The courts therefore rely on their inherent power (where appropriate) under the common law principle of modified universalism to provide such assistance. Although the application of this principle is not without its problems, the courts in recent years have shown some willingness to assist the effective implementation of cross-border insolvency and restructuring regimes.
The Court of Appeal's judgment in Shenzhen Futaihong Precision Industry Co Ltd v BYD Co Ltd is another recent example of the courts in Hong Kong trying to narrow the issues in respect of which parties seek permission to adduce expert evidence. In this case, the court refused to interfere with a lower court's case management decision that had granted the defendants permission to adduce expert evidence with respect to only one issue out of 10 contested issues that the defendants sought to raise.
Significant increases to the jurisdictional limits for civil claims in the District Court have been proposed. The upper limit of the monetary jurisdiction for the Small Claims Tribunal is also set to increase. The Legislative Council of Hong Kong recently passed resolutions which increase these jurisdictional limits by way of amendments to the District Court Ordinance and the Small Claims Tribunal Ordinance.