Hong Kong one step closer to introducing class actions

In November of 2012, the Hong Kong Department of Justice announced it would create a working group to study and consider introducing a class action regime. The first meeting of this cross-sector working group was set for earlier this year. The group will discuss the proposals for the introduction of a comprehensive class action regime set out by the Law Reform Commission’s Report on Class Actions in May 2012.

The working group will be chaired by the Solicitor General and will consist of members representing stakeholders in the private sector, the relevant government bureaus and departments, the two professional legal bodies and the Consumer Council. A representative of the Judiciary will also have a limited role providing input to the working group on interaction with court operations.

It may be some time before the group proposes legislation to introduce class actions, as the Commission’s report only makes high-level recommendations and the intricacies of a working system still need to be deliberated, especially given the complexity of the issues and opposition to reforms. The report does recommend phasing the implementation of class action suits to avoid overwhelming the system with mass litigation. The Report suggests beginning with consumer cases and later extending the law to include other types of cases, which would eventually include securities class actions. The Law Reform Commission also recommends an opt-out approach as the default, but would provide the court with the discretion to order otherwise in the interests of justice.