The only type of collective actions permitted in Hong Kong is representative proceedings under Order 15 rule 12 of the Rules of the High Court (“RHC”).

Order 15 rule 12 RHC provides that, where numerous persons have the same interest in any proceedings, the proceedings may be begun and, unless the court otherwise orders, continued, by or against any one or more of them as representing any or all of them. This has been held to mean that all the members of the alleged class should have a common interest and a common grievance and that the relief is in its nature beneficial to all (Pan Atlantic Insurance Co. and Republic Insurance v Pine Top Insurance Co [1989] 1 Lloyd’s Rep 568).

In addition, under this rule the court may, at any stage of the proceedings, on the application of the plaintiff and on terms as appropriate, appoint any one or more of the defendants or other persons to represent the defendants.

Under Hong Kong law, only a party with an interest in the action may bring an action.

Collective actions in Hong Kong are currently “opt in”, although they are not expressly characterised as such. Order 15 rule 12(3) RHC provides that a judgment or order given in representative proceedings shall be binding on all persons represented by the plaintiffs or defendants but shall not be enforced against any person not a party to the proceedings except with the court’s permission.

The representative proceedings procedure governed by Order 15 rule 12 RHC applies to all causes and matters. There is no limitation on who may bring an action in representative proceedings, provided that the parties can satisfy the “same interest test” or “common ingredient test” which requires all class members to show identical issues of fact and law.₁

¹ According to Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021 (CA), the “same interest test” requires: (a) the same contract between all plaintiff class members and the defendant; (b) the same defence pleaded by the defendant against all the plaintiff class members; and (c) the same relief claimed by the plaintiff class members. The “same interest test” has been relaxed by subsequent judgments to become the “common ingredient test”, which allows for separate contracts, separate defences against different class members and damages to be awarded in representative actions.

Civil actions in Hong Kong, apart from cases involving defamation, are heard by a single judge.

The usual remedies sought in civil proceedings, including damages, are available. As a matter of Hong Kong law, punitive damages of the type awarded in US proceedings are not generally available. However, in rare exceptions of egregious tortious activity, the courts in Hong Kong can grant punitive damages.

The represented parties are not liable for costs. However, the court has jurisdiction to order that costs incurred in a group action will be borne by all the members of the group equally and not only by those members bringing the lead action (Ward v Guinness Mahon & Co Ltd [1996] 4 All ER 112).

Contingency fees are not permissible.

Government funding is not automatically available to parties in a representative proceeding. Under section 8(1) of the Legal Aid Ordinance (“LAO”), any person, including those acting in a representative capacity, may apply for legal aid. However, to be eligible, the applicant must first satisfy both a means test, to establish that he meets the financial eligibility requirements, and a merits test, to show that he has reasonable grounds for bringing or defending a civil proceeding.

Legal aid may also be available to applicants who are not acting as “representative parties”. Section 9(e) of the LAO provides that where an application for legal aid is made, the Director of Legal Aid may “take or cause to be taken such steps as may be necessary to conserve the interests of the applicant or of any person on whose behalf the applicant is acting pending determination of his application”.

Order 24 RHC sets out the requirements for mutual pre-trial discovery between parties, as well as court-ordered discovery by any party, of documents which are or have been in their possession, custody or power and which relate to matters in question in the action.

Further, section 41 of the High Court Ordinance (“HCO”) gives the court the power to order discovery before the commencement of proceedings by a person who is likely to be a party to the subsequent proceedings and who has or is likely to have in his possession, custody or power, documents directly relevant to an issue arising out of the claim. Similarly, section 42 of the HCO allows a party to representative proceedings to apply to the court to order a person who is not a party to give discovery of documents if it appears to the court that such person has or is likely to have documents in his possession, custody or power which are relevant to issues arising out of the claim. This may apply to a represented person who is not a party.

The Law Commission of Hong Kong (“Commission”) published its Report on Class Action (“Report”) in 2012, setting out its proposals for the introduction of a comprehensive class action regime in Hong Kong.

Very little progress has been made since the Report was published, despite the introduction of a class action regime being described as one of the law reform initiatives of the Hong Kong Department of Justice (“DoJ”). A cross-sector working group was set up by the DoJ to study and consider the Report’s proposals. As at the end of December 2019 the working group had held 27 meetings and its sub-committee had held 32 meetings to study the proposals in detail.

The Working Group is currently mainly focusing on an incremental approach to implementing a class action regime starting with consumer cases, certification criteria for a class action to be adopted by the court, the design of the procedural rules and other ancillary measures. Upon completion of the study, the Working Group will put forward its recommendations for the government to consider and to map out the way forward. That being the case, the introduction of a class action regime in Hong Kong does not appear to be imminent.