Friday Tea Workshop 4 July 2008 6.30 pm – 7.45 pm Civil Justice Reform Practice before Masters Room UT, City University

1. Friday Tea Workshop 4 July 2008 6.30 pm – 7.45 pm Civil Justice Reform Practice before Masters Room UT, City University of Hong Kong, SCOPE Admiralty Learning Centre, 8/F., United Centre, 95 Queensway, Admiralty, Hong Kong.

2. Topics in Civil Justice Reform: • Chart A • (2) Chart B • (3) Important Note • (4) Interlocutory Applications • (5) Costs – Order 62 • (6) Costs Offer and Payments into Court – Order 62A • (7) Some General Practical Points for Solicitors to Remember • (8) Some Practical Points for Counsel to Remember • (9) Conclusion

3. (1) Chart A Existing Procedures Possible Delays at Each Step Pre-action Discovery (PI & Fatal Cases only) Commencement (4 types – OS, Writ, Petitions or Motions) Interlocutory Applications Pleadings (Statement of Claims, Defence or Reply) • Interlocutory Appeals • as of right Default Judgments, Summary Judgment etc. Summons for Directions Taxation Checklist Review After Listing Listing • Late Discovery • New Witness Statements • Amendment of Pleadings Pre-trial Review Trial Trial aborted Appeal Taxation

4. Reformed Procedures (2) Chart B Underlying Objectives and Case Management New Features to Reduce Delays / Complexity New Measures to Facilitate Settlement Pre-action Discovery (All Types of Proceedings) Costs-Only Proceedings • Reformed System of • Interlocutory • Applications • paper disposal Commencement (2 types – OS or writ, unless otherwise Prescribed by law) • Interlocutory Appeals to • Court of First Instance • as of right • Interlocutory Appeals • to Court of Appeal • Leave required Pleadings (Statement of truth) Admissions and Default Judgments Court-determined Timetable with Immovable Milestone dates Summary Assessment of Costs Sanctioned Offer At any stage CMC Pre-trial Review All Interlocutories Completed Before Listing Trial Appeal Taxation

5. (4) Interlocutory Applications (3) IMPORTANT NOTE This note only sets out a part of the CJR incentives. Readers should refer to the final version of the Rules of the High Court (Amendment) Rules 2008 gazetted on 6 June 2008 and the relevant Practice Directions to be issued in due course. Interlocutory applications • Take out only if necessary, procedural economy encouraged. • Procedural directions may be given on application or court’s own motion: Order 1B, r.3(1). • Order nisi, 14 days absolute: Order 1B, r.3(2). • Keep within timetable. • Delay / default in compliance: unless order, barred on expiry of time, or conditions imposed: Order 2, r.3(2).

6. Sanctions do have effect unless defaulting party obtains relief: Order 2, rr.4, 5. • When Court makes order on interlocutory application • before it has given CM directions under Order 25, it may specify sanction: Order 32, r.11B; • After it has given CM directions under Order 25, it shall specify sanction: Order 32, r.11B. Disposal on the Papers • Limited to interlocutory applications before Masters who may • determine an interlocutory application without an oral hearing; or • adjourn the application to be heard before him or another master or a judge in chambers. Order 32, r.11A. • Directions for filing of evidence skeleton submissions (and cost statements) will be given.

7. Order date will be set before which all evidence will be closed and skeleton submissions filed. • If new circumstances render oral hearing desirable, must inform court as soon as possible. • Determination is final as far as the Master is concerned, not order nisi. • Examples of suitable applications: security for costs, F&BP, interim payment, simple landlord and tenant matters. • Experience. Appeals in interlocutory matters • From Master to CFI judge remains as of right; Ladd v. Marshall applies: Order 58, r.1. • From Judge to CA requires leave, subject to exceptions (see Order 59, r.21).

8. (5) COSTS – Order 62 General Principles Governing Costs • For main action: costs generally to follow event: r.3(2). • For interlocutory application: costs to follow event is but one option: r.3(2A). • No satellite litigation on costs. • Proportionality • 4 ways for deciding amount of costs: • Fixed costs and statutory scale of costs • Summary assessment } new • Provisional summary assessment } scale of • Taxation } costs

9. A New Set of Fixed Costs and Statutory Scale of Costs • Fees for mechanical preparation abolished and photocopying fees have been changed: Order 62, 1st Schedule. • New fixed costs for default judgment and judgment on admissions under O.13A given without a hearing: Order 62, 2nd Schedule. • Transitional provisions. • Certify no breach of indemnity principle. Summary Assessment of Costs: r.9A(1)(a) • Applies to both interlocutory (r.9A) & non-interlocutory matters (r.9). • Receiving party to provide a costs statement (will be in PD). • Assessment done right after disposal of the interlocutory application by the same judge or master or adjourn to another day (for paper assessment or 15 minute hearing).

10. Broad-brush approach; no mini-taxation. • 14 days to pay except for legally aided paying party: r.9B. Provisional summary assessment: r.9A(1)(b) • Judge of Master will need to make an order under this rule; do summary assessment subject to the right of either party to tax the costs. • Adjustment of costs summarily assessed against the taxed costs. • A party who insists on taxation at risk as to a special order for costs of the taxation if the taxed costs do not materially exceed the assessed costs: Order 62, r.9A(4), (5). Taxation: r.9A(1)(c) • One taxation at end of case: r.9D(1). • Taxation to be commenced within 2 years of completion of case (judgment or date or order absolute on costs whichever is the later): r.22(7)-(9). • Court has power to make an unless order compelling a party to commence or proceed with taxation: r.22(3).

11. Delay in commencing or proceeding with taxation may result in: • costs consequence • global reduction of taxed costs • reduction in interest   r. 22(5) • New procedure for filing Notice of Commencement of Taxation (NOCT) in draft PD: r.21(1). • Taxing fee to be paid to court based on amount claimed: r.21(5), Fees Rules. • Reimbursement of taxing fee based on amount allowed: r.32B, Fees Rules. • Application to set down after time for filing list of objection has expired: r.21A, (see draft PD). • Bills channelled to: • Chief Judicial Clerk if amount of bill is $200,000 or below: r.13(1A) • Taxing master for paper disposal: r.21B. • Taxing master for taxation with a hearing: r.21C.

12. Paper taxation on a nisi basis with a right to ask for oral hearing; party requesting for oral hearing bears cost of hearings if he fails to do materially better. Practical Matters in Taxation • New format of bill of costs. • Taxation of bundle to be properly prepared. • Fill in summary sheet properly after taxation when you submit allocatur for sealing to enable us to collect information on taxed costs: • to promote consistency, accuracy and fairness in judicial awards of costs • to assist parties in negotiation of legal fees • to settle dispute as to costs • to educate your client • Transitional position: procedure and scale costs: Order 62, r.37. • Experience.

13. (6) Costs Offer and Payments into Court – Order 62A • Paying party’s offer by way of sanctioned payment (“S/P”) i.e. payment into court: r.3(1). Receiving party’s offer by way of sanctioned offer (“S/O”): r.4. • 14 days for acceptance without leave: rr.13, 14(1). • Leave to accept required if: • acceptance beyond 14 days and parties cannot agree on costs: r.13(2). • persons under disability involved: r.17. Court will deal with question of costs when granting leave. • Withdrawal or diminution of offer within 14 days requires leave of court: r.10. • If S/O or S/P withdrawn, will not have consequences of Order 62A: r.7(4) & r.10(4). • Consequence of acceptance of S/O or S/P: taxation is stayed (in whole or in part as case may be); either party may apply to enforce those terms without the need to commence new proceedings: r.18.

14. If receiving party fails to do better than paying party’s sanctioned payment: r.19. • interest on costs for the period after the latest date on which the payment could have been accepted without requiring leave disallowed • costs to paying party incurred after the date on which the payment was made on indemnity basis • enhanced interest on those costs up to 10% above judgment rate • If RP does better than his own sanctioned offer: r.20. • enhanced interest on costs up to 10% above judgment rate for the period after the date of service of the S/O on PP • receiving party to get costs after the date of service of the S/O on indemnity basis • enhanced interest on those costs

15. (7) Some General Practical Pointsfor Solicitors to Remember • Discuss with the opposing party as much as possible. • New statutory forms • Pleadings • Mark diaries: difficult to get extensions of time • Transitional provisions for filing of pleadings • Brief counsel • Signing statement of truth • Fill in summonses properly

16. Train your filing clerks • New fees apply • New set of fixed costs • New set of scale fees • New chops to prepare • Costs • Discuss with LCDs and try out paper taxation • Don’t modify your templates for producing bills yet until the PD has been issued.

17. (8) Some Practical Points forCounsel to Remember • Settle pleadings / affidavit in good time. • For open court hearings (whether before Master, Judge, CA, CFA), get certificate if client wants to cover costs for 2 or more counsel; specify senior or junior if more than 3 certificates. • Rule for allowing fees of counsel in full unless excessive or unreasonable abolished; may need to assist solicitor in giving breakdown of fees to justify on taxation.

18. (9) Conclusion • Remember the underlying objectives • increasing the costs effectiveness in the court’s procedures • Ensuring the expeditious disposal of cases as it reasonably practicable • promoting a sense of reasonable proportion and procedural economy in the conduct of cases • ensuring fairness between the parties • facilitating settlement • distributing the court’s resources fairly, always recognizing that the primary aim of judicial case management should be to secure the just resolution of the parties’ dispute in accordance with their substantive rights

19. Plan ahead and focus on the main issues • Keep timetable • Agree procedural directions and issues as far as possible • If need to go to court, try paper disposal if permitted by rules • If order nisi, usually 14 days to become absolute • No satellite litigation on interlocutory matters and costs • Appeal period counted from date of order, not date of perfection of order • Try out some of the incentives by consent • Watch out for draft PDs and comment on them – July / August 2008

20. REMEMBER THIS MILESTONE DATE FOR IMPLEMENTATION OF THE CIVIL JUSTICE REFORM 2 APRIL 2009

21. THANK YOU