Hong Kong: Hong Kong's Civil Justice Reform in Review

Last Updated: 27 August 2010
Article by Jonathan Denniss

Substantial statutory reform to the practice and procedure of the Hong Kong Court system became effective on 2 April 2009; the so called "Civil Justice Reform" (CJR). The underlying objectives of the CJR - which parties have a duty to assist the Court in furthering - include increasing the cost-effectiveness, speed and efficiency of Court proceedings and facilitating pre-trial settlements.

This article examines how the CJR has worked in practice since its introduction and its implications for corporate parties (and in-house counsel or company officers) in defending a Court action or deciding whether to commence one.

We focus on the following specific reforms, which are aimed at promoting the above underlying objectives:

  • active case management;
  • statements of truth;
  • mediation (effective from 1 January 2010); and
  • sanctioned offers and payments.


In deciding whether to commence proceedings, you should bear in mind that with the CJR, you will have to actively progress your claim and ensure your pleaded case and witness statements are accurate. This will mean incurring higher costs at an earlier stage in proceedings, rather than putting-off those costs prior to trial.

Similarly, in defending an action, you must ensure the accuracy of your case and evidence and assist the Court in actively progressing the matter.

Significantly, for both parties, the CJR has incentivised pre-trial settlements.

Active case management

Case management conferences

With CJR, the Court proactively controls the progress of cases up to trial by way of active case management and, particularly, the "case management conference" (CMC). Once the parties have filed pleadings, the Court will set a timetable for interlocutory steps and set a future date for a CMC. Prior to the CMC, parties are required to disclose if they have complied with the timetable and explain any non-compliance. At the CMC, the Court assesses the parties' compliance with its timetable, with a view to setting the case down for trial.

Significantly, CJR seeks to avoid delay caused by the adjournment of hearing / trial and CMC dates: these are immovable except in exceptional circumstances.

In our experience, the Court takes the CMC procedure very seriously and will readily make costs orders against parties who unreasonably fail to comply with its timetable and may only grant extensions on the basis that unless the outstanding procedural step is completed by a certain date, judgment be entered for the opposing party. Significantly, the Court may also provisionally strike out a plaintiff's claim if they fail to attend a CMC (see below).

Late interlocutory applications

Courts are very reluctant to allow late pre-trial applications, including amendments to pleadings, further discovery and further witness statements, which would otherwise have the effect of adjourning (immovable) hearing dates.

In two cases (one an interlocutory application to serve a witness statement days prior to a hearing on assessment of damages1, and the other involving an application by an interested party to be heard at a hearing for judicial review in two weeks' time2) the Court noted it would not generally allow late applications which raised new issues, such that the opposing party would have insufficient time to respond prior to the hearing if the applications were allowed.

Undue delay

Where a plaintiff had failed to take any step in the action for two years, the Court ordered the plaintiff to progress its claim or have it dismissed with costs3. The Court found the delay to be an abuse of process but declined to dismiss it as the plaintiff could (re)commence another action, causing greater overall cost and delay in resolving the dispute. The Court noted that:

"Upon the anniversary of the Civil Justice Reform coming into effect on 1 April 2009, parties to litigation and practitioners should have come to accept the fact that the reforms come with a change in approach and culture...Orders of the court are to be complied with, and procedural rules exist to ensure fair, speedy and efficient dispute resolution. The courts will not tolerate delaying tactics..."

Failure to attend CMC

In a case where a plaintiff's solicitors failed to attend at a CMC, the Court provisionally struck out of the plaintiff's claim (but restored it mainly on the basis that practitioners might not be aware of the new reform4).

Pleadings - no bare denials

Bare denial to pleadings is no longer allowed. In pleading a defence, a party must give reasons for its denial or plead a different version of events. As such, a party must consider carefully whether it has a proper defence to a claim and, if not, admit the claim either in whole or in part. It is no longer possible to plead a bare denial to "buy time".


In determining whether to commence proceedings, parties should note that the Court now expects plaintiffs to progress their claims - a writ cannot simply be lodged as a tool to apply commercial pressure to an opposing party absent a commitment to continue with the proceedings.

Once an action is commenced, the CJR does offer plaintiffs an opportunity to maintain pressure on the opposing party, with stricter Court timetables and fewer adjournments, with a view to having the case determined at an early stage or settled on more favourable grounds.

Defendants can no longer "go slow" and push the entire responsibility for the progress of an action on to plaintiffs. Defendants have a positive obligation to assist the Court with the speedy and efficient resolution of disputes.

Statements of truth

Parties and witnesses (factual and expert) are now required to sign a statement that they believe the facts contained in their pleadings and statements respectively are true and, additionally in the case of experts, their opinion is honestly held.

Corporate parties must execute statements of truth to pleadings by persons holding a senior position in the body: a director, secretary or manager.

The Court takes statements of truth very seriously and may strike out a claim on the basis that the statement of truth in the statement of claim was false5. Mis-statements may also expose parties to contempt proceedings.

The Courts have also indicated that non-compliance with the requirements as to statements of truth may render witness statements inadmissible6.

Amendment of factual matters in pleadings will now be difficult, as a party cannot provide statements of truth to two factually different versions of events.


The requirement for statements of truth will likely mean that parties incur more costs at an early stage in proceedings, through collating and analysing the relevant documentary and oral evidence, in order to certify the accuracy of a claim / defence and witnesses' evidence. However, this will also give parties an earlier indication of the strength or weaknesses of their case.


Mediation is a voluntary, out-of-Court process whereby the parties agree to involve an independent third party to facilitate a resolution (rather than decide who should win or lose), usually on a private, confidential and "without prejudice" basis.

Whilst Courts are not empowered to order mediation, the CJR encourages parties to mediate or face adverse costs orders (following trial) if they are found to have unreasonably failed to mediate.

The Courts appear more likely than not to find refusals or failures to mediate "unreasonable" and make adverse costs orders even if a party is successful at trial7. Specifically, the Court has indicated that it will not accept as arguments for a party's refusal to mediate that liability is in dispute (the rationale of mediation is to resolve disputes) or proceedings have reached an advanced stage.

Further, Courts have declined to award a successful party their costs of the action on a more generous basis than party-party costs on the basis of that party's failure to mediate8.


Although it is outside of the scope of this article to consider the benefits and disadvantages of mediation, mediation does potentially offer, in certain circumstances, a means of readily and cost-effectively resolving disputes.

In light of this, as well as adverse costs sanctions, parties should seek advice on and seriously consider whether mediation is suitable (it may not be, for example, where the case involves important issues of public interest) and whether it is reasonable to mediate, particularly where the other party has requested it.

Sanctioned offers and payments

The "sanctioned offers/payments" regime encourage parties to settle prior to trial.

If a plaintiff rejects a defendant's sanctioned offer / payment and fails to better it at trial (even if successful), the Court may disallow interest on any judgment sum and order indemnity costs with penalty interest on those costs from the date the offer could have been accepted. The same applies for defendants who fail to better a plaintiff's sanctioned offer unless the Court also orders penalty interest on any judgment sum.

Where defendants have failed to better a plaintiff's sanctioned offer, the Courts have ordered interest on judgment sums at three per cent and two per cent above judgement rate (currently eight per cent), indemnity costs and interest thereon at three per cent and two per cent above judgment rate9.


This regime offers parties a useful strategic tool to put pressure on the other to settle a case or to protect the offeror's position of costs.

The offeror must be comfortable that the offer - if accepted - provides it with a satisfactory outcome in light of the merits of its claim / defence and unrecoverable costs had it proceeded with the case.

If the offer is rejected and not bettered at trial, the offeror would have protected its position on costs, including the (high) costs of trial.

In deciding whether to accept a sanctioned offer or payment, parties should carefully consider the likelihood of failing to better that offer at trial.


In short, CJR has the effect of:

  • increasing costs for both plaintiffs and defendants at an earlier stage in proceedings due to compliance with case management orders and ensuring, on the evidence, the truthfulness of their pleadings and witness statements;
  • encouraging the early settlement of disputes by mediation and the sanctioned offer / payment mechanism; and
  • discouraging "delaying" tactics by way of proactive Court supervision of cases and costs sanctions.

1 Liu Chen v Chan Poon Wing [2009] HKEC 1650.

2 Lo Hom Chau v Director of Marine [2010] HKEC 398.

3 Erp Furniture Ltd v Top Pine Timber Products Ltd [2010] HKEC 522.

4 World Chinese Business Investment Foundation Ltd v Shine Rainbow Marketing Ltd [2010] 2 HKC 294.

5 Tong Kin Hing v Autron Mauritius Corp [2010] 1 HKLRD 77.

6 Liu Chen v Chan Poon Wing [2009] HKEC 1650.

7 Leung Catherine v Tary Ltd [2009] HKEC 1669.

8 Chong Cheng Lin Courtney v Cathay Pacific Airways Ltd [2010] HKEC 272.

9 The Garden Co Ltd v Smart Year Ltd [2009] 5 HKLRD 542, Tsoi Hak Kong Herbert v Kok Wai Chun [2009] 4 HKLRD 215, Amoi Electronics Co Ltd v Kin Cheung Transportation (Hong Kong) Co Ltd [2010] HKEC 235.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions