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”

Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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