The Hong Kong Law Reform Commission has appointed Herbert Smith Freehills' Kathryn Sanger and Briana Young to co-chair a consultation on outcome-related fee structures – or "success fees" – for arbitration.

The study will be conducted by a new sub-committee of the Law Reform Commission.

Hong Kong lawyers are currently prevented from entering into fee agreements for work on contentious proceedings – including arbitration – that provide for payment only if their clients' cases succeed. The sub-committee will consult on the risks and benefits of allowing success fees for Hong Kong arbitration, and outline any legislative and regulatory changes required to effect change.

It follows legislation permitting third-party funding of arbitration in Hong Kong, which took effect on 1 February 2019, and changes allowing parties to Hong Kong-seated arbitrations to seek interim relief from mainland Chinese courts.

Major arbitral seats including London and the US already allow lawyers to charge success fees for both arbitration and litigation. Singapore is consulting on whether to introduce such fees for arbitrations seated there.