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Following is the speech by the Solicitor General, Mr Bob Allcock on "Hong Kong: the Regional Hub for Legal Services and a Gateway to Mainland China" at the In-House Congress Asia Pacific 2000 today (November 23):
Ladies and Gentlemen,
It is my great honour and pleasure to address you this morning. As an in-house lawyer of the Hong Kong SAR Government, I hope that I am able to identify with many of your needs and feelings.
In-house lawyers are not always given the credit they deserve. Before joining the government, I often heard it said that working in private legal practice is like being an animal in a jungle; and working as an in-house lawyer is like being an animal in a zoo. My own experience has shown this to be true in only one respect - every day, government lawyers are closely watched by the media and the community, and our behaviour subjected to critical scrutiny. It is rather like being an animal in a zoo. Perhaps it would be easier being in the jungle.
But, more seriously, there are similarities between the work of a government lawyer and an in-house corporate law. They both need to understand their employer's issues intimately and to keep pace with ever-changing demands; they both need to provide specialist legal advice at the drop of a hat; and they both need to decide when and how to brief out some of their legal tasks. Neither type of lawyer works in a vacuum. We all operate within a particular legal system; with the support of an independent legal profession; and subject to the power of adjudication of the courts.
The quality of those various institutions are therefore key considerations when a multinational company decides where to place its offices and its in-house lawyers. This morning I would like to focus on the quality of those institutions in Hong Kong, and on Hong Kong's development as a regional centre for legal services. Over the years, this development has been actively encouraged and facilitated by the government. In order to get a sense of perspective, I will divide my talk into three periods: before Reunification; since Reunification; and the future.
I. Before Reunification
The common law system
Before Reunification, one major advantage that Hong Kong had over many other Asia cities was its common law system. The common law is, of course, one of the most sophisticated and respected legal systems in the world. The values underpinning the common law - the rule of law, independence of the judiciary and respect for human rights - provide excellent guarantees of a level playing field for businessmen, and of civil and political rights for individuals.
As members of the common law world, Hong Kong and its lawyers were plugged into hundreds of years of jurisprudence, and into dozens of advanced legal communities. And, of course, English was the language of the law.
The growth of the legal profession
As Hong Kong changed from a small manufacturing centre to one of the world's leading financial and services centre, its legal profession had grown dramatically. Before 1969, the only route to legal qualification was through English courses and exams. The legal profession was relatively small and elitist. Then, in 1969, the University of Hong Kong opened its doors to law students, who could for the first time obtain an LL.B. and a professional qualification (the PCLL) locally. Starting from 1987, the City University also offered these courses.
In the 28 years before Reunification, over 2,000 people obtained a local law degree, and over 3,000 obtained the PCLL, from Hong Kong University alone. The legal profession grew in numbers from a few hundred to about 5,000.
A further major contribution of the Law Faculties was in the field of legal research and publications. Before 1969 there were very few publications on Hong Kong law. By 1997, there were dozens of excellent books, 27 years of the Hong Kong Law Journal, and articles on Hong Kong law published in prestigious journals around the world. This undoubtedly helped to put Hong Kong on the legal map.
Foreign lawyers
Another way in which Hong Kong strengthened its legal community before Reunification was by liberalising the laws relating to the admission of foreign lawyers.
Before 1994, a person could only be admitted as a solicitor in Hong Kong if he or she had obtained professional qualifications in the United Kingdom or certain other common law jurisdictions such as Australia, Canada, New Zealand, and Singapore.
Foreign lawyers who wished to practise foreign law in Hong Kong were subject to an informal procedure for the regulation of their practice based on an undertaking given to the Law Society. That informal procedure was not satisfactory to the Law Society because foreign lawyers and foreign law firms were not subject to the Law Society's rules regulating professional conduct, ethics and discipline. Foreign lawyers and foreign law firms were also dissatisfied because there were no statutory criteria which set out the conditions for the establishment and regulation of their practices in Hong Kong.
However, a new regulatory scheme became law in July 1994 with the enactment of the Legal Practitioners (Amendment) Ordinance and the subsidiary legislation made under it. The new scheme created a liberal regime for foreign lawyers who wished either to practise as such, or to qualify as local solicitors.
Foreign lawyers and foreign law firms who wished to practise as such were required to register with the Law Society. In order to qualify for registration, a foreign lawyer needed to be a person of good standing in the foreign jurisdiction in which he was qualified to practise law; and to be a fit and proper person to be so registered. A foreign law firm needed to be of good standing and to have substantial experience. Once registered, foreign lawyers and foreign law firms became subject to the Foreign Lawyers Practice Rules.
A registered foreign firm was permitted to enter into an association with a local firm, provided that the ratio of foreign lawyers to local lawyers in the association did not normally exceed 1:1. The association could share premises, facilities and personnel.
Previous restrictions on the admission of non-Commonwealth qualified foreign lawyers as solicitors were removed. They were replaced with objective, reasonable, non-discriminatory and competency-based criteria, set out in the Overseas Lawyers (Qualification for Admission) Rules. Under those Rules all foreign lawyers could gain admission as Hong Kong solicitors by passing a specified examination. These amendments brought Hong Kong into line with the general obligations under the General Agreement on Trade in Services ("GATS").
Between the enactment of the regulatory scheme for foreign lawyers and Reunification, over 400 foreign lawyers and over 50 foreign law firms were registered with the Law Society. These lawyers, together with the strong local profession, undoubtedly made Hong Kong a more desirable location for multinational companies.
Pre-Reunification position
To recap, before Reunification Hong Kong had on offer an effective, and familiar, common law system, and a strong and independent legal profession. Just as importantly, it had a first-class, and independent judiciary. It also had a world-renowned International Arbitration Centre and a very modern Arbitration Ordinance, providing for the enforcement of both domestic and international arbitration agreements. It had a fully justiciable Bill of Rights Ordinance. It benefited from over 200 multilateral treaties. These included agreements in the fields of civil aviation, merchant shipping, private international law, protection of labour standards, and customs cooperation. They also related to many international organisations in which Hong Kong participates, such as the World Trade Organisation, the Asian Development Bank, the World Health Organisation, the Customs Cooperation Council, the International Maritime Organisation, and the World Intellectual Property Organisation. These agreements played a vital role in facilitating Hong Kong's legal and commercial links with the international community.
But over this rosy picture there loomed the uncertainty of 1997. It was known that the Sino-British Joint Declaration and the Basic Law contained many guarantees concerning the continuance of the legal system. In particular, Article 8 of the Basic Law provided that -
'The laws previously in force in Hong Kong . . . shall be maintained, except for any that contravene this law, and subject to any amendment by the
legislature of Hong Kong Special Administrative Region.'
In addition, there were specific guarantees in the Joint Declaration and Basic Law relating to the legal system, including -
* an independent judiciary with security of tenure,
* the use of the English language, in addition to Chinese, in the courts,
* reliance on precedents from other common law jurisdictions,
* an independent public prosecution service,
* the continuing ability of overseas lawyers and law firms to practise in Hong Kong,
* a Hong Kong based Court of Final Appeal, to replace the Privy Council in London as the final appellate court for Hong Kong,
* a requirement that the International Covenant on Civil and Political Rights as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.
But some people doubted whether these guarantees would be honoured. At the time of the Handover in July 1997, there were those ready to write off Hong Kong.
II. Since Reunification
Let me now turn to the experience since Reunification. The prophecies of the loss of freedoms, the suppression of democracy, the curtailment of a free press and the end of the common law system have all proved false. Hong Kong remains as free today as it ever was.
Hong Kong continues to be a common law jurisdiction. On the first day that the SAR courts opened in July 1997, the validity of all common law offences, and of all laws enacted by the Provisional Legislative Council were challenged on the basis that they contravened the Basic Law. As many of you will recall, those challenges created great public interest! However, I am happy to report that they were rejected by the Court of Appeal.
So far as Hong Kong's statute law is concerned, Article 160 of the Basic Law provides that, upon the establishment of the Hong Kong SAR, the laws previously in force in Hong Kong shall be adopted as laws of the Region, except for those which the Standing Committee of the National People's Congress declares to be in contravention of the Basic Law.
In February 1997, the Standing Committee of the National People's Congress, acting under Article 160 of the Basic Law, adopted all the laws previously in force, save for 24 Ordinances which were found (in whole or in part) to contravene the Basic Law. This means that the common law principles, and nearly all the 600-odd Ordinances, that were previously in force, continue to apply in the Hong Kong SAR.
So far, I have been emphasizing the continuity of the law. What about the courts and the judges?
Article 81 of the Basic Law provides that the judicial system previously practised in Hong Kong shall be maintained except for those changes consequent upon the establishment of the Court of Final Appeal of the Hong Kong SAR. The establishment of the Court of Final Appeal, and the appointments made to it, have I believe been an unqualified success. The permanent judges of the CFA have undoubted wisdom, integrity and independence. And the non-permanent judges, one of whom sits in every case, include lawyers of the highest international standing - such as 3 Law Lords from England, and retired Chief Justices of Australia and New Zealand.
The jurisdiction and procedures of the Court of Final Appeal were modelled on those of the Judicial Committee of the Privy Council. The system of appeals therefore follows a familiar path, but litigants now benefit from the fact that the highest appellate court is now in Hong Kong, not on the other side of the world.
The other courts and tribunals that were previously in existence were re-established on 1 July 1997. The only changes that took place were the re-naming of certain of those courts.
The continuity of the judiciary was achieved on 1 July 1997 when the Chief Executive, acting in accordance with the recommendations of the Judicial Officers Recommendation Commission, re-appointed all judges who were in service on the previous day.
The 200 multilateral international agreements that I referred to earlier continue to apply to the Hong Kong SAR, and were unaffected by the Reunification. Hong Kong remains firmly linked to the international community.
The legal profession
Since Reunification, Hong Kong's legal profession has continued to grow, and remains as strong and independent as ever. There are now 5,176 practising solicitors, 755 practising barristers, 573 registered foreign lawyers and 43 registered foreign law firms in Hong Kong.
Further liberalisation is taking place in respect of foreign lawyers who wish to qualify as local barristers. Prior to recent amendments to the law, there was no way for foreign lawyers from non-Commonwealth jurisdictions to gain admission as barristers in Hong Kong. This was inconsistent with the general obligations of the GATS which require the criteria for admission to a profession to be objective, reasonable, non-discriminatory and standards-based.
However, the admission criteria are being changed as a result of provisions in the Legal Practitioners (Amendment) Ordinance 2000, which was enacted in June this year, but have yet to come into force. Those provisions will remove the privileges conferred on barristers or advocates from England, Scotland, Northern Ireland and other Commonwealth countries. The Court will be able to admit a person to be a barrister if he or she is considered to be a fit and proper person and has complied with the general admission requirements, including passing any required examinations and paying any required fee.
The amendments represent a significant liberalisation of the current provisions governing admission of barristers to practise in Hong Kong. Allowing foreign lawyers from non-Commonwealth jurisdictions to gain admission as barristers in Hong Kong will directly promote competition among barristers. Consumers will benefit in terms of price and quality through this increased competition.
In-house lawyers
I am conscious of the fact that I have given no statistics on in-house lawyers. I am told that their numbers are growing. But there are no official statistics, for the simple reason that in-house lawyers do not need to be registered or to obtain a practising certificate in order to operate.
Unless an in-house lawyer intends to act as a solicitor or as a barrister, he or she is not required to comply with the provisions of the Legal Practitioners Ordinance concerning qualifications, admission, practising certificates or indemnity insurance. Government lawyers are subject to special provisions in the Legal Officers Ordinance but other employers of in-house lawyers are generally free from statutory restrictions. I am sure that such flexibility is an attraction to the many multinational companies which establish offices in Hong Kong.
So far as professional standards are concerned, employed solicitors and barristers are generally subject to the same principles of professional conduct as apply to those in private practice.
The split profession in Hong Kong may be something that some in-house lawyers are not used to. For example, if a barrister's advice is to be sought, this must normally be done by or through a practising solicitor. I would, however, draw your attention to another amendment to the Legal Practitioners Ordinance made earlier this year, but not yet in force. This provides that an employed barrister who holds a current employed barrister's certificate may directly instruct a barrister for the purpose of obtaining a legal opinion.
Rule of law
Before looking at Hong Kong's future prospects, I would like to emphasize what I believe is the most crucial aspect of Hong Kong's legal system - the rule of law. Many businessmen were originally drawn to Hong Kong because of their confidence in the rule of law and the independence of the judiciary here. A continuing confidence in those institutions is likely to be a pre-condition to their remaining here. The SAR Government fully appreciates this and constantly acknowledges that the rule of law and the independence of the judiciary are cornerstones of Hong Kong's success. For example, the Chief Executive in his policy address last month stated that governance in a modern society involves three main elements - the first of which is 'to ensure equality for all before the law, judicial independence and that the rule of law prevails in all spheres of society.'
I am of course aware that concerns were raised last year when the Chief Executive requested the Standing Committee of the National People's Congress to interpret two provisions in the Basic Law. Time does not permit me to go into details over that issue, but I would like to stress the following points.
First, this was a lawful and constitutional way to resolve a problem that could have posed a serious threat to the continued stability and prosperity of Hong Kong. The interpretation given by the Standing Committee in June last year made it possible for our immigration laws to be restored in a way that will prevent a huge influx of immigrants.
Second, I do not accept that either the rule of law or the independence of the judiciary has been undermined as a result. Indeed, four senior retired judges have publicly expressed their view that judicial independence has not been affected by these events.
Third, the SAR Government nevertheless hopes that it will not in future be faced with a problem of the magnitude of the right of abode problem that can only be solved by an approach either to the National People's Congress or its Standing Committee.
III. The Future
What of the future? The successful implementation of the concept of 'one country, two systems' is, I hope, apparent to all of you. The 1997 factor, which was once regarded as a negative factor, is I believe a cause for optimism for the future. I say this for many reasons.
Bilingualism
First, Reunification has encouraged the development of a bilingual legal system in Hong Kong. All Ordinances are now bilingual, with the English and Chinese texts being equally authentic. All courts and tribunals may operate in either English or Chinese.
Great care has been taken to ensure that the quality and integrity of the legal system are not compromised by the use of the Chinese language. It is for the judge in any case to decide which language to use at any particular stage. And, regardless of which language the judge chooses to use, the parties, witnesses, and legal representatives in any case may use either or both of the official languages. In other words, a judge could (for example) decide to use Chinese when hearing evidence and English when giving directions to a jury. And a legal representative before him could choose to use either language as he or she thought fit. No one is therefore being required to abandon the use of English in court.
The increasing use of Chinese in the courts is of immeasurable value to the community, since it removes a language barrier, helps to de-mystify the law and promotes the ideal that the law belongs to the people. For the first time, the vast majority of Hong Kong's population now has access to the law in their own language. And, I would add, free access to the Laws of Hong Kong through the Internet. And if they are ever involved in a court case, it will be possible for the proceedings to be heard in their own language.
There is another reason why I see bilingualism as a positive development - Mainland authorities can increasingly look to Hong Kong for legislative precedents in areas that they wish to reform. The Mainland's rapidly developing legal system, and the demands of WTO membership, are likely to produce encouraging changes, and Hong Kong has much to contribute in these areas.
Entrenched constitutional rights
My second reason for optimism relates to human rights. Before 1997, there were fears that the protection of human rights in Hong Kong would diminish. In fact, the opposite is true. Not only is the Hong Kong Bill of Rights still in place, but the Basic Law provides entrenched guarantees of human rights.
Litigants are able to base their arguments on these provisions in the Basic Law, and challenge actions that they believe are inconsistent with them. The Basic Law has therefore created a new era of constitutional law in Hong Kong. We have already seen challenges brought in respect of the National and Regional Flags Ordinances, the establishment of the Provisional Legislative Council, and the abolition of the Municipal Councils. The determination of these challenges by our fiercely independent judiciary demonstrates the strength of the guarantees provided by the Basic Law.
Review of legal education
My third reason for optimism is that the legal community is reviewing the future of legal education and training in Hong Kong. A system is needed that will be capable of meeting the challenges of legal practice, and the needs of Hong Kong society, in the 21st century. In September this year, a Consultation Paper on Legal Education and Training, produced by two eminent Australian consultants, was issued. The paper raises fundamental questions about all aspects of legal education and training and calls for responses by the end of this month. It is not too late for you to send in your comments! Hard copies can be obtained from the Law Society, the Bar Association and the Department of Justice, and soft copies are available on the home pages of those organisations.
This forward-looking study is a good example of Hong Kong's pro-active approach to issues. The nature of legal practice is likely to be subject to profound changes in the years ahead, and we must have a legal profession that is able to cope with those changes and offer a world-class service to its clients.
China's accession to WTO
My final cause for optimism is, perhaps unsurprisingly, China's proposed accession to the WTO. Hong Kong must surely be the best base for multi-national companies, and their lawyers, if they wish to take advantage of the opportunities that will open up. And Hong Kong law firms are surely best placed to offer additional legal services to those developing Mainland markets.
Some law firms already have offices in the Mainland. But their operations are restricted in many ways - particularly by the 'one firm, one office' rule. There are encouraging signs that these restrictions will be lifted. It is also proposed that Hong Kong lawyers can be registered in the Mainland as Hong Kong Law Lawyers; can then be employed by a Mainland law firm to practise Hong Kong law; and after a number of years would be allowed to become partners.
It has also been announced that people from Hong Kong will be allowed to sit the National Lawyers Examination, with a view to becoming qualified as Mainland lawyers. Many people in Hong Kong are likely to enrol for this examination. Expertise in Mainland law will grow rapidly in the SAR. This will be particularly beneficial to in-house lawyers operating here. There will be a wider pool of Mainland law experts in private practice, which will create more competition and higher standards. It will therefore be easier for in-house lawyers to obtain cost-effective and expert services relating to Mainland laws.
On the subject of competition, I hope you will forgive me for reminding you of the Heritage Foundation's recently released 2001 Index of Economic Freedom. Hong Kong is ranked as the world's freest economy for the seventh year in a row. The Foundation acknowledge in particular, Hong Kong's commitment to the rule of law, lack of trade barriers and low taxes, and its regional centre role in trade and finance in East Asia.
Summary
For all these reasons, I believe that Hong Kong is the right place for in-house lawyers of multinationals doing business in the Asia-Pacific Region. The SAR has inherited an extremely sound legal system and legal profession. Contrary to what some had feared, Reunification has not posed a problem. Quite the opposite. Our new constitutional order has not only effectively guaranteed the continuance of the legal system and all its values, but has enabled us to develop a much closer working relationship with the Mainland.
Our bilingual system will give us an advantage in influencing legal developments in the Mainland; our review of legal education will prepare us for the challenges ahead; and China's accession to WTO will place Hong Kong lawyers in poll position for advising on relevant issues.
A final comment
Let me leave you with one thought. When the Department of Justice formulates its policies on many issues, it consults widely. In addition to the Bar, the Law Society and the Law Faculties, there is a long list of organisations we contact. But I am not sure how we can consult in-house lawyers collectively.
Many of the issues we deal with will be of interest to you - such as continuing professional education, rights of audience and so on. Your views on the issues would be very helpful. I would welcome any suggestions you may have for improving communications between us.
This conference has been a great opportunity for me to meet you all. I hope that, from this beginning, we can develop an ongoing dialogue on matters of common interest. May I wish you an enjoyable and fruitful conference.
End/Thurday, November 23,2000
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