LCQ22: Bringing legal actions against acts in contravention of conduct rules according to Competition Ordinance
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Question:
According to the Competition Ordinance (Cap. 619), a person may bring a legal action for the loss or damage he has suffered as a result of another person's act that contravenes a conduct rule, but the act must have been (i) investigated by the Competition Commission (the Commission), and the Commission has brought legal proceedings in the Competition Tribunal (the Tribunal) afterwards, and (ii) determined by the Tribunal to be a contravention of a conduct rule. There are comments that the proceedings involved are so time-consuming that they cannot help prevent large enterprises from engaging in anti-competitive conduct, thus failing to effectively protect the rights and interests of small and medium enterprises and those of consumers. In this connection, will the Government inform this Council:
(1) whether the authorities will amend Cap. 619 to allow a person who has suffered loss or damage as a result of another person's act that contravenes a conduct rule to bring a legal action directly without having to wait for the investigation of the Commission and the determination of the Tribunal; if not, of the reasons for that;
(2) given that competition-related claims in general must be brought in the Tribunal but the authorities do not provide legal aid in respect of the proceedings in the Tribunal, whether the authorities will consider providing the claimants concerned with legal support, including the provision of voluntary lawyers and the making of advance payment of litigation costs; if not, of the reasons for that; and
(3) whether the authorities will examine the establishment of a legal action fund so that the Commission will have adequate resources to step up law enforcement through instituting legal proceedings?
Reply:
President,
For the three parts of the question, after consulting the Home Affairs Bureau, my consolidated reply is as follows:
(1) The Competition Bill introduced by the Government into the Legislative Council in 2010 contained provisions which allowed stand-alone private actions, to the effect that any person who had suffered loss or damage as a result of a contravention of a conduct rule might bring legal action in the Competition Tribunal. However, during the scrutiny of the Bill, small and medium enterprises (SMEs) expressed concern that stand-alone private actions might be abused by large enterprises to oppress SMEs. In view of such concern, the Government removed the relevant provisions.
Under the existing Competition Ordinance (Cap. 619) (Ordinance), the Competition Commission (Commission) is responsible for bringing proceedings in the Competition Tribunal. Any person may lodge a complaint with the Commission in respect of contraventions of the conduct rules, and persons who have suffered loss or damage as a result of contraventions determined by the Competition Tribunal may initiate follow-on actions.
After the Ordinance has been in operation for a number of years, we will review it, including the need to provide for stand-alone private actions, taking into account the experience gained and problems encountered.
(2) The policy objective of legal aid is to ensure that all those who comply with the regulations of the Legal Aid Ordinance (LAO) (Cap. 91) and have reasonable grounds for pursuing or defending a legal action in the courts of Hong Kong will not be denied access to justice due to a lack of means. Pursuant to this policy objective, the Legal Aid Department (LAD) may provide legal aid in the form of legal representation to all eligible persons to conduct proceedings, irrespective of their nationality and residential status. To qualify for legal aid, a person is required to satisfy both the means test and merits test as provided by the LAO.
Legal aid for civil cases covers most proceedings heard in the District Court level or above, but not proceedings heard in tribunals in general. Same as proceedings heard in other tribunals, proceedings heard in the Competition Tribunal are not within the scope of legal aid. That said, LAD may provide legal aid to any person who is involved in proceedings transferred from the Competition Tribunal to the High Court, and satisfies both the means test and merits test. However, it is stipulated in the LAO that applicants and legally aided persons do not include any body of persons corporate or unincorporate.
(3) The Government provides an annual subvention to the Commission and we have been liaising closely with the Commission on its operational and financial position. We will seek funding for the Commission having regard to its actual operational needs (including progress on its enforcement and litigation work), and explore appropriate means for providing resources to the Commission to support its work.
Ends/Wednesday, April 12, 2017
Issued at HKT 14:30
Issued at HKT 14:30
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