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Claims Recovery Agents
In March 2004 Council met the Law Society of Hong Kong and the Hong Kong Bar Association separately to discuss matters relating to the operation of claims recovery agents (CRA). It was noted that these agents operated under the pledge of "no win, no charge". They appealed to citizens because they did not demand downpayment. In some cases, the agent or a related financial institution provided loans to its client. On the other hand, the agent charged a substantial portion of damages recovered (say 25%). Concern had been expressed that the agents might settle a case early for a lower sum and the client's interests might not be adequately safeguarded. At those meetings, there was apparent consensus that both professional bodies and Council could make a joint effort to put the matter in perspective for the benefit of the public. Since then, Council had discussed the issue on a number of occasions at its meetings.
In November 2005, the Legislative Council Panel on Administration of Justice and Legal Services (the AJLS Panel) deliberated on the subject. The Panel Chairman pointed out that not only would litigants suffer losses from hiring the services of their activities would also adversely affect the development of the legal profession.
In response to the concern raised by the AJLS Panel, the Department of Justice explained that the Administration had adopted a three-pronged approach to the issue :
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the public to be educated on the possible risks involved in using the services of CRAs;
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bringing a prosecution against a CRA if there was sufficient evidence that it had committed a crime; and
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to consider whether legislation should be introduced to regulate CRAs.
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The Department further advised that the Law Reform Commission's Consultation Paper on Conditional Fees was still at the public consultation stage and that the outcome of the consultation might have a bearing on the policy regarding CRAs. The AJLS Panel considered that the Administration should tackle the problems of CRAs which had affected the interests of the public and the operation of the legal profession, and that the Panel would follow up the subject at its future meeting.
Council considered that the matter was being addressed by the relevant authorities, but would nevertheless, keep watch on development and revisit the issue when necessary.
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