Minutes of the Sixteenth Meeting of the Bills Committee
on the Legal Services Legislation (Miscellaneous Amendments) Bill 1996

3. According to the letter of 9 May 1997 from the Law Society, banks and trustee companies tended to charge for administrating an estate by way of a scale linked to its value. Miss Margaret NG therefore requested information as to: (a) whether banks and trustee companies did charge according to a scale; (b) if so, what charges were included in the charges of the banks and trustee companies; (c) whether their charges included solicitors fees or counsel fees if solicitor or counsel was involved; and (d) why did they charge according to the value of an estate. Mr ALLCOCK undertook to ascertain the requisite information as soon as possible. Mr Ambrose LAU then queried why the Administration adopted a different stance on the matter if banks and trustee companies did charge according to a scale. He remarked that it seemed to imply a mistrust of solicitors which would lead to negative public perception of the integrity of the legal profession. Mr ALLCOCK stressed that the approach of setting a scale was not necessarily wrong. The thrust of the matter was that only the Costs Committee had the statutory authority, not the Law Society, to set up such a scale. Invalidation of non-statutory scale fees was to ensure that the current law was properly reflected in the practice. Mrs Miriam LAU asked and Mr ALLCOCK confirmed that the Administration had drawn the Law Society’s attention to the inconsistency between their scale fees for probate work and the current costs rules. However, the Administration had not formally requested the Law Society to refer them to the Costs Committee because it was a matter for the Law Society to deal with. In this connection, Mr Albert HO informed members that: (a) the charges of banks and trustee companies were pegged against the value of an estate and there was no restriction on how they should be set; and (b) their charges were lower than the scale fees for probate work prescribed by the Law Society and hence invalidation of non-statutory scale fees for probate work might not necessarily be disadvantageous to solicitors. Members noted that the Democratic Party tended to support the Administration’s proposal that scale fees for probate work, if it was necessary, should only be set by the Costs Committee.

4. In view of members’ concerns about the transitional arrangements if non-statutory scale fees were to be invalidated, the Chairman asked and Mr ALLCOCK responded that according to the current costs rules, when there was no scale fees, solicitors were entitled to charge fees that were fair and reasonable in respect of non-contentious business. In addition, there had not been any chaos in other non-contentious businesses. With reference to the concern expressed by the Law Society on the retrospective effect of the proposed section 56A(3), Ms Emily LAU asked and Mr ALLCOCK explained that the provision was not retrospective in a strict legal sense. It only sought to invalidate any existing rule that had been made by the Law Society and did not affect any bill of costs issued before the commencement of the provision. Contractual agreements between a solicitor and his client would still be valid notwithstanding the clause. Mr ALLCOCK added that a provision could be added to the Bill to the effect that any agreement entered before the enactment of clause 16 would not be invalidated, or the commencement for that provision could be delayed. Ms LAU therefore sought legal advice to confirm the Administration’s interpretation. In response, Mr Jonathan DAW said that the Legal Adviser would provide a legal advice for members’ reference. At the Chairman’s request, Mr ALLCOCK undertook to respond to concerns expressed as soon as possible in order to facilitate members’ consideration on the matter.

6. Miss Margaret NG remarked that although she agreed that the Costs Committee should include consumer representatives, solicitor members should not be out-numbered by non-solicitor members in the composition. She cautioned that it would be unacceptable for any profession for its charges to be determined by an outside body in which they were in a minority. She stressed that it was a matter of professional autonomy. In addition, it was possible that such a body might set conveyancing charges at such an extremely low level that solicitors might simply refrain from engaging in conveyancing business. The view was shared by Mr Howard YOUNG and Mr Ambrose LAU. Ms Emily LAU opined that it was important to have consumer representatives in the Costs Committee but the crux of the matter was to tip the right balance between consumer interests and professional autonomy. In this connection, Mr Albert HO asked and Mr Wesley WONG confirmed that rules made by the Costs Committee were subject to the endorsement of the Chief Justice before gazettal as well as the approval of the LegCo in the form of negative vetting procedure. Mr HO therefore reminded members that the LegCo would have the final say on these rules, having regard to the views from both sides.

7. Members in general supported the idea of adding consumer representatives to the Costs Committee but they did not favour the Administration’s proposal of increasing its size by having an additional 4 to 6 members. Most members were of the view that 3 laypersons to represent consumer interests would be sufficient to provide different perspectives in the discussion. However, Miss Margaret NG argued that 3 lay person plus the ex-officio members in the Costs Committee would out-number the solicitor members. In this connection, Mr ALLCOCK reminded members that: (a) the Director of Lands was sitting on the Costs Committee in his personal capacity; and (b) the High Court Judge and the Registrar of the Supreme Court were independent of the Government and could be relied upon to consider the issues in an objective and fair manner. They should therefore be excluded when members were considering the balance between solicitor and non-solicitor members. After discussion, members present had two divided views, namely: (a) 50% of the total membership of the Costs Committee including ex-officio members should be solicitors; and (b) the total membership should be in a ratio of 4:3:3, i.e. 4 solicitors, 3 ex-officio members and 3 laypersons with consumer or business background. At the Chairman’s request, Mr ALLCOCK undertook to give serious consideration to a possible amendment along the lines of one of the aforementioned views.