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

2. Mr R ALLCOCK explained that: (a) non-statutory rules would have impact on clients which could only be dealt with through taxation; and (b) the proposed provision to give prevailing status to statutory rules could remove the solicitors’ obligation to follow non-statutory rules. However, most members present were of the view that a provision giving statutory rules a prevailing status expressly was not necessary and inappropriate on the grounds that: (a) non-statutory rules made by the Law Society of Hong Kong (the Society) did not have equal legal status to those made by the Costs Committee; (b) all these rules were subject to the review of the court according to the Solicitors (General) Costs Rules; (c) the Society as a professional body would not act irrationally by establishing rules that the Costs Committee had already made; and (d) the words "shall prevail" in the alternative proposal had an uncertain meaning. At Mrs Miriam LAU’s suggestion, the Chairman asked the Clerk to seek confirmation from the Society that it would not establish another scale of charges if the same had already been set by the Costs Committee. In this connection, a vote was taken. Most members present, apart from one dissenting vote, agreed that clause 16 should be deleted from the Bill.

(Post-meeting note : The Society had confirmed in its letter of 4 June 1997 (issued vide LegCo Paper No. CB(2) 2570/96-97) that it would not attempt to establish, implement or enforce an alternative probate scale if the Costs Committee had already set up a scale of probate fees.)

3. Miss Margaret NG informed members that the Society had proposed an amendment to section 56(1) of the Legal Practitioners Ordinance (the Ordinance) to the effect that the first clause of the section should read "Subject to any rules made under section 74 that are in force,". Mr ALLCOCK cautioned that such a proposal would mean a substantial amendment to the law relating to scale fees in the light that: (a) the existing section 56 was designed to give freedom of contract and would allow solicitors and clients to enter into agreement for non-contentious business whether or not there were rules made by the Costs Committee; (b) the proposed amendment by the Administration arguably would allow solicitor and client to agree on a fee which was different from the scale fees; but (c) the proposed amendment by the Society would prevent solicitors and clients from contracting out from the scale fees. Miss NG remarked that if the Administration considered that the scale fees were not binding, it would not have spent the time to introduce legislative change to abolish them. At the Chairman’s suggestion, Miss NG agreed to prepare a paper setting out the Committee stage amendment (CSA) to be proposed and its rationale for discussion at a future meeting. Members continued with the clause-by-clause examination of the Bill and the gist of the ensuing discussion is summarized in the following paragraphs.

5. As some members were of the view that the number of solicitors in the Costs Committee should be at least half of the total membership, Mr Bruce LIU proposed to consider having 6 solicitors, 3 ex-efficios and another 3 laypersons (including one consumer representative and two others with business background) which would maintain the existing balance between solicitor members and non-solicitor members. Miss Margaret NG and Mr Ronald ARCULLI said that the proposed composition was acceptable. Mr IP Kwok-him agreed that it was important to have a balance between solicitor and consumer interests. However, he had reservation on the proposed composition because it seemed to categorize the High Court Judge and the Registrar of the Supreme Court, who should be able to consider issues objectively and fairly, as representatives of the consumer interests. A vote was taken and members present agreed to support the composition division of 6:3:3 as proposed by Mr Bruce LIU. The Chairman therefore asked the Legal Adviser to prepare relevant CSAs accordingly. In this regard, Mr Andrew CHENG informed members that it was the stance of the Democratic Party that the Bill should give a nomination right to the chairman of the Consumer Council for nominating a consumer representative to the Costs Committee. Mr ALLCOCK responded that the Administration expected that the chairman of the Consumer Council would be consulted by the Governor in the nomination process. He further informed members that the Consumer Council had been invited to nominate a representative to the Costs Committee years ago but the invitation was declined because the Consumer Council opposed scale fees in principle. In this regard, Miss Margaret NG and Mr IP Kwok-him remarked that flexibility should be maintained and it was not necessary to stipulate rigidly the nomination right in the legislation. The Chairman therefore suggested Mr CHENG consult the Consumer Council and move a CSA if considered appropriate.

9. The Chairman reminded the meeting that although some members supported the proposal as separate representation would be in the consumer interest, the majority of members present, when the clause 18 was discussed, opposed the proposal on the grounds that it was against freedom of contract and was of no real benefit to the consumers. Miss Margaret NG therefore suggested and members agreed that the Legal Adviser would prepare CSAs to be moved by the Bills Committee to delete clause 18 from the Bill and make any consequential amendments accordingly. In this regard, Mr Andrew CHENG pointed out that the Democratic Party as well as the Hong Kong Bar Association supported the principle of separate representation. In light of negative members’ views on clause 18, Mr CHENG asked whether the Administration would consider proposing a mandatory requirement for separate representation in the Bill. Mr ALLCOCK responded that the issue of separate representation was raised in the Consultation Paper on Legal Services. However, the Administration did not propose mandatory separate representation as a result of the consultation exercise on the grounds that although separate representation would be encouraged, consumers should have a free choice providing there was no severe financial disincentive. Legal Adviser also cautioned that in his view, a CSA stipulating mandatory requirement of separate representation, which was covered by the Solicitors Practice Rules, was not within the ambit of the Bill. He further explained that the clause was proposed on the basis of fair competition for consumer interests and it did not deal with separate representation in specific circumstances as required in the subsidiary legislation of the Ordinance.

10. Mr ALLCOCK reminded members that clause 20 and Schedule 2 would need to be deleted if members decided to retain scale fees. In this connection, the Chairman asked and Legal Adviser agreed to prepare relevant CSAs with any necessary consequential amendments to abolish scale fees for members’ reference. Mr ALLCOCK also undertook to advise in this respect.