EC(95-96)73

For discussion
on 17 January 1996

ITEM FOR ESTABLISHMENT SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 92 - LEGAL DEPARTMENT Subhead 243 Hire of Legal services and related professional fees

Members are invited to recommend to Finance Committee the retention of the following consultancy position for the period from 1 February 1996 to 30 June 1997 in the Prosecutions Division of the Legal Department -
1 Consultant
(at Deputy Principal Crown Counsel, (DL2) level)
($95,550 - $101,450)

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PROBLEM
PROPOSAL
JUSTIFICATION

The BMFL Case
Staffing Requirements

FINANCIAL IMPLICATIONS
BACKGROUND INFORMATION
CIVIL SERVICE BRANCH COMMENTS

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PROBLEM

The Legal Department lacks the capacity at the Deputy Principal Crown Counsel (DPCC) level to provide legal advice and conduct prosecution of the Bumiputra Malaysia Finance Ltd (BMFL) case when the existing consultancy position at DPCC level lapses on 31 January 1996.

PROPOSAL

2. The Attorney General (AG) proposes to retain the existing consultancy position for a period of 17 months from 1 February 1996 to 30 June 1997.

JUSTIFICATION

The BMFL Case

3. The BMFL case is one of the biggest fraud cases in Hong Kong's history. It involves voluminous documents and is exceptionally complex. The case has been going on since the first arrest in 1985. From then onward, consultants have been appointed to act as junior counsel to the UK leading counsel.

4. The current consultancy position lasts from 4 April 1995 to 31 January 1996. At the time the position was created, AG assessed, based on the information then available, that the proceedings against the main defendant would commence in June 1995 and continue until the end of 1995.

5. However, as the case further develops, it has become clear that the process is more lengthy and the case more complex than anticipated. For instance, the case is proceeding under the Complex Commercial Crimes Ordinance, which provides for many steps which have to be taken before the trial proper starts. AG's latest assessment is that the trial proper is unlikely to commence until about August 1996 and will last until April 1997. There is of course the possibility of an appeal thereafter.

Staffing Requirements

6. All the existing DPCCs in the Prosecutions Division are fully engaged. They have no spare capacity to absorb the work which now requires the full-time attention of the consultant. An organisation chart of the Prosecutions Division is at Enclosure 1.

7. The duty list of the consultant for the BMFL case is at Enclosure 2. AG considers it operationally essential to retain the consultancy position. Given the complexity of the case, the continuity and specialist experience required, and the critical stage the case has now reached, any disruption to the prosecution team at this juncture could seriously undermine the prosecution work and be costly in terms of court time as the new counsel thereby engaged will need time to familiarise himself with the case.

8. AG has considered the alternative of briefing the case out. However, this option would be very expensive. Even assuming a new counsel could be brought in at this juncture, he would have to be remunerated on the basis of a six-day week, as with the leading counsel. If a junior counsel from the local Bar were to be engaged at the expiry of the current consultancy, a proper basis for his fee calculation would be two-thirds of the leading counsel's fees which, at the moment, are approximately $600,000 per month. This would mean that the junior counsel would probably seek a fee of about $400,000 per month before agreeing to be retained. The total remuneration for the junior counsel would therefore be $6,800,000 assuming that his service is required for the same period as the proposed consultancy. It is obviously far more cost-effective to retain the consultant, for whom the total staff cost for the same period is only about $3,100,000, than to brief a junior counsel from the local Bar.

9. Since the normal practice is for consultants to take accumulated leave at the end of the contract period, AG therefore proposes that the consultancy position should last until 30 June 1997. The Administration will review the need for the further retention of the post in early 1997.

FINANCIAL IMPLICATIONS

10. The additional notional annual salary cost at mid-point of the proposal is -

	$	No. of Post
Retention of consultant post	1,182,600	1

We have included sufficient provision in the 1995-96 Estimates and the 1996-97 draft Estimates to meet the cost of this proposal. The proposal will not entail the creation of any non-directorate posts.

BACKGROUND INFORMATION

11. When the BMFL case first started, one consultant pitched at DL3 was appointed to deal with it. He left the Chambers in July 1988. In view of the voluminous documents involved and complexity of the case, two consultants were subsequently appointed at DPCC (DL2) level in June and July 1988 to continue to handle the case, both acted as junior counsel to the UK leading counsel. In November 1991, one of these two consultants left the Chambers but still remained as junior counsel working full-time for the case in his capacity as a briefed-out counsel. He left the case in February 1995. The other consultant, on the expiry of his consultancy, also left the Chambers in March 1995. In view of the urgency and necessity of having an experienced counsel to take up this onerous duty, the incumbent was appointed for the period from 4 April 1995 to 31 January 1996.

12. Following the decision of the Finance Committee on 8 July 1994, the endorsement of the Establishment Subcommittee and Finance Committee is needed for the creation of positions for directorate level consultancies for individuals lasting for more than one year.

CIVIL SERVICE BRANCH COMMENTS

13. The Civil Service Branch considers that the grading and ranking of the consultancy position are appropriate having regard to the complexity of the BMFL case and the duties and responsibilities of the consultant.

Legal Department
January 1996

(E4087/p.1-4/WIN 66)

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Enclosure 2 to EC(95-96)73

Responsible to the Director of Public Prosecutions through the Deputy Crown Prosecutor for -

1. advising on and conducting the prosecution of the Bumiputa Malaysia Finance Ltd (BMFL) case in the capacity as the junior counsel to the UK leading counsel, and undertaking any other duties arising from the case; and

2. advising the Director of Public Prosecutions on the BMFL case and, when required, undertaking such duties as may be assigned to him by the Director of Public Prosecutions.

(E4087/p.5-6/WIN 66)

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