EC(97-98)81
For discussion
on 12 February 1998


ITEM FOR ESTABLISHMENT SUBCOMMITTEE OF
FINANCE COMMITTEE

HEAD 92 - DEPARTMENT OF JUSTICE
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 July 1998 to
17 August 1999 in the Prosecutions Division of the Department of Justice -

1 Consultant
(at Deputy Principal Government Counsel (DL2) level)
($110,000 - $116,800)


PROBLEM

The Department of Justice requires a consultant at the Deputy Principal Government Counsel (DPGC) level to continue to provide legal advice and conduct prosecution of the World Trade Centre (WTC) case when the existing consultancy position at DPGC level lapses on 1 July 1998.

PROPOSAL

2. The Secretary for Justice (SJ) proposes to retain the existing consultancy position for a period of about 13 months from 1 July 1998 to 17 August 1999 or until such time the WTC case is concluded, whichever is the earlier.

JUSTIFICATION

The WTC Case

3. The WTC case is one of the most complicated and biggest commercial crime cases which has ever been tried in Hong Kong. Five accused are charged with conspiracy to defraud the Securities and Futures Commission in the performance of its public duties with respect to the takeover of Bond Corporation International Limited by Tomson Pacific Limited in 1990. It involves voluminous documents and is exceptionally complex. The case has been going on since the first appearance of the accused in August 1996 and there are approximately 100 witness statements, some of exceptional length. The witness statements occupy four large volumes. There are no less than 32 volumes of documentary exhibits and a large number of explanatory documents. The WTC case also involves complex commercial concepts and practices. There are five defendants and the cases against each are diverse. The WTC case not only involves the proof of a conspiracy to defraud involving all five defendants, but also involves proof of offences under the Prevention of Bribery Ordinance against four of those defendants.

4. As the case develops, it has become clear that the legal process is more lengthy and the case more complex than anticipated. The case is proceeding under the Complex Commercial Crimes Ordinance, which requires many steps to be taken before the trial proper starts. For instance, the preparation of the Summary of Evidence, the Prosecution Case Statement and the Propositions of Law, which took about nine weeks to complete. These documents are all lengthy and complex. The Notice to Admit Facts, also a complicated document, took about the same period of time to prepare. There are also other pre-trial procedures to be undertaken between now and the commencement of the trial such as argument on admissibility of evidence, service of Summary of Evidence, Prosecution Case Statement and Propositions of Law, disclosure of unused materials and applications by three of the accused for legal aid.

5. The trial has now been scheduled for 14 April 1998. SJ's assessment is that the trial proper will last for about six months until late October 1998. However, it will probably last for nine months (i.e. up to January 1999) if some of the accused appear in person. Much of the prosecution case relies upon the admissibility of the transcripts of evidence taken by an Inspector appointed under the Companies Ordinance. The admissibility of these transcripts is now a matter of hot dispute. The argument as to admissibility involves difficult questions of law, in particular the operation of the Bill of Rights. Apart from problems associated with admissibility, there are other difficulties with the transcripts such as their provenance. In the circumstances, the case may last up to June 1999. The case will last even longer if the accused are convicted and lodge an appeal or if there is a review of sentence by SJ.

Staffing Requirements

6. We have appointed a consultant at the DPGC level to handle the case initially for a period of 12 months from 1 July 1997 to 30 June 1998. In view of the complexity and workload of the case, the specialist experience required for handling the case and hence the need for continuity, SJ considers it necessary to retain the consultant to handle this case. Given the critical stage the case has now reached, any disruption to the prosecution team at this juncture could seriously undermine the prosecution work. The duty list of the consultant for the WTC case is at Enclosure 1.

7. Moreover, all the existing DPGC in the Prosecutions Division are fully engaged. They have no spare capacity to absorb the work arising from the WTC case which requires the full-time attention of a counsel at the DPGC level. An organisation chart of the Prosecutions Division is at Enclosure 2. Even if an in-house DPGC could be assigned to the work, he would need time to familiarise himself with the case. This would affect the effectiveness of the prosecution work and would be costly in terms of court time.

8. SJ has considered the alternative of briefing out the case. However, this option would be very expensive. Even assuming a junior counsel from the local Bar could be brought in at this juncture, he/she would have to be remunerated on the basis of a five-day week, at around $457,600 per month. In addition, the junior counsel would probably seek the payment of $325,000 as the brief fee. The total remuneration for the junior counsel would therefore be $5,816,200 assuming that his/her service is required for a period of 12 months. It is obviously far more cost-effective to retain the consultant, for whom the total staff cost for the same period is $2,470,644, than to brief a junior counsel from the local Bar.

9. In view of the circumstances described in paragraph 5 above, SJ proposes to extend the consultancy position for a further period of 12 months plus accumulated leave, i.e. from 1 July 1998 to 17 August 1999. If Members approve the extension, the Consultant will be available until 30 June 1999. If for any reason the WTC case is concluded earlier than June 1999, we shall terminate the Consultant's contract which will include a provision enabling either party to terminate the contract at three months' notice in writing or by paying one month's fee in lieu of notice. We will closely monitor and review the exact duration required of this consultancy position as the case proceeds.

FINANCIAL IMPLICATIONS

10. The additional notional annual salary cost at MID-POINT of the proposal is -

$No. of Post
One consultant post1,360,8001

11. The full annual average staff cost of the proposal, including salaries and staff on-costs, is $2,470,644. This proposal will not necessitate the creation of any non-directorate posts.

12. We have included sufficient provision in the 1998-99 draft Estimates to meet the cost of this proposal.

BACKGROUND INFORMATION

13. Prior to the appointment of the consultant, an experienced commercial crime counsel in the Prosecutions Division at the DPGC level had handled the WTC case. The DPGC handling the case left the Government service on completion of his contract on 30 June 1997. Having considered the complexity of the case and the specialist experience required for handling the case, we appointed a consultant at DPGC level who was specialised in white collar crime to undertake the conduct of the prosecution initially for a period of 12 months from 1 July 1997 to 30 June 1998.

CIVIL SERVICE BUREAU COMMENTS

14. Having regard to the complexity of the case and the continued need to provide staffing support at the present level, the Civil Service Bureau supports the creation of the proposed Consultancy position in the Prosecutions Division. The proposed grading and ranking are considered appropriate.


Department of Justice
January 1998

(LU0128/WIN6)

Enclosure 1 to EC(97-98)81

Main duties and responsibilities of Consultant at
Deputy Principal Government Counsel (DL2) level
Prosecutions Division

Responsible to the Director of Public Prosecutions through the Deputy Director of Public Prosecutions -

  1. advising on and conducting the prosecution of the World Trade Centre (WTC) 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 WTC case and, when required, undertaking such duties as may be assigned to him by the Director of Public Prosecutions.