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LEGISLATIVE COUNCIL — 25 June 1997
617
OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 25 June 1997
The Council met at Nine o'clock
MEMBERS PRESENT:
THE PRESIDENT
THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.
THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.
THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P.
THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.
DR THE HONOURABLE DAVID LI KWOK-PO, O.B.E., LL.D. (CANTAB),
J.P.
THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.
THE HONOURABLE SZETO WAH
THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.
THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.
THE HONOURABLE RONALD JOSEPH ARCULLI, O.B.E., J.P.
THE HONOURABLE MRS MIRIAM LAU KIN-YEE, O.B.E., J.P.
DR THE HONOURABLE EDWARD LEONG CHE-HUNG, O.B.E., J.P.
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THE HONOURABLE ALBERT CHAN WAI-YIP
THE HONOURABLE CHEUNG MAN-KWONG
THE HONOURABLE CHIM PUI-CHUNG
THE HONOURABLE FREDERICK FUNG KIN-KEE
THE HONOURABLE MICHAEL HO MUN-KA
DR THE HONOURABLE HUANG CHEN-YA, M.B.E.
THE HONOURABLE EMILY LAU WAI-HING, J.P.
THE HONOURABLE LEE WING-TAT
THE HONOURABLE ERIC LI KA-CHEUNG, O.B.E., J.P.
THE HONOURABLE FRED LI WAH-MING
THE HONOURABLE HENRY TANG YING-YEN, J.P.
THE HONOURABLE JAMES TO KUN-SUN
DR THE HONOURABLE PHILIP WONG YU-HONG
DR THE HONOURABLE YEUNG SUM
THE HONOURABLE HOWARD YOUNG, J.P.
THE HONOURABLE ZACHARY WONG WAI-YIN
THE HONOURABLE CHRISTINE LOH KUNG-WAI
THE HONOURABLE JAMES TIEN PEI-CHUN, O.B.E., J.P.
THE HONOURABLE LEE CHEUK-YAN
LEGISLATIVE COUNCIL — 25 June 1997
THE HONOURABLE CHAN KAM-LAM
THE HONOURABLE CHAN WING-CHAN
THE HONOURABLE CHAN YUEN-HAN
THE HONOURABLE ANDREW CHENG KAR-FOO
THE HONOURABLE PAUL CHENG MING-FUN, J.P.
THE HONOURABLE CHENG YIU-TONG
DR THE HONOURABLE ANTHONY CHEUNG BING-LEUNG
THE HONOURABLE CHEUNG HON-CHUNG
THE HONOURABLE CHOY KAN-PUI, J.P.
THE HONOURABLE DAVID CHU YU-LIN
THE HONOURABLE ALBERT HO CHUN-YAN
THE HONOURABLE IP KWOK-HIM
THE HONOURABLE LAU CHIN-SHEK, J.P.
THE HONOURABLE AMBROSE LAU HON-CHUEN, J.P.
DR THE HONOURABLE LAW CHEUNG-KWOK
THE HONOURABLE LAW CHI-KWONG
THE HONOURABLE LEE KAI-MING
THE HONOURABLE LEUNG YIU-CHUNG
THE HONOURABLE BRUCE LIU SING-LEE
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THE HONOURABLE LO SUK-CHING
THE HONOURABLE MOK YING-FAN
THE HONOURABLE MARGARET NG
THE HONOURABLE NGAN KAM-CHUEN
THE HONOURABLE SIN CHUNG-KAI
THE HONOURABLE TSANG KIN-SHING
DR THE HONOURABLE JOHN TSE WING-LING
THE HONOURABLE MRS ELIZABETH WONG CHIEN CHI-LIEN, C.B.E.,
I.S.O., J.P.
THE HONOURABLE LAWRENCE YUM SIN-LING
PUBLIC OFFICERS ATTENDING:
THE HONOURABLE DONALD TSANG YAM-KUEN, K.B.E., O.B.E., J.P.
FINANCIAL SECRETARY
THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P.
ATTORNEY GENERAL
MR RAFAEL HUI SI-YAN, J.P.
SECRETARY FOR FINANCIAL SERVICES
MR BOWEN LEUNG PO-WING, C.B.E., J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS
MR LEO KWAN WING-WAH, J.P.
SECRETARY FOR ECONOMIC SERVICES
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CLERKS IN ATTENDANCE:
MR RICKY FUNG CHOI-CHEUNG, J.P., SECRETARY GENERAL
MR LAW KAM-SANG, J.P., DEPUTY SECRETARY GENERAL
MRS JUSTINA LAM CHENG BO-LING, ASSISTANT SECRETARY
GENERAL
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PRESIDENT (in Cantonese): Council now resumes.
Resumption of Second Reading Debate on Bill
LEGAL
SERVICES
AMENDMENTS) BILL 1996
LEGISLATION
(MISCELLANEOUS
Resumption of debate on Second Reading which was moved on 26 June 1996
PRESIDENT (in Cantonese): We will now resume the Second Reading debate
on the Legal Services Legislation (Miscellaneous Amendments) Bill 1996. Mr
Fred LI, as you have to spend more time on presenting the report of the Bills
Committee, I will give you an extra three minutes.
MR FRED LI (in Cantonese): Mr President, as it will take me almost 15 minutes
to speak on behalf of the Bills Committee, I will speak again in my capacity as a
member of the Democratic Party. Thank you, Mr President.
In March 1995, the Consultation Paper on Legal Services was published to
invite views on 40 provisional recommendations. In February 1996, a Report
on the Consultation Exercise and Proposals for the Way Forward (the Report)
was published. The Bill is introduced in the form of a miscellaneous
amendment bill to amend the Legal Practitioners Ordinance (Cap. 159) and the
Conveyancing and Property Ordinance (Cap. 219) in order to implement some of
the recommendations contained in the Report and some of the proposals, which
the Administration has accepted, made during the consultation process.
A Bills Committee, of which I am the Chairman, has been set up by this
Council to study the Bill. The Bills Committee has held 20 meetings, 13 of
which were with the Administration. It has received submissions from 28
organizations and individuals, including the Law Society of Hong Kong, the
Hong Kong Bar Association, the Consumer Council, solicitor groups and other
interested organizations. It has met deputations from various organizations to
hear their representations on the various provisions in the Bill.
LEGISLATIVE COUNCIL — 25 June 1997
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I will state briefly the major areas of concern of the Bills Committee.
First, with regard to clause 2 on solicitor corporations, members note the view of
the Consumer Council that if solicitor corporations are permitted, the rules to be
made by the Law Society of Hong Kong should adequately protect consumers.
The Administration has pointed out that it is clear from models in other
jurisdictions that safeguards can be imposed particularly in relation to the
insurance level. Members also note that the rules to be made by the Law
Society will be tabled in the Legislative Council in the form of subsidiary
legislation and the Council can reject or amend the rules if they do not offer
adequate consumer protection.
One Member holds the view that all professionals, including solicitors,
doctors and accountants, should not be allowed to incorporate their practice.
Except for this Member, other members of the Bills Committee support the
proposal of setting up solicitor corporations, provided that adequate safeguards
for consumer protection are included in the rules to be drawn up. As suggested
by the Law Society, the Administration will move an amendment to the proposed
new section 7C(2) to make clear that the Council of the Law Society may
prescribe a fee for application to register a solicitor corporation.
In discussing clause 5 on foreign lawyer corporations, although a few
members do not support the proposal, the majority of members agree that if local
solicitors are allowed to incorporate their practice, foreign lawyers should also be
able to do so. However, in view of the difference in the disciplinary codes and
policies of the 11 jurisdictions where the existing foreign lawyers come from, the
relevant rules to be drawn up by the Law Society need to be carefully scrutinized
to ensure that they provide adequate safeguards.
Members who are in support of the two proposals have however suggested
to adopt a two-stage approach so that solicitor corporations and foreign lawyer
corporations can be implemented at different times subject to the relevant rules
being in place. The Administration will add a new clause 19(2) to ensure that
the provisions in respect of solicitor corporations can be brought into operation
separately from those in respect of foreign lawyer corporations.
On the other hand, Members do not support clause 14, which allows
solicitors and notaries public to enter into multi-disciplinary practices.
Members are particularly concerned about the possible impact on the codes of
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professional conduct and the confidentiality in the lawyer-client relationship.
We are also worried that the proposal may undermine the independence of the
legal profession, which is very important to the rule of law in Hong Kong. In
the light of members' negative views on the proposal, the Administration will
delete Part V of the Bill to remove the provisions relating to multi-disciplinary
practices.
Clause 7 provides that in circumstances prescribed by the Council of the
Law Society, solicitors must pay interest on money held in their clients' accounts.
The Administration considers that the Law Society's rule on the subject, in the
form of Practice Direction, should be subsidiary legislation subject to the
approval of the Legislative Council.
Nonetheless, Members do not support the proposal to legislate in this
respect. They think that the matter can continue to be dealt with by the Practice
Direction of the Law Society of Hong Kong. As the proposal is not supported,
the Administration will delete Part III of the Bill relating to interests on clients'
accounts of solicitors. Furthermore, as suggested by some Members, the
Administration will request the Consumer Council to help educate members of
the public about their right to interest and to consider whether the Practice
Direction of the Law Society is fair.
Clause 8 provides for a new status of Senior Counsel to replace the status
of Queen's Counsel and proposes minor amendments in respect of the Barristers
Disciplinary Tribunal. With regard to the new status of Senior Counsel, the
Bills Committee supports the proposals made by the Bar Association which
include: "standing at the Bar" should be a statutory criterion for the appointment
of practising Senior Counsel; a person must have practised as a barrister or
advocate for at least ten years to be eligible for appointment as a practising
Senior Counsel; and the Chinese term for Senior Counsel should be " 資 深 大 律 師
" and not " 特 委 大 律 師 " as proposed by the Administration.
The
Administration accepts the proposals and also agrees to a proposal by the Bar
Association that the statutory provision should require the Chief Justice to
consult the Chairman of the Bar Association and the President of the Law
Society to reflect the current practice.
As to the Bar Association's proposal that there should be distinct
provisions in respect of those who may be appointed as a Senior Counsel on an
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honorary basis, members agree in principle that there should not be rigid
statutory criteria for the two types of Senior Counsel. Members have suggested
that the Administration could consider stipulating in the legislation that the Chief
Justice is empowered to appoint non-practising Senior Counsel with lesser rights,
instead of having two systems of appointment.
As regards the Bar Association's opinion that appointment as Senior
Counsel should be restricted to barristers, the Administration has pointed out that
in the United Kingdom, academic lawyers, employed lawyers and civil and
public servants are eligible for appointment and they need not be barristers.
The Administration therefore proposes that a person should be eligible for
appointment as a Senior Counsel on an honorary basis if he or she is a legal
academic, a barrister or a solicitor who, in the Chief Justice's opinion has given
distinguished service to the law. The proposed amendment will make it clear
that such an appointment will not accord precedence before the courts or confer
any rights of audience before the courts. A majority of members support the
Administration's proposal.
Clause 16 invalidates any non-statutory scale of charges made by the Law
Society, on the basis that such charges are inconsistent with the statutory
functions of the Costs Committee. Members note that Rule 5 of the Solicitors
(General) Costs Rule provides that in the case of any non-contentious business to
which the schedule relating to conveyancing scale does not apply, costs should
be fair and reasonable. The Administration has pointed out that the probate
scale of the Law Society is fixed exclusively by reference to the value of property
without regard to all the circumstances of the case and therefore cannot be
considered as fair and reasonable.
As one of the purposes of introducing the proposed section 56A is that the
Law Society would not be allowed to create scale on any work without going
through the Costs Committee, the Bills Committee has asked the Law Society
whether and when it would make recommendations to the Costs Committee in
respect of its scale for probate work. The Law Society has advised that it is
prepared to refer the existing probate scale to the Costs Committee and the matter
has been referred to the Probate Committee of the Society for its action. It has
also confirmed that in the event that the Costs Committee sets a scale of probate
fees, the Law Society would not attempt to establish, implement or enforce an
alternative probate scale.
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In the light of additional information provided by the Law Society,
Members agree to delete clause 16. The Administration has also advised that it
no longer objects to the proposed deletion of the clause.
Clause 17 is on the composition of the Costs Committee. The Costs
Committee is a statutory body having the power to make rules relating to
solicitors' non-contentious costs. It has set the scales for conveyancing and a
few other sets of costs. At present, half of the members are solicitors and there
are no members who represent consumer interests or who have knowledge of
commercial activities. The Bill proposes that there should be an additional four
to six members who would make the Committee more knowledgeable and
representative.
With regard to increasing membership of the Costs Committee as proposed
in clause 17, Members of the Bills Committee hold two different kinds of views.
Although Members generally support the addition of lay persons, they have
divided views as to the number of solicitors who should be on the Committee.
While some Members consider that half of the Costs Committee should be
solicitors, others are in favour of four solicitors, three ex-officios and three lay
persons. Since it is the majority view of the Bills Committee that half of the
members of the Costs Committee should be solicitors, I will, on behalf of the
Bills Committee, move an amendment to change the composition of the Costs
Committee to 6:3:3, that is, six solicitors, three ex-officios and three lay persons.
The Administration accepts that solicitors should not be outnumbered by
those who are users of legal services or government officials. However, it
considers that there is no reason to regard the two members, one of whom is a
High Court Judge and the other the Registrar of the Supreme Court, as falling
into the user or government category. Since they are members of the
independent Judiciary, they can be relied upon to consider the issues objectively
and fairly. The Administration therefore supports the 4:3:3 proposal, that is,
four solicitors, three ex-officios and three lay persons, which creates a balance
between four solicitors and four people who might take a pro-consumer approach
and will move an amendment accordingly.
In this respect, members of the Democratic Party in the Bills Committee
propose a middle course and will move an amendment with a 5:3:3 membership,
that is, five solicitors, three ex-officio members and three lay persons.
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Clause 18 proposes to invalidate contractual provisions in respect of the
sale of units in new developments that require the purchaser to pay the vendor's
legal costs. The Administration considers that these provisions are unfair to
buyers since they discourage separate representation by making it more
expensive than joint representations, and they discourage developers from
negotiating fees that are cost-effective.
Some Members support the proposal as they agree that separate
representation is in consumers' interest and they note that there is strong support
for the proposal from the Consumer Council, and also support from the Hong
Kong Bar Association and a number of other organizations. However, a
majority of Members oppose the proposal on the grounds that it is against the
freedom of contract and that it is of no real benefit to the consumer. Based on
the majority view, the Bills Committee will move an amendment to delete clause
18 from the Bill.
Members of the Democratic Party consider that even though the vendor
and purchaser may have freedom to contract, they cannot ignore the much
weaker position of the purchaser who may be forced to accept unreasonable
contract provisions. The Democratic Party will therefore move an amendment
to clause 18 to delete the proposed subsection (3) and to substitute it by a new
subsection to the effect that where the solicitor or solicitor corporation acting on
behalf of the purchaser is different from the solicitor or solicitor corporation
acting on behalf of the vendor, the purchaser does not have to pay for the
vendor's legal costs.
Clause 20 and schedule 2 repeal the scale fees for conveyancing. While
some Members support the proposal because they consider that scale fees linked
to property price is not acceptable and that competition will benefit consumers,
others are against the proposal as they believe that it will cause confusion to
individual consumers and will affect the quality of service. A third group of
Members wish to see the outcome of the Costs Committee's consideration of the
Law Society's proposals before deciding on the matter. They are prepared to
accept retention of scale fees if the new scale is set at a reasonably low level. In
this connection, Members note that the revised scale, if agreed by the Costs
Committee and approved by the Chief Justice, will be introduced into the
Legislative Council in the form of subsidiary legislation. The Bills Committee
has written to the Chairman of the Costs Committee with regard to the matter but
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the information provided is that the proposals have to be approved by the Chief
Justice first before the relevant information can be provided.
Based on the majority view of its members, the Bills Committee will move
amendments to delete clause 20 and schedule 2, as well as consequential
amendments, to retain scale fees.
A Member has pointed out that section 56(1) of the Legal Practitioners
Ordinance raises doubts as to whether the rules on fees made by the Costs
Committee are mandatory. Therefore she considers that if Members oppose to
the proposal in the Bill to abolish mandatory scale fees, it is necessary to amend
the section to provide that scale fees made by the Costs Committee should
prevail over agreement entered into between a solicitor and his client. As her
proposed amendment is supported by the majority of members, it is agreed that
the amendment will be moved by the Bills Committee. The Administration has
pointed out that as section 56 currently provides that a solicitor and client can
agree on remuneration regardless of any rules made under section 74, the present
system allows a measure of flexibility while the proposed amendment would
limit the freedom to agree on remuneration by reference to those rules. The
Administration therefore considers that the proposed amendment would have
profound implications for conveyancing fees and is opposed to it.
In my speech above, I have listed out the amendments as proposed by the
Bills Committee. Now, I would like to spend two to three minutes to speak a
few words in my capacity as the spokesman for the Democratic Party on
consumer interests. Although we will examine the provisions again during the
Committee stage, I would like to highlight some important principles first.
The Law Society has lobbied a lot of the Legislative Councillors and I
believe the move has been the most successful ever. The Society has contacted
each Councillor many times and has done a very good job in its lobbying. The
Government's performance in this respect is however poor and this explains why
many Councillors are in favour of the decision of the Law Society. Therefore, I
cannot but hereby criticize the Government for what it has done. As the
spokesman on consumer interests, I regret to learn that many Councillors are of
the feeling that removing scale fees will bring about vicious competition which
will in turn lead to a decline in the quality of service. If the quality of service
really declines, it is the responsibility of the Law Society to monitor. The
Society can also discipline its members internally or even strike them off the
register, just as what the Hong Kong Medical Association is doing. How can
LEGISLATIVE COUNCIL — 25 June 1997
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we attribute this to scale fees? How can we say that once scale fees are
removed, solicitors will undercut and some unscrupulous solicitors will even try
to "snatch" business? Such an idea is just undue.
The service provided by solicitors for property transactions is an exclusive
commercial service. We hope that they will respect this exclusive right and
allow fair competition, so as to ensure that consumer interests are protected.
However, it is grossly unfair that solicitors should have this exclusive privilege
and their income should be guaranteed by scale fees. Before becoming a
solicitor, one has to undergo professional training and the same applies to
doctors. However, do doctors have scale fees? The answer is "no".
Architects also have to undergo professional training. Do they have scale fees?
The answer is again "no". Engineers have to undergo professional training.
Do they have scale fees? The answer is also "no". Why then do solicitors,
who provide professional service for property transactions like other
professionals, have to establish scale fees to guarantee that they will be able to
have a fixed income? Under such circumstances, it is virtually impossible for
solicitors to compete on fees and this is extremely unfavourable to consumers.
We have conducted a territory-wide opinion poll on this.
The
Honourable Andrew CHENG and the Honourable Albert HO of the Democratic
Party will put forth the views of the Party on the Bill respectively.
With these remarks, I propose the Bill.
MISS MARGARET NG: Mr President, in his consultation paper on legal
services, the Attorney General sought to bring fundamental and sweeping
changes to the legal profession less than two years before the change of
sovereignty. They represented the most blatant assault on professional
autonomy under the banner of "consumer interest". Yet, the most illusive fact
to establish is precisely whether the consumer will indeed benefit, and if so in
what way. Will they be in fact paying less for legal services? Will they get
better services with stronger guarantees? Will they have a wider choice of legal
expertise in reality? Throughout the period of public debate and discussions in
the panels and committees of this Council, never has any representative of the
Administration said an unequivocal "yes" to any of these questions with any
respectable evidence to back it up.
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The only certainty is that it will bring great uncertainty to the legal
profession and to the public, on the eve of Hong Kong's change of sovereignty.
The Bill before us, introduced into this Council on 26 June 1996, though
less wide than the consultation paper, still proposes numerous and fundamental
changes, particularly for the practice of solicitors. If all or most of the proposed
changes were implemented, there will be devastating effects on the solicitors'
practice, while real benefits to the consumer remain highly doubtful.
From the start, Mr President, whatever someone from the legal profession
says ─ unless it was in agreement with the Administration or attacks the legal
profession ─ was dismissed by officials as interested and therefore untrue. I,
as the representative of the profession in this Council, was publicly cast in this
light.
Mr President, I accept lawyers are an interested party. I accept what we
say is not to be taken at face value without checking against other sources of
evidence. But it would be unrealistic and naive to regard government officials
as totally disinterested, though not directly economically. It would be wrong to
treat anyone who speaks in the name of the consumer as the bearer of a sacred
message. Clearly, interests must be balanced: fairness to the lawyers' against
the best deal for the consumer, the lowest price against the greatest protection,
freedom of negotiation against legislative intervention. The overall public
interest is best served not by favouring any exclusively, but by achieving the
right balance.
Mr President, conscious of the need for balance, I have taken a personal
interest to persuade as many non-lawyer members to join the Bills Committee as
I could. This was easy since the Bill is of interest to many members anyway.
As a result, out of the 18 members of the Bills Committee, 10 are non-lawyers.
Three of the eight lawyers are members of the Democratic Party. All major
parties in this Council are represented. In addition, three are independent
members. There can hardly be a more fairly represented forum. The
Chairman, the Honourable Fred LI, is a non-lawyer Democratic Party member.
The Bills Committee took time to hear views, discuss among themselves
and deliberate. Over a period of eight months, 20 meetings were held. Many
representations were made by lawyers, but likewise, many were made by
LEGISLATIVE COUNCIL — 25 June 1997
631
representatives of the Administration, the Consumer Council, and others ─
including solicitors supporting the Administration's proposals. The Law
Society put before the Bills Committee submissions and materials from other
parts of the world. The Administration wrote just as many, if not more
submissions in response. No one can say there was no balance in the Bills
Committee's consultation.
At the end of this fair and democratic process, the Bills Committee voted
on each of the main proposals in the Bill separately. Mr President, it is only
right that the outcome of such a meticulous process be respected and adopted by
this Council.
Partly as a result of the Bills Committee's resolutions and partly for other
reasons, the Administration has withdrawn several of its proposals, and will be
moving amendments later today to delete the relevant clauses.
The outstanding main proposals are the following:
1.
Abolition of scale fees in conveyancing transactions;
2.
The composition of the Costs Committee;
3.
The invalidation of contractual terms for the purchaser to pay the
legal costs of the vendor.
On every one of these issues, the decision of the Bills Committee is
opposed to that of the Administration. Consequently, Committee stage
amendments will be moved by Mr Fred LI later today on behalf of the Bills
Committee. Mr President, I strongly urge Honourable Members to support
these amendments to clauses 16, 17, 18, 20 and schedules 1, 2 and 3 of the Bill.
Not only because otherwise the process of careful scrutiny and discussion in a
Bills Committee will count for nothing, but also because, in my view, which I
will elaborate on at the Committee stage, every one of them stands up to the test
of a fair balance of interest.
Mr President, I need mention only one other matter at this point and that
concerns clause 8 of the Bill on Senior Counsel. Unlike the more controversial
issues which were more high-profile, this issue was not fully discussed in the
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LEGISLATIVE COUNCIL — 25 June 1997
Bills Committee. New issues not contemplated in the Bill or even mentioned in
the consultation document or canvassed anywhere were raised in an amendment
of the Administration very late in the day. Indeed, it was not finalized even at
the last meeting of the Bills Committee on 5 June 1997. I was given to
understand only days afterwards that the Chairman of the Bar had little
opportunity of being consulted. The Bar actually had very strong views and
strong grounds for objection. Since by then it was not feasible for the Bills
Committee to be re-convened to discuss the matter, I am proposing an
amendment under my name later today. I have explained the matter in a letter
circulated to Members, and will do so again in this Council later. I asked
Members for their support.
Mr President, no profession is perfect. No profession can expect to
remain vibrant without periodic review and self-renewal in order to meet new
values and new circumstances. The legal profession is no exemption. But any
change must be well-thought out and carried out in an orderly manner. When
change is brutally forced upon a reputable profession with all the might the
executive authorities of the government can muster, including a persistent
campaign to discredit that profession, shock and bewilderment are only
understandable. It is not the best or the most responsible way to effect change.
Not at these nerve-wrecking times or at any time. In opposing some of the
Administration's proposals in this Bill, the legal profession is not opposing
change, but introducing far-reaching changes without first ensuring that it is safe
and justified to do so.
Mr President, I support the Second Reading of the Bill subject to the
amendments to be moved at the Committee stage by Mr Fred LI and myself.
Thank you.
MR ERIC LI (in Cantonese): Mr President, the Government did consult the
public on the provision of legal services in 1995. I believe the most
controversial issue is the system of setting scale fees in respect of the sale and
purchase of flats by the legal profession.
After detailed discussion, the Hong Kong Society of Accountants has
indicated to the Government that it inclines to support the abolition of scale fees
in principle. However, the questions concerning how to implement this policy,
what mechanism should be put in place to replace scale fees, what measures
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633
should be taken to properly arrange for the legal profession to switch to the new
system, in particular as regards how we can maintain a high standard of
professional service in order to safeguard the interests of consumers, are not
included in the scope of consultation. The accounting sector naturally assumed
at that time that the Government and this Council would adhere to traditional
policy administration that had been consistently adopted and, with a fair and
understanding attitude, discuss with the profoundly affected legal profession the
relevant issues and the ways to deal with them.
It is extremely regrettable that such policy changes which in our opinions
are reasonable in principle have greatly surprised and disturbed the accounting
sector. To start with, the Government has gone against its normal practice by
stubbornly formulating public policies with the scale of lawyers' charges as its
standard, while neglecting whether the level of professionalism might drop
because of the need to face stringent competition all of a sudden and the lack of a
protection mechanism, thereby victimizing the consumers. Perhaps Mr Fred LI
did not understand professional services very well and he thus thought that these
problems could be easily solved. I hope Mr LI can explain, if he has the
chance, in the absence of this protection mechanism, by what means we can
choose a good lawyer apart from looking at his scale of charges. I cannot say
we will not be afraid of people committing crime as long as we have the police.
The standard of professional service is not that simple. We must create an
environment to enable lawyers to put their minds at ease to provide proper
service.
In fact, the Government should understand perfectly that cheap service
does not necessarily meet the public interest. Undoubtedly, the legal profession
has its vested interest but this does not mean that lawyers have no right to speak.
I hope the Government will not forget that the organizations which are at present
operating the greatest number of monopolized services are the Government itself
and the public bodies it controls. I just cannot remember the number of
occasions in which the Financial Secretary, the Secretaries for the Treasury,
Economic Services and Transport keep on lobbying Members to support the
Government's fees increases every year. They say that levying low charges is
not necessarily good. Instead, the Government should maintain reasonable
services. If the Government says one thing to us today and says something
different to us tomorrow, such as quoting the need to safeguard consumer
interests to deal with the lawyers, but when it comes to safeguard the charges
levied by the Government itself or to safeguard the Government's interest, it will
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put forth another set of theory, we just do not know how the Government will
explain to us or how it will justify itself if it is to propose fees increases next
time.
The Government is now practising a system of representative government.
Those organizations and people who are most seriously affected by the
legislation will absolutely have reasons and responsibilities as well as the need to
explain to the public their situation and position. If the Government really, as
Miss Margaret NG said, attempted to spread the opinions on public affairs
publicly or privately in describing the self-defending action taken by the legal
professional as immoral behaviour, that will be totally unacceptable. In my
opinion, the Government is obliged to clarify in public why such a point of view
should exist. I also consider that it is imperative for the Government to do
justice to the legal profession.
I am glad that in dealing with this incident, Members of this Council have
refrained from adopting the Government's attitude. Instead, they have given the
Law Society due respect and allowed it ample opportunities to explain its
position to this Council and the public. This can be seen from the fact that the
Bills Committee has held numerous meetings to let the Society fully express its
views. This has also enabled the accounting sector and I to understand the
matter better.
In fact, we do not know and understand many things if they are not clearly
explained to us. We only come to understand now what it is meant by "a
broad-brush" approach of amending the legislation. The accounting sector is of
the view that, with such a sudden change, the legal professional will be dealt with
a serious blow within a short period. The jeopardies will include undermining
the job opportunities of young lawyers, stripping consumers of reliable criteria in
the choice of lawyers and making it difficult for legal services to maintain the
highest professional standard.
The accounting sector hopes that the
Government will not forcibly abolish scale fees in a hasty manner. Instead, it
should allow the legal profession a buffer period to enable it to progressively
deal with the dramatic structural changes brought about by the relevant
restructuring in a systematic and orderly manner. This Council casts a vote of
confidence to this respectable profession, which has a long history in Hong Kong
and is able to safeguard and take into account public interests. On the other
hand, we should prevent the Government from taking the risk to carry out this
unnecessary reform which lacks proper arrangements and abounds in crises.
LEGISLATIVE COUNCIL — 25 June 1997
635
As regards the composition of the Costs Committee, as far as I can
remember, over recent years, this Council has shown high respects to
professional organizations and allows them to exercise self-discipline in their
operation. As a result, it often allows professionals to make up half or more of
the membership of their statutory committees. Since this Council has the final
monitoring power, serious violation of the public interest should not have taken
place.
Basically, I do not agree with the principle of scale fees. But we consider
it unfair if lawyers are allowed to determine the fees unilaterally. At the same
time, I do not agree with the proposal of allowing consumers to determine the
fees charged by professionals. This is similarly not acceptable because this will
undermine the law of a free economy and will change this type of private legal
service into a controlled fee-charging service. Without reasonable charges, it
will be difficult to ensure that the standard of legal services will be maintained.
Mr President, I am glad that although the respectable Mr Fred LI has his
own views, the Bills Committee has been able to, under his fair leadership, reach
the most sensible decision on the two issues I just mentioned. I hope that Mr LI
can follow the final decision made by the Bills Committee. I will also follow
the decision of the Bills Committee in voting.
Thank you, Mr President.
MRS MIRIAM LAU (in Cantonese): Mr President, first of all, I have to declare
my interest that I am a practising lawyer. As the Bill will impose a great
challenge to the profession and produce a profound impact, I have to speak in
spite of the fact that the Bill involves the interests of solicitors.
Over the past few years, most of the disputes relating to scale fees in
respect of conveyancing have been centred around such concepts as market
competition, consumers interests, free trade and so on. I do not want to get
entangled in these concepts. I only wish to raise the most fundamental question.
What is a fair deal? The answer is very simple. A solicitor charges a
reasonable fee and provide professional services; whereas a consumer pays a
reasonable fee and obtains professional services. Of course, a reasonable
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charge needs to be assessed by means of an objective standard and the actual
need of the service provider needs to be taken into account as well.
It is evident to all that in a fair deal relating to the provision of legal
services, reasonable charges and professional services are two inter-related
elements, and these elements are of the same importance to both onsumers and
solicitors. Nevertheless, the Government has ignored what a fair deal means.
It only insists on abolishing scale fees by allowing consumers and solicitors to
negotiate the fees freely and holds that this is fairest to consumers.
However, as regards whether the public will pay less after the abolition of
scale fees, the Government has refused to give comment. In other words, the
Government cannot guarantee that the fees to be paid by the public will be
cheaper or more reasonable. For instance, if scale fees were to be abolished, a
solicitor might increase the fee instead of lowering it. This is because if
calculated in terms of the time spent, a consumer might need to pay a fee higher
than the scale fees if the transaction his solicitor is dealing with involves
complicated title though the price is low. Moreover, some unscrupulous
solicitors might charge an exceedingly high fee as some members of the public
might not know how to negotiate.
Even if the fees to be paid by the public are cheaper than what they paid
before, I wonder if this means that they are provided with the same level of
professional protection. In this respect, the Government advises that the Law
Society of Hong Kong is obliged to safeguard the standard of the services. Of
course, this is theoretically correct. However, after the United Kingdom
abolished scale fees in 1972, there was a deterioration in the standard of the
services provided in respect of conveyancing. Even the huge English Law
Society found it difficult to save the situation. Has the Law Society of Hong
Kong such power? What is more serious is that the consumers are in fact
unable to assess whether the services provided by a solicitor in respect of
conveyancing are good or not. Even if there are some problems, they are not
visible in the short term. They might be detected many years later when the
premises in question is to be dealt with again. It will then be too late, and the
consumer's interests will inevitably be undermined. It is precisely due to this
reason that the fees payable in respect of conveyancing need to be fixed.
Perhaps doctors, architects and other professions need not charge scale fees, but
in the legal profession, charges payable in respect of conveyancing need to be
fixed. No one asks to fix fees payable in respect of litigation and the signing of
LEGISLATIVE COUNCIL — 25 June 1997
637
contracts. The charging of scale fees is essential only in the area of
conveyancing.
While asking solicitors to, in respect of conveyancing, provide
professional services that offer protection to consumers, the Administration is
unable to guarantee that solicitors will levy reasonable charges. What is more,
the Government is unable to guarantee that consumers can be provided with
professional services of a good standard. The Government is not acting
responsibly to the solicitors. It is acting even more irresponsibly to the
consumers.
Looking from the other side, is the existing system of levying scale fees
capable of ensuring that the solicitors will levy reasonable charges and provide
professional services? This system has in fact balanced the interests between
consumers and solicitors. It is fair to both sides. Under this system, solicitors
get reasonable returns for their professional and quality services while consumers
only need to pay scale fees. There is no need for them to "compare prices" or
bargain over prices. Without the constraint of prices, they are free to choose
solicitors with good quality and reputation to provide them with the professional
services they need. This is entirely a fair deal.
Of course, from the viewpoint of consumers, the fees are naturally the
lower the better, and the cheaper the more reasonable. However, the greatest
interests of consumers do not hinge on the how low the fees are. Instead, the
real interests of consumers lie in the quality professional services they obtain
after paying reasonable fees.
Once scale fees are abolished, solicitors will be forced to cut fees in order
to compete among themselves. With a reduction in incomes, the solicitors will
naturally make up for the shortfall by increasing their workload. They might
then lower the standard of the services they provide according to the level of the
fees charged. The lowering of the quality of the services provided by solicitors
will definitely be detrimental to consumers. In fact, what consumers really need
is quality professional services.
It was pointed out by the Government that many common law
jurisdictions, such as the United Kingdom and Australia, have abolished scale
fees for a long time. Although the Government has pointed out this fact, it has
failed to illustrate the consequences. What are the consequences? After New
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South Wale of Australia abolished scale fees in 1991, there was a marked
reduction in fees. During the 20 years after the United Kingdom abolished the
system of levying scale fees in 1972, the number of claims in respect of lawyers'
negligence has risen by 30 to 40 times, with more than 44% of the cases involve
conveyancing. After New Zealand abolished the system of levying scale fees,
many solicitors had to tighten their spending, thereby leading to the lowering of
the quality of services. The former chairman of the English Law Society, Mr
Tony HOLLAND, did point out that after the abolition of scale fees in the United
Kingdom, many solicitors dealing with conveyancing could only levy unrealistic
fees. As a result, they handed their work to unqualified and inexperienced staff
members, resulting in numerous mistakes. Legal services in respect of
conveyancing have thus turned into something which is mechanical, let alone
legal advice in respect of property title. In attending a meeting of the Bills
Committee, Mr Robert SAYER, former vice-chairman of the English Law
Society, vigorously told us the bitter experience of the United Kingdom in
abolishing scale fees. He pointed out that the abolition of scale fees had
produced an adverse impact on the society as a whole, apart from affecting the
standard of services and independence of the profession. In 1994, Singapore
conducted an independent study on the abolition of scale fees. After making
reference to overseas experiences and making its analysis, Singapore eventually
made up its mind decisively to maintain the system of levying scale fees.
Perhaps honest advice is unpleasant to the ear. The Government,
therefore, still insists that there is no concrete evidence proving that the
deterioration in the quality of legal services is directly related to the abolition of
scale fees. Nevertheless, the Government has not denied the fact that many
countries have experienced unhealthy competition and the quality of legal
services has lowered after scale fees were abolished. Neither has the
Government been able to prove that these phenomena are not caused by the
abolition of scale fees. Of course, the levying of higher fees does not
necessarily guarantee that solicitors will definitely provide excellent services. I
agree that the Law Society of Hong Kong should exercise more stringent
supervision as far as the issue of the quality of solicitors is concerned. But if
scale fees are to be abolished, it is more likely that the quality of solicitors will
decline. This will make it even more difficult for the Law Society to improve
the quality of services of the profession.
As responsible legislators, we need to show the public "the benefits" as
well as to let them know the "harmful effect" so that they can make a wise
LEGISLATIVE COUNCIL — 25 June 1997
639
choice. Nevertheless, those people who object to scale fees still try to make use
of different concepts to confuse the public. In this respect, I would like to
clarify point by point so as to give people the true picture.
To start with, I consider that we cannot confuse the charging level with the
charging system. Are the public dissatisfied with the charging level or the
charging system? In my opinion, the public are mainly dissatisfied with the
charging level. Their focus is not on the charging system itself. If the problem
hinges on the charging level, and the public consider that the fees are
unreasonable or too high, we should then review the charging level instead of
abolishing the charging mechanism.
Secondly, some people try to confuse other professions which do not levy
scale fees with solicitors who do. In fact, the charges levied by many other
services are calculated with reference to a charging table. Examples are
services provided by surveyors, assessors, stock brokers and estate agents.
Please do not build up a false image that this is unique to solicitors. But the key
point of the issue does not lie in whether "I should have it if others have it as
well". Rather, it lies in whether there is a need to preserve this system. I have
just explained clearly the reason why solicitors need this system and I am not
going to repeat.
Thirdly, some people hold that property prices bear no direct and definite
relationship with the workload and costs of solicitors. As such, there is no valid
reason for solicitor's fees to be levied in accordance with the property price.
Superficially, this seems to be unreasonable but the charges in fact bear a
significant relationship with legal responsibilities as the solicitor needs to
shoulder a hugh responsibility. If any mistake is made in dealing with
conveyancing, compensation will be determined on the basis of the price of the
property instead of the solicitor's fees. It will be unfair to solicitors if the fees
they charge are not in direct proportion to the responsibilities they shoulder.
Perhaps Members should think what a fair deal means.
Fourthly, some people consider that solicitor's fees are very high. The
concept of high and low is relative. To make an objective comparison, for a $3
million-flat, for instance, the cost for dealing with the sale and purchase
agreements is $20,000, which is lower than the $45,000 stamp duty levied by the
Government and is far lower than the $60,000 commission charged by estate
agents.
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Of course, after putting forward all the rationale and arguments, the public
may finally still feel that the charges are exorbitant and unreasonable. I have
said right at the beginning that in a fair deal, the so-called reasonable charges
have to be assessed by an objective standard.
The existing charging system is not decided by solicitors unilaterally.
Instead, it is determined by a Costs Committee made up of representatives from
solicitors, the Government and the Judiciary. Of course, representatives of
consumers will be added to the Committee in future so that the fees will be
negotiated between both parties. In that case, the public will definitely consider
that the charges are more reasonable.
As regards the composition of the Costs Committee, I consider that the
number of representatives of solicitors and lay persons should be equal, so as to
balance the interests of service providers and consumers. The Government
proposes to increase the ratio of lay representatives so as to reduce the number of
representatives of solicitors in the Committee to less than half, that is the "4:3:3"
composition proposal as put forward by the Government. However, this will
weaken the chances for solicitors to negotiate over the fees and undermine the
spirit of a fair deal. If the composition proposed by the Government is adopted,
the conclusion drawn by the Costs Committee will probably incline to safeguard
consumer interests, and there will be no objectivity. This is absolutely unfair to
the profession.
Mr President, with social progress and economic development, on the one
hand, the general public have a greater need for legal services and, on the other
hand, solicitors should meet social changes and the public needs. However, in
making such responses, the solicitors should adhere to their principle and make
changes only when it is more beneficial to the public in general, instead of going
backward. The abolition of scale fees will undermine the autonomy of
solicitors and seriously damage the dignity and independence of the legal
profession. As a result of this, people in the trade will feel insecure and this
will lead to a lowering of the quality of legal services. This will definitely be a
big retrogression for the society.
Mr President, I so submit.
LEGISLATIVE COUNCIL — 25 June 1997
641
9.40 am
THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.
MR ALBERT HO (in Cantonese): Mr Deputy, I declare that I am a practising
lawyer. I am now speaking on behalf of the Democratic Party, and I will mainly
focus on issues pertaining to scale fees in respect of conveyancing.
As we all know, the Democratic Party is in support of the abolition of scale
fees. In other words, it opposes the proposal of maintaining scale fees as put
forward by the Law Society of Hong Kong. Many people will ask me, "As a
practising lawyer, are you going to set yourself against your own profession, and
are you going to turn your rice bowl upside down?" Mr Deputy, frankly
speaking, I have no such feelings. I earnestly believe that the position I am
trying to state on behalf of the Democratic Party is in line not only with public
interests, but also with the interests of the legal profession. I do not think that
the interests of the legal profession and public interests must stand in an opposite
position in respect of this issue. In our opinion, a fair solution can be worked
out. The problem rather lies in why some people consider that the abolition of
scale fees will do so much harm. This is mainly because these people have not
got the courage to accept reforms and prepare for making improvements. They
should not fear that reforms will bring about instability. Perhaps what they are
worried about are some unpredictable but purely imagined elements.
Mr Deputy, I am now going to state why the Democratic Party strongly
supports the abolition of scale fees. Firstly, within the legal profession, the
abolition of scale fees in respect of conveyancing is aimed at encouraging people
in the trade to compete freely so as to allow consumers to make their choices
freely. This principle is widely accepted and followed in many regions where
common law is practised in the context of a democratic and advanced society.
This is also a trend of an open society. Let us look around at various advanced
regions in the world. The United Kingdom, the United States, Canada and most
regions in Australia have abolished the system of scale fees for a long time.
Only Singapore and one province in Australia have not done so. Why have
most modern societies abolished scale fees? The answer is in fact crystal clear.
This is because firstly, solicitors are given statutory franchise to deal with
conveyancing procedures, and both the vendors and vendees must hire a solicitor
and there are no other alternatives. Secondly, many people hold that it is unfair
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for property prices to be pegged with solicitor fees, and they consider that the
fees should be determined in accordance with the time spent by the solicitor and
the service he provides. Thirdly, the solicitor profession should allow
competition in the levying of fees so as to enable the users to make their own
choices.
In fact, other professionals, such as accountants, doctors, architects,
stock-brokers and even barristers whom we are familiar with, have not set scale
fees. Why is there such a need for solicitors to set scale fees in the area of
conveyancing for the sake of protection?
Mrs Miriam LAU has mentioned earlier that although other professions
have not set scale fees, there are in fact some charging standards for reference.
We have no objection to the setting of such standards for reference purpose.
We can also agree with the setting of a charging standard by the Law Society of
Hong Kong (Law Society) for reference. But this is not the same as a statutory
charging standard because this will strip the solicitors of the freedom to make
their choices and make fees adjustments. Moreover, this will deprive users of
their rights to choose solicitors in the light of the charges levied.
Secondly, we consider it impossible to set up a scale fee system which is
fair, reasonable and objective. In this respect, our opinion differs greatly from
that of Mrs Miriam LAU. Could Mrs LAU tell us on what basis she is going to
establish a reasonable and objective standard? Can it really be achieved? If
so, please tell me what the standard is. As a matter of fact, we all know that
every solicitor firm has its own way to operate its business. With the changes of
time, increasing competition and rise in operating costs such as salaries and
rentals, the mode of operation must be updated and altered. All operators of
solicitor firms should know this is reality. As such, a properly-run solicitor firm
will achieve high cost-effectiveness and its competitiveness will naturally grow
stronger, and its prices will be, relatively speaking, more flexible and cheaper.
As a result of these, it will be able to provide quality services and gain the
support of its clients. Therefore, we cannot say that this must be a client-win
and solicitor-loss package. The most important question is whether the firm is
properly run.
As a matter of fact, the costs of running a solicitor firm differ from district
to district. For instance, rentals in areas near Yuen Long, Tuen Mun and
Sheung Shui are comparatively cheaper and the salaries in these areas are lower.
LEGISLATIVE COUNCIL — 25 June 1997
643
Therefore, solicitor firms operated in these districts will be able to adjust their
solicitor fees downward naturally. Why must we force solicitors from solicitor
firms throughout Hong Kong, Kowloon and the New Territories to levy
standardised fees, particularly in respect of conveyancing?
In addition, the returns asked by various solicitor firms and solicitors are
not necessarily the same. Many solicitors can work very hard and provide
quality services but they do not necessarily aim at a reward of seven or eight
digits before they consider that the return is reasonable. In fact, each person can
ask for a different return. Therefore, a reasonable standard is to be determined
by the individual. On what basis should we require all solicitors to charge a
mandatory fee so as to acquire what we call a reasonable return?
The third reason for our objection is that it is difficult to enforce the
system of charging scale fees. In fact, it is generally recognized by the legal
sector that although this system has not gone so far as to exist in name only, the
phenomenon of not adhering to this system has become quite popular. Many
solicitor firms have even openly disobeyed this system. I believe the Law
Society knows which solicitor firms have failed to comply to this system. The
problem rather lies in whether these firms have the determination to do this or
maybe they have encountered some obstacles. None of these issues have been
properly clarified. The Law Society also admits that many major solicitor firms
have failed to levy charges on each sale and purchase agreement. Technically
speaking, we cannot say that these solicitor firms have violated the rules.
However, if a certain solicitor firm can do this in an open and systematic manner,
and even the users know that the firm will levy charges on one out of three
documents only, can we say that this is a "price cut"? Although such practice
cannot be regarded as "violating the rules", it proves that solicitor firms can
compete by way of making different fees adjustments. In that case, why should
we disallow them to enjoy a greater degree of freedom?
The Democratic Party is of the view that in order to enforce the execution
successfully, only two options can be adopted. The first one is to handle those
people who do not abide by the rules by means of criminal proceedings.
However, we strongly object to this option because this will go against the
principle of our public policy. We feel that it is meant to be an insult to
solicitors if we have to monitor the profession by a criminalized means,
particularly in respect of the levying of charges. It seems that we do not trust
the integrity of the solicitors. Secondly, we feel that it is similarly not desirable
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if solicitors are to inject a hugh amount of resources for the purposes of
supervision and examination. For a self-disciplined profession which attaches
great importance to integrity, this is hardly acceptable.
Mr Deputy, if we set up a scale fees system which is not frequently
observed by people whereas there is no effective mechanism to ensure its
execution, it will be unfair to solicitors who abide by the rules. This is because
they will then be unable to compete with other solicitors who reduce their
charges. Some solicitors lose their business just because they abide by the
rules. Moreover, they are deprived of the commercial interests they are entitled
to by someone who makes use of unfair practice, and this has given rise to
unfairness.
In conclusion, we object to the maintenance of the scale fees system. As
what I said earlier, this violates the principle followed by many common law
jurisdictions. At the same time, we have no means to establish a fair and
objective standard. We will also find it difficult to put this standard into
practice.
Just now, many of my colleagues such as Mrs Miriam LAU and Mr Eric LI
mentioned the point as to whether the reduction of solicitor fees will lead to
vicious competition and thereby resulting in lower quality of services. We have
to point out that the maintenance of the service quality relies essentially on the
integrity of the professionals and the self-discipline and supervision of the
professional organization. I really cannot say that if solicitors or the legal
profession fails to gain satisfactory profits, solicitors will no longer perform their
duties faithfully and that they will not take their clients' interests into account and
care about their own reputations as well as the reputation of the legal profession.
If many people of the legal profession hold such attitude, this profession will lose
its dignity and independence.
Some people are worried that if the system of charging scale fees for
conveyancing is to be abolished, solicitor fees will then keep on dropping.
Subsequently, this will lead to vicious competition and the clients will in the end
suffer losses. In our opinion, this is only a hypothesis, and there is on sufficient
evidence to prove that this will definitely happen. Although the Law Society
has provided some data for our reference, the Society has also stated that there is
no sufficient data which can prove that the rising claims for insurance is related
to the abolition of scale fees or the reduction of charges. I remember when Mr
LEGISLATIVE COUNCIL — 25 June 1997
645
XAVIER was in Hong Kong last time, I asked him whether there was such a
definite relationship. Although he might believe in that, there is no objective
data which can prove the relationship between the two. In fact, there are no
strong voices or movements which ask for the restoration of scale fees in any
advanced countries in the world. I have asked an expert attending the Costs
Committee whether there are such a voice and movement. Even his reply was
in the negative. Solicitors must face the reality that they need to adjust their
charges in order to strengthen their competitiveness. But eventually I am of the
view that it is not absolutely necessary for them to make a drastic price cut for
the sake of competition. In fact, a client will look at the quality of services, the
reputation of the solicitor firm as well as his relationship with the solicitor. As
such, we should not hold that only the fees have a definite link with client
choices.
Lastly, let me turn to the quality of services. As a professional
organization, the Law Society is obliged to provide more information on the
choices of solicitors. It is also obliged to educate the public to pay attention to
the quality and standard of the services provided by a solicitor, apart from the
fees factor, in their choice of solicitors, so as to prevent their interests from being
infringed. As for those solicitors who are negligent of their duties and
irresponsible, the Administration should strengthen its supervision and take
appropriate sanctions against them to achieve a deterrent effect.
Based on the reasons I have just listed, I consider that we cannot accept the
new charging table proposed by the Law Society. The Democratic Party also
wishes to stress that we hold no objection against the setting of a charging
guideline for reference of clients.
Lastly, I must point out that although the Law Society is an independent
and autonomous organization, we must bear in mind that legal services influence
the whole society. As such, this issue should be handed to the community for
discussion. Moreover, Members should be allowed to make a decision from the
viewpoint of public interests.
Just now, Miss Margaret NG and Mr Eric LI have mentioned that we have
to respect the decision made by the Bills Committee. However, I must stress
that although we have 18 members in the Committee, the attendance rate was not
high as the members needed to attend a lot of meetings and these meetings often
"clash" with one another. We all know that the Bill is highly controversial, and
LEGISLATIVE COUNCIL — 25 June 1997
646
its decision was passed by a slight majority only. As such, we are of the view
that Members should not use the decision reached by the Bills Committee as the
basis to represent Members of this Council.
Thank you, Mr Deputy.
10.00 am
THE PRESIDENT resumed the Chair.
MRS ELIZABETH WONG: Mr President, I rise to thank the Attorney General
and the Consumer Council for bringing to the surface the controversial subject of
the removal of scale fees for conveyancing services as included in the Bill before
us. I think this has the decided advantage of bringing the high level of scale
fees into our consciousness and has been the subject of much debate and much
criticism.
In my opinion the legal profession is an honourable profession. As a
consumer, I trust my lawyer and I do not like to hawk around for the lawyer with
the cheapest level of service as I would hawk around for vegetables and fish in
the market. So, Mr President, I for one would like to preserve the scale fees as a
yardstick in the law books so that my choice of a lawyer is based on his
professional expertise and not on how cheap he is or how much better he might
offer his services at a lower fee.
Mr President, this does not mean I support the current high level of scale
fees for conveyancing irrespective of the complexity of the work involved. I
consider that the scale fees should be reduced dramatically to a reasonable level
or several levels to reflect the complexity, or the lack of it, for the work involved:
the more standard the work, the lower the fees. Thus, at this stage, I do not
support the removal of scale fees because I think that if the fees are removed the
consumer would indeed, like myself, be befuddled in our choices, and I shall
explain why.
I think the complaint at the moment is that fees are set at high levels over
which the consumers have no choice. If this situation continues, then sooner or
later, Government's stand at the moment, which I do not support, will be
LEGISLATIVE COUNCIL — 25 June 1997
647
vindicated and the Government will be proven right at the later stage. But as
things stand, as a consumer, I would prefer to protect my own interests in going
to the lawyer of my choice, not because he charges cheaper prices but because he
is good and I trust him and I know he protects my interests against the vagaries
of Hong Kong's conveyancing field.
However, if my lawyer, and God forbid, should be a crook, the abolition of
scale fees would merely make him a bigger crook and, God forbid. But to
protect the interests of a consumer, the choice of a lawyer for a consumer lies in
the choice based on professionalism and not merely on how low the fees should
be negotiated, the removal of which would serve to, again as I said earlier, to
befuddle the minds of the consumer. Because the consumer does not know
about the law. He trusts his lawyer.
So, I think the point at issue, Mr President, is not that this is a scale which
is not acceptable but that there are not several scales to reflect the type of work
involved. Some conveyancing work is standard, some not so standard. Surely
this justifies not the removal of scale fees but rather several levels of scale fees,
be they pegged to the value of the flat or the type of conveyancing involved, and
I think the legal profession ought to seriously address this problem through its
Costs Committee.
I think we have attacked the problem at the wrong end. The composite
amendments proposed involve also major reform in the composition of the Costs
Committee. I think that is a bigger instrument in order to achieve consumer
protection and also to achieve what I would call a reasonable step forward
beyond today.
I shall certainly support the amendment proposed by the Democratic Party
at the suitable Committee amendment stage in order to make sure that the
Composition Committee reflects the larger interests of the consumer.
Thank you, Mr President.
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DR LEONG CHE-HUNG: I rise to support the Second Reading of the Bill but
that does not mean to say that I support all the amendments proposed by the Bills
Committee.
I do respect the legal profession ─ I have got a lot of friends there ─
and I am a professional myself although I am not a lawyer. But we have still
got to balance between consumers rights, free market choice and professional
autonomy. I feel that these are the few areas we should really address. But as
a start, the medical profession is against scale fees or any form of control fee.
We do not believe that a scale fee is equivalent to standard, a control fee is
equivalent to standard, nor do we believe that standards should be in any way
related to charge whatsoever.
I am, therefore, sort of surprised to hear Members in this Council of the
legal profession when they indicate that standards are somehow linked to charge.
I am even more disturbed to hear Members of this Council who are in the legal
profession who, whilst they criticise Government for pressing on with abolition
of scale fees, that Government has not made any move to maintain standards of
service in the legal profession. I am surprised because in my mind standards are
something that the profession should control itself. The Government should
never be allowed, let alone request, to interfere with control of a professional
standard, and this is what professional autonomy is all about.
On the other hand, professional autonomy is of utmost importance, and in
this aspect, the medical profession would support a cost committee which the
profession would have adequate representation.
Thank you, Mr President.
DR LAW CHEUNG-KWOK (in Cantonese): Mr President, should the scale
fees for legal services in respect of conveyancing be abolished to allow the
public and the legal profession to get the greatest benefits in the free market and
through fair price negotiations? To every economist concerned about the public
interest, the answer to this question is undoubtedly affirmative.
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649
The Hong Kong Association for Democracy and People's Livelihood
(ADPL) agrees to the abolition of scale fees for legal services and this is
consistent with the stand all along adopted by the ADPL in opposing the interest
rate agreement of the Hong Kong Association of Banks, challenging the uniform
prices of gasoline products, opposing the guiding suggestions made by
employers' associations on annual wage adjustment and in querying the uniform
prices of newspapers years ago.
The views of the ADPL on this issue differs from those of the Democratic
Party and the Government, not because the Democratic Party wishes to protect
consumers while the ADPL goes against and opposes the interests of consumers.
It is precisely because the ADPL wishes to protect the long-term interest of
consumers that we support the staged proposal in the hope that the scale fees
system can be abolished step by step. If this system is rashly abolished, the
messy consequences should not be neglected.
We must carefully analyse the experiences of foreign countries in relaxing
scale fees. A lot of data prove that some lawyers charged substantially lower
fees after the abolition of scale fees in Britain, and they provided poorer services
for lower fees, and as a result, there was a tremendous increase in litigation and
compensation cases. Many property buyers lost more than they got as these
litigation cases lasted quite a long time. The ADPL and I are very concerned
about these adverse effects on consumers. The cases in Australia also show that
the fees may increase rather than decrease.
The ADPL believes that if the scale fees are fully relaxed immediately, this
may lead to unpredictable chaos which may not be beneficial to consumers.
Therefore, the ADPL considers adopting a staged relaxation proposal because the
most important task at present is to tackle the problem of relatively high fees
immediately. The ADPL has asked the Law Society of Hong Kong (Law
Society) to reduce the scale fees through continuous negotiations with the Law
Society. After repeated negotiations, the Law Society agrees to introduce a fee
structure with prescribed upper and lower limits in future.
The ADPL does not approve of uniform fees but finds a fee structure with
upper and lower limits acceptable as we think that lawyers can suitably compete
under this fee structure. On the basis of the lowest fee under the fee structure
now provided by the Law Society for our reference, the new fees may be 50% or
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more below the existing fees. The Law Society also agrees that the fees will be
reviewed from time to time.
I hope that upon completion of appropriate legal procedures, the Law
Society can fulfil its promise to reduce fees and review them from time to time in
order to achieve the goal of ultimately abolishing scale fees.
It can be said that the issue as to whether scale fees should be abolished
immediately is most nerve-racking within the two years I work in this Council.
Many colleagues ask why lawyers should charge special fees when providing
conveyancing services and how the services provided by lawyers differ from
those provided by doctors and accountants. I have also pondered over these
questions. Legal services have their characteristics. They are neither standard
nor frequent, unlike other services received by the public from other professions
such as medical services. Consumers can hardly understand the contents of
such services or how the costs are calculated. I believe that most consumers do
not have any criteria to base on when they negotiate fees with lawyers. Another
feature of legal services is that their consequences and effects may be
far-reaching. As regards the standards of these services and whether they are
appropriate and up to standard, it may take five or even ten years for a consumer
to know that the services provided by their lawyers then were totally below
standard and the relevant formalities had not been fully completed.
The
effects of legal services also differ greatly from those provided by doctors and
accountants. As the legal services provided by lawyers in respect of
conveyancing have so many features, we think that it is very important for a fixed
fee system with upper and lower limits to be initially maintained as the first step
towards opening the market to allow consumers and lawyers to learn and
understand during the transition in order to protect consumer interests.
Another main reason why the Government criticises scale fees is that fees
are pegged with property prices. The more expensive the property is, the higher
the fees are. The Government finds this unreasonable but I do not think that
this fee structure has any problem as most charges for services are linked directly
to the values of the services. Any fee structure with fixed rates is similar. For
instance, the fees collected by the management companies of private housing
estates are mostly 10% of the total management expenditure. In other words,
higher fees are charged for higher expenditure. Everyone knows that most
banks collect 1% handling charges when personal overdraft facility is arranged.
In the same way, the larger the overdraft amount is, the higher the charges are.
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651
A government official has recently told me that although the Law Society
has agreed to reduce fees, the fees to be set by the Costs Committee will soon be
out-dated as property prices increase rapidly. I cannot really tell whether
property prices will increase rapidly in the near future. But if we refute the fees
to be set by the Costs Committee on the basis of the projection that property
prices will keep increasing and that there will be adverse effects on consumers, I
think this is groundless as the cause and effect are reversed.
Several consumer representatives will join the Costs Committee in future
and I deeply believe that they can surely play their role well in the Costs
Committee and safeguard consumer interests. I hope that the future Costs
Committee can review the fee structure from time to time and safeguard
consumers interests, with a view to achieving the ultimate goal of abolishing
scale fees.
Thank you, Mr President.
MRS SELINA CHOW (in Cantonese): Mr President, the existing arguments
mainly centre around whether scale fees should be set for lawyer services and
whether scale fees should be made statutory.
Scale fees are nothing special as many industries and professions have
scale fees which have not been made statutory, so the repercussion from people is
not as great. Why must we set statutory fees? It is because such fees will be
implemented only if they have a legal basis; otherwise, some people will take no
notice. Consumers have little chance of fee negotiation under a mandatory fee
system. All government fees are scale fees with legal bases, and therefore
people have to pay. Why has the scale fees of lawyers caused such
repercussions? Is it because the legal profession is unique as other professions
do not have scale fees? After all, it is just because the public do not trust
lawyers.
As regards consumer protection, some lawyers may charge exorbitant fees,
just as what the Honourable LEE Wah-ming said just now, and so we have to
protect consumers. For consumers, the most attractive offer is low fees.
However, value for money also matters if we really wish to protect consumers.
This relates not only to prices but also to a balance struck between the prices and
the quality of the articles received, regardless of whether the articles concerned
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are services or goods. In other words, it relates to whether consumers get the
highest quality at certain prices. This is the greatest protection for consumers.
As an English proverb goes, "Give him peanuts and you'll get a monkey."
There is also a Chinese proverb meaning "You can't eat your cake and have it".
Such things do not happen in this world at all. People will let you have petty
gains when they want to cheat you, and they will tell you that "Give him peanuts,
he may not be a monkey." This is a golden rule and what the Honourable Albert
HO said is not established. When a person is penniless, he will get a monkey.
Certainly, he may not necessarily get something good after he has spent money,
but if he is penniless, he can only get a monkey. Thus, we have to consider
competition in relation to both prices and quality and we cannot consider prices
alone.
Dr the Honourable LEONG Che-hung has just said that the medical
profession does not approve of this. I will ask Dr LEONG to set his mind at
ease. We have heard, not from Dr LEONG, that some doctors asked for almost
$1 million for an operation on a patient. I am not commenting about Dr
LEONG. How can people who paid almost $1 million lodge a complaint and
seek justice? How can patients know whether $500,000, $50,000 or $1 million
should be charged? Why do doctors say that scale fees are not necessary? For
the same operation, some doctors may charge $50,000 while some others may
charge $500,000 or fill in the amount by himself on a check. As every trade is
unique, we cannot make sweeping criticisms.
I am not a lawyer but only a member of the Committee. As I have taken
part in the work of the Consumer Council, I share the feelings of consumers. In
fact, I often need professional services. The greatest problem with the
Government is that when it has to direct its efforts at the reform of the whole
trade, it cannot be rash or act wilfully. The Government has to make the best
value for money arrangements for consumers and it has to be fair and just. The
Government does have such a channel, but why has it not utilized this in these
ten years or so? I ask such a question because I have paid lawyer fees before.
Why has the Government not fought for the best value for money prices for us
through the Costs Committee comprising government officials? As the
Government has not utilized this channel, it has to give us an answer and justify
itself to the public.
At a meeting of the Bills Committee, we heard a government official say
that the Government could not interfere. What does "interfere" mean? As a
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653
government representative in the Costs Committee, this person does not represent
himself. He represents the Government and the public interest. However, he
has not played his role and this is not right. This does not mean that the entire
Costs Committee has to be abandoned. The Costs Committee will not have
much function if there is free competition among lawyers and lawyers are free to
set their fees. Why? If lawyers can set their fees themselves, why do they
have to follow the direction of the Costs Committee? Therefore, the function of
the Committee in fee negotiation on behalf of the public will be useless. The
Committee will actually fail to perform its duties. Furthermore, it is also wrong
if the lawyers treat this lightly. I heard that the representatives of the Law
Society initially adopted the strategy of lobbying senior officials, thinking that
everything would be fine if the Executive Council paid no attention. However,
the Administration introduced a blue bill and the Law Society had to think of
another strategy hastily.
I have said that I am a professional and a consumer of professional
services. If we really wish to respect professional autonomy, we cannot fail to
respect autonomy in respect of this key issue. As to how we can help
consumers get the best value for money deals, it depends on whether there is a
sound mechanism.
The mechanism was the Costs Committee but the
Administration failed to make full use of it. I hope that the Administration will
make full use of it in future.
I have heard some Honourable colleagues say that setting scale fees is
useless as nobody is observing them. As a result of competition or for other
reasons, many smaller law firms do not observe the scale fees at all. However,
the fact that lawyers do not respect this system does not mean that this system has
to be abolished in such a way that two wrong things will become a right one.
The Law Society is wrong in not putting set fees into effect as a commonly
approved system should be implemented.
I support setting scale fees and I think that the Law Society should
definitely put them into effect. Some people claim that free competition is
helpful to small scale law firms, but experience tells us otherwise. There was
such an experience in England. Therefore, Mr Albert HO's assumption is
definitely incorrect. Actual examples tell us that small scale law firms are
impaired and naturally these law firms run on small capitals cannot compete with
large law firms with reputation. Without scale fees, consumers will certainly
rely on reputable firms to ensure that they can get proper services. Similar to
taking out insurance, consumers prefer paying more money to insure with large
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insurance companies. Therefore, large companies are not as seriously affected
as small companies.
Mr Albert HO has raised a very strange question just now by saying that if
there are problems, why nobody has asked to reinstate scale fees. I think that
time does not move backwards. In particular, there are things which cannot be
repeated if they have been done in a wrong way. Legislative Council Members
sometimes do something wrong. When I disapprove of what the Democratic
Party has done, I will say that the Democratic Party has done something wrong.
However, even if it is wrong, we cannot undo it. Regarding the Consumer
Council, consumers are naturally the majority. Have Members who proposed a
price cut encountered people who disapprove of their proposals? Definitely not.
People will definitely think that Members who ask them to sign in support of a
price cut are doing something right. What the majority are doing is called "the
most politically correct act" but I think that it should be called tyranny of the
majority.
A few thousand professionals will naturally fail to beat the majority,
millions of consumers. Therefore, it is impossible for the legal profession to do
that once again. It has failed once and it will not succeed even if it tries once
again. As we all know, many English lawyers have shown their dissatisfaction
as abolishing scale fees has many defects and compensation claims increase
rapidly. The change in the system is highly undesirable, and the quality of
services of the legal profession is also unsatisfactory. Therefore, we should
absolutely not make the same mistake twice. Let us take a look at Singapore.
After in-depth scientific analysis, Singapore finally decided not to abolish scale
fees. In fact, we also see where the problem lies. I definitely disapprove of the
abolition of scale fees. I will speak about the Costs Committee when we come
to the amendments. Thank you, Mr President.
MR ANDREW CHENG (in Cantonese): Mr President, I speak in support of the
Second Reading of the Bill. I would like to declare interest that I am also a
practising lawyer.
Mr President, having listened to the speeches of Honourable colleagues,
we find that the lobbying carried out on this issue by the Law Society of Hong
Kong (Law Society) and many Honourable colleagues who are lawyers has been
extremely successful.
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655
We find that people always think that the professional autonomy of the
Law Society and its work in maintaining the legal profession have been fair and
just, but the lawyer fees and scale fees give people a strong feeling of
self-protection and self-defence.
In fact, I am facing serious contradictions and great pressure. I have been
scolded by a person who claims to be a lawyer inside the lift as to whether I am a
lawyer. A few days ago, the Honourable Ronald ARCULLI also criticised me
on a newspaper as the Legislative Council Member with the worst performance
as I did not fight on behalf of my profession or my constituency when we debated
on the Estate Agents Bill.
I am not as lucky as Mr ARCULLI because the sectors I represent include
the financial, insurance, real estates, commercial and service sectors. I have
voted on the basis of the platform of the Democratic Party and my will today. I
may be criticised by Mr ARCULLI again that I fail to represent fellow workers in
law firms as some lawyers may belong to the old constituency while some
lawyers, their secretaries and staff may belong to my constituency. When we
scrutinised the Estate Agents Bill, many people from law firms told me that
estate agents should be monitored while some estate agents told me that it was
time to alter the scale fees of lawyers. As legislators, when it is necessary to
strike a balance while catering for the public interest, we have to follow our
conscience and firmly uphold our principles under the mechanism of speaking on
behalf of the public.
In June this year, the Democratic Party again carried out an opinion poll
which had been carried out in last August on this issue and successfully
interviewed 509 Hong Kong people. 80% of the respondents think that the
lawyer fees of property developers should not be borne by buyers in transactions
of newly completed and uncompleted flats. More than 65% believe that there is
conflict of roles for lawyers to represent property developers and buyers
concurrently. Over 60% of the respondents think that the scale fees system
should not be maintained. The result of the opinion poll is exactly the same as
that of the poll carried out in August last year. I hope that Honourable
colleagues of this Council returned by election in 1995, especially those
Honourable colleagues from political parties who often stress that they strive for
people's livelihood and represent public opinion and the grassroots, will think
twice on the issue of scale fees.
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Mr President, professional standards should not rest on scale fees. Why
must there be scale fees before reasonable services can be provided? Mr
President, reasonable services should be maintained by the good system all along
adopted by the Law Society in ensuring the integrity of lawyers. Why can fees
not be charged as in the case of other legal services such as litigation and divorce
services in which lawyer fees are determined on the basis of the qualifications
and record of service of lawyers, and the time and energy involved in the
services?
Mr President, some Honourable colleagues think that this will undermine
the autonomy of the profession but I doubt what they say. Will this undermine
the autonomy or dignity of the profession or the self-interests of the profession?
When the public interest is affected, adjustments have to be made to the
autonomy of the profession. Mr President, professions are not patents, and
people should ask more from professions. People do not have any idea about
the good mechanisms for regulating professionals and they can only depend on
professional bodies to determine such criteria on their own. Precisely for this
reason, the Law Society has to look squarely at the public and their requests.
On the basis of the opinion poll I just referred to, the Law Society has to think
twice. If the Law Society only focuses on maintaining the autonomy of the
profession and pay no heed to public views, the Law Society and the entire
profession will only be confined in an ivory tower, making the public think that
lawyers are profiteers and care only about scale fees and their own interests. As
a lawyer, I do not hope that the Law Society will subject us lawyers to
humiliation.
I recall that in 1994, when I was still a member of the Meeting Point, it
conducted an opinion poll. I have forgotten the details of the results but I still
remember clearly that almost 80% of the respondents commented that lawyer
fees were high and they wondered why they charged that way. They also
expressed that they only met the subordinates of lawyers when they signed
contracts. They might have a chance to meet the lawyers when fees were
collected, but some even did not have such a chance. As regards the lawyers
acting on behalf of developers, some large law firms may only ask a staff
member to play through a cassette player the recorded contents of the contracts
and ask dozens of buyers to sign contracts together in a conference room.
Should the Law Society look squarely at such legal services?
LEGISLATIVE COUNCIL — 25 June 1997
657
I have heard of some surveys carried out in foreign countries on the image
of professionals. I vaguely remember that people often think that lawyers have
a poor image. They are described as shrewd and money-minded, and they only
care about collecting money. In the past few months, the Law Society spent
much energy and time lobbying Members. I suggest that the Law Society
should spend its energy and time on figuring out proper mechanisms and
measures to improve the image of lawyers in the mind of Hong Kong people.
I find that the public relations work of the Law Society in respect of the
scale fees issue has been very poor. I do not know which public relations
company it has engaged but it suggested at the very beginning a cut in the scale
fees. In other words, the system is still there but the fees are cut. Many of my
clients will say, "Andrew CHENG must have reaped staggering profits in the past
as the Law Society says that he can still make a living when the fees are reduced
by 50%." I do not know what to say. The crux of the problem actually does
not lie in the levels of fees. Instead, it lies in whether the scale fee system
should be maintained. I hope that the Law Society will no longer mix up the
scale fees system with professional standards. It is because lay persons and
consumers will definitely ask if lower fees mean poorer professional standards.
Lawyers are professionals holding certificates. Regardless of the levels of the
fees charged, we have to make efforts. Only in this way can our profession give
a good image in the mind of people.
Mr President, professionals have dignity, and lawyers do not rely on
certificates but the judgement and evaluation of the public to uphold and enhance
their dignity. Therefore, I hope that law firms will not insist on maintaining the
scale fees system by means of price cuts.
Mr President, I will move an amendment on behalf of the Democratic Party
on the composition of the Costs Committee. The Democratic Party certainly
supports the "4:3:3" system proposed by the Government but it also proposes a
"5:3:3" system, that is, five Law Society representatives, three government
officials and three consumers. The Democratic Party hopes that when a judge
becomes the Chairman of the Costs Committee, there can still be five Law
Society members on the Committee to give a more balanced voice. I also hope
that Honourable colleagues will carefully consider the "6:3:3" amendment
proposed by the Committee, which will definitely give the Law Society a certain
weight. I hope that Honourable colleagues will ponder over whether there
should be equal voices from the Law Society and the public in the Costs
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Committee or whether particular emphasis should be laid on professionals. The
Democratic Party hopes that Honourable colleagues will support the amendments
proposed by the Government or the Democratic Party.
As regards the other amendment, we suggest cancelling the provision for
buyers to pay the lawyer fees of property developers. According to the opinion
poll I just mentioned, 80% of the respondents think that it is unreasonable to
provide that buyers of newly completed or uncompleted flas should pay the
lawyer fees of property developers. I find out that many consumers even do not
know that they can engage lawyers on their own when they buy newly completed
buildings as developers often tell them that there are designated lawyers. The
buyers will therefore naturally engage the designated lawyers of the developers
and they have to pay the lawyer fees of the developers. We find that definitely
unfair and we sincerely hope that we can get the support of Honourable
colleagues. This is also one of the Government's amendments which adopts the
"invalidation of contract" approach. In other words, if there is a clause in the
contract specifying that buyers should pay the lawyer fees of developers, this
clause will become invalid. However, the Law Society and the Bar Association
think that this spirit cannot be supported from the perspective of a free contract
system.
The Democratic Party also thinks that this amendment of the Government
runs contrary to the principles of a free economy and free contracts. To prove
this and to safeguard consumers or buyers against unfair payment of the lawyer
fees of developers, we have made a proposal which stipulates that buyers who
engage lawyers on their own need not pay the lawyer fees of developers.
I hope that Honourable Members will carefully consider this when they
vote. If they support the Government's proposal, it means that they support that
even if people sign contracts at the law firms of the developers' lawyers, they
need not pay the lawyer fees of the developers. If they support the proposal of
the Democratic Party, it means they support that even if buyers engage lawyers
on their own, they need not pay the lawyer fees of developers. Although the
two proposals are only slightly different, as people who buy newly completed or
uncompleted flas have limited affordability and price negotiation abilities, if this
Bill is passed, consumer interests can be greatly enhanced.
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659
Mr President, the Honourable Albert HO reminds me to declare interests
and I vaguely remember that I have already done so. I hope that I can touch
upon other views of the Democratic Party when I move amendments later.
Thank you, Mr President.
MR IP KWOK-HIM (in Cantonese): Mr President, the Legal Services
Legislation (Miscellaneous Amendments) Bill 1996 was introduced on the basis
of the various points set out in the Legal Services Report published in 1995.
Undeniably, the Bill has far-reaching impact on the legal profession and the
public. Many provisions of the Bill are extremely controversial and I will
roughly state the views of the Democratic Alliance for the Betterment of Hong
Kong (DAB) on the controversial points of the Bill.
Firstly, as regards abolishing the scale fees for conveyancing, although the
scale fees system may not allow consumers to enjoy the cheapest services, the
DAB thinks that the quality of professional services is most important, especially
in respect of conveyancing transactions, as the public may have to spend all the
savings of their life on buying properties. More importantly, there is still no
sound registration system for the title of properties in Hong Kong, and people
depend to a very great extent on lawyers to examine property title. As
excessively intense price competition will lead to a fall in service quality, the
public may ultimately suffer losses. I do not wish to see Honourable colleagues
doing bad deeds out of goodwill. In addition, the Law Society is proposing a
substantial reduction in the scale fees for conveyancing and it promises that once
a property registration system is established in Hong Kong, it will abolish the
scale fees. As the DAB wishes to safeguard the public from being impaired in
future as a result of a decline in the quality of lawyer services, it does not
approve of the abolition of scale fees for conveyancing at this stage.
Furthermore, as regards the composition of the Costs Committee, the DAB
is of the view that the Committee has the right to determine the scale fees for all
non-litigation lawyer services. As a matter of fact, the Costs Committee has not
functioned well during the past eight years, for which the DAB is very regretful.
According to the information I get, the Committee has not held any meeting at
all. I sincerely hope that the Committee can have sound operation and provide
the public with suitable services. For the Costs Committee to operate properly,
a balance should be struck between the views of the profession and consumers in
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the Committee. Furthermore, views should also be expressed by neutral
members to attain fair, representative and widely accepted fee standards.
Therefore, the DAB supports the 4:3:3 mode proposed by the Government. I
will also give details about the position of the DAB during the Committee stage.
Mr President, the DAB supports abolishing the provisions specifying that
buyers have to pay the lawyer fees of the selling party. Although some
Members criticize this as a breach of contract freedom and that the lawyer fees
can be made up for through an increase in property prices, this is similar to the
point that "you pay for whatever you are given", which is quite true. However,
the DAB has not considered this entirely in the light of economic factors.
Conversely, we have approached this from the perspective of consumers and
considered whether consumers can enjoy independent lawyer services. Under
the existing practice, as compared with engaging separate lawyers, if one lawyer
is engaged to represent both the buying and selling parties, the buyer pays less
lawyer fees, so it will not take the initiative to engage other lawyers. In many
cases, large law firms with good relationship with developers often provide most
of the lawyer services for transactions in the first-hand property market, and it is
thus unfair for small law firms. If the Government's proposal is adopted,
besides giving the buyers more impetus to engage other lawyers to get more
independent views, it can also let some small law firms join the competition
against large law firms and the buyers will certainly be benefited at the end.
Mr President, I so submit.
MR CHIM PUI-CHUNG (in Cantonese): Mr President, I rise to speak in
opposition to this Bill. First, let me declare my interests. I am a very
troublesome client of law firms.
Mr President, lawyers in Hong Kong are basically divided into two kinds:
solicitors and barristers. Barristers can be further divided into two categories:
ordinary barristers and Queen's Counsels (QCs). When we discuss the issue in
question, we should treat these different types of lawyers separately.
On the question of scale fees, it is worth noting that many doctors actually
do not charge their patients according to any scale fees. Let me perhaps tell
Honourable Members a story to illustrate my point. Some 10 years ago, a
famous doctor was asked to perform a surgical operation on a rich man, and the
doctor asked for $100,000. Naturally, the family members of the rich man tried
LEGISLATIVE COUNCIL — 25 June 1997
661
to bargain with the doctor, asking him whether it was possible for him to charge
less. In response, the doctor said, "No problem. However, please remember
that the quality of services will be commensurate with the fees charged. I know
what to do." Hearing this, the rich man's family members immediately stopped
bargaining with the doctor any more; instead they decided to pay the doctor the
full amount he requested, asking him to do his best. This is not a fictitious
story, and it highlights the problems relating to fees bargaining.
Hence, two issues are of concern to me. The first issue relates to QCs and
barristers. Personally, I agree that they should charge scale fees. In the case of
newly qualified QCs and barristers, I think a minimum scale should be set for
them, and this should be raised on a yearly basis. Thus, clients will be enabled
to know how much such a legal practitioner will charge after he has practised his
profession for, say, 10 years. Of course, whether clients are prepared to pay the
amount asked for should be another matter. And, this aside, I think the legal
profession should really pay attention to one of its existing practices. Under
this practice, once a solicitor firm employs a QC or barrister for any of its clients,
it will be held responsible for paying the QC or barrister concerned. That being
the case, if a barrister or QC behaves irresponsibly and refuses to co-operate with
the client, and if any disputes thus occur, the client may simply say, "Since you
have not followed my instructions, I will not pay you any money." Then, the
barrister concerned will most certainly sue the solicitor firm, and if the dispute is
brought before the Law Society, the solicitor firm will certainly be delisted.
Owing to this, a solicitor firm is often forced to make a prior promise that it will
undertake to pay the barrister or QC. In view of this, I hope the legal profession
or the committee due to be set up will come up with a ruling that can solve the
problem. For the reasons I have given, I am not opposed to the imposition of
scale fees; not only that, I insist that scale fees should be set down in a more
detailed and specific manner, so that consumers, members of the public and all
those who have a need for lawyer services will know how they should employ
lawyers to work for them. These are my opinions relating to barristers and QCs.
As I understand it, conveyancing is the major business of solicitors in
Hong Kong. In this regard, we must consider whether solicitors are profiteering
from their conveyancing business. If they are really found to be doing so, and if
any unfairness thus results, I hope that the Law Society of Hong Kong will
review the situation at regular intervals of half a year or one year in future. This
means that if scale fees are found to be too high and consumers are dissatisfied,
solicitors should reduce their scale fees and bring the rate down from 1% to
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0.5%, or even 0.3% or 0.4%. Actually, though many solicitors claim that they
are charging scale fees, quite often they do not follow the scale. In order to win
the goodwill of their clients, many solicitors simply do not impose any charges
for some items of their services. This applies to some routine services such as
making telephone enquiries on behalf of their clients. This also shows that
solicitors are not applying any scale fees at all because they may decide not to
charge their clients for some services which, in theory, should be charged. That
is why I cannot see why the Government has decided to raise this proposal at this
particular moment. Even if this proposal can bring about desirable results, it
will at best remain a belated solution. And, if it is not going to work, the
Government will in fact be asking for the impossible.
I also see that the Financial Services Branch and the Financial Secretary
are not quite happy with the fees charged by some stock brokers, and that they
want to abolish the scale fees concerned. I have always adhered to one
principle: our actions should be directed at excessive profits only, and only
profiteers should be subjected to criticisms and queries. If no profiteering is
involved, and if our sole intention is to facilitate the implementation of uniform
practices among members of the trade, we can in fact leave the situation as it is as
long as there are no chaos and confusion. At the same time, we must of course
avoid the occurrence of what I have just related ─ the example of the doctor
who was asked to perform an operation on a rich man.
Mr President, the legal profession is a very important part of our society.
I very much hope that the Government will assist its operation by encouraging it
to promote the functioning of our economic and other activities instead of trying
to reap excessive profits. It used to be very difficult for one to qualify as a
lawyer. However, there are many law students now, and when they work as
trainee lawyers after graduation, they may receive nominal payments as little as
$5,000 per month as travel expenses. Therefore, I hope that the Law Society
will listen to the views of all of us. Even if this Bill is really passed to their
benefit later on, I still hope that they will carry out regular reviews to reduce the
voices of discontent from consumers. I know only too well that consumers who
are very often ill-informed about this issue may well think that price bargaining
will be conducive to their interests. However, I must say that in the final
analysis, price bargaining will only benefit huge consortia instead of individual
consumers, the reason being this: Since individual consumers often employ the
services of lawyers on a one-off basis, what substantial benefit can they get from
LEGISLATIVE COUNCIL — 25 June 1997
663
price bargaining, especially when solicitor firms all render roughly homogeneous
services? What is more, individual consumers do not actually have the means
to employ lawyer services on a frequent basis.
Therefore, Mr President, I do have reservations and questions about the
Government's attempt to raise such a proposal during this transition period.
These are my remarks.
MR RONALD ARCULLI: Mr President, I only wish really to address this
Council on one point, and that is on the survey that was referred to by the
Honourable Andrew CHENG. I do not think I want to enter into any particular
controversy about my assessment of his performance in this Council because that
is not the purpose of today's debate.
On the survey that he has referred to, Mr President, I am advised by Dr
Robert CHUNG Ting-yiu, who is the Director of the Social Science Research
Centre of the University of Hong Kong, the method adopted by the Democrats is
called Interactive Tone Dial Recorded Telephone Interview. That sounds like
quite a mouthful, but there we are, there it is. I am told that it is not a scientific
method and its representativeness is, to say the least, questionable. The normal
acceptable level of response for an opinion survey is between 40% to 50%. In
this particular instance, I believe the response was only 16.1%. Consequently
one really cannot attach any reference value to this survey.
A second point that was raised was that in terms of the questions that were
asked in this survey, and all of us know that depending on the questions asked,
you can have the desired answer, but I do not wish to attribute any ─ how do I
say ─ any unfairness on the part of the Democratic Party in this survey, but it is
a fact that in the survey the question was simply asked whether they favoured
abolition or retention of scale fees. There was no mention, Mr President, of the
Law Society's planned revision of the scale fees. So, I think for the public, for
Members of this Council, and for the Government, all I can say is that, surveys
might be slightly indicative, but in this particular instance, not reliable at all.
Mr President, I think when it comes to the Committee stage amendments, I
will have further comments on a particular aspect of the Bill and I would reserve
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my remarks therefore on clause 18, which provides for the invalidating clause at
that stage.
Thank you, Mr President.
DR YEUNG SUM (in Cantonese): Mr President, a moment ago, the Honourable
Ronald ARCULLI referred to the comments of some researchers and he also
commented on the telephone survey conducted by the Democratic Party. I must
admit that some of his arguments are indeed valid.
Mr President, the response rates of telephone surveys are very low in
general. Just imagine what a person will usually do when he suddenly receives
a telephone call in which he is asked to answer some questions in a recorded
telephone survey. Many people will just hang up. That is why the response
rates of such surveys are generally not high, averaging about 10% only. That is
also what happens to the telephone surveys conducted by newspapers, and this is
in fact a characteristic of this type of surveys. Another point is that a telephone
survey must not cover too many issues; if too many issues are covered, the
respondent will simply hang up. That is why not many questions can be asked,
and each question is very short.
That said, Mr President, telephone surveys can still produce findings which
can be of some reference value. Incidentally, let me also tell Mr Ronald
ARCULLI that since we have conducted more telephone surveys than others, we
are in fact in a proper position to affirm their reference value, though we must
hasten to add that such reference value is not absolutely indicative. To a greater
or lesser extent, the people will invariably respond to survey questions when it
comes to some issues of major concern. In the case of this survey conducted by
the Democratic Party, for example, I presume that even if we had adopted some
methods which are more scientific, such as a territory-wide sample survey, we
would have obtained roughly the same results, though, of course, the truth of my
presumption has yet to be verified. It follows that inadequate as they may be (as
not too many questions can be asked and response rates are generally low),
telephone surveys can still reflect the people's reaction to the policies in question.
The stronger their reaction is, the more we will be able to see where the problems
lie. I venture to think that even if we conduct a territory-wide sample survey on
the people's opinions about conveyancing scale fees, the findings which we will
LEGISLATIVE COUNCIL — 25 June 1997
665
obtain will not be very much different from those obtained by our recent
telephone survey.
Mr President, I really have to say that the Government has been very
courageous in putting forward this proposal. However, since the transfer of
sovereignty is fast approaching, many people have queried whether there is any
political motive behind this proposal. These people are worried that the
proposed change may add to the instability already surrounding the transfer of
sovereignty. These worries are related to the background against which the
proposed change is put forward. Such a background aside, there is also the hard
lobbying of the Law Society of Hong Kong (Law Society). Besides, since the
Honourable Miss Margaret NG is highly respected in this Council, other
Honourable Members may well accept her points out of respect. Even if they
disagree with her, they will still listen very carefully to what she has to say.
That is why I think the lobbying efforts of the Law Society and Miss Margaret
NG will probably bear fruit this time, and the Government's proposal may well
be negatived by the voting results. However, I just want to give Miss Margaret
NG and the Law Society a piece of honest advice: they may win this time, but the
image of the Law Society and the legal profession may be impaired as a result.
They should really consider this point very seriously.
Actually, all other professions do not have any statutory scale fees. The
Honourable Mrs Selina CHOW is certainly right in saying that other professions
do charge scale fees, but I must add that such scale fees are not statutory in
nature. That is why people will certainly query the legal profession. Never
ever argue that the people of Hong Kong are ignorant, and that once scale fees
are abolished, they will not know how to bargain and how to choose their
lawyers. This argument is simply ridiculous. The people of Hong Kong are
known the world over for their intelligence. The abolition of scale fees may
lead to an initial period of confusion, but the names of reputable lawyers will
spread quickly in the market and among the people and the mass media. So
never ever think that following the abolition of scale fees, people will not know
how to choose their lawyers and will have to spend a lot of time on making a
choice. This will never happen. If this will really happen to the people of
Hong Kong, Hong Kong will never have become such a successful city as it is,
and, do not forget that our success is attributable to all trades and industries, not
just to any particular trade or profession.
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Very obviously, the people of Hong Kong are highly mature in terms of
information technology, education level and knowledge about the outside world.
There may well be some confusion for a short period of time, but the people will
get to know how to make their choices very quickly. Barristers do not charge
any scale fees. Does this mean that people have been unable to choose the
barristers they want? I am sure that Honourable Members all know the answer
without my telling them. Some lawyers have indeed managed to earn very good
reputation for themselves, but they have not done so by trying to get media
appearance. Media appearance can sometimes be a bad thing, because a widely
known person does not necessarily enjoy a high degree of support. We all
know that in the case of some local celebrities, whenever people hear their
names, they will simply put on a face of contempt. If a lawyer can perform
well, as time goes by, his reputation and good name will certainly be spread
around in the market. So even if they manage to win this time, I still hope that
the Law Society and Miss Margaret NG will consider the possibility of
abolishing scale fees in due course. If they do not do so, they will not be able to
explain to the public as to why solicitors can charge statutory scale fees while
other professions do not.
Second, the success of Hong Kong is often attributed to market
competition. If a solicitor wants to get more business, he must demonstrate that
he has the ability and is willing to work hard. He will have to attract clients
with his achievements and good performance. This type of competition within
the profession itself is indeed very important. Besides, it is often said that
competition will lead to progress; in other words, progress is possible only with
competition. That being the case, why have we seemed to forget all about the
virtues of competition when it comes to conveyancing scale fees?
Third, solicitors often try to justify their case by referring to consumer
choices, but if we are to look at this issue with any objectivity at all, we will see
that scale fees will in fact adversely affect our choices to a certain extent. So let
me advise Honourable Members again, and in earnest, that even if the
Government really loses this time, its efforts should already have produced some
effects on the legal profession, one example being that the Law Society has
decided to lower the scale fees for conveyancing. Therefore, I hope that
solicitors will stop arguing that the quality of their services is linked to the levels
of fees charged. If their argument holds, does it mean that the proposal of the
Law Society on fees reduction will inevitably lower the quality of services of all
solicitors? Such an argument is simply not valid at all.
LEGISLATIVE COUNCIL — 25 June 1997
667
Miss Margaret NG has, however, raised a valid point, one which the
Government should consider. According to her, such a drastic change may well
plunge the legal profession into a state of rush and inadequate preparation. I
have listened to her remarks with care, and I find this particular point quite valid
when compared with the rest of her points. Miss NG's remarks have always
been valid, but this time around, she has raised some points which cannot be
justified. For example, she has argued that the quality of services will be
affected and that uncertainties will inevitably result. As we all know, changes
will inevitably lead to uncertainties, and if we are so afraid of uncertainties, no
social changes of any kind will ever be possible. Am I not right? Miss
Margaret NG often advocates that Hong Kong needs to be more democratic and
open, but it must be noted that democratization and openness will likewise lead
to uncertainties. What matters, however, is that since we all feel that such
uncertainties are within the acceptable limits of our community, we have after all
chosen to go ahead with this reasonable development.
In her remarks, Miss NG questioned whether such a change was in fact too
drastic, and she wondered whether the entire legal profession would find this
change unacceptable. I think both sides can conduct further exploration on this
particular worry and draw lessons from any similar experiences. All in all, I
think the Government has actually behaved most courageously in putting forward
this proposal. Though the timing of this proposal may induce some people to
doubt whether this is yet another conspiracy set up by the British Hong Kong
Administration before its withdrawal, I must emphasize once again that market
competition and consumer choices are heavily emphasized in Hong Kong, and
for this reason, the Law Society must really consider these two factors very
seriously. Although it may succeed in negativing the Government's proposal by
winning the support of Honourable Members this time, it must still consider the
possibility of abolishing scale fees in due course and inform the community
accordingly. If not, it will be hard for it to justify its case.
Thank you, Mr President.
MR JAMES TO (in Cantonese): Mr President, let me first declare my interests.
I am also a practising solicitor, though after joining the Legislative Council, I can
devote only part of my time to legal practice and can no longer work as a
full-time lawyer. Fortunately, however, the bills and ordinances which I have
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had to deal with as part of my job in this Council over the past few years have
prevented me from losing touch with legal knowledge.
I will not repeat the points which my honourable colleagues have already
mentioned. My first point is that in the long run, our most important task will
be to reduce the complexity of property transactions. In this regard, the
legislation relating to property titles which the Government put forward some
time earlier does represent an inevitable course of reform, though it was
eventually withdrawn amidst very complicated circumstances. With respect to
conveyancing fees, the arguments put forward by the Law Society of Hong Kong
(Law Society) to support its own case have tended to centre around the
complexity of property transactions. It is argued that if conveyancing fees are
lowered (and lawyers even fear that keen competition will depress such fees to
very low levels), lawyers will be unable to get the returns which are
commensurate with the efforts which they have made. The point is that if there
is a property title registration system, lawyers will no longer be able to use this as
an excuse for continuing to charge high fees. I think that the demand of the
community for lower fees does indeed point to an inevitable step in our economic
development. We cannot possibly avoid such a step, and I hope that my
colleagues in the solicitor profession can face the realities.
My second point is that I really understand the worries of some of my
fellow solicitors. According to them, while they will always do their best in
their work, others who are pressured by competition may be tempted to offer
lower fees in order to attract clients, and this may lead to poorer, less meticulous
services. They are particularly worried that the names of solicitors charging
lower fees may spread quickly among property agents and speculators. An
added worry is that if fees are really lowered, good and dedicated lawyers may
feel that they are not getting the rewards they deserve and they may regard this as
a blow to their dignity. One example is that when a client sees a lawyer for
several minutes and discuss the fees with him, the lawyer can, in theory, charge
the client several hundred dollars. So, many lawyers do indeed find it hard to
forget the good old days when there was stability without any competition.
However, I must point out that competition has always been present. The
reason is that even with scale fees, lawyers have had to compete against one
another in terms of quality of services, though this is only limited competition.
Even if quality of services is to be considered, I still believe, as the Honourable
Albert HO has rightly put it, that there are always some lawyers who are prepared
LEGISLATIVE COUNCIL — 25 June 1997
669
to render quality services at lower prices. One cannot gainsay the fact that there
are many different lawyers, and there are always some good layers who are
willing to charge lower fees. This may be the result of a variety of reasons, and
one of them concerns the costs structures of individual law firms. In other
words, the overall manpower deployment, staff morale, willingness or otherwise
of staff to work over-time, work efficiency and even lunch break arrangements of
an individual law firm will all count. For example, in some law firms, the lunch
break for staff may be one hour, but in others, this may last one and a half hours.
Another example is that some staff members may go off duty at 6 pm, but others
will not do so until 8 pm. Moreover, some staff members may well be more
dedicated to their work because of their good relationship with their employers
and colleagues. And, there is also the factor of office location, the district or
place where a law firm is located. This is important because rental payments do
indeed occupy a great proportion in the expenses of many law firms. To sum
up, I do appreciate the worries of some of my fellow lawyers.
I am of the view that although price bargaining may well lead to some
initial pains or instability, the instability so caused will be well within tolerable
limits and will not create any problems. Why? First, I agree with Dr the
Honourable YEUNG Sum that we must not underestimate the Hong Kong
people. I can foresee that if price bargaining is really put into practice, and the
number of complaints is on the rise in recent years, claims against negligence
will increase. Having read so much about these complaints and claims in the
papers, they will naturally be very cautious when buying properties. Possibly,
then, they will not decide to select lawyers on the sole basis of lower prices. A
mere saving of $500 will definitely not induce a person to hire the services of a
lawyer. In fact, many people, especially those buying properties, will make
more careful choices under a system of price bargaining. Of course, if we want
the system of price bargaining to work well, we must make various efforts to tie
in with and support such a system. For example, the mass media will have to
work harder to expose professional malpractices; sometimes, it is reported that
some lawyers are willing to prepare an assignment for just $1,000. How can it
be possible to prepare an assignment at a price of just $1,000 for a housing unit
valued at $3 million? If the mass media report more on such cases, the names
of the lawyers concerned will spread very quickly. The people will certainly
avoid such lawyers, as it is obvious that $1,000 may not even be able to cover the
operating costs of a law firm for one single day. Those selling their properties
may not be so worried, because they know that if they cannot sell their properties
because of any legal problems and technicalities, they can always lodge a claim
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against the lawyers who represented them in buying the properties concerned.
And, in such cases, these people need not worry about anything because the trade
insurance for lawyers will cover any property transactions under $10 million
each. That being the case, there is a possibility that lawyers may reduce their
charges for property sales very drastically. Of course, I certainly do not mean
that a lawyer representing the vendor of a housing unit is not required to do
anything. Like the buying of properties, the selling of properties also have to
follow a set of procedures. However, a difference does exist as I have just
explained.
Some colleagues of mine in this Council have argued that the abolition of
scale fees is tantamount to wanting a horse to work well without bothering to
feed it with enough fodder. Suppose the horse really cannot have any fodder
under a system of competition, what should have gone wrong? The answer is
very simple: there are just too many lawyers. If there are too many lawyers, it is
inevitable that there will not be enough business for them all, even though all
lawyers do work hard under a system of competition. We may look at the
example of medical graduates. They may simply fail to work as housemen
because all houseman posts in hospitals are already filled. If ever I am asked, I
would certainly admit that during this period of property boom, all lawyers will
have enough business, but during periods of property market downturn, as and
when price curbing measures are implemented, many law firms will find it hard
to survive. This is especially the case with law firms operating in rented
premises because the rents which they have agreed to pay will not be adjusted
even if business is poor.
The point is that when the horse really cannot have any fodder, some
lawyers, experienced or otherwise, will simply shift to other occupations in the
labour market. I know, for example, that some lawyers, with all the legal
training and qualifications which they possess, have already become journalists.
Frankly speaking, this is good to the mass media and the journalist profession.
The reason is that a professionally trained lawyer will most likely make a better
editor of court news than a layman. Am I correct? Of course, I must hasten to
add that such a lawyer-turned-editor must first receive training in editorial and
mass media work. I also know that some lawyers who are pessimistic about the
prospects of private practice have chosen to join the civil service. However,
even Government posts are not so easy to get, as the rate of success is about one
to several hundred. Why is it so? About a decade or so, that is, when lawyers
of my time graduated, frankly speaking, those lawyers who joined the civil
LEGISLATIVE COUNCIL — 25 June 1997
671
service were not always the best. Today, however, I dare say that those who do
join the civil service are certainly the best. And, I have noticed that many of the
best students in my law classes have virtually started to scramble for Government
posts. The reason is that there is job security in the civil service. In contrast,
lawyers in private practice have to face keen competition, even with scale fees.
That is why they have chosen to join the civil service. I also know that some
lawyers have switched to some private sector organizations such as listed
companies, banks and financial institutions where they work as legal advisers.
Actually, we do not really have to make any institutional guarantee as to how
much a newly-qualified lawyer should earn. Ten years ago, for example, a
newly-qualified lawyer might be able to earn some $20,000 a month, and if he
operated a law firm of his own, he might even get some commission. Does this
then mean that today, 10 years later, a newly-qualified lawyer should at least be
earning a monthly income of $40,000 to $50,000, plus commission? No, the
reality is not like this. Suppose I am now an employer, I am sure that once I put
up a recruitment advertisement, I will certainly receive a deluge of applications,
and even though I have hinted that the salaries will not be too high, I can predict
that many lawyers with eight or ten years' experience will still apply. The
conditions of the lawyer profession is actually not as good as people imagine. I
must be fair in my remarks.
The situation as such, why do I still support the idea of introducing
competition? Because I simply cannot see how a one-off bargaining mechanism
can possibly determine what levels of fees can give the best value for money.
Why do I say that the Costs Committee is a one-off bargaining mechanism?
Because even though the composition of the Fees Committee is very satisfactory,
with representatives of lawyers, consumers, the Government and so on sitting on
it, what it is going to do is basically a one-off price bargaining on the basis of
unforeseen factors such as rents and work efficiency. It may well be argued that
the representatives of consumers and lawyers on the Costs Committee will turn
the price bargaining process into something like collective bargaining, and this
will command our confidence, because all consumers and lawyers are supposed
to follow the outcome of the bargaining. However, I must say that even if I
were to represent consumers, or lawyers for that matter, on the Costs Committee,
I would never be able to say what price levels should be regarded as reasonable.
In the meetings of the Bills Committee, the Law Society quoted some
statistics and survey findings. And, using the example of a medium-sized law
firm employing some 10 staff members, it illustrated how the levels of fees
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should be fixed by taking account of its costs structure. I think this hypothetical
example is actually questionable in a number of aspects.
First, it is assumed that the law firm is situated in Central, but it will make
a world of difference if it is situated in Mong Kok.
Second, it may well be argued that even if we stay middle-of-the-road and
assume that the law firm is situated in Mong Kok, we may still find that a fee of
$8,000 to $10,000 should be charged for preparing an assignment for a housing
unit valued at $3 million, and anything less than that is unacceptable, is
tantamount to attracting clients at all costs. I must point out that even such a
projection involves a complication: the income which a lawyer with five years of
experience should earn. If this complication is not taken into account, it will be
impossible to project the income and expenses of a law firm. However, this is
precisely the point which I find it most difficult to take. Should lawyers with
five or 10 years of experience necessarily be guaranteed a certain level of
income?
Some may say that professionals should have their dignity, and for this
reason, if even a mere $8,000 is deemed reasonable for a lawyer with five years
of experience, it will be very difficult to maintain our system of professions. In
response to this argument, I must ask, "Is it really feasible to maintain the income
of lawyers at some specific levels through the implementation of scale fees?" I
cannot help asking, "If scale fees are really justified, and if they can really protect
professional dignity, why have accountants and doctors not followed suit?"
Some may say, "The answer is very simple. There are not many doctors and
accountants, but each year, we have many law graduates." Well, I really have to
say that with the law that the fittest survives, some lawyers will eventually have
to switch to other occupations. The fact that there are more people with legal
training does not necessarily mean that all of them must be lawyers. People
with legal training can always choose many other kinds of occupations, one
example being executive posts. When they really do so, they will in fact help
promote the rule of law in the community. And, people with legal training may
also engage themselves in China trade; their interaction with Mainland people
may even lead them closer to the rule of law. That is why we should not think
that people with legal training should all work as lawyers. With competition,
lawyers will naturally decide whether they are going to remain in the profession,
and I am sure that many lawyers will be willing to do so. So, a lawyer with five
years of experience may well decide to remain in the profession, and work with
LEGISLATIVE COUNCIL — 25 June 1997
673
dedication, even if he can just earn $30,000 a month. I would say that
competition is the only way through which we can know how many lawyers our
community can accommodate and how much they should earn. Lastly, let me
say that money is but just one of the many rewards of lawyers. Job satisfaction
and social recognition are their rewards too.
Many of my colleagues in this Council have raised the point that scale fees
are also found in other types of professions. I want to make one point only:
their scale fees are not mandatory in nature. Actually, I cannot find any other
professions which impose scale fees on a mandatory basis. The case of lawyers
is really unique.
Lastly, let me do justice to the Government by making one point. Many
colleagues have argued that lower fees are not necessarily synonymous to the
best quality of services. Actually, the Government has never said so, and I hope
all my colleagues in this Council will join hands to tell the community that this is
not necessarily the case. We just hope that all of us can become wise
consumers. I believe that given the people's existing levels of education and
their understanding of the society, all of them are fully capable of becoming wise
consumers. The adjustment period will not last long.
Mr President, I understand that Honourable Members belonging to the
Hong Kong Association for Democracy and People's Livelihood (ADPL) will
support the abolition of scale fees in principle, but that they would like to
implement the abolition in stages. Later on, I will try to move an addition to
clause 16, so that the abolition of scale fees will take effect only after the
Legislative Council has passed a resolution at a later time. In other words,
while the abolition of scale fees is supported, it will not take effect until after an
adjustment period. I am sure that our ADPL allies will certainly support this
amendment, and I hope that other colleagues and the Government will also say
whether they will support this amendment. I will request the President to waive
the requirement on giving notice of the proposed amendment.
DR PHILIP WONG (in Cantonese): Mr President, having listened to the
remarks of many Honourable Members this morning, I notice that they seem to
think that there is only one significant point about this Bill, and that is whether
there should be any scale fees. Actually, Honourable Members should pay
attention to another point, and that is whether lawyers should practise their
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profession in the form of limited companies. Unfortunately, as far as I am
aware, no Honourable Member seems to have said anything on this point. I for
one do have some reservations about this particular proposal because I do not
think that it is adequately justified. To begin with, why should we tamper with
a system which has been operating very effectively for more than a hundred
years? This is the first reason for my reservation. Second, there seems to be
no adequate justification for law firms to operate as limited companies. It may
well be argued, "Why should one share the consequences of the mistakes
committed by one's colleagues?" This argument is specious. Why? The
reason is that if a person is a professional, and if even that person chooses the
wrong partners, how can consumers be expected to have any trust in him or her?
Therefore, I do have some reservations about this proposal.
These are my remarks.
MR BRUCE LIU (in Cantonese): Mr President, over the past two years, I have
served as a member on some 20 Bills Committees. Like the Honourable James
TO, I have served mostly in those Bills Committees which deal with security
matters, and of all the bills which I have come across, this Bill is by far the most
"complicated" to me. That is why I have been subjected to the most intense
lobbying efforts this time around.
Dr the Honourable LAW Cheung-kwok has already stated very clearly the
position of the Hong Kong Association for Democracy and People's Livelihood
(ADPL) on phasing in the abolition of scale fees for solicitors. So I will just
add a few more words on how this is to be done. Actually, my intention is to
proceed with the abolition by two stages.
During the first stage, scale fees are to be maintained provisionally,
pending a detailed review and the establishment of a scheme of new fees by the
Costs Committee.
During the second stage, at a suitable time, the Legislative Council should
seek to abolish all scale fees by a resolution or formal legislation.
First, let me discuss the first stage. Why should we abolish scale fees by
stages? The reason is that if we seek to abolish them immediately, a lot of
confusion will result, and we know this from many different statistical sources.
LEGISLATIVE COUNCIL — 25 June 1997
675
In the case of abolishing the Interest Rate Agreement among our banks, we also
maintain that we should proceed by stages, because if we abolish the agreement
all at once, the entire financial system of Hong Kong will be affected, and this
may not necessarily be good to consumers as intended. So in the case of scale
fees for solicitors, we have to proceed with equal caution.
How are we going to proceed with the first stage? I think the best way is
to leave the decision to an adequately represented Costs Committee, which
should be changed and improved in several aspects. I would like to add a few
points here. First, the Costs Committee must be adequately representated. In
Hong Kong, whenever it comes to this kind of committees, we will invariably
think of a tripartite committee which includes members from the Government.
In the case of the Costs Committee, apart from Government representatives, there
should also be representatives of the legal profession and consumers. The Costs
Committee, if remains as it is, with representatives of the legal profession and the
Government officials, as well as judges, but no consumers, will obviously be far
from being satisfactory.
Second, the principle of professional autonomy must not be impaired.
The principle of professional autonomy is very important. If we agree to let a
committee determine the fees, we must make sure that at least half of the
committee members should come from the relevant profession; in other words,
we have to make sure that the decision made is acceptable to the profession.
This is very much like the case of a committee which is responsible for, say,
setting the charges of certain types of work or the wages of certain kinds of
workers. Decisions of the committee should not be made entirely by employers.
This simply should not be allowed, and there should be a sufficient number of
labour representatives. That is why one can actually look at the Costs
Committee as a mechanism of collective bargaining, one which is composed
adequately of lawyers' and consumers' representatives. Inside the Costs
Committee, all parties involved will bargain with one another and seek to set the
fees at levels which they consider reasonable in the context of Hong Kong. Its
members must consider all related factors such as the hourly charge of lawyers
and the time currently required for sorting out the problems of property titles in
one transaction. They must consider many such factors.
Third, a reasonable scheme of fees must be drawn up. It can be said that
the Costs Committee has so far existed in name only, because it has never
changed or reviewed the fees set down. That is why it must now make
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proactive attempts to conduct the reviews required. In doing so, it must respond
to the relevant comments, both from this Council and the community at large.
In any case, there has long been a consensus that the fees are unreasonable and
need to be changed. In concrete terms, changes will in effect mean price cuts.
Moreover, while answering consumers' expectations, the Costs Committee must
see to it that the fees are not reduced to levels which are too low. That is
precisely what I mean by a reasonable scheme of fees.
Fourth, the fees set down should be mandatory. In other words, once a
scheme of fees is set down, all should follow it as far as possible, and penalties
should be imposed in case of violation. As for the implementation of the
scheme of fees set down, the Law Society must establish a mechanism which can
ensure mandatory compliance. If not, all efforts will be in vain.
Fifth, some other types of scale fees should also be reviewed regularly.
At present, apart from conveyancing, solicitors also charge scale fees for other
types of services, the probate scale being one example. All these scale fees
should be examined and reviewed by the Costs Committee on a regular basis,
say, once a year. The Costs Committee should conduct discussions and make
its decisions by taking into account the views of the community. Some people
argue that in view of soaring property prices, it is unreasonable to peg
conveyancing fees solely with property prices. This unreasonable situation can
in fact be rationalized, if the scheme of scale fees can be adjusted during periods
of soaring property prices. This is what is meant by the function of collective
bargaining.
Sixth, a considerable degree of fair competition should be allowed. In
other words, the upper and lower limits of fees levels should be set down, and
within the range between these two ends, consumers should be allowed to
bargain. Some solicitor firms may well think that given the minimum level of
fees, they will have to make adjustments out of costs considerations, and they
may thus choose to move from Central, where land prices are the highest, to
Wanchai, or even other districts where land prices are still lower. At the same
time, on the basis of the minimum level, big solicitor firms may also make
adjustments accordingly.
The last point is that there must be legislative monitoring. The fees now
set down are all tabled in the Legislative Council in the form of subsidiary
legislation, giving this Council a role to play in the monitoring process.
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677
Has the demand of the public been satisfied when the aforesaid points are
implemented at the first stage? No, not yet. Actually, in the long run, there
must be more reasonable safeguards for consumers. How can this be achieved?
The best way is to review the issue of legislating on property titles registration as
soon as possible. In this respect, the Administration has made very slow
progress, at a snail's pace. Actually, even such a property titles registration
system has to be implemented by stages, and it cannot possibly be put in place
right after the enactment of legislation. It is possible that another scheme of
scale fees may emerge, with each property transaction charged as a package.
This will be every much unlike the present situation, under which a solicitor has
to make a lot of efforts to conduct land searches to ascertain property titles.
Since solicitors have to spend a lot of time under the present system, it is only
natural that they want to maintain their charges at some specific levels.
However, as soon as there is a suitable social climate, the Legislative Council
should reconsider the issue of abolishing scale fees, and one possible alternative,
as proposed by the Honourable James TO and on which I may have to debate,
will be the adoption of a resolution under which scale fees are to be abolished by
stages. This is actually the same as the "Kill-by-two-blows" proposal ─ the
phased abolition proposal ─ advocated by the ADPL. Such a proposal has in
fact been raised repeatedly in the Bills Committee, but it was not until about half
an hour ago that we managed to reach a tentative consensus in the ante-chamber
on such an alternative. This consensus is in fact the same as the proposal we
have just referred to. I hope that Honourable Members will conduct a debate to
find out whether this is a suitable direction of changes.
Mr President, these are my remarks.
PRESIDENT (in Cantonese): Honourable Members, when the Honourable
James TO spoke a moment ago, he said that he was going to move an
amendment, and he requested me to waive the requirement on giving notice. I
told him that he could make such a request, but that I might not necessarily
oblige. The Honourable Bruce LIU has just made a similar request. The
Attorney General has also given me a note, saying that he wants to defer the
deliberations on clause 1. He may have made such a request for the same
reasons. I now propose to suspend the sitting after the Second Reading voting,
so that the persons involved can discuss with me separately to clarify the
LEGISLATIVE COUNCIL — 25 June 1997
678
situation. If, during a sitting, people keep sending me notes requesting me to
waive the requirement on giving notice of amendments or of deferring the debate
on a certain clause, the situation will be very confusing.
ATTORNEY GENERAL: Mr President, first of all, I would like to thank
members of the Bills Committee, and particularly the Chairman, the Honourable
Fred LI, for their thorough and penetrating and painstaking study of this Bill. I
would also like to thank Members for an interesting and stimulating debate this
morning. I cannot recall the time in my years in Hong Kong when this Council
has had such an extensive debate about the way which legal services are
delivered to the community, about the rights of consumers, about the rights of
lawyers. I very much hope that the representatives of the Law Society who are
in the Gallery this morning will have taken careful note of the many powerful
expressions of view delivered this morning, Mr President, in this democratic
constitution. This Council then speaks for the community and I am sure that the
profession likes so many others will pay particular attention to, as I say, the great
many penetrating remarks that have been made this morning about the way in
which legal services are delivered.
Mr President, before I comment on the Bill itself, I would like to mention
two related topics.
Reforms implemented by the legal profession
First, I am pleased to report that significant progress has been made by the
legal profession in implementing proposals made in the Consultation Paper on
Legal Services.
The Bar Association:
has abolished the "two-counsel rule";
-
it now ensures that all practising barristers are covered by adequate
professional indemnity insurance cover;
-
it now permits members of three professional bodies (in addition to
solicitors) to have direct access to barristers; and
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-
679
it is disseminating information about the services of barristers to
users of those services.
In addition, the Bar Association has agreed that employed barristers should
be permitted to instruct practising barristers directly; it is considering using the
Internet to disseminate information about barristers to the public; and it is
proposing to publish a bilingual summary of some of the provisions in the Bar's
Code of Conduct.
The Law Society:
-
now requires a solicitor to provide clients with information
concerning the likely cost of legal services;
-
it also requires solicitors to act promptly and to keep their clients
properly informed;
-
it investigates complaints of shoddy work, in the form of delays or
failure to keep the client informed;
-
it has relaxed the restrictions on advertising by solicitors;
-
it has produced a number of publications (some on the Internet) so
that members of the public will know what to look for when
instructing a solicitor;
-
it has issued a Practice Direction requiring a solicitor, in certain
situations, to pay interest to a client.
In addition, the Law Society's Guidance Committee is considering how
procedures for handling complaints might be standardized.
A problem that both branches of the legal profession have been tackling is
that of touting and commission-taking in respect of criminal defence work. The
Administration recently concluded that self-regulation in this area has been
effective, and that there is no need to introduce criminal sanctions at this stage.
If I may say so, Mr President, the fact that so many reforms have been
carried out in the last two years by the two branches of the legal profession does
them great credit. Their acceptance of so many of the proposals in the
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Consultation Paper on Legal Services also demonstrates that there is no truth in
the allegation, made by some people, that this exercise has been an "attack" on
the legal profession. There has been no such thing. And certainly, there has
been no attack on the confidence and the integrity of solicitors. There has been
no smear of the solicitor's profession. As the Consultation Paper made clear,
what were under attack were restrictive practices and conduct within the
profession that are contrary to the public interest.
Other legislative proposals
The other preliminary matters I wish to mention are three legislative
proposals that were introduced and announced but not included in the Bill.
In October of last year, I said that legislation would be introduced to
permit solicitors to acquire extended rights of audience. I had initially hoped to
add the necessary provisions to this Bill by way of Committee stage amendments.
However, an informal ruling was obtained from you, Mr President, to the effect
that such an amendment would be outside the scope of the Bill. I could have
sought to introduce an additional Bill on this subject. However, given the large
number of Bills to be considered by the Council this Session, I decided that it
would not be fair to add to that burden. Moreover, the Law Society and the Bar
Association have entered into a dialogue on this issue and it is hoped that an
understanding can be reached between them in the near future.
The second legislative proposal not contained in the Bill concerns the
criteria for admission as a barrister. The Bar Association's proposals for new
criteria that are objective, reasonable, non-discriminating and standards-based
were received after the Bill was published in the Gazette. The Administration
has since made detailed comments on these proposals, and discussions are
continuing between the Bar and the Administration. Since it is essential that
Hong Kong should fulfil its obligations as a member of the World Trade
Organization, I hope that agreement can soon be reached on suitable legislative
amendments.
The third proposal, set out in the Report on Legal Services, was that
legislation should be introduced to create a statutory fidelity fund to protect
consumers from the dishonesty of solicitors or their employees.
The
preparation of legislation on this topic is a complex matter and the
Administration has not yet completed the necessary work.
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681
Mr President, I now turn to the Bill itself.
THE BILL
Chinese text
When the Bill was published, there was then no authentic Chinese text of
the Legal Practitioners Ordinance. Since that time, such a text has been
published, and it is necessary to reflect that in the Bill. I will, at the Committee
stage, propose suitable amendments.
Incorporation of solicitors and foreign lawyers
The clauses in the Bill providing for the incorporation of solicitors and
foreign lawyers were supported by most members of the Bills Committee.
Some concern was, however, expressed that the rights of consumers should not
be prejudiced by such incorporations, particularly as it will be possible for the
proposed new corporations to operate with limited liability. The Administration
shares the view that consumers should not be prejudiced, but believes that rules
providing for adequate insurance cover can safeguard the position of consumers.
This is the case in England, where solicitors have been able to incorporate since
1992. Moreover, Mr President, an additional safeguard exists in Hong Kong,
since the rules to be made by the Council of the Law Society will be subsidiary
legislation, which the Legislative Council will have the power to amend.
At the suggestion of the Law Society, I will at the Committee stage move
an amendment to make it clear that the Council of the Law Society may prescribe
a fee for applications to register solicitor corporations.
With regard to foreign lawyers, most members of the Bills Committee
accepted that, if solicitors are permitted to incorporate, foreign lawyers should
also be able to do so. Some concern was, however, expressed that it may take
more time to prepare rules for foreign lawyer corporations than for solicitor
corporations since, in respect of foreign lawyers, the laws of other jurisdictions
will need to be taken into account. The Bills Committee was therefore anxious
to ensure that the two sets of provisions can be brought into operation at different
times. I will thus later move Committee stage amendments to the Bill to
achieve this.
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Multi-disciplinary practices
With regard to multi-disciplinary practices, the Law Society informed the
Bills Committee that it did not enthusiastically welcome the immediate creation
of multi-disciplinary practices involving solicitors; and that it opposed the
provision relating to notaries entering into multi-disciplinary practices.
It is clear that many problems need to be resolved before solicitors can be
permitted to enter into multi-disciplinary practices. These problems include
how to preserve legal professional privilege, how to provide for professional
indemnity insurance, and how to preserve the independence and the integrity of
the solicitors' profession wherein the Administration does not underestimate the
difficulties involved in resolving these problems. However, the provisions in
the Bill do no more than pave the way for the time when satisfactory
arrangements can be devised. They propose to remove the statutory provision
that indirectly prevents solicitors from entering into multi-disciplinary practices,
and to empower the Law Society to make rules relating to such practices. Given
that the Law Society could decide when and how to make rules on this subject,
and the rules would be subject to the approval of this Council, the interests both
of solicitors and of the general public would be adequately protected. The Bills
Committee nevertheless considered that it is better to defer legislating on this
subject until the problems have been resolved.
At present, there is no statutory prohibition against notaries public entering
into multi-disciplinary practices. The provisions in the Bill on this subject
would simply empower the Chief Justice to make rules in respect of notaries who
enter into a multi-disciplinary practices. The Hong Kong Society of Notaries
supported these provisions. Nevertheless, the Bills Committee opposed them.
For the reasons that I have just given, the Administration continues to
believe that legislation is needed in respect of multi-disciplinary practices.
However, in the absence of support for such legislation from the Bills
Committee, the Administration has agreed to delete from the Bill the relevant
provisions. I will be moving Committee stage amendments to this effect.
Interest on solicitors' clients' accounts
LEGISLATIVE COUNCIL — 25 June 1997
683
With regard to interest on solicitors' clients' accounts, as I said a moment
ago, the Law Society has issued a Practice Direction in respect of the
circumstances in which solicitors must pay such interest. The Law Society
considers that it is therefore unnecessary to legislate on this subject. The
Administration sought to persuade the Bills Committee that the legislative
approach is preferable.
As a matter of law, in the absence of any agreement to the contrary,
interest on a solicitors' clients' account belongs to the client. However, despite
the availability of computer technology, practical considerations appear to rule
out the return of all interest.
A more practicable approach is to require a solicitor to pay interest to the
client when it is fair and reasonable to do so. It seems to be agreed that this
approach should be adopted in Hong Kong. The only point at this issue is who
should determine the circumstances in which it is fair and reasonable to do so.
The Law Society contends that it should do so, and it has therefore issued a
Practice Direction on this subject to all solicitors.
The Administration takes the view that it is not appropriate for the Law
Society unilaterally to determine the circumstances in which interest is in
practice paid. Members of the Law Society have a direct pecuniary interest in
this matter and, if they determine the rules, they would be acting as judges in
their own cause.
The approach in the Bill is therefore to empower the Law Society to make
statutory rules in this respect, which would be laid on the table of this Council
and subject to the negative vetting procedure. This would ensure that there is
an independent and impartial body to scrutinize the fairness of the rules. A
similar system has been in operation in England for over 30 years.
The Administration also considers that a Practice Direction on this subject
is not appropriate for another reason. A Practice Direction is an instruction to
solicitors, which is enforceable against them as a matter of professional
discipline. It does not, however, change the law. Clients will continue to be
entitled to all interest earned on their accounts, unless they agree otherwise.
The problem is that many people do not know this. The Public Opinion Survey
conducted on behalf of the Administration indicated that almost 90% of
LEGISLATIVE COUNCIL — 25 June 1997
684
respondents did not know that solicitors can only keep the interest on their
clients' accounts if the clients agree to this.
It is possible that this lack of awareness may, unwittingly, be compounded
by the Practice Direction issued by the Law Society. The document states that a
solicitor shall only be required to pay interest in four specified circumstances.
Clients may easily think that this is a statement of law, which it is not, and
therefore may not insist on receiving the interest to which they are entitled as a
matter of law.
When these matters were drawn to the attention of members of the Bills
Committee, their response was that consumers should be better educated, and
that the Consumer Council or other concern groups could monitor the situation
and, if necessary, make representations to the Law Society in respect of the
Practice Direction.
The Administration continues to believe that the legislative approach to
this problem is preferable but, in the absence of any support from the Bills
Committee, it has agreed to delete the relevant provisions from the Bill. I will,
however, be inviting the Consumer Council to help educate consumers in respect
of their right to interest, and to evaluate the fairness, or otherwise, of the terms of
the current Practice Direction.
Senior Counsel
I now turn to the provisions for the new status of Senior Counsel. The
Bill as drafted empowers the Chief Justice to appoint as Senior Counsel a
barrister who has been admitted for at least 10 years, and who (in the Chief
Justice's opinion) has sufficient ability and experience as a barrister, and
sufficient knowledge of the law, to be accorded that status. The Bar
Association proposed amendments so that:
(a)
there are separate provisions for the appointment of practising
Senior Counsel and honorary Senior Counsel;
(b)
a barrister will only be eligible for appointment as a practising
Senior Counsel if he or she has been practising as a barrister for at
least 10 years, and is of good standing at the Bar;
LEGISLATIVE COUNCIL — 25 June 1997
685
(c)
the Chief Justice will be under a statutory duty to consult the
Chairman of the Bar Association and the President of the Law
Society before making an appointment;
(d)
the Chinese expression for Senior Counsel is changed; and
(e)
the Chief Justice has no power to make rules on this topic.
Following discussions with the Bills Committee, the Administration
agreed to consider revisions along these lines. After consulting both the Bar
Association and the Law Society on suitable amendments, the Administration
submitted draft Committee stage amendments to the Bills Committee. There
was general support for these, although the Honourable Miss Margaret NG
reflected the opposition of the Bar Association to certain aspects of the
amendments.
She has since given notice that she will move Committee stage
amendments in respect of the appointment of Senior Counsel.
Those
amendments differ from the ones that I will move in various respects; and I will
discuss those differences, Mr President, when the Council goes into the
Committee.
Barristers disciplinary tribunals
Dealing now with the provisions in the Bill covering barristers disciplinary
tribunals, these were included at the request of the Bar Association. A few
drafting suggestions were made in respect of these provisions but, subject to
those, they were supported by the Bills Committee. I will, at the Committee
stage, move amendments to improve the drafting as suggested.
Non-statutory scale fees
The Bill proposes to invalidate any non-statutory fee scales created by the
Law Society. The background to this proposal is the existence of a
non-statutory scale of fees for probate work, which the Law Society requires its
members to comply with. The Administration considers that this scale is
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inconsistent with rule 5 of the Solicitors (General) Costs Rules, which is
subsidiary legislation made by the Costs Committee. Rule 5 provides that, in
the case of non-contentious business not covered by the statutory scales, costs
shall be such sum as may be fair and reasonable, having regard to all the
circumstances of the case. That principle should apply to probate work.
However, the non-statutory fee scale is based solely on the value of the estate and
does not take other circumstances into account.
Rule 5 of the Costs Rules was made in 1970, and should have applied to
probate work since then. Instead, the non-statutory fee scale for probate (which
pre-dated rule 5) has continued to be applied by solicitors. The Law Society
informed the Bills Committee that it had overlooked the need to refer the scale to
the Costs Committee when that Committee was set up. However, it now
proposes to review its non-statutory scale and to submit proposals to the Costs
Committee. It has also confirmed that, in the event that the Costs Committee
sets a scale of probate fees, it would not attempt to establish, complement or
enforce an alternative probate scale.
In these circumstances, members of the Bills Committee did not consider it
necessary to legislate on this topic. The Chairman of the Bills Committee, the
Honourable Fred LI, has earlier explained that he will be moving a Committee
stage amendment to delete the relevant clause from the Bill. In the
circumstances, Mr President, the Administration does not oppose that deletion.
The Costs Committee
I now turn to the clause in the Bill relating to the Costs Committee.
The Costs Committee is a statutory committee which has the power to
make rules in respect of fees for solicitors' non-contentious work. It is this
Committee that has established fee scales for conveyancing. Even if, as the
Administration proposes, those scales are abolished, the Committee will still
have an important role to play in respect of solicitor's fees. It could, for
example, set scale fees for other types of work, or prescribe fees for
conveyancing on another basis (for example, at a specified hourly rate).
At present, half of the members of the Costs Committee are solicitors, and
there is no consumer representative, or member with expertise in accountancy or
economics. With the greatest respect to the current members of the Committee,
LEGISLATIVE COUNCIL — 25 June 1997
687
and this is not a lawyer's practice that is really meant, it is not fair to require
members of the community to pay legal fees in accordance with rules made by a
committee which is so narrowly constituted. In addition, it is unfair to expect
members of the Committee to make such far-reaching rules without the
assistance of suitably qualified persons who are not connected with the legal
profession.
The Administration does not consider that the existing composition is
appropriate for modern day Hong Kong. The Bill proposes an additional four to
six members who would represent consumers, or would have substantial
experience of commercial activities. After discussion in the Bills Committee, it
was generally agreed that three such members would be appropriate. However,
no agreement could be reached over the number of solicitors there should be on
the Committee, or over the quorum.
Given that the Bills Committee did not consider that the solicitor members
or the Committee should be outnumbered by lay members, I will be moving a
Committee stage amendment to create a 4:3:3 membership, that is, four solicitors,
three laypersons, and three ex-officio members.
Under this proposal, solicitors will not be outnumbered by laypersons.
And even if the single government official is counted with the laypersons, there
will be an even balance. The High Court Judge and the Registrar of the
Supreme Court, who are members of the independent Judiciary, should not be
regarded as favouring the interests of either solicitors or consumers. There is
therefore no reason why they should be counted amongst those who may take a
pro-consumer approach.
The Law Society and some members of the Bills Committee object to the
Administration's revised proposal on the basis that the majority of the members
of the Committee will not be members of the profession. They consider that his
would seriously undermine the independence of the solicitor's profession. But,
Mr President, solicitors were in the minority on the equivalent committee in
England ever since 1883 without ─ they were being suggested that ─ the
independence of the solicitor's profession being undermined there.
As Members have heard, Mr Fred LI will be moving a Committee stage
amendment on behalf of the Bills Committee to create a 6:3:3 formation, Mr
LEGISLATIVE COUNCIL — 25 June 1997
688
President, it should look like the football formation, that is, six solicitors, three
laypersons and three ex-officio members. Under that amendment, the users of
solicitors services will be outnumbered two to one by solicitors. This
arrangement would therefore perpetuate the system under which solicitors can
effectively block any proposal that is not in their interests. This is not a fair
arrangement, and I would urge Members not to support it.
The Honourable Andrew CHENG will move an amendment which offers a
compromise between the other two proposals, and which would create a 5:3:3
formation. If one excludes from consideration the two members who come
from the Judiciary, solicitors would still outnumber the other members by five to
four. I would therefore urge Members to support the Administration's
amendments, rather than Mr CHENG's.
Developers' legal costs
I now turn to the provisions relating to the payment of developers' legal
costs.
When developers sell off units in a new development, they do not pay their
own legal fees for doing so. A standard term of the sale and purchase
agreement provides that the buyer should pay those fees. The Consultation
Paper on Legal Services proposed that such provisions should be invalidated, and
this proposal received clear public support. Amongst those who supported the
proposal were the Consumer Council, the Hong Kong Society of Accountants,
the Hong Kong Institute of Company Secretaries, and the Hong Kong Junior
Chamber of Commerce.
Clause 18 of the Bill therefore proposes to invalidate contractual
provisions in respect of new developments. Those provisions are unfair for two
reasons:
-
first, they discourage buyers from obtaining the services of their
own solicitor, instead of using the one acting for the developer;
-
secondly, they discourage developers from negotiating reasonable
legal fees.
LEGISLATIVE COUNCIL — 25 June 1997
689
As to the first point, under the current fee scales, a purchaser who opts for
separate representation is likely to pay 50% more than if there was joint
representation. This is because he or she will be required to pay the legal costs
of the seller (equal to half the scale fee) in addition to paying his or her own costs
(at the full scale fee). If there is joint representation, only the full scale fee will
be payable.
This extra legal cost is a significant discouragement to separate
representation. More than half of those respondents to the public opinion
survey who currently prefer joint representation would opt to be separately
represented if they were not required to pay the developers' costs.
If, as the Administration proposes, scale fees are abolished, the contractual
provisions in question would almost certainly continue to make separate
representation more expensive for a purchaser than joint representation. And if
scale fees are retained in a modified form, those scales plus the provisions in
question may well continue to make separate representation more expensive.
The second reason why it is unfair to make a buyer pay the developer's
legal costs is that it means that developers have no reason to ensure that those
fees are reasonable.
Project conveyancing involves the preparation by the developer's solicitor
of many ─
sometimes thousands ─
of identical documents.
The
investigation of title is, of course, done only once. In fact, as the Law Society
concedes, most Consent Scheme developments do not have as many title deeds to
check as a secondary market transaction. The preparation of the sale and
purchase agreement and the assignment is only done once, and is then simply
duplicated.
If developers had to pay their own legal fees, they could use the above
facts to negotiate fees that are lower than at present. They would also have an
incentive to do so.
If, as the Administration proposes, scale fees are abolished, developers
could negotiate their fees freely, and solicitors who were competing for a
developer's conveyancing work could compete on price as well as quality. This
would mean that the fees would be more cost-effective.
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Even if scale fees were retained, developers who had to pay their own legal
costs would have an incentive to press for a fairer system of scale fees for project
conveyancing. At present, the fees payable to the developer's solicitor are based
on the price and number of all units sold. This system does not properly reflect
the value of the work done, since that I have pointed out much of it is duplicated
hundreds of times.
Mr President, two main objections have been raised to the proposed
invalidation of these contract terms. The first is that it would be an interference
with freedom of contract. Indeed it would. But our statute book is peppered
with provisions interfering with freedom of contract on the basis that there is a
need to protect persons who are in a weak bargaining position from unfair
contracts. This is precisely why there is a need to intervene in respect of
developers' legal fees.
The second objection is based on the view that the legislative provision
would be ineffective (since developers would merely add their legal costs to the
price of the property) and counter-productive (since extra stamp duty would then
also be payable by the purchaser).
The Administration does not accept this view. The price of units in new
developments is fixed according to what the market will bear, and is not
calculated by reference to the cost to the developer of building the unit. If sale
prices are already as high as the market will bear, they cannot (by economic
definition) be increased above that. The Administration considers that the
effect of the abolition of scale fees and of the invalidation clause will be to
reduce developers' fees considerably. Even if those reduced fees were added to
the purchase price and extra stamp duty was payable, the purchaser would still
pay less than at present.
Despite these considerations, Mr Fred LI will be moving an amendment
(on behalf of the Bills Committee) to delete clause 18. For the reasons I have
given, I urge you not to support it.
Mr Andrew CHENG will be moving an amendment to clause 18 so that it
applies only where the buyer is separately represented. In other words, it will
provide that, where a buyer is separately represented, he or she cannot be made to
pay the developer's legal costs. This amendment, like the original clause, would
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691
have the effect of encouraging separate representation. However, it would still
allow a developer to pass his legal fees to a buyer who chooses joint
representation. Those who, like the Administration, consider that consumers
should not be subsidizing developers are therefore urged to support the original
clause in the Bill, rather than Mr CHENG's amendment.
SCALE FEES FOR CONVEYANCING
I now turn to the most contentious of the provisions in the Bill, namely,
those providing for the abolition of scale fees for conveyancing. The Law
Society has fought a hard campaign to retain scale fees and has raised many
arguments in their favour. The Administration has considered every such
argument, and has responded to it. So much has been said on this topic, both
within and outside the Bills Committee, that it is impossible in this debate to
cover adequately all those arguments. The Administration's position is set out
fully in a number of papers that were submitted to the Bills Committee.
In the time available, I propose, Mr President, to state what I regard as the
key points in this debate. If I fail to respond to every point raised by Members
today, I hope I will be forgiven.
A defining moment
This Council's decision in respect of scale fees for conveyancing will be a
defining moment for consumer rights in a vital area. The purchase of a home is
a fundamental aspiration of most members of this community. This Council
therefore has the power today to benefit consumers in this area, or to perpetuate
an anti-competitive and unfair system. The abolition of scale fees would benefit
consumers by giving them the benefits of price competition, which will almost
certainly result in lower fees, and which will prevent fees from automatically
rising with property prices.
An unfair system
It is self-evident that scale fees are anti-competitive. They deny the
consumers the benefit of price competition. Moreover, under the system of
scale fees, fees for conveyancing are based on the price of the property, not on
the value of the work done. This is irrational and unfair to consumers. The
unfairness is increased by the fact that when property prices rise, as they are
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692
rising now, there is an increase in conveyancing fees, even though the work
remains the same.
Free market economy
Hong Kong has a free market economy. In December of last year, the
influential Heritage Foundation, for the third successive year, rated Hong Kong
as having the world's freest economy.
Save in wholly exceptional
circumstances, prices of goods and services in Hong Kong's private sector are not
fixed, but are determined by market forces within a competitive environment.
Statutory scale fees for conveyancing run counter to Hong Kong's
successful free market philosophy. The fixing of fee scales involves a
judgement of what the remuneration or profit levels of solicitors ought to be.
This approach is similar to that adopted in planned or commanded economies,
where incomes and prices are fixed by a central authority. It is not an approach
to be endorsed in a free market economy such as Hong Kong.
Scale fees are ignored
Supporters of scale fees argue that they provide certainty over charges and
discourage shoddy work by solicitors. But the reality is that the system of scale
fees has already broken down, and with no adverse effects. Some solicitors
have openly admitted that, at present, "scale fees are a farce", since full scale fees
are rarely charged. Market forces are now operating to bring fees down to an
appropriate level. It is time to recognize this reality and abolish the scales. To
continue the pretence that scale fees apply and are beneficial undermines, in my
judgement, the credibility of the legal profession.
The proposal
The Administration's proposal is that conveyancing fees should be
governed by the same principles that already apply to other non-contentious work
performed by solicitors. This principle is that "costs shall be such sum as may
be fair and reasonable, having regard to all the circumstances of the case" and, in
particular, to seven factors. These include:
(a)
the complexity of the matter or the difficulty or novelty of the
questions raised; and
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(b)
693
where money or property is involved, its amount or value.
The principle permits solicitors, when setting their fees, to take into
account the size of their potential liability if things go wrong. It is not,
therefore, necessary to have scale fees in order for the risk factor to be dealt with.
Support
The proposal to abolish scale fees has strong public support. In response
to the Consultation Paper on Legal Services, the Administration received 44
written submissions. Apart from the Law Society and some individual
solicitors, only four submissions opposed the abolition of scale fees.
The Public Opinion Survey of 1 000 households indicated that 47% of
respondents who had previously consulted lawyers were dissatisfied with the
system.
According to a submission to the Bills Committee made by the Democratic
Party, a public opinion survey conducted by that Party in August of last year
indicated that 60% of respondents supported the abolition of scale fees, as
opposed to 22% who favoured retaining them.
And the Consumer Council has informed the Bills Committee that in 1996,
432 consumers expressed a view in respect of scale fees. All of them were in
favour of abolition. So, Mr President, public opinion on this issue is, as lawyers
say, all one way. It all points to abolition and look at the comments recently in
the media, look at the editorials, editorial after editorial, calling for the abolition
of scale fees. We are listening to the tyranny of the majority or are we listening
to the authentic voice of those who are the users of lawyer services?
The argument for retaining scale fees
The main argument put forward for the retention of scale fees is that their
abolition would lead to poor quality work by solicitors. But scale fees offer no
guarantee of the quality of work, and their abolition would not affect a solicitor's
duty to provide a proper service to his or her clients. There is no basis for the
assertion that standards would drop.
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Some Members have argued that the abolition of scale fees in England has
caused a deterioration in standards. However, as I explained when introducing
this Bill into this Council in June of this year, no link has been established in
England between low-cost conveyancing and shoddy work. The British
Government and consumer groups remain opposed to scale fees. And the
English Law Society has made no attempt to re-introduce scale fees, which it
could do so if it could establish that this would be in the public interest.
Supporters of scale fees also refer to Singapore, which decided in 1995 to
retain them. However, Singapore's Minister for Law is on record as saying that:
"a fixed scale is an anachronism in a free market economy such as
Singapore's" and that
"the complete abolition of scale fees is a matter of time".
Other jurisdictions
It is not only England that has abolished scale fees. Canada, New
Zealand, Scotland and Australia have also abolished them. The Administration
has made enquiries of these jurisdictions. None of them has produced any
evidence to show that abolition was not in the public interest, and none is
proposing to re-introduce scale fees.
The Hong Kong experience
Undercutting of scale fees by solicitors was only prohibited by law in
1980, that is, only 17 years ago. It is alleged that, if price competition were
permitted, this would lead to disastrous results that are contrary to the public
interest. It has also been suggested that, since it may take many years for the
results of shoddy work to emerge, to permit price competition would be like
planting a time bomb.
But price competition was allowed before 1980. No evidence has been
submitted of any disastrous consequences before then. And if price competition
before 1980 amounted to a time bomb, why has it not exploded by now?
There is therefore no evidence to suggest that, if scale fees are abolished,
the Law Society will be unable to maintain standards within the profession, or
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695
that individual solicitors do not have the ability and integrity to perform their
work properly.
A compromise
Given that the Law Society is strongly opposed to the abolition of scale
fees, some Members may be tempted to seek a compromise solution which is
aimed to satisfy both the Law Society and consumers. For some, the perceived
compromise is the retention of revised fee scales. Revised fee scales might, on
the face of it, offer some benefits to consumers. But is this the best way
forward?
Revised fees scale would not, of course, address the fundamental
objections to scale fees, which are that they prevent price competition, and they
do not reflect the value of the work done. And what benefit would consumers
actually obtain under revised scales? As of today, it is not known:
-
when the Costs Committee will make rules to establish revised
scales
-
what those revised scales will be, or
-
when those revised scales are intended to come into operation.
Two years after the Law Society accepted there was a need to revise the
scales, the Costs Committee has yet to make amendment rules to establish
revised fee scales. Nor is it known when those rules will be made or what they
will be . If the revisions were based on the last set of proposals submitted by
the Law Society to the Costs Committee, Members should remember that the
Consumer Council has studied those proposals and considers them to be
unsatisfactory.
The current levels of scale fees were set in 1983. The fees in that year for
buying a property costing $1 million, with a 70% mortgage, were $18,625.
Taking into account the increase in property prices since then, the scale fees for a
comparable transaction this year are $73,625. In other words, the nominal
increase in solicitors' fees since the current fee scales were set is nearly 300%.
It is against this background that one must judge whether a reduction of scale
fees along the lines proposed by the Law Society is adequate.
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And that is not all. As I said earlier, the system of scale fees has to a
large extent broken down. But if this Council decides to retain them, it will also
be invited to amend section 56 of the Legal Practitioners Ordinance in order to
prevent solicitors from charging less than the scale fees. This amendment was
proposed by the Law Society, clearly signals an intention to enforce strict
adherence to the scales. I will explain my opposition to the proposed
amendment to section 56 more fully at the Committee stage. For now, I would
merely point out that, if scale fees are retained and section 56 amended, it is
possible that consumers will be asked to pay more under revised fee scales than
they are, in practice, paying now.
Finally, I would point out that revised fee scales could very quickly create
excessive fees, since property prices can rise very rapidly. And it is unrealistic
to expect frequent revisions of the scales. The current revision exercise, I
would remind you, has taken over two years and is still not complete. In the
Administration's view, it is unacceptable to require consumers to be bound by fee
scales that were fixed by reference to the prices of property a number of years
ago.
For all the reasons I have given, I urge Members to vote for the Bill as it
stands, and thereby to abolish scale fees for conveyancing.
Thank you, Mr President.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order
43(1).
PRESIDENT (in Cantonese): As I said just now, the Honourable James TO and
the Attorney General had asked my permission to move amendments without
notice, and I had promised to think about it. However, I now feel that there
might be some problems, since other Members might object. I wish to listen to
Members' views first. Afterwards, Mr TO, the Attorney General, other parties
LEGISLATIVE COUNCIL — 25 June 1997
697
and interested Members can discuss with me. I now suspend the sitting. We
will resume at 2 pm.
12.27 pm
Sitting suspended.
2.09 pm
Council then resumed.
Committee stage of Bill
Council went into Committee.
LEGAL SERVICES LEGISLATION (MISCELLANEOUS AMENDMENTS)
BILL 1996
Clauses 2 to 6, Part III, clauses 9 to 13, Part V, clauses 19 and 21
ATTORNEY GENERAL: Mr Chairman, I move that clauses 2 to 6, Part III,
clauses 9 to 13, Part V, and clauses 19 and 21 be amended as set out under my
name in the paper circulated to Members.
The amendment to clause 2 makes it clear that the Law Society may
prescribe fees to be paid by those applying to be registered as solicitor
corporations.
The amendment to clause 5 is to improve the drafting of proposed new
section 39BA subclause 7 of the Legal Practitioners Ordinance, which relates to
foreign lawyer corporations.
The amendment to Part III will delete it from the Bill. Part III relates to
interest on solicitors' clients' accounts. As I explained in my speech at the
resumption of the debate on the Second Reading, the Law Society has made a
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Practice Direction on this subject and it has therefore been agreed that the
legislative provision should be withdrawn.
The amendments to clause 9 are to improve the drafting of provisions
relating to barristers disciplinary tribunals.
The amendment to Part V will delete it from the Bill. Part V relates to
multi-disciplinary practices. As I explained in my main speech earlier today,
the Bills Committee was of the view that the problems associated with these
practices should be resolved before legislation is put into place in respect of
them.
The amendment to clause 19 will make it clear that the provisions in
respect of solicitor corporations can be brought into operation separately from
those in respect of foreign lawyer corporations.
The clauses I have mentioned are also amended by way of the addition of a
Chinese text.
Mr Chairman, I beg to move.
Proposed amendments
Clause 2 (see Annex XII)
Clause 3 (see Annex XII)
Clause 4 (see Annex XII)
Clause 5 (see Annex XII)
Clause 6 (see Annex XII)
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699
Part III (see Annex XII)
Clause 9 (see Annex XII)
Clause 10 (see Annex XII)
Clause 11 (see Annex XII)
Clause 12 (see Annex XII)
Clause 13 (see Annex XII)
Part V (see Annex XII)
Clause 19 (see Annex XII)
Clause 21 (see Annex XII)
CHAIRMAN (in Cantonese): I would like to remind Members that the script has
been amended and clause 1 will be discussed after all other clauses and Annexes
have been scrutinized. Therefore, the Attorney General is moving that clauses 2
to 6, Part III, clauses 9 to 13, Part V, and clauses 19 and 21 be amended.
Question on the amendments put and agreed to.
Question on clauses 2 to 6, Part III, clauses 9 to 13, Part V, clauses 19 and 21,
as amended, put and agreed to.
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Clause 8
CHAIRMAN (in Cantonese): Both the Attorney General and Miss Margaret
NG have separately given notices to move amendments to clause 8.
I propose that the amendments to clause 8, proposed separately by the
Attorney General and Miss Margaret NG, be debated together in a joint debate.
CHAIRMAN (in Cantonese): Committee shall debate the amendments to clause
8, proposed separately by the Attorney General and Miss Margaret NG, in a
joint debate. I will first call upon the Attorney General to move his
amendments, as he is the public officer in charge of the Bill.
ATTORNEY GENERAL: Mr Chairman, I move that clause 8 be amended as
set out under my name in the paper circulated to Members.
The purpose of this amendment is to revise the provisions in respect of the
new status of Senior Counsel. As I explained in my main speech this morning
my proposed amendments are supported by most members of the Bills
Committee and differ from those being moved by the Honourable Miss Margaret
NG in various ways.
The essential difference is that my amendments will create a larger pool of
lawyers who are eligible for appointment. My amendments will allow the Chief
Justice to appoint a person as a Senior Counsel in an honorary capacity if the
person is a barrister or solicitor or a legal academic who has, in the Chief
Justice's opinion, provided distinguished service to the law of Hong Kong.
Miss NG's amendment would limit those eligible for such appointment to
legal academics and the holders of certain offices in the Legal Aid Department,
the Official Receiver's Office and the Intellectual Property Department.
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701
Lawyers who do not fall into these categories, whether in private practice or
government service, would not be eligible.
The Administration does not agree with such a limited approach. In
England, the Lord Chancellor considers academic lawyers and other lawyers,
whether barristers or solicitors, notably those in the employed and public sectors,
as potential recipients of an honorary appointment. The Administration
considers that a similar system should operate in Hong Kong.
Miss NG's proposal would exclude from eligibility the majority of lawyers
in the public sector and all those in the private employed sector. The
Administration does not agree with these exclusions. It considers that the Chief
Justice should be free to exercise his judgment to appoint suitable persons for an
honorary appointment without being limited to a small field of candidates.
With regard to the appointment of Senior Counsel otherwise than in an
honorary capacity, both the Administration's and Miss NG's amendments would
limit appointments to barristers who have, in the opinion of the Chief Justice,
sufficient ability and standing as a barrister and sufficient knowledge of the law
to
be accorded that status. The difference between the two sets of amendments are
in their requirements as to the current status of the barristers and as to their past
experience.
The Administration proposes that to be eligible a barrister should currently
either be practising at the Bar in Hong Kong or be a government Legal Officer or
a holder of certain offices in the Legal Aid Department, the Official Receiver's
Office or Intellectual Property Department.
Miss NG's proposal is to limit eligibility to those who are currently
practising at the Bar or are practising as an advocate whilst being a Legal Officer.
A similar difference arises in respect of the past experience required.
Miss NG's amendment requires a person to have for not less than 10 years'
practice at the Bar in Hong Kong or practised as an advocate whilst being a Legal
Officer. The Administration's proposal would also make eligible those who
have for not less than 10 years been a Legal Officer or a holder of one of the
government legal offices I referred to a moment ago, or practised as an advocate
in a court of unlimited jurisdiction in another common law jurisdiction.
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The Administration's proposal reflect the existing practice in appointing
local Queen's Counsels. There are examples of local appointments to the rank
of Queen's Counsel both of barristers in, for example, my department, who have
not practised as advocates and barristers who have practised at the Bar in Hong
Kong for less than 10 years but who had previously practised at the Bar in
another common law jurisdiction. Moreover, there is no reason to require
advocacy experience of a barrister in my department but not of a barrister in
private practice.
For the reasons I have given, the Administration considers that its
proposed Committee stage amendments are the best basis for the new system of
appointing Senior Counsel. Moreover, these amendments were supported by
most members of the Bills Committee. I would, therefore, urge Members to
support those amendments. Thank you, Mr Chairman.
Proposed amendment
Clause 8 (see Annex XII)
CHAIRMAN (in Cantonese): I will call upon Miss Margaret NG to speak on the
amendment moved by the Attorney General as well as her own proposed
amendment, but I will not ask Miss NG to move her amendment unless the
Attorney General's amendment has been negatived. If the Attorney General's
amendment is agreed, that will by implication mean that Miss NG's proposed
amendment is not approved.
MISS MARGARET NG: Mr Chairman, I oppose the Administration's
amendment to clause 8 of the Bill and will later move my own amendment to
clause 8. Clause 8 concerns the appointment of Senior Counsel, which is in
effect the continuation of the appointment of Queen's Counsel by another name.
It was not expected to be a controversial issue. The Bar has no objection to the
new title of Senior Counsel. Indeed, the only point they raise about the
proposed new section 31A to be added to the Ordinance is that the criterion
concerning a barrister's standing be made explicit as part of the qualification for
being appointed as Senior Counsel.
LEGISLATIVE COUNCIL — 25 June 1997
703
A small amendment to the proposed new section 31B was also suggested
and was accepted by the Administration. The Bar's request that standing be
made explicit as a criterion was strongly resisted by the Administration in the
Bills Committee until it became clear that the Bills Committee supported the
Bar's view. However, the bizarre result was that at the eleventh hour, the
Administration came up with an elaborate amendment to the proposed 31A
which, while incorporating standing, not only far exceeded the original purpose
of clause 8 but also the consultation paper from which the proposals issue.
Under clause 8, the proposed 31A provides for the appointment of
barristers as Senior Counsel. There is no mention of any other categories of
persons being appointed as Senior Counsel. There is no mention of any system
of honorary Senior Counsel, which is totally new to Hong Kong. The
Administration was unable to point to one single instance of an appointment in
the past. Yet the present amendment of the Administration does not only
provide for honorary Senior Counsel but also for the appointment to this title
people other than barristers.
Under 31A subsection (2)(c) of their proposed amendment, four categories
of legal officers may be appointed as Senior Counsel. Under 31A subsection
(4) a person may be appointed as Senior Counsel in an honorary capacity if that
person is a barrister or a solicitor or a member of the academic staff of a faculty
or school of law in a university whether in Hong Kong or elsewhere. The net is
cast extremely wide.
These matters have never been raised until the last stages of the Bills
Committee. The Bar cherishes the honour and the distinction of appointment as
Queen's Counsel, and in future as Senior Counsel. The title and what it stands
for have long been established in Hong Kong and well understood by the public.
Such appointments have always been made from those actively practising in
court, even when they are selected from the Attorney General's Chambers.
As far as the appointment of solicitors to the title is concerned, the
proposal in the Attorney General's consultation paper ─ Members could refer
to paragraph 2.68 ─ states the policy intent clearly, and I quote: "that solicitors
who acquire full rights of audience should be eligible to acquire that status."
Mr Chairman, I mean no disrespect to academics or to the other branch of the
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profession whom I also have the honour to represent. I am all for a proper
system honouring distinguished practitioners of that branch and I know the Bar
feels the same. What we strongly object to is this high-handed and downright
contemptuous manner in making changes to the highest honour given to the Bar
without so much as giving the Bar Council an opportunity to consult its members
or be consulted by the Bills Committee.
The Administration's amendment of 31A was still not finalized when it
was presented to the Bills Committee at its last meeting on 6 June 1997. But for
the hurried copy of correspondence made available to me by the Chairman of the
Bar, I would not have been alerted to the situation. By that stage, members
were far too tied up in their punishing schedules to go into the matter properly.
Mr Chairman, important changes as these cannot be allowed to come about
by default. There is plenty of opportunities in future to consider them. With
the assistance of the Chairman of the Bar, I have tried to base my amendment on
the Administration's as far as possible, removing only those provisions we find
most unacceptable. I urge Members to support my amendment and oppose the
amendment of the Administration.
Mr Chairman, I also would like to respond at once to what the Attorney
General has just said. The Attorney General referred to the practice in England,
the appointment by the Lord Chancellor of all sorts of categories of persons.
Mr Chairman, England has its own system. For some reason, that system of
appointment of honorary silks has never been practised in Hong Kong. The
Attorney General proposes to introduce this at the eleventh hour. In the future,
Hong Kong may want to follow the same system or it may want to have a system
of its own. Our present need is to preserve the present system, not to contract or
to expand by following the example of England.
The Attorney General may well have his own reasons for expanding or for
arguing on his own amendment. My point is simply that if new things are going
to be introduced there should be proper consultation. There should be proper
discussion and not to be done in this manner.
Mr Chairman, later on when I move my amendment, I will urge Members
of the Council to support my own amendment, and therefore at this point I would
ask Members to vote against the Attorney General's amendment. Thank you.
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705
MISS EMILY LAU: Mr Chairman, from the past experience this Council learns
that once we deal with the names "barrister" or "solicitor" or whatever, we are
opening a can of worms. I hope this debate will not drag on for four hours, Mr
Chairman.
Mr Chairman, actually, I am quite sympathetic to the Administration's
proposal, although of course you know that I am married to a barrister, now
Queen's Counsel. I do not know whether I have to declare an interest.
But I think one point which Miss NG mentioned which I would like the
Attorney General to respond to immediately in order to help me to clarify in my
mind, and in some Members' minds who have not yet decided, is whether the
Administration has used a high-handed and contemptuous manner to treat the
Bar, and also even Members of this Council, if you introduce this thing at the
very late stage. And I was told, some bird somewhere told me that it was
something that was dreamt up by some member of the Chambers at the very late
stage, concocted and then tried to rush it through. So, maybe the Attorney
General owes this Council some clear explanation on the development of things.
Was it pushed in at a very late stage? That is one point. It is very important,
because I am sure the Administration does not want to treat the Bar or any
Member of this Council in a high-handed and contemptuous manner.
And the other thing is, which I have heard also, concerned with the thin
end of the wedge. They are afraid, there are all kinds of people, you know how
close this profession is. I am in favour of breaking it open. I mean, I am in
favour of many of the reforms, but they are afraid that it may let others in in this
way, and in future the Administration may give them right of audience and all
that, the floodgate syndrome. I am sure the Attorney General has heard of that
before.
So, Mr Chairman, I hope the Administration would clarify these points,
and that would make us, you know, make up our mind, help us to make up our
mind easily. Thank you.
MR ANDREW CHENG (in Cantonese): Mr Chairman, I rise to speak in
support of the Honourable Miss Margaret NG's amendment. As I have said
during the resumption of the second reading debate, one of the Democratic
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Party's important views is centering on how we should look at the spirit behind
respecting professional autonomy. When we have to make a choice between
professional autonomy and consumer interest, which of them should we respect?
We have to look into the amendments to see if there is a conflict between
professional autonomy and consumer interest.
In our opinion, there is a major difference between a barrister and a
practising solicitor as the main duty of a barrister is to be an advocate in court.
We respect the viewpoint of the Hong Kong Bar Association and Miss Margaret
NG. However, there are two big differences between Miss NG's amendment
and that proposed by the Administration. First of all, she proposes that the
appointee should have practised in Hong Kong as an advocate for not less than
10 years. The second major difference is that in Miss NG's amendment, she
makes the experience of advocacy a requisite. Currently, there may be some
barristers in the Legal Department and the Legal Aid Department who have no
experience of advocacy at all. I believe this is the most significant difference.
With regard to this point, we do respect professional choice and autonomy. As
regards the title "Senior Counsel", we feel that it is only a kind of honorary
appointment. Looking into the history of Hong Kong's legal profession, we will
find that there has never been such a system in Hong Kong. The Administration
says that there is a similar practice in England, but it does not make any sensible
relationship from a consumer's point of view because it is too far away from the
consumer. Mr Chairman, in view of our respect to professional autonomy and
the unique job nature of the barrister of having to be an advocate in court, we
respect the amendment proposed by the Hong Kong Bar Association and Miss
Margaret NG.
In other words, we will negative the Administration's
amendment and support Miss Margaret NG's amendment.
Thank you, Mr Chairman.
MR RONALD ARCULLI: Mr Chairman, I suspect in this Chamber I am
probably the only person who is experienced enough to speak on this particular
issue about Honorary Senior Counsel and Senior Counsel. Having had the
benefit of starting my own career at the Bar, which happily or unhappily, I
voluntarily terminated after 13 years of practice and turned my back, so to speak,
on the Bar by becoming a solicitor in 1976. So, I think on this particular issue, I
think, I suspect my heart is with the Bar whereas my head would be with my
present fellow solicitors.
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707
But I think the practical aspect is that in terms of the long-term
development of any profession, and particularly the legal profession where, at a
time when we need a strong, independent and fearless legal profession, I would
be extremely hesitant to do anything to upset either branch of the profession
which is equally important to Hong Kong.
We have had many discussions in the past about the possibility of fusion,
and I remember when I was approached by the Law Society Committee on the
issue of fusion my first question was "Have you consulted the Bar?". You
cannot force professionals to do things which they honestly believe it's not in the
best interests of the community firstly, and secondly, of the profession itself.
So, on the issue of Senior Counsel and Honorary Senior Counsel, I have
just obtained exemption from my party whip, the Honourable Miriam LAU, for
leave, as it were, to depart from the Liberal Party's stated position. I have the
greatest admiration for my former colleagues at the Bar, and if we look to the
members of the Law Society, I have no doubt that there are a few, or maybe even
quite a few members of the Law Society who deserve and have earned perhaps
the honour of being nominated Honorary Senior Counsel. But whether they be
in the tens or in hundreds, which I doubt because I imagine one would need a
certain amount of litigious experience and advocacy which solicitors generally
find not, as it were, their neck of country, they generally find that they are much
more capable of preparing a case, of filtering the relevant facts and putting it in
front of the table of a barrister to give due consideration to the best way to
conduct the case.
So, with these few words, Mr Chairman, I am afraid that I will take issue
with the Government on this particular matter and I will in fact support the
Honourable Miss Margaret NG. I wish I could have persuaded my fellow
Liberal Party members to go down the same path as I have, but equally I respect
their views as they respect mine. Thank you.
MR MARTIN LEE: Mr Chairman, with all due humility I have to make a
declaration of interest, being the only Queen's Counsel in this august body.
There used to be another Queen's Counsel, that is, your illustrious predecessor
who of course is also a Queen's Counsel, and a very eminent one at that.
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I remember when I came back to Hong Kong to practise at the Bar, the
Honourable Ronald ARCULLI was actually senior to me and he was holding a
very important position as Honorary Secretary of the Hong Kong Bar
Association. I am happy, therefore, that he has so valiantly defended the
Queen's Counsel, soon to be renamed Senior Counsel.
I daresay that he may be the most qualified person, actually, to be made
Honorary Senior Counsel if we were to extend that to the other profession, but
Mr Ronald ARCULLI is even more humble as a person than I am, so I
understand that he is not actually going for it.
MR RONALD ARCULLI: Yet!
MR MARTIN LEE: Yet. Mr Chairman, I have no difficulties about the
change of name to Senior Counsel, but that is set for hereafter. The Chinese
name has a little difficulty ─
" 資 深 律 師 " ─ which can be used by any
experienced barrister, actually, and the problem is in Chinese we have no capital
letters as in "Senior Counsel", so we cannot use capital letters for " 資深律師", but
I will go along with that.
I actually doubt, Mr Chairman, if I were to be applying for appointment of
Queen's Counsel, as we say applying for silk today, I wonder if I would have got
it because that requires 10 years of active practice as an advocate in the Hong
Kong court, and you see me more often here than in the courts of Hong Kong, so
I doubt it if I would have got it if I had not applied much earlier, in fact in 1979.
Actually, I am extremely glad that my party members who normally do not
agree with me happen to agree with the Honourable Miss Margaret NG and the
Hong Kong Bar Association, and I am sure many of them will say "yes, we still
do not agree with you, Martin" on this one. We actually had a discussion about
that. Of course this seems to be a very rushed and ill-conceived idea because it
was rushed at the very last minute, it seems to us. And if I may borrow an old
American expression, "if it ain't broke, why change it?". Why rush it indeed if,
as Miss Margaret NG said, if upon reflection, after detailed discussion with the
Bar, especially the Inner Bar as it is called, it be thought to be a good idea, then
perhaps we could have another look at it.
LEGISLATIVE COUNCIL — 25 June 1997
709
But in the meantime, actually, the Bar has made a concession through the
amendment soon to be proposed by Miss Margaret NG allowing certain types of
persons indeed to be given this honorary title. So, I am glad that the
Democratic Party has no hesitation in supporting Miss Margaret NG's proposed
amendment, so we will be opposing the Attorney General's amendment.
CHAIRMAN: Does any other Member wish to speak? Miss Margaret NG, do
you wish to speak for a second time?
MISS MARGARET NG: No, Mr Chairman, thank you very much.
CHAIRMAN: I am sorry, Miss Margaret NG, if you do not speak now, as it is a
joint debate, you will not have the opportunity to speak again.
MISS MARGARET NG: Oh, I am sorry. Thank you, Mr Chairman, very
much. In that case I will, because I thought I would get another chance.
CHAIRMAN: When you move your amendment, if with some luck, the Attorney
General's amendment is negatived, then there will be no debate. So if you wish
to speak you will have to speak now.
MISS MARGARET NG: Mr Chairman, maybe my optimism got away with me
and I actually did think I was going to stand up again, but thank you very much
for reminding me.
Mr Chairman, I am very grateful to the words of Members supporting my
motion, particularly the Honourable Ronald ARCULLI. I know how difficult it
is nowadays for one to depart from the party line, but I particularly appreciate the
Liberal Party in respecting the wish of Ronald and saying that on this matter
Ronald is free to cast his vote wherever his heart lies. Mr Chairman, I am very
grateful to him.
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Mr Chairman, I am also very grateful on behalf of the Bar to the support of
the Democratic Party. In answer to the Honourable Miss Emily LAU as to
whether the Bar was treated in a high-handed fashion and contemptuously, I
would invite Miss LAU to look at the original clause 8 under which section
31(A) is proposed, and there is no mention of anyone other than a barrister.
Mr Chairman, if the Administration had contemplated an honorary system
including various categories of people, the honourable thing to do is to put it into
the Bill so that Members of the Bills Committee will take notice of it so that the
Bar and the Law Society will have prior notice of it so that when they come
before the Bills Committee they will know that they have this to address. And
if the Bar or the Law Society have any strong views about it, they could have
alerted the Bills Committee at the beginning and say "this is a controversial issue.
Please allow room to discuss".
But, as the Honourable Fred LI no doubt recalls, when the Bills Committee
tried to work out its plan in the beginning, we all knew how pressed for time we
were, how complicated the Bill was and we separated the controversial areas
from the non-controversial areas and we all thought that Senior Counsel was a
non-controversial matter and it would not take a very long time, so consequently
the Bar was not prepared for this.
Mr Chairman, I would also like to draw attention to the fact that when this
was finally proposed in the Administration's amendment, I understand that a copy
was then sent to the Chairman of the Bar, Miss Audrey EU, Queen's Counsel, and
she was given, I think, less than five days including some holidays to make a
response to that letter. It was not possible for her to consult even her Bar
Council within that time, let alone consult members.
If that is not treating the Chairman of the Bar contemptuously, I do not
know what is. Throughout the Bar has voiced the strongest view and yet the
Bar was pressured into co-operation into, given so little time, that all that the
Chairman of the Bar could think of was to reduce the area of controversy, and
this is what we finally ended up with.
Mr Chairman, I would also like to respond to Miss LAU, I know Emily's
view is to open up the profession and I am not saying at this point that I am
against that, but even in the Attorney General's paper one sees a sort of
progression. If we should arrive at the point when solicitors will be given the
LEGISLATIVE COUNCIL — 25 June 1997
711
right of audience under certain conditions and this is actually taken up, then the
next thing to do is to also say, "Well, this comes as a natural development that
solicitors with a right of audience should of course also be eligible for
appointment of Queen's Counsel, or in future Senior Counsel". But since for
some reason, which has been explained by the Attorney General, we have not
arrived at this point, then the logical thing to do is to leave room for the future so
that in future we can discuss developments.
But right now there is another point which nobody has touched on which
even I wonder if the Bills Committee even noticed, and that is the appointment of
people who may be outside Hong Kong. We have never contemplated this,
where it is an academic of a member of the law faculty or law school in a
university, that university can be in Hong Kong or not. I mean, are we looking
at that sort of system? Mr Chairman, also the Bar is rather wary of what we call
"artificial silk". Queen's Counsels are called "silks", so honorary Queen's
Counsel we call "artificial silks". These are very often used as political
appointments. When you cannot think of anything else to do then, I am sorry, I
do not mean any disrespect to that system, but this is sometimes used as a
political appointment. Now, is Hong Kong contemplating that kind of
appointment? It may be very welcomed by the community, but let us talk about
it. Let us put it on the table.
Mr Chairman, I would also like to make some reference to the other branch
of the profession whom I also represent. Mr Chairman, the solicitors have made
no representation whatsoever to this amendment. They have not said "Yes, why
is it that 31A does not allow solicitors to be appointed?" They have said
nothing of the kind. Mr Chairman, I respect them enough to believe that they
would scorn to get in on the tailcoats of the Bar at the eleventh hour. They have
the confidence to have an honorary system all to themselves. I do not think that
when it is put like this, of course it is difficult for the Law Society to say "No,
please cross out solicitors", because it would mean at the least a discourtesy to
the Attorney General. But I think that this is wrong just to make use of any old
feelings which might exist between the Bar and the Law Society.
Mr Chairman, still on Emily's point of opening up the profession, I myself
do not see why in the future the two branches of the profession should not sit
down and discuss the re-organization or the development of the profession as a
whole, but in the past few years the atmosphere has been made most impossible
for that to happen because every discussion is prefaced with attack either on the
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other branch of the profession or both branches being attacked by the
Administration at the same time. So, I take this opportunity to appeal to the
Administration to leave the legal profession alone. Let us catch our breath.
Let us mend any feelings of opposition we had in the last few years. Let us sit
down together. Let us discuss our own problems and do not rush us because it
will be counter-productive.
Mr Chairman, I thank you for this opportunity and I would urge Members
to vote against the Attorney General. If you are minded to expand the honorary
silk system, there are plenty of chances in the future to do so. Voting it down
today simply means that you do not consider it now.
Thank you, Mr Chairman.
ATTORNEY GENERAL: Mr Chairman, can I start off by going straight to the
quite serious accusations that have been levelled at the Administration that we
have treated the Bar and possibly this Council with contempt and that we have
been high-handed. Those comments were made, I think, specifically in relation
to the proposal that there should be a rank of Honorary Senior Counsel.
Could I first of all refer to a paper from the Bar Association to the Bills
Committee of January this year dealing with various matters? Part of that
submission dealt with the appointment of both practising and non-practising
Senior Counsel and the Bar made its position plain, that it did not wish to
conflate the appointment of practising and non-practising Senior Counsel under
one statutory provision. It makes some powerful points about the method of
appointment. But in what I would have regarded as a significant phrase it says
that, and I do not want to quote them out of context, Mr Chairman, I will quote
the whole paragraph:
"The Bar considers that if it is deemed desirable for there to be a senior
status to be accorded on non-practising barristers statutory provision
should be in place for such appointments. The Bar has indicated to the
Attorney General that a separately framed proposal for appointment of
non-practising Senior Counsel would receive sympathetic consideration by
the Bar."
LEGISLATIVE COUNCIL — 25 June 1997
713
So, the matter was in issue certainly in January of this year. The
Administration sent a copy of its revised proposals dealing with Honorary Senior
Counsel to the Bar Association on 22 April, and the Bar replied on 28 saying that
the appointment of Honorary Senior Counsel should be restricted to barristers.
The Administration informed the Bills Committee of that comment in a letter
dated 16 May, and when the Bills Committee discussed the matter on 5 June, I
believe, although I was not present, the Honourable Miss Margaret NG repeated
those comments.
I have taken some time to go through those points to, I hope, allay
concerns that the Administration has been high-handed or treated the Bar
Association with contempt. The letter to which Miss Margaret NG referred, the
letter to the distinguished Chairman of the Bar, attached the actual text of the
Committee stage amendment, which was closely based on detailed proposals that
had been sent earlier to the Bar and on which the Bar had commented. So, I do
not think it would be accurate to say that these were matters that were sprung on
the Bar at the last minute, and certainly there has been and there is no question of
us treating the Bar with contempt or in a high-handed manner, much less this
Council.
Mr Chairman, still on the question of Honorary Senior Counsel, I think it
just has to be borne in mind that this is a status that would not, of course, accord
precedence and would not confer any right to practice. It is a status that in other
places, Britain, is conferred fairly rarely on distinguished people, academics,
whether they are barristers or solicitors. There have been very distinguished
solicitor practitioners who have been made Honorary Queen's Counsels. The
late and great Dr MANN was made an Honorary Queen's Counsel. He was a
solicitor in one of the leading London firms, one of the world's leading authority
on the law relating to money. There is no question of conferring a right to
practice. It is, I think, a modest and moderate proposal to enable on rare
occasions distinguished people who have made contributions to the law in Hong
Kong to be given some form of recognition.
As for the point that it might allow academics elsewhere to be made
Honorary Senior Counsel, I would simply point out that the text makes it clear
that the services must have been provided to the law in Hong Kong.
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So, this issue has been under discussion for some time. It has not been
sprung on the Council or on the Bills Committee or on the Bar. It is true that
we and the Bar take a different view of this matter.
Mr Chairman, if I could just pick up a point in relation to Miss Margaret
NG's amendment to the clause 8 relating to practising Senior Counsel, I would
just like to point out that the effect of that amendment would not be to replicate
the existing system, it would in fact be to narrow it. The effect of Miss NG's
amendment would be to limit eligibility to be appointed to the ranks of Senior
Counsel to those who have practised at the Bar in Hong Kong or practised as an
advocate while holding office as a legal officer within the meaning of the Legal
Officers Ordinance.
Now, that is not the present system. There have been members, say of my
department, who have been appointed Queen's Counsel who have not practised
as advocates whilst holding office within the Government. I can think of at
least two former law draftsmen who had never practised before the courts in
Hong Kong but who were nonetheless made Queen's Counsel in recognition of
their service as barristers ─
they were both barristers ─
within my
department. So, the effect of Miss NG's amendment would be to, not to
replicate the present system but to change it and narrow it. So, if Miss NG is
right in saying that we should keep to the present system then we should keep to
the present system, and that means as regards practising Senior Counsel, the
Council should adopt my amendment because Miss NG's amendment would
narrow the existing practice.
Question on the Attorney General's amendment put.
Voice vote taken.
THE CHAIRMAN said he thought the "Noes" had it.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
LEGISLATIVE COUNCIL — 25 June 1997
715
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the question that the amendments moved by the Attorney
General to clause 8 be approved.
Will Members please first register their presence by pressing the top button
and then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Members may wish to check their votes. All
present! The result will now be displayed.
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr Edward HO, Mrs
Miriam LAU, Mr Frederick FUNG, Mr Henry TANG, Mr Howard YOUNG, Mr
James TIEN, Mr CHAN Kam-lam, Mr CHEUNG Hon-chung, Mr IP Kwok-him,
Dr LAW Cheung-kwok, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan
and Mr NGAN Kam-chuen voted for the amendment.
Mr Martin LEE, Dr David LI, Mr SZETO Wah, Mr LAU Wong-fat, Mr Ronald
ARCULLI, Dr LEONG Che-hung, Mr Albert CHAN, Mr CHEUNG Man-kwong,
Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr
Eric LI, Mr Fred LI, Mr James TO, Dr Philip WONG, Dr YEUNG Sum, Mr
WONG Wai-yin, Miss Christine LOH, Mr LEE Cheuk-yan, Mr CHAN
Wing-chan, Miss CHAN Yuen-han, Mr Andrew CHENG, Mr Paul CHENG, Mr
CHENG Yiu-tong, Dr Anthony CHEUNG, Mr CHOY Kan-pui, Mr David CHU,
Mr Albert HO, Mr LAU Chin-shek, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr
LEUNG Yiu-chung, Miss Margaret NG, Mr SIN Chung-kai, Mr TSANG
Kin-shing, Dr John TSE, Mrs Elizabeth WONG and Mr YUM Sin-ling voted
against the amendment.
Mr CHIM Pui-chung and Mr Ambrose LAU abstained.
THE CHAIRMAN announced that there were 17 votes in favour of the
amendment and 39 votes against it. He therefore declared that the amendment
was negatived.
716
LEGISLATIVE COUNCIL — 25 June 1997
DR LEONG CHE-HUNG: Mr Chairman, I move under Standing Order 37(4)
that in the event of further divisions being claimed in respect of the remaining
motions at the Committee stage of the Legal Services Legislation (Miscellaneous
Amendment) Bill 1996 at this sitting the Committee do proceed to each of such
divisions immediately after the division bell has been rung for one minute.
Question on the motion proposed, put and agreed to.
CHAIRMAN (in Cantonese): For further divisions being claimed in respect of
the remaining motions at the Committee stage of the Legal Services Legislation
(Miscellaneous Amendment) Bill 1996 at this sitting, the duration of the division
bell will be shortened from three minutes to one minute.
CHAIRMAN (in Cantonese): As the amendment to clause 8 proposed by the
Attorney General has been negatived, I now call upon Miss Margaret NG to
move her amendments to clause 8.
MISS MARGARET NG: Mr Chairman, I move that clause 8 be amended as set
out in the paper circularized to Members.
Proposed amendment
Clause 8 (see Annex XII)
Question on the amendment put and agreed to.
Question on clause 8, as amended, put and agreed to.
Clause 16
MR FRED LI (in Cantonese): Mr Chairman, I move that clause 16 be amended
as set out in the paper circularized to Members.
LEGISLATIVE COUNCIL — 25 June 1997
717
I move this amendment in the capacity of the chairman of the Bills
Committee. The purpose of clause 16 is to render any non-statutory scale fees
set by the Law Society void, while the amendment seeks to delete clause 16, the
logic and justification for which have been elaborated by me during the
resumption of the Second Reading debate.
The Administration no longer
resisted the deletion of clause 16 after learning that the Law Society has
undertaken to submit the question of probate fees to the Costs Committee.
Mr Chairman, please allow me to speak in another capacity. Can I speak
for a second time after I have moved the amendment on behalf of the Bills
Committee?
CHAIRMAN (in Cantonese):
Committee.
Yes, you would get another chance in the
MR FRED LI (in Cantonese): Mr Chairman, I move this amendment on behalf
of the Bills Committee.
Proposed amendment
Clause 16 (see Annex XII)
MISS MARGARET NG (in Cantonese): Mr Chairman, I speak to urge
Members to support amendments to clauses 16 and 17(f) moved by the
Honourable Fred LI in has capacity as chairman of the Bills Committee. The
amendments seek to delete the provision proposed by the Administration to
abolish the scale fees.
The issue of scale fees is a very complicated one. It will bring a
far-reaching impact on the legal profession and the general public whether the
scale fees is abolished or not. It is practically not easy to get hold of the actual
situation and weigh the merit and demerits of the existing system in order to
balance to a reasonable extent the benefits of all sides concerned. A total of 18
Members have joined the Bills Committee. The membership is not only large in
number but also comprehensive in nature because it comprises representatives of
various major political parties, independent Members, and Members representing
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LEGISLATIVE COUNCIL — 25 June 1997
the legal and non-legal professions. The Bills Committee held 20 meetings
during the past eight months, discussing with representatives from the
Administration and various sectors to get an in-depth understanding of the issue
and balance the interests of all sides before coming to a decision in a democratic
way. I opine that it deserves Members' respect and support.
Mr Chairman, I think that the decision itself is reasonable and fair enough.
The scale fees on conveyancing was originally a government policy through
legislation. The Administration set up the Costs Committee, which is a
statutory body comprising lawyers, government officials and the judiciary. The
Committee proposed how fees were to be charged and at what levels. With the
approval of the Chief Justice, subsidiary legislation would be drawn accordingly
and submitted to the Legislative Council for endorsement. The fees were not
determined arbitrarily and enforced in a mandatory manner by the Law Society.
The mechanism is not only legitimate but also reasonable. Since property
transactions are in large numbers and most of them are similar in legal
formalities, there is justification to set up a uniform scale of fees. With the
setting up of scale fees, one major merit is that clients will be treated equally and
no one will stand to lose for a lack of bargaining power.
The Honourable CHIM Pui-chung hit the nail right on the head during the
Second Reading debate held earlier today. He said that bargaining was only
beneficial to large companies. It would not benefit any individual consumers.
We have today a Member representing the banking sector. He should clearly
understand that the fees can be calculated beforehand and an estimate can thus be
made.
Besides, the system of scale fees can also minimize disputes.
Regarding the reasonableness of the fees, the courts do have the power to make
judgement on the level of fees charged by lawyers. If the Chief Justice is of the
opinion that the fees proposed by the lawyers are ......
CHAIRMAN (in Cantonese): Miss Margaret NG, would you please stop for the
moment. We are now scrutinizing clause 16. According to my understanding,
clause 17 is concerned with conveyancing although I have not looked into the
clauses carefully. We shall have further debates on clause 17.
MISS MARGARET NG (in Cantonese): Please let me explain. Clause 17 is
about the membership of the Costs Committee and clause 16 is actually
LEGISLATIVE COUNCIL — 25 June 1997
719
concerned with the abolition of scale fees. Mr Chairman, perhaps Mr Fred LI
can confirm my views.
MR FRED LI (in Cantonese): Mr Chairman, clauses 17(e) and (f) are also about
the scale fees charged on the sales and purchases of housing units. We are now
talking about the fees fixed by the Law Society on non-contentious cases. I
think that there is some difference between the two.
CHAIRMAN (in Cantonese): Miss Margaret NG, please continue.
MISS MARGARET NG (in Cantonese): Mr Chairman, let me give a brief
explanation here. Clauses 16, 17(f) and 20 are the main provisions on scale fees
but it is a pity that the agenda of today's debate is not arranged in this way. I
will, therefore, take this opportunity to discuss clause 16. If clause 16 is not
carried, its effect will be most significant. The courts have always had the
power to determine whether the fees charged by solicitors are reasonable and if
the Chief Justice considers that the levels of fees charged are unreasonable, he
will certainly reject them and the Law Society of Hong Kong (Law Society)
cannot require its members or the public to adhere to the scale fees.
The Government's criticism on the scale fees structure focuses on the fees
being calculated according to the sale prices of the properties. In fact, the
calculation has been agreed by the Costs Committee, and other members of the
Committee and the Chief Justice will certainly not endorse or approve it without
adequate justifications. One of the reasons is that the law requires solicitors to
take out indemnity insurance. A solicitor has to bear legal responsibilities when
acting as the agent in a property transaction. If either of the purchaser or vendor
suffers any loss as a result of his negligence, he will have to indemnify the loss.
The Honourable Mrs Miriam LAU also mentioned this point this morning.
Therefore, the higher the property value is, the bigger the indemnity amount will
be incurred and the premium the solicitor has to pay in advance will naturally be
higher. That is the actual cost that is to be borne for the protection of the
clients. Besides, a simpler reason is that the bigger the amount that the
transaction is involved, the parties responsible for the transaction, including the
solicitor, naturally have to pay more attention, spend more time and go over the
procedures more times. This is common sense which applies not only to
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LEGISLATIVE COUNCIL — 25 June 1997
solicitors. It does not follow that transactions involving smaller amounts can
be handled with less care.
The Government says that no other sectors adopt the practice of charging
scale fees according to value of the transactions. This, however, is not correct.
It has been a practice for years for real estate agents to charge commission
according to the prices of the flats. Nevertheless, real estate agents have not
gained professional status yet and they need not bear legal responsibilities or take
out indemnity insurance for the property transactions effected through them.
Banks and trust companies also act as agents for the management of property or
handling of estates. It is also their normal practice to charge fees according to
property values. We have Members from the banking sector among us and if I
am wrong, they will certainly correct me.
Some would say that other sectors do not charge their fees according to a
fixed scale and therefore their practice is in line with the principle of free
competition. However, Mr Chairman, the fees charged by these sectors are not
subject to approval and monitor by their respective costs committee, the Chief
Justice and the Legislative Council. As for free competition, we all know that
there is no absolute freedom. The authorities determining public policies have
to strike a balance between encouraging free competition and protecting
consumers. The present mechanism also consists of an adjustment and balance
mechanism. It is not an immoral practice as described by the Government.
I agree that no mechanism is perfect. The best mechanism today may
become out-of-date in future as a result of changes in the social environment.
The rapid rise in property prices in recent years has rendered solicitor fees to
such high levels that they are no long reasonable remunerations. To deal with
this problem, an appropriate way is to have the Costs Committee review and
adjust the fees with a view to making them fair to both lawyers and consumers.
Of course, this is not the only or the best solution to the problem. Perhaps in
this social environment where people's idea is dominated with the consumer
interests, abolishing the scale fees, disbanding the Costs Committee, and even
abolishing the requirement of solicitors who have the professional knowledge to
handle the necessary procedures, allowing totally free choices and free
competition, putting the services of solicitors on the same level as other
commercial services might suit the trendiest needs. But no matter what
directions we choose to follow, we have to consider thoroughly, estimate the
potential problems and shortcomings that we have to take precautions against,
and arrange for appropriate measures, rather than rashly abolishing the existing
LEGISLATIVE COUNCIL — 25 June 1997
721
system first and then shirking the responsibility on others when adverse
consequences come up. Mr Chairman, when adverse consequences really come
up, it would not help with the situation, no matter on whom we put the blame.
In the process of the Bills Committee scrutinizing the Bill, the Law Society
and a working group formed by lawyers produced plenty of materials proving
that serious problems have arisen since the United Kingdom abolished scale fees.
The quality of legal services for property trading has plummeted and the number
of claims and indemnity amounts have shot up, dealing a heavy blow to the
operation of lawyers. On the other hand, after studying the situation
thoroughly, the Singapore government has decided to hold off the abolition of
scale fees and not to follow the Western trend for the time being.
The abolition of scale fees may not be the only culprit of the problems in
the United Kingdom but is obviously one of the major causes. Although the
Law Society of the United Kingdom can hardly turn back now, with its
experience, it advises the Bills Committee that if it could start all over again, it
would have established a standard for the protection of property trading services
first before abolishing scale fees. This could have been much better.
Mr Chairman, others' advice may help us overcome our shortcomings.
Should Hong Kong learn from the experience of the United Kingdom and follow
the example of Singapore to maintain scale fees for the time being while actively
exploring other alternatives to this system to maintain the service quality?
Several days ago, the Law Society has announced that the Costs
Committee passed a new method and standard for the calculation of fees which
will lower all fees, up to 50%, but it is not published yet. However, once it is
approved by the Chief Justice and enacted as subsidiary legislation, the public
will be benefited immediately and they no longer have to bargain and the service
quality that they receive will still be guaranteed. I think that members of the
public, who are fair and just, will certainly accept the sincerity of the Law
Society.
Mr Chairman, lastly I would like to respond to the issue about the image of
lawyers. Mr Chairman, in the Second Reading debate this morning, I was very
grateful to the Honourable Mrs Elizabeth WONG for her support when she said
that to ensure the service quality was the most important thing and was the
concern of most people. The Law Society has indeed started the work and its
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LEGISLATIVE COUNCIL — 25 June 1997
former chairman, Mr Christopher CHAN, has already drafted a pamphlet entitled
Thirty Nine Steps to introduce the steps a solicitor should take when dealing with
property transactions so that the public can see for themselves whether the
solicitor follows these steps when providing them with the services. I hope that
we will continue to look into ways to maintain the standard; or if the Consumer
Council is interested in this subject, it should also give us their positive opinions
in this regard.
Mr Chairman, during the deliberations on scale fees, I feel that the image
of solicitors has been tarnished and that really saddens me. In the discussion
this morning, Dr the Honourable YEUNG Sum, whom I respect very much, also
doubted me of not siding with the public in this scale fees issue and I really
regretted it. In these two years, the colleagues in the Legislative Council should
have seen that both the Bar Association and the Law Society have sincerely done
their best to serve the people on all matters that the Legislative Council has to do,
no matter regarding the public policies or bills. Today, they are being doubted
and queried in such a way by this Council. To be frank, I do not know how they
would feel but it is very hard for me to take. What I regret most is that the
Government has resorted to tarnishing the image of the solicitors in an effort to
have this policy passed and I consider it extremely unfair.
Mr Chairman, I hope that no matter how this would be settled today, we
would never again bear a grudge over this issue. We are willing to work
together with one heart and one mind to protect consumer interests, not only in
respect of their money but also in terms of service standard and protection to
consumers.
I hope that Members will support the amendments moved by the Bills
Committee.
Thank you, Mr Chairman.
MR FRED LI (in Cantonese): Mr Chairman, today I will move a number of
amendments on behalf of the Bills Committee but I call upon Members to vote
against all my amendments. Although I fully respect the decision of the Bills
Committee to move these amendments, I know how the actual discussion has
been done. The Honourable Miss Margaret NG has mentioned that it has been
democratically decided so and so after 20 meetings, but as the chairman of the
LEGISLATIVE COUNCIL — 25 June 1997
723
meetings, I know too well that sometimes we had to wait till we almost aborted
the meetings before there was a quorum and the quorum was only six Members.
Many a time when we put a decision to a vote, there were at most six or seven
Members present, not all 18 members of the Bills Committee. To say that this
is a very democratic decision, even I, the chairman of the Bills Committee,
cannot agree. It will be most democratic if the matter is put back to this
Council, so that both the Law Society of Hong Kong (Law Society) and the
Government can do their best to lobby and then see how Members of this
Committee will vote. The decision of the Bills Committee may not necessarily
the most democratic one that everyone has to follow.
Mr Chairman, although we held 20 meetings, I had not been able to say
what I wanted to. This time I will speak out of my mind. Concerning the
amendment to the Legal Practitioners Ordinance, that is, to add clause 56A after
clause 56, specifying that if the Law Society sets any scale fees for
non-contentious services, these fees will be invalidated. This provision
includes the scale fees for sale and purchase of flats and fees for probate. These
are non-contentious services and have fixed scale for the fees at present and
services regarding the administration of estates also have scale fees. Of course,
what arouses so much of our attention which is also of the greatest concern of the
public is scale fees for conveyancing. We, the Democratic Party, have always
put this on our major agenda and the Government has also been discussing this
issue for two or three years. It is not just our sudden pleasure to bring it up or to
rush into a discussion today. Many colleagues say that this is not the right time
and we have to wait a while or in principle scale fees should be abolished but it is
impractical to have it done so soon. Until when should we wait then?
I have collected many newspaper cuttings about the whole issue. The
Law Society and the Lawyers Concern Group, which is another body demanding
to lower the scale fees as much as possible and some members of which even ask
for the abolition of the scale fees, have discussed the matter. It is only that they
represent a smaller number and they have not been very out-spoken and that is
all. Concerning the whole dispute over scale fees, we may also touch on it in
today's discussion. Actually, after we have discussed it at this part of the
meeting, Members should not spend any more time to argue about it later
because when we go to clauses 17(e) and (f) and also clause 20 that I propose to
amend, they are all about the scale fees charged on buying and selling properties.
If we have already had adequate discussion on this part, I hope that Members will
not repeat it in the remaining part of the debate because we will discuss it and
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give our opinions when we discuss clause 56A.
suggestion and I do not want to repeat my points later.
I will follow my own
Concerning scale fees, many colleagues keep repeating their discussion on
the points such as control of service quality and that fees being too low will
damage consumer interests. I stress that when we, the Democratic Party, strive
for the abolition of scale fees, our goal is not to seek for very low fees. We
have never said that the fees have to be very low. Few colleagues have pointed
out that what we need is competition, competition within the sector, competition
that is fair and open. The Government is also heading in this direction; if not,
why are there differences in interest rates among banks? The interest rate for
savings under $500,000 used to be standardized, but now the restriction is lifted.
If not so, why has the telecommunication market been opened? Why must
solicitors keep sticking to a fixed scale for their fees? While they claim that
abolition of scale fees will lead to vicious competition and cite the experience of
the United Kingdom to back them up, someone from the United Kingdom has
written to us and says that the case is not so and it is not necessary so. There are
also articles published in British legal magazines pointing out that no one has
said the increase in the number of claims is related to the abolition of scale fees,
but rather it is the "cut-throat" price cuts that have sacrificed the service quality
and given rise to numerous problems. We cannot place an equal sign between
the two — we may place a question mark but not an equal sign. Even if Mr
STAIR comes to Hong Kong, he will not be so bold as to say that the case must
be so. Not everyone in the British law society agrees with Mr STAIR. We
would of course hang on to some of his arguments while others would hang on to
some others. Everyone has his own supporters and everyone has his own
arguments. When some people mention that Singapore does not abolish the
scale fees, they ignore the rest of the world and talk about Singapore alone.
Why do they not mention that many other countries have abolished scale fees and
just cite the example of Singapore? The conclusion that Singapore has come to
is that scale fees should be abolished in principle but it has to wait till it has come
up with the way to deal with it before abolishing them but it is not to maintain
them in principle. Do we have to follow the path of Singapore? Colleagues
have to decide for themselves. We have to abolish it in principle but it cannot
be done now and therefore we have to maintain it for the time being.
What disappoints me the most is that the Law Society still insists on
maintaining scale fees. In today's press conference, I asked the reporters
whether they had obtained the price list of the Costs Committee. They said they
LEGISLATIVE COUNCIL — 25 June 1997
725
had not. The Law Society only took a $3 million flat as an example, claiming
that the fee for a $3 million flat used to be so much and now how much was
reduced and so the consumers were benefited. The first question I could think
of was that since they could make such a big cut now, it indicated that they had
reaped a big profit in the past; they were profiteering, and hence they could
reduce the prices by such a large margin now. Of course, I could have spared
this question because I had no idea about the criteria on which they cut the fees.
I have no idea now. Besides, how about the $4 million flats? And the $5
million flats? The list for scale fees is not yet published and perhaps it is in the
Honourable Miss Margaret NG's grasp but I do not know. I have only learned
the fees for a $3 million flat from the newspaper and news report but I do not
know how much they have cut. On what criteria are they to decide the amount
to decrease? Why do they not cut more? And not less? This is where the
question lies. On what criteria are they to decide whether to cut or raise the
fees? Why is this perspective taken now? How much do solicitors make?
Why is it for the Law Society to decide how much everyone should make and
then determine the scale? There should not be such criteria. It is absolutely
normal to compete on the prices when providing services. The prices and fees
are a competition among the restaurants, among accountants and among doctors.
When I go to see the doctor in Laguna City and find that one clinic charges $230
and another charges $280, it does not necessarily mean that I will go to the one
that charges $230, but at least I know the difference in their charges. Who says
that I must go to the one that charges $230? There is difference in the charges,
but I can go to whichever clinic that I like. The reputation is very important; a
friend's recommendation is very important; the fee is also very important; but the
fee is not the sole factor on which I depend when I make my choice.
When others talk about our demand for the abolition of scale fees, they
usually make it sound like that we think the fees are the only difference. But it
is not so because when we consumers buy a flat, we look for stability and
confidence. Whether it costs $1,000 or $2,000 less is not the deciding factor
and it should not be taken as a reference.
Do scale fees necessarily guarantee quality? I do not see this point.
Does it mean that there will not be claims for compensation and everything about
property transactions will be fine when there are scale fees? For the lawyers in
this Chamber, including those sitting in the public gallery above, do they not
know that there is competition among lawyers, that they also compete for clients,
and that there are price cuts? Do some of them follow all the fixed scales when
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determining their own fees? I do not think so. There are always exemptions
of certain fees and certain charges. Why? That is because they have to
compete, too. As such, why should they not frankly and openly abolish scale
fees? Why should they hang on to this?
The issue of scale fees has already been referred to the Costs Committee
for deliberation now. We will, of course, not know the final decision of the
Costs Committee on how it shall be handled. To flat purchasers, it is of course
good to pay a lower fee. But back to the fundamental issue, what are the criteria
for determining fees? Is it that only when one and every lawyer makes a certain
amount per hour will they feel protected? If there is no such a guaranteed
remuneration, will the quality of their services drop as a result? I am directing
at the matter and I am not trying to pick on the Costs Committee or anything. I
think that I was very fair when I chaired the Bills Committee meetings. We
would wait for the Law Society to present us all their views. I have never used
the power of the chairman to interfere in the running of the meetings. But to me
personally, I do not see why scale fees should be used to guarantee the service
quality and protect the consumers against damages. On the other hand, would
some unscrupulous lawyers, the black sheep of the profession, because their
basic income is guaranteed by scale fees, be perfunctory and careless in their
work? Therefore, we can also look at the matter the other way round.
An unreasonable system, therefore, have to be tested by an opinion poll.
The Honourable Ronald ARCULLI has suggested that we ask Mr CHUNG
Ting-yiu. I know Mr CHUNG Ting-yiu too but many members of our party are
also knowledgeable about designing questionnaires. Out of the several
thousand people that we contacted, we chose as our target 509 people who gave
affirmative answers when asked whether they had the interest to buy new flats or
uncompleted flats. We did not interview those who answered that they were not
interested. Hence the deviation of this questionnaire survey was not so large as
described by Mr Ronald ARCULLI earlier as we had excluded the opinions of
those who had no intention to buy a flat. Last August, we also conducted a
street interview. The interview was different in the way that it was done in the
vacinity of private housing estates and the targets were home owners. The two
surveys were different in the sense that one was done territory wide in which the
computer was used to record answers made to a questionnaire on the telephone
and the survey has just been finished. Another one was a street interview done
in August last year. But the findings of the two were very similar. I believe
this is a reflection of the people's opinion where 65% of the interviewees were
not against the level of fees but the charging system. They were against the
LEGISLATIVE COUNCIL — 25 June 1997
727
system of scale fees. We did not ask them whether they were against it because
the fees were too high. We only asked whether they agreed to the scale fee
system or not but we did not ask whether they agreed to the level of fees or not.
We have to stress this and make it very clear.
With these remarks, the Democratic Party opposes the amendments moved
by Mr Fred LI. (Laughter)
MISS MARGARET NG (in Cantonese): Mr Chairman, may I make a brief
elucidation? This may be considered my second speech. The Honourable
Fred LI has just asked why the Law Society of Hong Kong (Law Society) has not
published the entire charging package that they have come up with recently but
has only revealed a small part of it. I have just verified this with the chairman
of the Law Society. It is not that they do not want to reveal more. Although
they have already made the decision in the Costs Committee, the package has yet
to be approved by the Chief Justice and hence they cannot not publish it at the
present stage. I believe that they really want to talk about it but they are unable
to at the present stage. Hence they can only reveal some general information
about it. It is not their intention to conceal anything.
Thank you, Mr Chairman.
MR ALBERT HO (in Cantonese): Mr Chairman, I would like to take this
opportunity to speak on this matter so that we do not have to go through another
debate again when we talk about the scale fees for conveyancing services later
on. Actually, I want to make a few points in respond to Members' remarks. I
have clearly stated our stance and arguments against maintaining scale fees. Mr
Chairman, frankly speaking, as a lawyer, I would be ashamed to righteously
defend scale fees by telling the public that we need scale fees to maintain the
legal profession and guarantee the standard of our professional services, and that
public interests would be jeopardized as many lawyers would try to undercut the
market by reducing prices and it would lead to a fall in the standard of the
service, and the interests of their clients would also be jeopardized. I do not
think I can bring myself to say something like that nor do I have the cheek to say
so.
Mr Chairman, let us take a look at other parts of the world. Most
developed countries do not have a scale fees system, and none of the
professionals in the world have to rely on scale fees to maintain the quality of
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their services. Even in the legal profession of Hong Kong, barristers do not
have scale fees and there are no scale fees for many of the solicitors' services.
Then, why should conveyancing services be an exception and why is that we
have to rely on scale fees to guarantee the quality of the service? Even if there
may be reasons for saying so, I do not think the arguments are convincing
enough. It is precisely for this reason that the English Law Society found that it
could not appeal to the Fair Trade and Anti-Monopolies Committee. I believe
that the legal profession in the United Kingdom can have the best lawyers and
most eminent barristers, but even then they cannot find any convincing
arguments for reopening the case.
I think the Honourable Mrs Selina CHOW has made a very good point.
Let me quote her in saying that " we cannot put back the clock ". It will be very
difficult to put the clock back once progresses are made; but if something goes
wrong, I cannot understand why we cannot reopen the case.
Many people say that the Democratic Party is very stubborn and even
though a lot of matters have already been decided on, we are still fighting to
reopen the cases. Later on, we will have a debate on the Basic Law, and before
the implementation of the Basic Law, we have always fought to reopen the case
and ask for amendments. If something is wrong, we will justly and forcefully
say so. No matter whether the clock can be put back, we think we have to move
forward, and continue to argue for our case, to fight for changes, improvements
and reforms. It is precisely because of the fact that the things we are asking for
are unjustifiable and indefensible that it would give others an impression that the
clock cannot be put back. For example, it would be very difficult to take back
the right of public participation in the democratization process all of a sudden.
Mr Chairman, many colleagues have mentioned that other professions also
have guidelines on fees chargeable, but first of all, I think we have to find out
what those guidelines are and whether those guidelines are mandatory. It is a
fact that Hong Kong real estate agents charge a commission of 1% to 2% and the
agents in some other foreign countries may even charge a commission of 6% to
7%. Also, banks acting as trustees may charge a commission of a certain
percentage, but we have to bear in mind that these rates are not mandatory. The
Honourable David LI will know that the trustee fees charged by the Bank of East
Asia are not the same as those charged by the Standard Chartered Bank and the
Hong Kong Bank, and we can make our own choices. Actually, the situation is
the same with other professions. Real estate agents will also cut their prices. I
LEGISLATIVE COUNCIL — 25 June 1997
729
can cite many examples and we all know that this is true from the experiences of
our everyday life. Surveyors, architects or accountants may offer discounts for
individual transactions, and so they do not have any mandatory guidelines for
fees to be charged, and this is entirely different from the scale fees we are now
talking about. It does not make any difference whether the scale fees are
statutory or not, for as long as the Law Society of Hong Kong (Law Society) has
the right to impose a scale fee, members of the legal profession will be liable to
disciplinary action or even suspension of their licences if they do not abide by the
scale fees. So, I have to stress that the scale fees or statutory fees we are talking
about, or the fees imposed by the Law Society, are different from the guidelines
for fees chargeable in other professions.
The Honourable Eric LI has asked whether there will be any protection
mechanisms in place if scale fees are abolished abruptly. He wonders how we
can explain this to the public if there are no replacement for the mechanizm. I
do not quite understand how scale fees are related to the operation of the
conveyancing system. We have repeatedly discussed this issue simply because
we are worried that solicitors will become lax in their work if their fees are
reduced. The solicitors will be forced to cut their prices because of
competitions. But, I do not think that there will be any particular problems with
the existing conveyancing system after scale fees are abolished because apart
from the fact that the legal professionals have to maintain their own integrity and
work according to their own conscience, they are also monitored by the Law
Society and liable to punishments for any misconducts. Some people suggest
that in the future we can replace the conveyancing system with an ownership
registration system, but that is a separate issue. Of course, we can consider
implementing another system, but I cannot see what the existing system has to do
with scale fees. There is nothing wrong with the system itself and we only find
flaws in the system because scale fees have to be abolished. Accountants do not
have scale fees, and how can we guarantee their services? Does it mean that no
one will sue the accountants? All in all, this is down to the question of
integrity, professional monitoring mechanisms and the conscience of individual
lawyers.
Mr Chairman, some colleagues have raised the issue of compensations and
point out that the amounts of compensation are getting larger. Actually, I do
not wish to repeat these views. At present, I do not think any conclusions have
been made on this subject, for if there are any conclusions, I believe that the
whole case would have been reopened in the United Kingdom. If the verdict is
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reversed, my colleagues will feel even more righteous in retaining the scale fees
system. It is precisely because no conclusion has been drawn that we cannot
prove that the abolition of scale fees would lead to deterioration in the quality of
services. So, this is not something that can be scientifically proved. Some
colleagues say that since property prices have soared, it is reasonable that
solicitor charges should also go higher as a greater risk is involved. I do not
find anything wrong with this argument, but it does not mean we need scale fees.
I think it is all right for solicitors to charge higher fees if higher property prices
are involved, but must we have an objective standard in the form of scale fees
determined by property prices? I do not think there should be such a formula.
Take for instance, in regard to litigations cases, should we specify how much the
barrister should charge if the litigation involves $100 million or $10 million?
Each case will be different, but all in all, I will not have any objections if the Law
Society can provide members of the public with more information about the
factors that should be taken into account in choosing lawyers.
We have mentioned earlier that the Democratic Party will have no
objections to some guidelines on fees chargeable being published, but like
cases of other professions, members of the public and the Consumer Council
should be allowed to comment on the guidelines of the legal profession.
However, I do not know why the legal profession has failed to publish such
guidelines for the reference of the public. I think it will be a good thing if
members of the public can refer to the guidelines of the Law Society when they
seek services from lawyers and see if the fees for different law firms are
different. We find it unacceptable to have the statutory fees calculated in
accordance with a formula. I do not want to repeat the reasons for our
objection, and I only want to point out that this is unfair and it would be very
hard to come up with such a formula.
Furthermore, I believe that in choosing a lawyer, members of the public
would only consider charges to be one of the factors. The services provided by
the lawyer, the goodwill of the law firm and the faith in the lawyer are equally
important. For instance, many people who have sought the assistance of
barristers will know that a barrister may charge from $8,000 to $500,000 for a
case. Then why do people ask help from a barrister who charges $500,000? It
is because they understand that the quality of service is very important. We
have to let the public know that it is very important to choose a responsible
lawyer; otherwise they will think that there is enough guarantee as they can
always sue the lawyer if anything goes wrong. But they should know that they
LEGISLATIVE COUNCIL — 25 June 1997
731
may not always win the case. In a litigation case, members of the public have to
pay a lot of money, put in a lot of efforts and put up with a lot of inconveniences.
Therefore, I believe even if we abolish the scale fees, it will not present any
major problems in the areas of conveyancing, estate administration and probate
matters such as the letter of administration. I have repeatedly stressed that
many people do not observe the scale fees in spite of their existence, and this is
unfair to the law abiding and rule-abiding lawyers. Law-abiding lawyers may
be willing to cut their fees but since they have to go by the scale fees, they will
not be able to provide services to a lot of clients.
Mrs Selina CHOW also mentioned that though this system could not be
enforced, it did not mean that we should give it up. She pointed out that by
doing two wrongs will not make a thing right and I agree with this principle.
However, I think that the scale fees system was a mistake in the first place. In
other words, the abolition of scale fees is not a mistake, and therefore we are not
talking about turning two wrongs into one right. Most importantly, we find it
hard to accept the fact that one who accepts a lower fee on good grounds would
be liable to disciplinary actions. The Law Society or the professional body may
adopt some very harsh measures, including criminalizing the act and mobilizing a
lot of resources to monitor the practice of every law firm to ensure that they are
abiding by the scale fees. I really do not think that this is acceptable because
there may be situations where a lawyer considers it best to bring down the
charges to help people.
Finally, I only want to say that I believe the legal profession will be able to
compete more fairly after the abolition of scale fees without necessarily
undermining the quality and standard of services. I hope that Members will
take into account the feelings and views of members of the public who are the
users of the legal services, and the fact that they have the right to choose.
These are my remarks. Thank you, Mr Chairman.
MR RONALD ARCULLI: Mr Chairman, I will try to be as brief as I can.
What we are discussing here today cannot be decided in absolute terms one way
or another. In other words, should there be a fixed scale of fees or charges? It
does not matter whether it involves the legal profession, and it does not matter
whether it involves the type of work the legal profession is doing. But the true
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discussion is, can this community tolerate, accept, welcome fixed scale of
charges?
I say this because different circumstances merit different considerations.
A lot of Members today have put forward the point that there are no scale
charges in other professions and that there are no scale charges. Nothing could
be further from the truth and when the Attorney General ultimately speaks on this
issue I would like him to confirm that there are no fixed charges or scale of fees
in some of the examples that I am about to give.
But what is important is in terms of the service that the members of the
Law Society are obliged to give to the public. In its wisdom, this Council many
years ago, or indeed Britain many years ago, decided that it was right to give
solicitors the right to self-regulation, so to speak, the right to self-discipline, the
right to be accountable to the public that they serve. And yet here today, quite
unfairly in my view, serious doubts and indeed unfair attacks are being levied
against a very noble profession.
The example, Mr Chairman, that I refer to is that if you look at the
financial sector, if you look at the stock-broking community, they charge a fixed
fee for undertaking work whether as representing the buyer of shares or the seller
of shares. In the financial sector merchant banks, financial houses charge a
fixed fee in terms of the underwriting risk that they take, and it is from this fixed
fee that they will pass on fees to what we call sub-underwriters. So, the main
underwriters would charge x% and part of it will go to sub-underwriters. This
is quite well accepted in the market. And to perhaps bring in an example which
some of my colleagues will no doubt say, "Well, that is a different
consideration", the Securities and Futures Commission charges fees on a scale
for advice and work which it undertakes for the financial sector.
So, Mr Chairman, there are a variety of scale fees that are being charged in
all different walks of life. A colleague of mine said to me in the ante-chamber
that "when are we going to remove taxi meters?". You know, if we do away
with fixed charges, why do we labour this increase in transport fares every year,
be it buses, be it Mass Transit Railway or taxis or minibuses? Why not let every
citizen negotiate with a minibus or a taxi driver? Well, I mean, that might cause
more traffic jams if we care to do so, but if you had no fixed charge then at least
you can negotiate en bloc or on a regular basis.
LEGISLATIVE COUNCIL — 25 June 1997
733
But I think life sometimes needs an order. An order sometimes takes into
account all the pros and cons of whether or not there should, for a particular
service, be a scale of fees or a fixed charge, and I suspect that those who
advocate for doing away with scale fees in so far as solicitors are concerned,
have simply turned a blind eye to the fact that in other jurisdictions quality of
service has been sacrificed.
I remember years ago when the Law Society in England did away with
scale fees on conveyancing matters, you would see advertisements in the papers
that you could pay 50 for a lawyer to represent you in a conveyancing
transaction. Well, no wonder the claims have gotten to where they are in terms
of the poor quality of service that resulted from such cut-throat business. And
who at the end of all these would suffer? Perhaps the lawyer charging 50, but
certainly the client who might not be able to sustain a claim against that
particular lawyer.
So, I think there is in fact a rationale, Mr Chairman, for justifying scale
fees, be it for non-contentious business or be it for property work. So, I think
one must look at the entire spectrum and come to a view, as to whether one can
be accountable and one can be fair to the community which we serve. And in
my view, for what it is worth, Mr Chairman, the Law Society has acted
responsibly in recent months in bringing about the new scale fees in terms of
conveyancing work.
Thank you, Mr Chairman.
MRS SELINA CHOW (in Cantonese): Mr Chairman, the Honourable Albert
HO has given me a lot of face when he repeatedly mentioned my name.
Therefore, even though I have not meant to speak, I am now obliged to say
something. In particular, after Mr Albert HO has used my words to refute the
points I raised just now, I have even more reason to speak.
Mr Albert HO quoted me for saying that we could not turn the clock back
and since the trend was so, we had no reason for not following the trend.
Actually, when I said that we could not turn the clock back, I meant that in an
assembly, when decisions need to be made, people invariably have different
opinions; some might think that the thing to be decided is a new move and a new
direction but everyone might be making a guess only; and after a certain decision
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has been made, it might be that only time can tell whether the decision is right or
wrong. Even if that is a wrong decision, it is impossible for us to reverse the
time and go back to the beginning. The only thing to do is to accept the
consequences of the wrong decision.
In some Western countries, their public or state policy is to hand out
welfare and when they want to turn back afterwards, they find that it is
impossible to do so. The only thing that they can do is to stop, remain at the
same position and wait patiently until the time allows them to take back the
welfare that they have wrongly offered. Why is Mrs Margaret THATCHER, the
former British Prime Minister, so well respected? That is because she has
contributed greatly to her country in this respect. The United States has,
however, sometimes gone too fast, leaving great impact on its economy, but it is
unable to go back. This situation of public policies are also like that. This is
what I meant when I said, "We cannot turn the clock back."
In fact, in the past, when the Liberal Party disapproved of the policies of
the Democratic Party but lost in the voting, we still respected the spirit of
democracy and let the policy go ahead. Time will prove that we are right.
Mr Albert HO has already said that scale fees are wrong from the very
beginning. But are scale fees really wrong? The Honourable Ronald
ARCULLI has already explained in detail how we should look at whether
something is right or wrong. Actually, just now I have said that there are many
things in our everyday life that have scale fees but we accept them. Scale fees
come in two ways: one is to cut the coat according to the cloth; the other is to fix
the price according to the service. When we compare like with like such as the
quality of services provided by two persons, we will have to decide what price
we offer and then compare their respective quality of service. If we do not set
the criteria first, we are not comparing like with like. In respect of the open
competition or free competition, it can be said that it is impossible to compare
like with like.
Under the scale fees system, it is easier for consumers to make a
comparison. Nevertheless, it is harder to make a comparison under the system
of fixing the price according to the service. The money paid in this way may be
less, but the service in return may even be less than which one gets from "cutting
the coat according to the cloth". Therefore, are scale fees always wrong or are
LEGISLATIVE COUNCIL — 25 June 1997
735
they certainly not in the interest of the consumers? This argument is invalid as
there are two different ways to peg the price with the commodity.
There are many lawyers in this Chamber. Are they offering very shoddy
services? If their services are really very shoddy, then there must be something
seriously wrong with the scale fees system. But why are their services not
shoddy? There are two reasons: first, job security of this profession frees the
lawyers from the worries of their "rice bowl"; no matter how keen and fierce the
competition in the legal profession is, lawyers do not have to worry about losing
their jobs, and since they are sure to have a certain level of security, they can
concentrate on the competition in terms of their service quality. Secondly, I do
somewhat agree with Mr Albert HO or the Government that if some lawyers
overcharge because they look for too much security, we must revise the present
charging system to resolve the problem.
If we have a mechanism to determine scale fees, how can we convince the
consumers that it is reasonable? I have talked about what reasonable and
inexpensive mean and hence I will not repeat. This mechanism has been in
place although it has not been used over the past dozen years. The Government
was to blame, as I think that we could have made good use of this mechanism.
I recall that many colleagues have said that if a certain company increases
its charges, we can also set up a mechanism to determine how they should do so
and surely there is no need to bargain. I cannot accept this view. Mr Albert
HO and the Democratic Party have said earlier that scale fees are certainly not to
the consumers' benefit. But scale fees can in fact benefit the consumers,
depending on whether all other checks and balance mechanisms can be fully
operational, and that is very important.
As regards the approach taken by the Government this time where it on the
one hand says that professionals can have independence in their practice while on
the other hand gives them no respect, I really resent it. Even if the Government
considers that a certain profession needs reform, it need not force them to carry
out the reform according to its present approach, which I feel to be extremely
improper; particularly when the Government does have a mechanism with which
it can safeguard consumer interests. However, sometimes the Government still
resorts to such high-handed approach which is unworthy of our support, in the
hope of enforcing its policy with such slogans as fighting for the best interest of
the consumers. I think that the Government has merely over-simplified the
whole issue. Besides, it does not allow the sector itself and the public to have
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LEGISLATIVE COUNCIL — 25 June 1997
an in-depth discussion of the merits and demerits or possible consequences of the
issue. Nor does it give everyone the time to ponder upon it carefully and
thoroughly. This is after all a very important and far-reaching reform. It is not
only for the benefit of a few thousand lawyers but it may, in fact, have bearing on
the whole legal system. If the quality of lawyer services is affected, it will also
affect the whole community. That being the case, why should it be done in such
a hurry? Is it that the British Hong Kong Government has to have this done
before the transfer of sovereignty? Perhaps that is because the Attorney General
has once said that he has to leave but he has to leave a good policy to the
territory. If so, this is a very paternalistic way of doing things and also very
unfair to Hong Kong.
I hope that Members will accept and agree that such a reform involves not
only a sector but also the whole community. I believe that we have to discuss it
carefully. At the present stage, as we have yet to anticipate what the
consequence will be, we should not take it for granted when we consider the
matter.
We object to hasty changes to the present principles.
Thank you, Mr Chairman.
MISS EMILY LAU (in Cantonese): Mr Chairman, I would like to speak in
support of the Administration's proposal to abolish scale fees. Actually, I
seldom agree with the Attorney General, and today I am very happy that I am on
his side for once before he leaves. I did not actually disagree with the Attorney
General just now, but his performance might be slightly not up to standard, and
the Honourable Miss Margaret NG was so eloquent that she managed to
convince all Members with different political beliefs to support the Bar
Association. This time I am very much in support of the Administration's
proposal and I will stick to this point. Mr Chairman, I was not fortunate enough
to have the chance to speak at the Second Reading bebate of the Bill, but I really
think that the Administration should promote changes in the legal profession. I
understand what Miss Margaret NG means but I believe the Administration has
the responsibility to do so. In the past, the Administration winked too much at
the lawyers and doctors. There have always been representatives of lawyers and
doctors in the Executive Council and the Legislative Council. I do not know
whether we are putting the clock back but the Honourable Mrs Selina CHOW is
LEGISLATIVE COUNCIL — 25 June 1997
737
certainly going faster ahead. Some colleagues may think that I am not nice to
them, but that is not true. If there is something which they do not want to
change, their resistance will be very great if we push them hard. Moreover, I
think that scale fees would have very far-reaching implications on the profession
because they are the main source of income for many lawyers, and in fact, this is
a matter which affects the backbone of the profession. I support the Consumer
Council and I support what most Members have said in their speeches just now.
I think scale fees should be abolished so as to allow lawyers to compete in a free
market.
Today many people claim that they know about consumer rights and I do
not think that this is a subject which should be pursued by the Consumer Council
alone. I respect the Consumer Council very much for what it has done in this
respect and I am convinced by it. Recently, the Consumer Council has made a
few submissions to us, and of course, the Law Society has also made many
submissions, but I am not convinced by the lawyers. As such, I support the
abolition of scale fees.
I want to raise one more point: why are there scale fees for conveyancing
only and not for other services provided by lawyers? I think that the
Administration is too late in introducing the changes and scale fees should have
been abolished a long time ago. Recently, the Law Society announced that after
discussing the matter, they had reached a decision to cut conveyancing fees
drastically by 40%. Of course, we welcome the decision in the first place as the
fees have been reduced, but then I also want to know why they can cut the fees to
such a large extent, and why is that the lawyers can still make a profit after
making such a drastic cut? Is it still possible for them to make further cuts? Is
it true that they can cut their fees arbitrarily? It is just like making a bargain
with street hawkers, and we do not know their bottom line. It looks as if we
were buying a piece of clothing: the shop keeper bid $400 and we returned a
price of $100. My mother once told me that if you walked away and they would
not call you back, you could bargain no further at that price.
We are not showing no respect to lawyers. There are many lawyers in
this Council today and the former chairman of the Law Society, Mr Christopher
CHAN, whom I respect very much, is also present. We are not showing no
respect to them. The Honourable Ronald ARCULLI talked about the issue of
taxis and he was not being disrespectful to taxi drivers. However, I think that it
is not very appropriate for the Honourable Mrs Miriam LAU to compare lawyers
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LEGISLATIVE COUNCIL — 25 June 1997
to taxi drivers. I am also married to a barrister. Lawyers are professionals and
we respect them very much. But the question is, why is that after so many
months of contention, the Law Society has suddenly announced that they will cut
their fees by 40%, and does it mean that if we put on more pressure, they will cut
their price further? Some people will certainly think that is not the way to
resolve the problem. So, I think the best way is to abolish scale fees. I am a
bit worried and I agree with the Attorney General that if there are scale fees,
solicitor fees will increase along with property prices. I think this is not right.
Now we are having all these debates, but we do not know what will happen in the
future provisional legislature. If the provisional legislators do not talk about
this matter again and cease to apply pressure, this matter will come to pass and
lawyers may increase their fees again. Now the consumers may think that they
have gained some benefits but they may lose them again in future.
All in all, we have spent five-and-a-half hours in discussing this issue, but
the Secretary for Education and Manpower has only just come in. I do not want
to spend eight or nine hours on this matter, so I will not waste any more of your
time. However, I have to say that I support the Administration and I also hope
that Members will support the Administration. It is because this matter has
already dragged on for years, and we have not done what we should have.
Now, we are not trying to make the changes just before the handover, and we do
not want people to think that are any political implications. I do not think that
the Attorney General is doing this just because he is going to leave. I think that
it is something we should do and not only because the Administration has
proposed to do so. The whole community feels that we should do it, and so we
have to ask for the endorsement of the Legislative Council. Therefore, I do not
think that the abolition of scale fees is related to the handover, and even if we
lose today, we will still work on it in the future. Our community feels that it is
necessary to do so , and even if the Administration is defeated today, it will still
raise this issue in the future. I believe that the people will thank the
Administration for this. Thank you, Mr Chairman.
MRS MIRIAM LAU (in Cantonese): Mr Chairman, I was to rise to compliment
the Honourable Fred LI on being a very fair Bills Committee chairman. He has
all along given me a very good impression until he said that the Bills
Committee's decision was not a democratic one. Why did he say so? He said
the decision was not democratic because not many people were present at the
Bills Committee meetings. But, I think it was because not many of his
LEGISLATIVE COUNCIL — 25 June 1997
739
Democratic Party colleagues were present, the final decision was not to their
liking. If I remember correctly, whenever we put a clause to vote at the Bills
Committee, a substantial number of members from all political parties, including
independent Members, were always present. Members of the Democratic Party
were also present, but of course, they did not constitute an overwhelming
majority, and that was why they might not find the final decision palatable. I
understand it is a hard time for Mr Fred LI to move an amendment today and ask
Members not to support him at the same time. However, I just want to point out
that the decision of the Bills Committee is a democratic one, because all the
members who could show up for the meetings were there, while those members
who were not present had merely given up their own rights, and that was also
their decision. So, I absolutely think that the decision of the Bills Committee is
a democratic one.
Regarding clause 16 of this Bill, my impression is that it is about the right
of the Law Society of Hong Kong (Law Society) to determine charges for
non-contentious businesses, and this amendment is to invalidate this power of the
Law Society so that the recommendations of the Law Society on such matters
will become null and void. I think this proposal is a great insult to the legal
profession because no other professions are prohibited by any similar provisions
from determining their own fees for certain services, and no legislation ever
stipulates that such powers of the other professions will be invalidated. We
have talked about the probate scale of the Law Society in the course of our
discussions on this Bill. This probate scale is not fixed by the Costs Committee.
Instead, it is a scale which is abide by the legal profession. The Government
thinks that it is a heinous crime for the Law Society to have a probate scale which
determines the probate fees with reference to the value of the estate and that it is
unreasonable for lawyers to charge an exorbitant fee. If the Government finds
the probate scale of the Law Society unreasonable, it should have asked the Law
Society to refer the scale to the Costs Committee for a ruling, or it could have
taken the initiative to ask the Costs Committee, with representatives of the
Government sitting on it, to review the probate scale and determine a rate which
would be more acceptable to the community. But, the Government has not
taken such moves. The probate scale has been in existence for three decades
and though the Government has not done anything about it during the period, it
now suddenly says that the probate scale is totally unacceptable and it is a
heinous crime for the Law Society to have such a scale. Is this something
which a democratic and open-minded government will do? Even if the
Government has any comments on the probate scale, should it resort to
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LEGISLATIVE COUNCIL — 25 June 1997
invalidating the powers of others? Is it really necessary for the Government to
crack a nut with a sledge-hammer?
Mr Chairman, it seems that we should not be talking about the scale fees in
conveyancing under clause 16 since scale fees will be specified under clause
17(f). As Members have been talking about this particular matter, I would like
to take the opportunity to refer to the points some colleagues made a moment
ago.
Mr Chairman, the main point of my speech at the Second Reading debate
this morning was that lawyers should be allowed to charge reasonable fees and
they should also be given the right to do so. Some Members ask what I mean by
reasonable fees and by what criteria they are determined. As far as lawyers' fees
are concerned, a reasonable level is one that allows them to provide high
standard professional services and decent enough to show respect for them.
When it comes to conveyancing, any experienced lawyer would realize that there
are certain processes which a lawyer has to go through, and scores of different
procedures of work are involved, so a reasonable level of fees should give the
lawyer sufficient time to complete all the procedures efficiently. It should also
reflect upon the liabilities of the lawyer in handling the transactions. A
reasonable fee should cover all the costs incurred by a lawyer in the course of
dealing with conveyancing, as well as reflect the liabilities of the lawyer. The
cost for a law firm which will only complete 10 or 19 out of the several scores of
the procedures in a conveyancing transaction will certainly be lower than that
will complete all the procedures. Some law firms may employ lawyers who are
not qualified or inexperienced, so they will be able to charge lower fees. Even
though they may charge lower fees, it does not mean that the fees they charged
are reasonable because their services are not up to the required professional
standard.
Mr Albert HO has made a very good point and he is a very experienced
and senior lawyer. Though he may not be qualified as a Senior Counsel after
the amendments of the Honourable Miss Margaret NG are passed, he is still a
senior lawyer. Mr Albert HO has made a very bold generalization by saying
that there are two types of law firms: those which are well-managed with high
costs and those which are not so well-managed with low costs. The outcome
will be very simple if you open up the market to allow the poorly-managed
low-cost firms to compete freely against the well-managed high-cost firms, for
the well-managed high-cost firms will be totally defeated, and very often these
LEGISLATIVE COUNCIL — 25 June 1997
741
firms will be defeated by the poorly-managed low-cost firms. If the former cut
their fees, the latter will come up with an even lower fee, and there will be an
on-going price war.
MR ALBERT HO (in Cantonese): Mr Chairman, I think the Honourable Mrs
Miriam LAU has misunderstood what I meant, and this morning I was actually
saying ......
CHAIRMAN (in Cantonese): Mr Albert HO, do you have a point of order? If
not, we will allow Mrs Miriam LAU to continue.
MRS MIRIAM LAU (in Cantonese): Mr Chairman, I think Mr Albert HO was
trying to clarify what he had said, but I listened very carefully this morning and I
do not think I would get it wrong. He has said there are two types of law firms,
the good ones and the bad ones, and I do not think he would have any objections
if I put it this way. There are really two types of law firms in the market, but
even if Mr Albert HO denied having said that, I would say it for myself that the
law firms can be divided into these two categories. One type of firms is, the
well-managed high-costs firms which employs qualified and experienced lawyers
and their services are of a high quality, and the other type is the unscrupulous law
firms which employ unqualified people in order to cut costs, and it is not at all
surprising that their work are of a poor quality.
What will be the outcome if we abolish scale fees and allow these two
types of law firms to compete freely against each other? There will only be two
consequences. First, the well-managed firms will bow to reality and have to cut
their costs in order to compete with the poorly-managed firms and their quality of
services will deteriorate. The second consequence will be like what happened
in the United Kingdom. The high-standard firms will not bother to compete
against the low-standard firms and they will give up conveyancing work and
concentrate on other businesses. And what will happen if it turns out this way?
The outcome will be that only the low-quality unscrupulous law firms are left to
handle conveyancing work. Miss Emily LAU asked why there are scale fees for
conveyancing but not for other services? As I said this morning, there are scale
fees for conveyancing because the quality of conveyancing is not something
plain to the naked eye, and it is not something which the consumers can easily
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LEGISLATIVE COUNCIL — 25 June 1997
determine. If something has gone wrong, it will take many years for the
consequences to come to light. A good conveyancing job does not simply mean
that the deed is beautifully printed out, and it should mean that the lawyer has
carried out a thorough title search, but this is something which the consumers
would not be able to tell. The consumers can easily tell whether the litigation
work is up to standard for everyone knows how the lawyer performs in court, and
the clients will soon find out if there are any problems in the contracts. If the
husband of Miss Emily LAU were a solicitor, instead of a barrister, she would
understand the work of solicitor firms better.
Furthermore, some colleagues have said it is unfair that the law-abiding
lawyers are not free to compete fairly with the unscrupulous lawyers because
they are bound by the scale fees. But, do we still have the rule of law in Hong
Kong if we have to abolish the rules in order to punish those people who do not
abide by them? We should not abolish the laws just because some people are
committing crimes and this is not the right way to do things. It is precisely
because some lawyers are not abiding by the rules that we have to enforce them.
I believe that the representatives of the Law Society sitting in the public gallery
today would make sure that these rules are followed.
Thirdly, Mr Albert HO said we have to rely on the integrity of lawyers to
maintain the quality of services, and we should not declare that the quality of
services will deteriorate if scale fees are abolished. I am not proud of this fact
and actually I am really ashamed. I feel really ashamed to be standing here to
talk about this matter and I am sure that Mr Thomas ROBIN did not feel proud
when he came before the Bills Committee to tell us about the situation in the UK
and their bitter experiences. That was why he had urged us not to follow in the
footsteps of the United Kingdom because the road which the United Kingdom
has taken is the road to destruction and Hong Kong should not follow its
example.
I hope Members of this Council would reconsider the situation. Some
colleagues say we do not have any objective information to prove that if scale
fees are abolished, the quality of services will be sacrificed, and the result may
not necessarily be a price competition or a deterioration in the quality of services.
The situation may not be as bad as anticipated. If that is the case, can any of my
colleagues or the Government tell me why the quality of services of the overseas
law firms has deteriorated after the abolition of scale fees? No other indications
or explanations could be found for the deterioration in the quality of services of
LEGISLATIVE COUNCIL — 25 June 1997
743
the overseas firms, and the only conclusion I can draw is that price competition
has led to disastrous results and deterioration in the quality of services.
We cannot just turn deaf ears and blind eyes to the things that happen
around the world. In the past, when we deliberated on the Mass Transit
Railway Corporation Ordinance, the Kowloon-Canton Railway Corporation
Ordinance and the Kowloon Motor Bus Corporation Ordinance, we have taken
into account the unpleasant experiences of other countries and learned from their
examples. The question is not whether we are proud of this fact, but that we
have to face up squarely to reality. Of course, we have to pursue our ideals, but
we cannot really opt for the idealistic situation without having regard to reality.
I think we should consider carefully the experiences of the overseas countries.
Mr Chairman, these are my remarks.
MR ERIC LI (in Cantonese): Mr Chairman, since I have already spoken during
the Second Reading debate, I could have sat here comfortably. However, I
cannot understand why the Honourable Albert HO, who is sitting behind me, has
this habit of mentioning my name. Every time he calls out my name, I am a
little scared and have to pay attention to what he is talking about. Though I
have been sitting here for two years, I am not aware of the fact that my
neighbour, the Honourable Fred LI, has a disposition to self-destruction, always
asking other colleagues not to support him. Although I have been sitting here, I
am not aware that I am surrounded by so many colleagues of individual
character. In this respect, I can only blame myself for a lack of political
awareness. Nonetheless, Mr Albert HO is right in saying that accountants do
not have scale fees. We have a very strong market awareness and this is
something which I admit.
The essence of my speech this morning is not to defend scale fees. I have
already made it clear that I do not support scale fees and have never commented
on whether they are set at a high or low level. This is not the subject of
controversy. In the past, the fees set by the Law Society were too high and
should be reduced. What I am talking about is a structural change which in the
short term may bring high risk. To handle this, we have to spend some time,
draw up strategies and do things step by step. This is in fact the argument of my
speech this morning. I listened to the imposing arguments of the Attorney
General and colleagues of the Democratic Party but made no response. This is
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LEGISLATIVE COUNCIL — 25 June 1997
an issue of free market economy. I fully understand what the impetus for a
market economy is. If we suddenly open up a planned market economy, a lot of
people will do their very best to control cost. Just as what the Honourable Mrs
Miriam LAU said, if they want to cut price, fees will subsequently go down
because this is the principle of market operation. This is particularly true for
lawyers or individuals who have just joined the trade. This would be a great
incentive for them to control their cost as far as possible in order to increase their
edge of competition. This is the way to survive in a free market. There is no
one to blame, nor does it have anything to do with respect. How then should we
address such matters? There should not be any problems in the long run. In
the face of keen competition, any trade, regardless of its nature, will be
particularly alert. Take the accounting profession as an example. We have
realized that there is a need to spell out certain criteria. We have done a lot of
work in these few years. Not only have we actively investigated our
practitioners but also monitored the market. Recently, we have applied to the
Legislative Council for greater investigative power. We have taken a lot of
precautionary measures before any undesirable circumstances arise, with with a
hope to maintain the highest level of professionalism.
As regards services of the government, some of them which used to be
provided by the government have recently been liberalized, with the setting up of
trading funds. It has taken years of preparation before the government presents
the relevant bills. There are still some major examples. When China
transformed from a planned economy to a market economy, it had to face a lot of
problems and a lot of time was spent to address those problems. This is a fact
we have to face, the problems that will be encountered in opening a new market.
I have mentioned just now that accountants have to take a lot of
precautionary measures. I do not think that Mrs Miriam LAU and some other
colleagues need to talk about whether this is a matter of shame or not. This is a
very practical matter. Accountants are my constituents and so I will not run
them down. However, I have stated clearly why precautionary measures have to
be taken. As a professional body, we need the government to draw a clear line
for us to go by. If there is no good guidance for them, they may fall below the
standard because of competition. The measures are in place for upholding the
dignity of the trade as a whole, and they have nothing to do with respect.
Professional awareness is very important.
LEGISLATIVE COUNCIL — 25 June 1997
745
I have trust in the Law Society but based on its actual experience, it is
itself suggesting to us the possible risks and consequences if the proposal is
pursued.
We cannot change the system casually.
Colleagues of the
Democratic Party should, during today's debate, point out what measures they
will introduce offset the risks that may arise, instead of simply saying that we
should believe in the professional standard of each and every lawyer of the Law
Society.
I do have respect for them but if they cannot say what
counter-measures they have, I will feel ashamed. My heart will not be at ease,
nor will I be convinced. What Mr Fred LI said is right. Members of the public
regard the buying of a property a major transaction and they need to be protected.
They want the legal trade to tell them that upon the opening of the market, their
major transactions will still be protected. What they are looking for is not just
low fees.
Thank you, Mr Chairman.
MR ANDREW CHENG (in Cantonese): Mr Chairman, I would like to respond
to the Honourable Ronald ARCULLI's remarks this morning about the opinion
survey conducted by the Democratic Party. I will also refer to the views
expressed by the Honourable Miss Margaret NG, as well as the Honourable Eric
LI's question as to my opinion of the Hong Kong Association for Democracy and
People's Livelihood (ADPL).
With regard to the opinion survey, what I want to clarify and state for the
record is that the number of calls we tried to make was 39 418. 9 255 phone
numbers were found to be existing, and 73.4% of the calls were put through.
The response rate was 16.1%, and the number of valid documents was 507.
Mr Chairman, I believe the results of our survey are very close to the
results of many opinion surveys conducted by telephone through computer
random sampling in Hong Kong at present.
As for the question about scale fees, the question we asked was that
whether we should legislate to abolish the present practice of charging fees on a
fixed scale in conveyancing, and replace it with having the client and the solicitor
set the fees between themselves. The number of respondents that said we
should legislate was 328, which accounted for 64.7%, while the number of
respondents that said we should not legislate was 127, which accounted for 25%.
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LEGISLATIVE COUNCIL — 25 June 1997
I believe this is the question. I do not think that we deliberately misled the
interviewees to say the answer that we wanted. We also want to stress that the
results of questionnaire surveys conducted on the streets coincide to a great
extent with the results of this opinion survey.
Besides, I would like to clarify a point raised by Miss Margaret NG. She
said that the Government pointed out that scale fees were not proposed by the
Law Society of Hong Kong (Law Society). Instead, the system of scale fees
was established by the Government through legislation. I feel that there is a
need to change the existing legislation. We should take public opinion into
account, which considers that it should be changed. Therefore, there is a need
to debate appropriate amendments to the law in the Legislative Council. In my
opinion, the Legislative Council certainly has a right to amend and abolish this
system of scale fees.
Some Members consider that there would be less argument when fees are
standardized. To me, this is wishful thinking. The present uniform fee system
has aroused much controversy. When they go to solicitor firms, many
consumers would ask the solicitors how many items of fees they would charge,
when a neighbouring solicitor firm is charging two items. If they charge only
one item, the neighbouring firm will charge even less. Basically, uniform fees
could reduce argument. Unfortunately, in the present market, the unform fee
system exists in name only.
Since solicitors are charging excessive fees, many people decide to
negotiate fees with solicitor firms. Estate agents should have a professional
image. The commission they charge is 1% on average or 1 to 2%. Recently,
we have passed the Estate Agents Bill, which provides further regulation on
estate agents. If the fee rates recently proposed by the Law Society but not
announced yet are passed by the Costs Committee, the public will benefit and the
service quality will be guaranteed. This is the view that many Members have
heard. I do not wish to repeat it. I am still puzzled as to how the public could
benefit from a reduction of scale fees. People spend several millions or tens of
millions on buying a flat and hope to obtain services of professional standard.
Mr President, it seems to me that the Law Society was forced into making the
recent fee reduction proposal by the Government.
When the Government revealed that the scale fees would be abolished, the
Law Society suffered from the first shock, which led to many reverberations.
From the calls which followed the first shock to the introduction of the blue bill,
LEGISLATIVE COUNCIL — 25 June 1997
747
a long time lapsed before actions were taken. The Law Society seemed to have
kept silent in the whole period, since it got the information that it would not be
passed by the Executive Council. Only when the blue bill was published did it
take salvage actions. In the eyes of the public, including myself, the whole
matter reveals that the Law Society has no sincerity at all to review the present
system of scale fees. Besides, the recent proposal of the Law Society centres at
reduction in fees, linking professional services with the setting of fees based on
the principle of "adjusting prices according to the goods". Mr President, such a
response really makes people worry about the standard and quality of services
provided by solicitors in conveyancing.
For this reason, in the Bills Committee, members of the ADPL waited for a
new proposal by the Law Society and for the Costs Committee to come up with a
better system and better conditions. It waited and waited. The system of scale
fees was a big problem and headache for Dr the Honourable LAW Cheung-kwok.
The ADPL started off by supporting the abolition of the system of scale fees,
then pointed out that there were a lot of problems. In the Bills Committee, I
heard them say several times that there were a lot of problems. Many members
of the Bills Committee sitting here also know about this. They just kept on
waiting. Perhaps they waited for too long and were cheated by the Law Society.
However, these four votes are very important and crucial. Therefore, I hope
that the ADPL will realize the main point we are discussing, which is not
whether the scale fees are high or low. Mr President, we stress again that the
Democratic Party is not asking for a reduction of fees. We are asking the Law
Society to monitor solicitors in a reasonable manner, abolish a system that is
unreasonable to the public, and provide professional services which
commensurate with the fees.
Mr Chairman, I do not wish to go on, since it is already 4.30 pm. I beg
your pardon. I have not yet responded to Mr Eric LI's point. Mr LI hoped that
the Democratic Party would provide a good proposal. Frankly, the Democratic
Party has always considered that if scale fees are good, why should they not
apply to all fees and services of solicitors fees? Just now the Honourable Mrs
Miriam LAU said that the reason was that the effects of conveyancing services
could not be seen immediately. Mrs LAU should know that the effects of many
contracts of business services are not immediately seen. It may take 10 or 20
years or even longer to see the problems, and there are no scale fees for ordinary
business contracts. I believe each solicitor has a different view. However, a
risk protection system should be established by the Law Society. A specialized
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profession or an organization of professional solicitors should be in charge of
this protection system. They should not set a fee that they consider reasonable
according to this system of scale fees. When people buy or sell property,
whether the scale fees are high or low, there is no protection for them. There
are no scale fees in the accounting profession. Why not? Why should there be
scale fees when solicitors deal with conveyancing contracts? I hope Members
will consider this question carefully.
Mr Chairman, these are my remarks.
MR JAMES TO (in Cantonese): Mr Chairman, I only wish to talk about two
points. First, scale fees in fact represent a kind of parentalism, showing that the
Government does not trust the public and consumers. So far, the transactions of
over 1 million flats have been completed. Actually, many people have made
use of the services of solicitors. Is the public not to be trusted and do they think
that cheap is good? The Democratic Party agrees that the Law Society of Hong
Kong (Law Society) can suggest a fee level that it considers reasonable.
According to the Law Society, if a solicitor firm thinks that it can depart
considerably from the fee and only charges $2,000 for the transaction of a flat
worth $3 million, then the consumer will ask why there is such a "good bargain"
and whether it can really be done. He will naturally thinks that this is
impossible. Of course, those solicitors can explain that they have an office in
the North District and the rent costs only $1 per square foot. They have long
office hours and they are very efficient etc. If they can convince the consumers,
there should be no problem.
Actually, are consumers not to be trusted? Many colleagues are in fact in
the same strain. While they agree to constitutional reforms, they object to direct
election of all seats. Their views are in fact the same. They all think that there
must be functional constituencies, indirect elections and appointed members.
They have the same mistrust of the public. When the people vote, they mistrust
them. When the people choose services, they mistrust them, thinking that they
are stupid and only ask for cheap fees. Such an attitude is really unseemly in
the present social environment.
Mr Chairman, the second point is for the record only. Just now in the
Second Reading debate, you said I had asked for your permission to propose
some new amendments at this stage without notice to postpone the
LEGISLATIVE COUNCIL — 25 June 1997
749
implementation of the clause on the abolition of scale fees by a resolution of the
Legislative Council. However, you had refused my application in writing. I
would like to know why my application had been turned down before I even
made it. The reason you gave was that it was already very late. Mr Chairman,
I respect your decision. However, I just wish to state the matter for the record.
MISS MARGARET NG (in Cantonese): Mr Chairman, I did not intend to take
up Members' time. However, some matters must be clarified and I hope that
Members will be patient.
Just now the Honourable Andrew CHENG said that he did not understand
why there was talk of fee reduction in the beginning, but then it came to nothing
and we were just asked to wait. Were we cheated by the Law Society of Hong
Kong (Law Society)? "Cheat" is a serious accusation, since this means that the
Law Society is cheating people, fooling them into doing something and then
going back on it's words. I think we cannot bear such an accusation.
Therefore, I have to make some explanations.
Actually, before the Attorney General published the consultation paper, the
Law Society had already proposed to review the scale fees for conveyancing.
After the review, it would submit the recommendations on fee adjustment to the
Costs Committee. Mr Chairman, the setting of fees is discussed by the Costs
Committee. It is not as simple as a matter of the Law Society drawing up some
forms on a piece of paper. Rather, arguments and data have to be submitted.
The Honourable Eric LI should be very clear about this. Just now, Members
talked about the methods of computation and what bases, costs or prices should
be used as criteria. Therefore, many studies have to be conducted and many
preparations have to be made.
Unfortunately, solicitors are very conservative and prudent people. When
the solicitors and accountants discussed how to conduct this study, the
accountants represented by Mr Eric LI, who are unfortunately also very
conservative and prudent, asked for quite detailed data. During the discussion
on this matter, the Consumer Council began to attack the Law Society and
criticized that it was wrong to charge scale fees. The Law Society thought that
it would only arouse people's suspicion if it proposed reduction in fees itself.
Therefore, it invited the Consumer Council to nominate a representative to sit on
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the Costs Committee to discuss how to adjust the fees. Since the Consumer
Council could reflect consumers' views, solicitors would not appear to be
conspiring with one another. Accusing judges of conspiring with the Law
Society is already a serious allegation. However, this suggestion was rejected
by the Consumer Council for various reasons. After various complications,
recently, the Law Society and the accountants at last realized that they had to
hasten their work and simplify the mechanism. This speeded up the task.
However, after the task was accomplished, there was another complication. The
Law Society could not one-sidedly asked to convene a meeting of the Costs
Committee. The meeting must be convened by the chairman of the Costs
Committee. Unfortunately, when the Law Society asked for a meeting to be
convened earlier this year, the chairman of the Costs Committee initially refused
to do so. This was reported in the media at that time, but maybe not many
people noticed it. The chairman refused to convene a meeting up to the end,
since the former Legislative Council wanted to discuss whether scale fees should
be abolished. Later, after the Law Society had asked the chairman to
reconsider, he finally decided to convene a meeting. After the meeting was held
and the data submitted, it was passed recently. So there were really a lot of
complications. I think Mr Andrew CHENG also understands that it is not the
Law Society that deliberately procrastinated and "cheated" people, but there were
really a lot of complications in the process.
Mr Chairman, just now I heard many colleagues ask why scale fees were
charged in conveyancing only. Now, the Costs Committee proposes to reduce
scale fees. However, even fee reduction is not right, since it shows that
solicitors have been cheating people all along. Why did I say the fees would
benefit the public immediately? I am not insulting consumers. Nor am I
saying that consumers will certainly ask for low fees. What we are saying is
that consumers ask not only for low fees, but also for guaranteed quality of
services from solicitors. We always insist that the standards should be
guaranteed. However, property prices were so high that after calculation, we
found that the fees could be reduced. Do we have an obligation to adjust
solicitor fees? After the legislation is passed, will the public be actually
benefited from the fees? The benefits I referred to should be substantial ones.
However, just now, many Members said that every time there was a fee
reduction, especially a substantial one, the public would immediately wonder
whether the fees should be even lower. One may also ask, "If open negotiation
on fee can further reduce the fees, would consumers feel more protected? The
public might ask whether there should be more open negotiations and whether it
LEGISLATIVE COUNCIL — 25 June 1997
751
would be better if they knew how to bargain so that solicitor fee would be further
reduced. If the public insisted on a fee reduction and the solicitors accepted it,
would they adjust the goods according to the prices? All these problems might
arise. Those who want uniform fees have their reasons too.
If we want uniform fees, why should we apply them to conveyancing only?
As I briefly mentioned just now, there are so many transactions on flats and so
many people are involved. How should the fees be set when these people
urgently require a solicitor? As we all know, when determining litigation costs,
if we think that the solicitor fees are too high, we can ask the court to determine
the costs. If there are no uniform fees and the fees are to be negotiated, one
would have to go the court to settle any dispute over the fees. If the courts have
to determine the solicitor fees for conveyancing, they would have a very heavy
workload. This is why we have the Costs Committee to set uniform fees.
What should uniform fees be based on? On the time spent by the
solicitors? In that case, would it create any arguments? Or should they be
based on the complexity of each case? In some cases, more deeds have to be
examined, while in other cases, less efforts are required. How should we handle
this? Basing them on the property price seems a possible way.
Mr Chairman, I am not saying that scale fees are the only way. Nor am I
saying that once scale fees are abolished, the standard of solicitor services will
decline. Scale fees have been implemented for a long time. If they are
abolished all of a sudden without careful thought and there is no protection
mechanism, it will result in confusion. I hope Members will take this into
account. We should only embark on this after we know how to reform and how
the process of reform should look like.
Mr Chairman, these are my supplementary remarks. I thank Members for
their patience.
MR JAMES TIEN (in Cantonese): Mr Chairman, when I raised my hand, I was
a little scared, since the Honourable Mrs Miriam LAU was still here.
Fortunately, she has just left. I hope she is not watching this on TV outside.
Mr President, in the sittings, the solicitors are very democratic and fair,
and they say that competition must be fair. However, I find that when it comes
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to their livelihood, it is a different matter. They will insist on their positions. I
have discussed this in the industrial and commercial sectors, in the General
Chamber of Commerce and in the Federation of Hong Kong Industries.
Oh, dear! Mrs Lau is coming back. (Laughter) We have discussed this
question. However, we have not made a major decision. Of course, the
commercial sector makes the same demands on consumer goods as the public.
It wants them to be both cheap and good. Unfortunately, there is nothing that
ideal in our society. Many things are not cheap at all but they are expensive. I
am not talking about solicitors; I mean my home. The building costs are very
high but it leaks. This shows that many goods are expensive but of poor
quality.
Actually, the cases of many professionals, such as accountants and
auditors, are different. When our company employs an auditor, we have to
negotiate over the fees, laying down the remuneration of the auditor for auditing
the accounts of the company. If the work is badly done, the company can
dismiss the auditor and employ another one. The auditor might find the fees too
low and adjust their service according to the price. Even if the fees are low, if
his performance is poor, the company can always find another auditor. Of
course, with doctors, we dare not do this. We will let the doctor set the price.
We will pay whatever he asks for. Otherwise, the consequences will be dire.
However, business matters are different.
Nowadays, during the transition, many people tell us that Britain is
messing things up. Actually, I do not understand why Britain should do that.
In any case, the Britain Administration should not abolish scale fees. Since the
Law Society of Hong Kong (Law Society) has proposed to reduce fees by 40%
and the Costs Committee is discussing it, can we leave it alone and let it be
passed first?
I have talked to the Honourable Paul CHENG about this matter. The
General Chamber of Commerce has no opinion in particular. Of course, I have
to show respect for the feelings of Mrs Miriam LAU, the Honourable Ronald
ARCULLI, the chairman of the Law Society and my friend's wife. I have never
been so vigorously lobbied before. Therefore, today, Mr Paul CHENG and I
will support the solicitors.
LEGISLATIVE COUNCIL — 25 June 1997
753
Since the chairman of the Law Society is present, I would like to remind
him of two things. The industrial and commercial sectors do not think too well
of the solicitors. Apart from reducing their fees by 40%, I hope that they will
refrain from increasing their fees when property prices go up. Nor should they
increase their fees when property prices drop, although their shares may have
decreased. Also, the Costs Committee should not propose an amendment for a
fee increase in the next Legislative Council or the Provisional Legislative
Council. I hope they will make these commitments. Perhaps Mrs Miriam
LAU can make these commitments on their behalf. Under these circumstances,
we will support the solicitors.
DR LAW CHEUNG-KWOK (in Cantonese): Mr President, I would like to
briefly respond to the Honourable Andrew CHENG's criticism on the Hong Kong
Association for Democracy and People's Livelihood (ADPL).
The ADPL also supports the abolition of scale fees. However, we feel
that we should abolish them by stages, instead of abolishing them at one stroke
through this Bill. In our view, fighting for consumer interests is not just a
concept. Rather, one should really be able to secure improvement for
consumers and the general public.
On this question, the most obvious improvement is a reduction of fees
while the quality of service is guaranteed. In the past few days, Members of this
Council and many people talked to members of the Law Society of Hong Kong
(Law Society) about this issue. It is said that the latest proposal is a reduction
of fees by about 25% to 40%. Just now, Mr Andrew CHENG reminded us not
to be cheated. Actually, we are also afraid of being cheated. However, I am
relieved to see the heads of the Law Society here today. Since so many
colleagues mentioned several times that they had promised to reduce fees, I do
not think they will go back on their promise.
Second, I very much agree with the Honourable Eric LI and other
Members, who raise a question, "When a system is opened up within such a short
time, how great are the risks and can the community bear them? Based on the
experience of other countries, is there a possibility of causing confusion or
disadvantaging consumers?" We have looked at the experience of Britain and
Australia and reached the conclusion that a lot of risks are involved.
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LEGISLATIVE COUNCIL — 25 June 1997
Let me draw a simple analogy for Members' reference. Since the
implementation of economic reforms and the open policy in China in 1978, the
exchange rate system had been in a state of confusion for a long time. Initially,
there was only an official rate. Then there were black market rates, foreign
exchange trading centre rates and even foreign exchange certificate rates. Many
international economists discussed whether China should immediately abolish all
exchange rates and switch to a floating exchange rate, whether this is the most
effective way for the economy or whether one should proceed gradually. Of
course, we all know now that China handled the exchange rate issue in a
step-by-step manner. In recent years, the exchange rates have been basically
unified. We see that Renminbi has risen, instead of fallen. There are many
reasons behind this and I am not trying to explain in detail.
Another example is also very clear. Several countries in the former
Soviet Union let their exchange rates float overnight. The people woke up to
find the floating exchange rates. We all saw what the results were. In many
countries, the rouble depreciated more than 100 times overnight. Consequently,
many people had to queue up for bread. Up to now, the economy of many of
these countries is still affected by the policy of liberalization of the exchange
rates adopted at that time and remains stagnant.
The examples I cite show that if we open up an important system within a
short time, we should not underestimate the risks involved. The more
responsible course is to adopt a more stable policy and implement it by stages.
Thank you, Mr Chairman.
MR ANDREW CHENG (in Cantonese): With regard to the words "being
cheated" which I used earlier, I would like to make a formal apology to the
Honourable Margaret NG and the Law Society of Hong Kong (Law Society) she
represented. I think I might have used the two words because I was rather
agitated at that time when I talked about the stance of the Hong Kong
Association for Democracy and People's Livelihood (ADPL).
However, Mr Chairman, I wish to explain why I have used the words
—"being cheated" in the first place. I feel that lawyers have all along given us
the impression of employing a "stalling tactic". I am a bit puzzled after listening
to Dr the Honourable LAW Cheung-kwok's analysis and his macro-economic
LEGISLATIVE COUNCIL — 25 June 1997
755
views. However, I am all the more convinced that he is resorting to that
argument and the stalling tactic of the Law Society to justify his voting against
the Government 's proposal on the abolition of scale fees.
Therefore, I hope that the ADPL can come up with a clear stance, and just
simply say so if they oppose the abolition of scale fees. They should not say
that they support the abolition with strings attached. I do not want to take up
too much of Members' time. I just want to apologize for using such harsh words
and hope that Miss Margaret NG and the Law Society would accept my apology.
MISS MARGARET NG (in Cantonese): The Honourable Andrew CHENG
need not apologize to us. I only wanted to clarify the matter.
DR YEUNG SUM (in Cantonese): Mr President, just now the Honourable
Andrew CHENG made some remarks about the Hong Kong Association for
Democracy and People's Livelihood (ADPL). Maybe he does not know the
ADPL very well. He said, "why does the ADPL oppose scale fees in principle,
and then say 'but......'?" In fact, this is not the first time that they have done this.
I would like to refer to what I said this morning. I said that the Honourable
Miss Margaret NG had very successfully lobbied Members. I am not doubting
her integrity at all. However, her conservative attitude towards this reform
surprises me a little, since she usually tends to advocate openness, freedom and
fair competition as far as reforms are concerned. Her stands are usually more
clear-cut. However, this time, she gives us a particularly conservative
impression. I am not questioning her personal integrity at all, since I have
always had great respect for her.
The Honourable Mrs Miriam LAU has expressed a lot of views about
reasonable fees. Hong Kong is a society of fair competition. People with
expertise and good performance can of course charge reasonable fees.
However, these fees are based on competition and good performance. They are
not scale fees. No one would question solicitors for charging reasonable fees.
However, why other people, including taxi drivers, cannot charge reasonable
fees? We fundamentally believe in equal opportunities. We are not opposed
to reasonable charges.
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LEGISLATIVE COUNCIL — 25 June 1997
Just now, the Honourable James TIEN very vividly conveyed two
messages. He said that when people buy things or services, they ask for both
cheap price and good quality. However, if they are just cheap but their quality
is poor, they are no good. This in fact reflects two things. First, consumers
know how to choose. Do not think that consumers are ignorant. For instance,
Mr James TIEN's company knows about the auditor that it employs. There is
information in the market. Hong Kong is a society of free economy with access
to advanced information. It is impossible that they know nothing about him.
It is impossible that people do not know who is good and who is not in a
profession. The second point he made was that fee reduction by the Law
Society might not be a very good solution. Actually, what he means is he that
he basically believes in fair and open competition. Even if the fees are reduced,
he still thinks that scale fees are in some contradiction with the open market
which the industrial and commercial sectors believe in. However, with the fee
reduction, the presson on the Law Society has been greatly reduced. This is a
successful move.
As I said this morning, scale fees are basically very muddled and not
suitable for Hong Kong at all. Just now Dr the Honourable LAW Cheung-kwok
cited the example of a planned economy transforming into a market economy.
This is not a very appropriate example. Hong Kong has always been an open
society. The example of a planned economy transforming into a free economy
is inappropriate. Scale fees do not fit into the overall economic structure. I
very much hope that Members can support the abolition of scale fees, since this
is the only way to further protect consumer interests and it conforms to the
principle of fair competition. I also believe that solicitors are capable of
competing freely. This has been proved. I believe they are also capable of
doing so in future. Solicitors do not need scale fees to maintain reasonable fees.
Thank you, Mr Chairman.
MR ALBERT HO (in Cantonese): Mr Chairman, I am not going to repeat. I
just wish to provide more information. I did not know what the latest fee
reduction proposal of the Law Society of Hong Kong (Law Society) would be.
However, I have heard some colleagues say that it is a 40% reduction. I just
want to furnish some information. As far as I know, in the legal profession, if
the solicitor represents the buyer in a transaction and if there are three
documents, that is, one title deed, one mortgage deed and one conveyancing
LEGISLATIVE COUNCIL — 25 June 1997
757
agreement, quite often, due to competition, many solicitor firms will charge the
handling fee for the mortgage deed or the title deed only. However, seldom
would they only charge the fee for the conveyancing agreement, since it is not
very proper and the fee cannot cover the costs. It is normal to charge only the
fee for the mortgage deed and it does not break the rules. I know that quite a lot
of solicitor firms will charge even less than the scale fees for the title deed or the
mortgage deed. However, this might be seen as breaking the rules. Therefore,
if the Law Society proposes to reduce all fees by 40%, they may not be lower
than the fees charged by many solicitors now. If they only charge the fee for the
title deed, it may be equivalent to 40% of the three documents. Thus, after a
40% reduction, the fees may still be higher than the fees charged by many
solicitors which they consider reasonable.
I am only providing additional information. Of course, some people will
say that the fees charged by some solicitors are too low. They should charge
60% of the fees. I will not draw any conclusions. I just want to provide
information based on my experience. If some colleagues, such as the
Honourable Mrs Miriam LAU or other colleagues, consider this information
inaccurate, they are welcome to provide information for Members' reference.
Thank you.
ATTORNEY GENERAL: Mr Chairman, could I start briefly by dealing with a
technical point, and I am grateful to the Honourable Mrs Miriam LAU for
picking it up. I believe that the Committee is currently debating the proposal to
delete section 16 of the Bill. Section 16 relates to non-statutory scale fees set
by the Law Society. Members will recall from my speech this morning that that
essentially deals with fees for probate. Statutory fees for conveyancing are in
fact set by the Costs Committee. As I made it clear, Mr Chairman, this
morning, the Administration has agreed to the deletion of clause 16 because the
Law Society has undertaken to submit the question of probate fees to the Costs
Committee, and I am grateful to Mrs Miriam LAU for picking that point up.
We have enlarged into a fresh debate on scale fees. Nobody can say that
this subject has not been talked through. A great many points have been made
and a great many practical points from practising solicitors have been made, I
think, to the great benefit and education of Members of the Council.
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LEGISLATIVE COUNCIL — 25 June 1997
Let me very briefly, Mr Chairman, just pick up some points, but can I start
unusually for me with an anecdote. When about 18 months ago we were well
into this exercise, a member of my staff, not a lawyer, came up to me in the
corridor and she said, "Attorney General, in my married life my husband and I
have bought and sold a number of homes, not as investments but as places where
we live. In all of those transactions we went to solicitors firms. In none of
them did we ever actually get to see a solicitor and the fees seemed always to us
to be extremely high, but we were told that nothing could be done. I hope that
at least on this occasion something can be done." Not a lawyer, not a Member
of this Council, nobody with a political axe to grind, just, if she will forgive me
for saying so, Mrs Average Hong Kong who has bought her flat. That's what
this is about. Reasonable answers to reasonable points put by lawyers' clients.
There are suggestions that the abolition of scale fees will lead to a
condition of great disorder, that we will descend into a sort of warfare situation.
As one or two Members have already pointed out, if that was going to happen it
would have happened already. It would have happened, presumably, before
1980 when there were no statutory, mandatory scale fees. Those of us who
were here before 1980 can remember many excitements, but I do not remember
that sort of excitement in the conveyancing market. As I pointed out this
morning, as has been repeated this afternoon, scale fees have largely gone. That
is the product of market forces taking over.
I will not repeat, Mr Chairman, all the points that I made this morning, but
it is counter-intuitive to say that scale fees are consistent with a free market
economy. That is not the prevailing philosophy in Hong Kong, and I would
remind Members what the Singapore Minister of Justice said in relation to scale
fees that they are an anachronism in Singapore, inconsistent with Singapore's free
market economy and they are bound to go eventually.
Much has been said about quality and the impact on quality. I have never
actually understood the argument which really goes like this: "you have got to
pay me, you have got to pay me a guaranteed sum before I can guarantee you
quality for a professional. If I do not get that amount of money, sorry, quality is
going to decline." That is what has been said this afternoon. I have been a
solicitor since 1963. I have practised conveyancing in England. I would,
frankly, be ashamed ever to advance that argument. But that's the argument that
is being put on quality. That is basically it, shorn of all the surroundings.
LEGISLATIVE COUNCIL — 25 June 1997
759
I am a member, and proud of it, of an ancient and honourable profession
with high standards, high standards of integrity, high standards of professional
probity, committed to service to the public. That is true of solicitors in Hong
Kong. That will continue to be true. There is no reason to suppose that the
abolition of scale fees is going to lead to the horror, doomsday scenarios being
painted about declining quality.
And consider other areas where there are no scale fees. Somebody goes
to a solicitor to have a will made. It is pretty important. The consequences of
getting it wrong may not be apparent until after death. Or tax advice. An
example has been given of a contract, saying the errors will be readily apparent.
Maybe so in some contracts, but those who have ever wrestled with things like
retention of title clauses will know the incredible difficulties inherent, those
difficulties that may not surface years later, but there are no scales fees for that.
In those areas lawyers charge what is fair and reasonable. So, what is wrong
with lawyers charging what is fair and reasonable to carry out conveyancing for
an apartment? What is the big difference?
A lot has been said about the horror shown in England. I said a lot about
that a year ago and I will not bore the Committee with rehearsing all of that, but
just let me pick up a few points from those who are closer to the scene of the
action than I am, or indeed any of us. The English Consumers Association has
said that the abolition of scale fees was far from disastrous and that their
re-introduction in Hong Kong would not be in the public interest. The Office of
Fair Trading has said that it does not believe that the abolition of fee scales has
been harmful to consumers. The Office has never received any representations
from consumers for their restoration. Even the English Law Society, and I will,
in fairness quote them, which represents solicitors has said that:
"views differ as to whether the abolition of scale fees was on balance for
the benefit of the public. If it could be demonstrated that scale fees were
in the public interest in England the Monopolies and Mergers Commission
could allow them to be introduced, but the English Law Society has been
advised that a scale of fees would be impossible to justify in the public
interest and it has not even attempted to reintroduce them."
It has also been said that the abolition of scale fees led to disastrous
declines, declines in solicitors' income and that that was linked to the abolition of
scale fees. There is no evidence to substantiate that allegation. A Royal
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LEGISLATIVE COUNCIL — 25 June 1997
Commission Report published seven years after the abolition of scale fees in
1979 established that the abolition of scale fees had not caused a drop in
solicitors' income. What did cause a drop in solicitors' income later on, in the
late eighties and early nineties, was the worst recession England has experienced
this century, when the volume of domestic conveyancing was halved between
1988 and 1992 and property prices fell by 45% between 1986 and 1993.
So, I think it would be unjustified to extrapolate from the English
experience and wave that in front of the Council as the justification for retaining
scale fees. And I have said this morning and drawn attention to the numerous
other jurisdictions that have abolished scale fees. The Administration made
enquiries of all those jurisdictions. None has any plans to reintroduce them and
we have no evidence that any group of consumers in any of those jurisdictions is
attempting to seek their reintroduction.
A price war. If scale fees are abolished we will have a price war. What
will happen is that there will be price competition, something that Hong Kong in
other walks of life is generally pretty well used to. In fact, it rather thrives on it.
Price competition between solicitors in conveyancing work would be permitted,
and each firm, each solicitor could decide for itself, or decide for himself, herself,
what it considers would be reasonable fees for the work it carries out.
In calculating that they can have regard to their overheads and make
allowance for a profit. They have to charge fees that are fair and reasonable,
and I outlined this morning some of the factors that they would be obliged to take
into account in fixing those fees, including the risk element, to pick up the
Honourable Eric LI's point, and also the value of the subject matter involved.
So, those are already built in to the way in which solicitors charge their fees for
other work. It is not as if one goes from abolition of scale fees to a void. You
go from abolition of scale fees to the normal system by which solicitors charge
their fees to their clients for other work.
So, a vicious price war or just price competition? There will be firms that
have got lower overheads or higher efficiency that will be able to charge less.
But that is the product of market forces at work. Once again, something that I
would suggest that Hong Kong is entirely familiar with.
LEGISLATIVE COUNCIL — 25 June 1997
761
It is said, or it could be said that some ─ and they would be, I have to
say, a very tiny majority ─ unscrupulous solicitors might charge low fees in
order to attract business without regard to the quality of service. Well, I have
dealt with quality, but if a person, if a professional is determined to betray
professional standards, scale fees or no scale fees, that person will betray
professional standards. That is not a product of price. Professional standards
are not a corollary to fees. They are inherent in the qualities of the profession
itself and the rigorous policing of the profession, as the Law Society does of its
members.
There have been one or two personal remarks in the debate. I always
regret that because descent to personalities usually achieves nothing, but I would
just very quickly dispose of them, if I may. There are no personal motives in
this. This is not a question of the Attorney General trying to, sort of, do
something good before he leaves. (Not on the Britannia, I hasten to add!) I
would have been delighted if we could have had this debate a great deal earlier.
I would have been absolutely delighted if we could have had this debate two
years ago. No, there is nothing in this that is specific to the handover that
represents some sort of plot by the departing British. There is nothing in that.
Not that I am suggesting that those words have been used.
Nor is there a hidden political motive here. No political hidden agenda.
This is just taking an issue on its merits and having, as we have had many times
in this Chamber, a frank debate about a matter of great public importance to
Hong Kong. It is simply that and no more. As I say, I would have been
delighted to have had this debate two years earlier.
Mr Chairman, a great many views have been expressed in the course of a
long, interesting, stimulating and serious debate. I have listened very carefully
to all views. I have taken very careful note of the views expressed by many
Members when they have said that they support the abolition of scale fees in
principle but they are concerned about the timing. Some have expressed a
preference for a phase-in approach. They are worried about moving too
quickly, although as a matter of principle they support the abolition of scale fees.
And some have linked those concerns to the Law Society's proposals to revise
scale fees, revisions that are yet to be legislated upon by the Costs Committee but
which are in train. As I say, Mr Chairman, I have given very careful
consideration to those views.
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LEGISLATIVE COUNCIL — 25 June 1997
The Bill as originally drafted provided for deferred commencement. I
just want to make that clear, that if you look at the Bill as published, the Bill did
not provide for its coming into force upon enactment. It provided for a deferred
commencement. It had a provision that is very familiar to Members of this
Council. It provides for its coming into operation on a date to be appointed. I
will later on be making a technical amendment to that to enable certain
provisions
relating to Senior Counsel and the Barristers Disciplinary Tribunal to come in
upon enactment. But there is a deferred commencement date.
Having regard to the views that have been expressed today, I am prepared
on behalf of the Administration to undertake that the provisions establishing
scale fees, the abolition of scale fees, will not be brought into effect without there
being consultations with the Legislative Council. That, I think, would enable
those Members who have expressed support in principle but are worried about
questions of timing, to have an opportunity to reflect further. It would enable
the Council as a whole to consider the effect, to consider this debate and to
consider the effect of abolition in the longer term, in the medium term and in the
short term. And it would allow revisions to scale fees, which are in train, to be
considered. If that were to be adopted, then I think that that would send, a very
clear message to the community, to the Administration and to the Law Society
that the Council agrees with the Administration that scale fees should be
abolished in principle, but it would enable the abolition to take place in a phased
manner.
Mr Chairman, with those thoughts, when we come to those provisions in
the Bill and we have not quite got to them yet, I would urge Members to support
the Administration's revision on the abolition of scale fees subject to the point
that I have just last mentioned. Thank you.
MR EDWARD HO: Mr Chairman, I do not know whether the Attorney General
would have the opportunity to clarify what he has just said regarding
commencement on certain sections of the Bill. It sounds like to me that once
this amendment is passed by this Council, then as far as the lawyers are
concerned, they have already been ─ just using a simile ─ sentenced to death.
It is not as serious as that, but I am just using that as a simile. They will be
LEGISLATIVE COUNCIL — 25 June 1997
763
strapped on the electric chair, but before the button is pushed the Attorney
General will consult them. I do not know if that is what the Attorney General
meant to say.
I do not wish to waste any more time to argue about other points. I think
there was some twisting of people's arguments in, for instance, guaranteeing a fee
first before guaranteeing a service. I do not think any Member suggested that.
I think Members were concerned that if there is an open market for fees then
some firms might want to lower their services because they want more business.
I think this is a fact of life and I am in the profession myself. I have seen this
type of undercutting in the profession, what I would call a vicious price war
myself. And at the end the client suffers. Thank you.
Question on the amendment put.
Voice vote taken.
Mrs Selina CHOW claimed a division.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I wish to remind Members that they are now called
upon to vote on the question that the amendment moved by Mr Fred LI on clause
16, that is, that clause 16 be deleted, be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Members may wish to check their votes. Are
there any queries? Still one short of the head count. The results will now be
displayed.
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr
Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr CHIM Pui-chung, Mr
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LEGISLATIVE COUNCIL — 25 June 1997
Frederick FUNG, Mr Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard
YOUNG, Miss Christine LOH, Mr James TIEN, Mr CHAN Kam-lam, Mr CHAN
Wing-chan, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr CHEUNG Hon-chung,
Mr CHOY Kan-pui, Mr David CHU, Mr IP Kwok-him, Mr Ambrose LAU, Dr
LAW Cheung-kwok, Mr LEE Kai-ming, Mr Bruce LIU, Mr LO Suk-ching, Mr
MOK Ying-fan, Miss Margaret NG and Mr NGAN Kam-chuen voted for the
amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily
LAU, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr
WONG Wai-yin, Mr LEE Cheuk-yan, Mr Andrew CHENG, Dr Anthony
CHEUNG, Mr Albert HO, Mr LAU Chin-shek, Mr LAW Chi-kwong, Mr
LEUNG Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE
and Mr YUM Sin-ling voted against the amendment.
Mrs Elizabeth WONG abstained.
THE CHAIRMAN announced that there were 31 votes in favour of the
amendment and 24 votes against it. He therefore declared that the amendment
was carried.
CHAIRMAN (in Cantonese): As the amendment moved by Mr Fred LI on
clause 16 was carried, Attorney General, you cannot move your proposed
amendment, that is to add a Chinese text to clause 16, as that clause has been
deleted.
Clause 17
ATTORNEY GENERAL: Mr Chairman, I move that subclauses (a) and (c) of
clause 17 be amended as set out under my name in the paper circularized to
Members.
LEGISLATIVE COUNCIL — 25 June 1997
765
The amendments add a Chinese text to the subclauses. It has got nothing
to do with scale fees.
Proposed amendment
Clause 17 (see Annex XII)
Question on the amendments put and agreed to.
CHAIRMAN (in Cantonese): The Attorney General, Mr Fred LI and Mr Andrew
CHENG have separately given notices to propose the addition of subclause (aa)
to clause 17.
I propose that the addition of subclause (aa) to clause 17, proposed
separately by the Attorney General, Mr Fred LI and Mr Andrew CHENG, be
debated together in a joint debate.
Committee shall debate the addition of subclause (aa) to clause 17,
proposed separately by the Attorney General, Mr Fred LI and Mr Andrew
CHENG, in a joint debate. I will first call upon the Attorney General to move
his amendment, as he is the public officer in charge of the Bill.
ATTORNEY GENERAL: Mr Chairman, I move the addition of subclause (aa)
to clause 17 as set out under my name in the paper circularized to Members.
This amendment relates to the composition of the Cost Committee. As I
explained in my main speech this morning the Administration proposes a 4:3:3
composition, that is four solicitors, three lay persons and three officials. Since
two of the officials will be members of the independent judiciary they should not
be treated as falling into either the Law Society or the lay persons category.
Those two categories would then be evenly balanced with four members each.
The proposed addition of subclause (aa) to clause 17 is one of the amendments
needed to achieve the 4:3:3 composition. As I have said, it provides for the four
solicitor members. I urge Members to support this amendment.
Proposed amendment
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LEGISLATIVE COUNCIL — 25 June 1997
Clause 17 (see Annex XII)
CHAIRMAN (in Cantonese): I now call upon Mr Fred LI to speak on the
Attorney General's amendment as well as his own proposal and Mr Andrew
CHENG's proposal. After Mr Fred LI has spoken, I will call upon Mr Andrew
CHENG to speak on the Attorney General's amendment and Mr Fred LI's
proposal as well as his own proposal. However, no motion on either Mr Fred
LI's proposal or Mr Andrew CHENG's proposal is to be moved at this stage.
MR FRED LI (in Cantonese): Mr Chairman, on behalf of the Bills Committee, I
move the amendment. In casting their votes, a majority of the members of the
Bills Committee were for the proposal that the Costs Committee should have half
of its members being solicitors. So, I am moving the amendment on behalf of
the Bills Committee.
The composition proposed by the Bills Committee is 6:3:3, whereas that
by the Government is 4:3:3 (we are not talking about football). The Honourable
Andrew CHENG proposes a 5:3:3 composition. The major difference lies
simply in the number of solicitors. The 3:3 proportion is basically the same, but
the number of solicitors in the Costs Committee varies from four to five to six.
Many colleagues think that scale fees can be retained, but the Costs
Committee should be there to represent the consumers to monitor the charging of
fees. The Honourable Mrs Selina CHOW has asked the Government this
question: Why has the Costs Committee not revised the scale fees for so many
years; nor have the three representatives of the Law Society of Hong Kong (Law
Society) in the Costs Committee proposed an amendment all these years? Why
did they not say the charges were too high? Why did they not take the initiative
to point this out? I think in this respect both parties deserve a reprimand. The
Government did not propose any amendment; nor did the Law Society.
The point is whether we should adopt a 6:3:3, 5:3:3 or 4:3:3 composition.
The proposal by the Government is for four solicitors, three layman
representatives and three others who on the whole are regarded as civil servants.
One of the civil servants is the Justice of the High Court, appointed by the
Governor as Chairman, one of them is a genuine civil servant, that is, the
Director of Lands or the Director of Intellectual Property, either of whom may
attend meetings depending on the topic under discussion, and the third one is the
LEGISLATIVE COUNCIL — 25 June 1997
767
Registrar of the Supreme Court. These three people will be there in all the
proposals, that is the proposals for a 6:3:3, 5:3:3 or 4:3:3 composition. The
point of dispute is whether the three will be biased towards the consumers, or
whether they will, being people from the Judiciary, be sufficiently independent
and have their own views. This is the point we are arguing about.
Colleagues in the Bills Committee who put forward the 6:3:3 proposal
think that since non-solicitors in the Costs Committee may be classified as
pro-consumers, solicitors and non-solicitors should each occupy half of the
membership. Hence they put forward the 6:3:3 proposal, that is, six
representatives for solicitors and six for non-solicitors. Later, Mr Andrew
CHENG will be talking about views of the Democratic Party, and I am not going
to raise them here. The Government disagrees with the proposal, and suggests a
4:3:3 composition. This is because the Government sees no reason why the
Registrar of the Supreme Court and the Judge of the High Court will be biased.
In particular, the Judge, who is the chairman of the Costs Committee, will not be
biased. At most the representative from one of the Government Departments
will be biased towards the consumer. Hence, it suggests for four solicitors and
four non-solicitors. It is again a half-half split. We need to look at the issue
basing on our own judgement.
I have been thinking it is not right for the Cost Committe not to convene
meetings and revise the scale fees. I hope it can perform better after this debate
so that the public knows it is doing well.
Thank you, Mr Chairman.
MR ANDREW CHENG (in Cantonese): Mr President, the Democratic Party
will now make a "middle-of-the-road" proposal and suggest a 5:3:3 composition,
that is five solicitors, three Government representatives and three other persons
appointed by the Governor, whom the Governor considers to be able to represent
the interests of consumers using legal services. Under this system, since the
chairman usually remains neutral in chairing the meetings and seldom influences
the discussion of the matters which need to be passed, solicitors and
non-solicitors are evenly balanced in the discussions. Only when the votes are
tied will the chairman exercise his casting vote after considering public and
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LEGISLATIVE COUNCIL — 25 June 1997
consumer interests. This is more reasonable and will ensure greater protection
of consumer interests which have a weaker representation in the Committee.
Compared to the 6:3:3 system, the 5:3:3 system provides better protection
of consumer interests. It can also allay solicitors' concern that there are fewer
solicitor representatives than non-solicitors. During the resumption of the
Second Reading debate of the Bill, I mentioned that in the 5:3:3 proposal, one of
the representatives in the 3:3 formula is a judge. When he becomes the
chairman, there are five solicitors and five non-solicitors. With the same
number of representatives from both sides, this is to us the fairest proposal and
one that best conforms to consumer interests.
I urge Members to support the 5:3:3 proposal of the Democratic Party.
Thank you, Mr Chairman.
MISS MARGARET NG (in Cantonese): Mr Chairman, The Honourable Fred
LI's job to propose an amendment for the Bills Committee is a difficult one, but I
urge that we support Mr LI's amendment.
Mr Chairman, no professional charges in Hong Kong are set by a
committee consisting of non-professionals. The only exception is the charges
for non-contentious business . At present, there is a half-half split between
solicitors and non-solicitors in the membership of the Costs Committee. There
are three for each category and I think it is reasonable. Among three of the
non-solicitors, one is the Director of Buildings or the Director of Intellectual
Property, one is the Registrar of the Supreme Court, who usually adjudicates on
disputes about the fees charged by solicitors, and one is the Judge of the High
Court, who acts as the chairman. The Costs Committee operates in the form of
an expert group to ensure that fees charged by solicitors are based on actual
figures and are reasonable.
As the society progresses, consumers are increasingly influencing policies
directly. I think increasing the composition of consumer representatives in the
Costs Committee not only serves to protect the interests of consumers but also
improves communication between consumers and solicitors. So, it is a good
proposal. Furthermore, to have more than one consumer representative in the
Committee can strengthen the voice of consumers in it and they can complement
each other. Again, I think it is reasonable. But with more members added to
LEGISLATIVE COUNCIL — 25 June 1997
769
the Committee, I think it is important there should be a balanced composition,
that is there should be an equal number of solicitors and non-solicitors in the
Committee, in particular when the change would entail added polarization. To
avoid a situation in which non-solicitors may control service charges by
solicitors, there should be an equal number of solicitors and non-solicitors. So,
I think the proposal by the Bills Committee for three people from the Judiciary
and the Government, three from consumers and three from solicitors, that is, a
6:3:3 composition should be supported as it is reasonable.
The amendments by the Government and the Honourable Mr Andrew
CHENG, a 4:3:3 and a 5:3:3 composition, are not balanced in representation.
Solicitors become a minority. Mr Chairman, why should it be so? Both the
Government and Mr CHENG have said even if the Government and the
consumers joined hands the Judiciary would remain neutral. So, in fact
solicitors are the majority. This is deceptive. If people from the Judiciary are
truly neutral, they should not be allowed to vote. If they have the right to vote,
we cannot rule out before anything else the possibility that they will exercise the
right. In fact, the arrangement would put the Judiciary in a very difficult
position. To change the power of the Judiciary to adjudicate into a political
power is very inappropriate.
In the Second Reading debate, Mr Andrew CHENG said the 5:3:3 proposal
will provide a balanced expression of opinion as the Judge would act as
Chairman. Mr Chairman, this shows even Mr CHENG advocates balance and it
is because the Judge will be the Chairman that Mr CHENG agrees to the 5:3:3
composition. But then the Chairman may vote too. So, to have real balance
we should adopt a 6:3:3 composition. Mr CHENG seems to have said that as
the consumer representatives are a weak group they should have one more vote.
But Mr Chairman, after today's debate, I do not think anyone in Hong Kong will
believe consumer representatives are a weak group. Therefore, I urge that Mr
CHENG re-consider the matter. To follow his reasoning, the 6:3:3 composition
should be the right composition.
The Government has pointed out that solicitors in the British Costs
Committee is also a minority, but there has never been any consumer
representatives in that committee. No consumer representatives is no consumer
representatives, despite whatever explanation or justification one may provide.
I would like to ask friends from the labour sector: If a committeee was to be
established to determine their wages and labour representatives in the committee
770
LEGISLATIVE COUNCIL — 25 June 1997
were a minority, would they accept the arrangement? Obviously, this is an
unreasonable and unfair arrangement.
Therefore, Mr Chairman, I urge that colleagues oppose the amendments
put forward by the Government and Mr Andrew CHENG and support Mr Fred
LI's amendment.
Thank you, Mr Chairman.
MRS SELINA CHOW (in Cantonese): Mr Chairman, I think anyone in the
business world would understand what is meant by "50-50", that is each of the
parties holds half of the shares and hence the control over a company is in equal
share. Both parties have to compromise. With one share more, that is 51
shares for the party, it would have absolute control. If we hope that charges by
solicitors are not left entirely to solicitors, nor controlled by others, the only
formula is a "50-50" distribution.
The Honourable Fred LI was right when he said the performance of the
Costs Committee in the past ten years or so should be reprimanded. The point
is that no one would start the reduction in price due to their position. I think the
three official representatives should be even more severely reprimanded. They
represented the interests of the public, those of the consumers; whereas solicitors
represented their professional interests and I do not find anything strange about
it. If we were to reprimand a party, we should aim at the three consumer
representatives because they had every opportunity to bargain for the public.
Now they get what they want as soon as they start working. I have heard that
solicitors are willing to offer a 40% discount (this is only a hearsay and has not
been announced yet). If the present Costs Committee with its half-half split in
membership can be so effective, why then do we not retain the present
composition? Indeed, it is entirely unfair to let a third party, that is consumers
or Government officials, to have control over charges set by a professional body.
In the Government proposal, it is very likely the Judge will decide because the
consumers and the solicitors are evenly split in the committee. So, it must be
the Judge who makes the final decision. Even in the Honourable Andrew
CHENG's proposal, the Judge will in fact be the one who decides. So, it is
indeed very unfair. Therefore, I hope everybody can support the decision of the
Bills Committee, that is, a 6:3:3 composition.
LEGISLATIVE COUNCIL — 25 June 1997
771
MR IP KWOK-HIM (in Cantonese): Mr Chairman, upon the resumption of the
Second Reading debate, I pointed out there should be an even distribution of
professionals and consumers in the Costs Committee. The Government's
proposal for a 4:3:3 composition (a proposal also mentioned by the Honourable
Fred LI, chairman of the Bills Committee,) in fact comprises four representatives
of solicitors, including the chairman and vice chairman of the Law Society, three
representatives of customers and users, and three Government representatives,
including the Director of Lands or the Director of Intellectual Property, a Judge
of the High Court and the Registrar of the Supreme Court.
In the opinion of the Democratic Alliance for the Betterment of Hong
Kong (DAB), the composition will reach a 4:4 ratio if there are four
representatives of solicitors and three representatives of customers plus an
official representative. I think this can achieve balance in views expressed in
the Committee. Some people have made comments on the two representatives
from the Judiciary. The DAB is of the view that they should be neutral and
should not be regarded as automatically representing a certain side. I have
heard from the legal profession that Judiciary people would certainly be biased
towards the consumers. But at the same time, Government officials have told
me these people would be biased towards solicitors. So, I do not think they will
be biased towards anyone. On the contrary, I think the Judiciary should be
neutral. If Hong Kong is to maintain a good system for itself, the Judiciary
must be neutral and fair and this is of great concern to people.
In the circumstances, the DAB regards the Costs Committee as a balance
achieved after discussion about charges by solicitors. From a certain viewpoint,
the charges are being monitored by consumers.
I think in the "50-50" theory, the contention lies in the Judge of the High
Court, be it the 5:3:3 or 6:3:3 proposal. I do not think we can achieve absolute
balance between solicitors and non-solicitors by resorting to either the "4:3:3",
"5:3:3" or "6:3:3" proposal
Thus the DAB supports the Government's "4:3:3" proposal. Thank you,
Mr Chairman.
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LEGISLATIVE COUNCIL — 25 June 1997
MR ALBERT HO (in Cantonese): Mr Chairman, let me quote again the words
of the Honourable Mrs Selina CHOW. She has said it is fair for solicitors to
represent the interests of their profession, just as it is so for consumers to
represent the interests of consumers. If what she has said is right, outsiders will
find it hard to accept that solicitors are a majority in the Costs Committee. The
reason is that solicitors have a privilege to handle legal matters and they are the
only ones who can do so. If they represent the interests of their profession, they
will surely win. In the circumstances, can the Costs Committee achieve its
aims? Can it balance the interests of all parties? People will doubt about it.
Although I quote the words of Mrs Selina CHOW, I do not agree with what she
said because I do not think solicitors always stand on professional interests. I
think all we need to do is to sit down and reason. So, I believe that in the Costs
Committee everyone will just try to convince others with reason most of the time.
They do not have to vote every time they need a decision. Solicitors and
non-solicitors do not necessarily confront each other.
I agree with the analysis of the Honourable IP Kwok-him. I think the two
persons from the Judiciary will be able to act independently as they understand
quite well the operation of the legal profession. But as they are not solicitors
they can act as a bridge.
So, although the Democratic Party's proposal is for a "5:3:3" composition,
it is actually a "5:2:4" one since five of them are solicitors, four consumer
representatives and 2 Judiciary personnel. Why do we want to put forward this
proposal? Let us not bother about the Judge first. The chairman do not
usually vote at Costs Committee meetings, unless votes for and against a certain
motion are equal in number, in which case the chairman will use the casting vote
and I think it is a fair arrangement and everyone will agree. But as I said most
of the time members of the Costs Committee will try to convince one another
with reason and so it is not necessary to vote every time.
In fact I think the proposal is desirable in that when there is a dispute
between a solicitor and his client, it is most likely that the case will be decide by
the court in the absence of scale fees or prior agreement on the fees. Then the
judge will decide whether the charges are reasonable, depending on the
circumstances. So, in fact judges are doing the same thing and this is acceptable
to the legal profession, which regards the arrangement as a fair one. Hence I
think the proposal of the Democratic Party can achieve balance and will not be
criticized as making solicitors a majority in the Costs Committee so that
LEGISLATIVE COUNCIL — 25 June 1997
773
solicitors will always have the final say. I do not want people to have that
impression. I hope everyone will support the Democratic Party's proposal.
Thank you, Mr Chairman.
MRS SELINA CHOW (in Cantonese): I do not quite understand. The
Honourable Albert HO seems to have misunderstood what I said. In the "6:3:3"
proposal, how can "6" be the majority? I do not understand.
MR ALBERT HO (in Cantonese): Let me briefly explain. In the Democratic
Party's proposal for a "5:3:3" composition, five are solicitors, three are
Government officials......
CHAIRMAN (in Cantonese) : The Honourable Mrs Selina CHOW asked about
"6:3:3".
MRS SELINA CHOW (in Cantonese): How can "6" in "6:3:3" constitute a
majority? The Honourable Albert Ho said my idea would make solicitors a
majority and would lead to a number of undesirable consequences. How can
"6" in the "6:3:3" proposal be a majority?
MR ALBERT HO (in Cantonese): Mr Chairman, according to my
understanding, in the "6:3:3" proposal, if the Judge acts as the chairman, it would
become six against five, that is, a "6:5:1" distribution will result.
CHAIRMAN (in Cantonese): The Honourable Albert HO assumes that the
chairman conducts meetings only and he will not vote.
MRS SELINA CHOW (in Cantonese): I understand the Honourable Albert
HO's idea. I only want to point out a discrepancy in what he said. In a
12-member Committee, six is not a majority.
774
LEGISLATIVE COUNCIL — 25 June 1997
MR BRUCE LIU (in Cantonese): Mr Chairman, during a discussion of the Bills
Committee I put forward a proposal for a "6:3:3" composition for the Costs
Committee. The reasons I gave were as follows: First, the duty of the Costs
Committee is to fix fees and we hope that the fees are reasonable. If scale fees
are not abolished, it is a fair arrangement for the Committee to fix fees. But the
mechanism must follow a principle of respecting the autonomy of the profession.
One way to uphold the principle is to have half of the members of the
Committtee from the profession and the rest from other sectors. If more than
half of the members come from other sectors, not being in the profession, it
would not be reasonble for them to determine the fees for the profession as this is
against the autonomy of the profession. So, the composition of the Committee
can be "6:3:3" or "8:4:4", but the principle must be upheld.
We have been debating about the issue for some time, for more than two
hours. I recall the Honourable Andrew CHENG was not there at the time and
the Honourable Fred LI did not put forward the "5:3:3" proposal. In fact his
proposal is also reasonable and is based on the assumption that the chairman
does not vote, like the president of the Legislative Council or the chairman of the
House Committee. So, each side has five people and is therefore balanced. If
they had put forward the proposal in the discussions of the Bills Committee we
would have debated on it. This would be better but they did not do so. It was
a pity that they did not put forward the proposals until later.
Indeed a "6:3:3" proposal can also have the merits mentioned by Mr
Andrew CHENG . The important point is that the chairman may vote and his is
a decisive one, that is, the "casting vote". Both sides have six people and the
chairman can vote when votes for and against a motion are the same in number.
We do have faith in the Judge of the High Court, who will be appointed
cahirman. He or she should be fair. So, he or she has the casting vote.
Therefore, the proposal has the strengths of the "5:3:3" proposal. The question
is whether the chairman can vote and this may be determined by internal rules.
If we had the chance to discuss, it could be stipulated in the law that a
"5:3:3" proposal would be adopted, and then it could be precribed in the internal
rules that the chairman would have the casting vote only upon a tie. In that
case, autonomy for the profession would not be violated. Unfortunately, they
did not put forward the proposal. If they did, I would support a "5:3:3"
LEGISLATIVE COUNCIL — 25 June 1997
775
proposal, plus the mechanism I mentioned, that is, the chairman would vote only
when there is a tie.
Since the proposal was put forward too late, we would support the decision
of the majority of the members of the Bills Committee, that is, a "6:3:3" proposal,
failing which we would support a "5:3:3" proposal, our second choice.
Thank you, Mr Chairman.
ATTORNEY GENERAL: Mr Chairman, the amendment moved by the
Honourable Fred LI would perpetuate the current system in which half the
members of the committee are solicitors and could result in the lay members
having no effective voice in the decisions being made, and for the reasons
already given I would urge Members not to support it.
The amendment moved by the Honourable Andrew CHENG is clearly a
compromise between the amendment proposed by the Administration and that
proposed by Fred LI. It would give the lay members of the Cost Committee a
less effective voice than the amendment I have already moved. However, lay
members would not be outnumbered two to one as under Mr LI's amendment.
If Members feel that they could not support the Administration's
amendment then I would urge them to vote for the amendment moved by Mr
CHENG.
Thank you, Mr Chairman.
CHAIRMAN (in Cantonese): Before I put the Attorney General's amendment to
Committee for a vote, I would advise Members that if the Attorney General's
amendment is agreed, that will by implication mean that the respective proposals
by Mr LI and Mr CHENG are not approved. I will therefore not call on either
Mr LI or Mr CHENG to move their respective proposed amendment. If the
Attorney General's amendment is negatived, I will call on Mr LI to move his
amendment. Whether or not Mr CHENG will be able to move his amendment
will depend on the Committee's decision on Mr LI's amendment.
Question on the amendment put.
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LEGISLATIVE COUNCIL — 25 June 1997
Voice vote taken.
THE CHAIRMAN said he thought the "Noes" had it.
Miss Emily LAU claimed a division.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the addition of subclause (aa) to clause 17 as proposed by
the Attorney General, that is the 4:3:3 proposal.
Will Members please first register their presence by pressing the top button
and then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): The result will now be displayed.
Mr Martin LEE, Mr SZETO Wah, Mr Albert CHAN, Mr CHEUNG Man-kwong,
Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE Wing-tat, Mr
Fred LI, Mr James TO, Dr YEUNG Sum, Mr WONG Wai-yin, Mr LEE
Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Andrew CHENG,
Mr CHENG Yiu-tong, Dr Anthony CHEUNG, Mr Albert HO, Mr LAU
Chin-shek, Mr LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr SIN Chung-kai, Mr
TSANG Kin-shing, Dr John TSE, Mrs Elizabeth WONG and Mr YUM Sin-ling
voted for the amendment.
Mr Allen LEE, Mrs Selina CHOW, Mr LAU Wong-fat, Mr Edward HO, Mr
Ronald ARCULLI, Mrs Miriam LAU, Dr LEONG Che-hung, Mr Frederick
FUNG, Mr Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG,
Miss Christine LOH, Mr James TIEN, Mr Paul CHENG, Mr CHOY Kan-pui, Mr
Ambrose LAU, Dr LAW Cheung-kwok, Mr LEE Kai-ming, Mr Bruce LIU, Mr
LEGISLATIVE COUNCIL — 25 June 1997
777
LO Suk-ching, Mr MOK Ying-fan and Miss Margaret NG voted against the
amendment.
Mr CHAN Kam-lam, Mr IP Kwok-him and Mr NGAN Kam-chuen abstained.
THE CHAIRMAN announced that there were 27 votes in favour of the
amendment and 23 votes against it. He therefore declared that the amendment
was carried.
CHAIRMAN (in Cantonese): As the addition of subclause (aa) to clause 17
proposed by the Attorney General has been agreed, it is not possible for Mr LI or
Mr CHENG to move their respective amendments, as they are inconsistent with
the decision already taken.
CHAIRMAN (in Cantonese): Both the Attorney General and Mr Andrew
CHENG have separately given notices to move amendments to clause 17(b).
I propose that the amendments to clause 17(b), proposed separately by the
Attorney General and Mr Andrew CHENG, be debated together in a joint debate.
Committee shall debate the amendments to clause 17(b), proposed
separately by the Attorney General and Mr Andrew CHENG, in a joint debate.
I will first call upon the Attorney General to move his amendments, as he is the
public officer in charge of the Bill."
ATTORNEY GENERAL: Mr Chairman, I move that clause 17(b) be amended
as set out under my name on the paper circularized to Members.
This amendment provides for three lay persons to be members of the Cost
Committee and was supported by most of the Members of the Bills Committee.
The Bill as amended would provide that of those lay persons at least one must be
a person who, in the Governor's opinion, can represent the interests of consumers
of legal services and the remainder are persons who, in the Governor's opinion,
778
LEGISLATIVE COUNCIL — 25 June 1997
have substantial experience in banking, accounting or some other forms of
commercial activity.
The purpose of providing for the latter category of persons is to make it
possible for there to be lay persons on the committee who understand commercial
activities and can therefore appreciate the financial and managerial side of
solicitor's work. It is important that the rules to be made by the Cost Committee
reflect the operational needs of solicitors as well as the interests of consumers.
However, one should not assume that if persons from the commercial sector sit
on the committee they would necessarily be biased in favour of solicitors. They
themselves are likely to be consumers of legal services and so will be able to see
both sides of the picture.
Mr Chairman, I urge Members to support this amendment.
Proposed amendment
Clause 17 (see Annex XII)
CHAIRMAN (in Cantonese): I will call upon Mr Andrew CHENG to speak on
the amendment moved by the Attorney General as well as his own proposed
amendment, but will not ask Mr CHENG to move his amendment unless the
Attorney General's amendment has been negatived. If the Attorney General's
amendment is agreed, that will by implication mean that Mr Andrew CHENG's
amendment is not approved.
MR ANDREW CHENG (in Cantonese): Mr Chairman, I hope to explain to
Members the Government's amendment. With the passage of the "4:3:3"
proposal, of the three people appointed by the Governor, at least one must be a
person, who in the Governor's opinion, can represent the interests of consumers
of legal services. The remaining two are persons who, in the Governor's
opinion, have substantial experience in banking, accounting or some other form
of commercial activity. My amendment is simpler and more direct, showing
that the Democratic Party fights for the interests of consumers. Our proposal is
for three persons to be appointed by the Governor, who, in the Governor's
opinion, can represent the interests of consumers of legal services. In the
Government's proposal, there is only one person, who, in the Governor's opinion,
can represent the interests of consumers of legal services; while the other two are
LEGISLATIVE COUNCIL — 25 June 1997
779
persons who, in the Governor's opinion, have substantial experience in banking,
accounting or some other form of commercial activity. The Democratic Party
thinks this deviates from the main objectives of the Costs Committee.
The "5:3:3" proposal of the Democratic Party was not carried. By the
way, Mr Chairman, indeed I wish it were carried because "5:3:3" adds up to 11
and it would make a football team. That was rather unfortunate, Mr Chairman
since both you and I like football. I hope in determining the distribution of the
three members, colleagues would consider the interests of consumers and vote
for the Democratic Party's amendment. The proposal of the Government is
biased towards persons with experience in banking, accounting or some other
form of commercial activity. The Democratic Party was not convinced in the
Bills Committee as the suggestion has not taken into full consideration the
interests of consumers.
Mr Chairman, with these remarks, I hope colleagues will support my
amendment.
ATTORNEY GENERAL: Well, Mr Andrew CHENG would require all three
lay persons on the Cost Committee to be persons who represent the interests of
consumers. This could deprive the Committee of commercial expertise and the
views of individuals who are both providers of services and consumers of legal
services. Those views might help to prevent a polarization of the attitudes of
solicitors and consumers on the Committee.
I therefore urge Members not to support Mr CHENG's amendment.
Question on the amendment put.
Voice vote taken.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
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LEGISLATIVE COUNCIL — 25 June 1997
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the the question that the amendments to clause 17(b)
moved by the Attorney General be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Members may wish to check their votes. Are
there any queries? If not, the result will now be displayed.
Mr Allen LEE, Mrs Selina CHOW, Mr LAU Wong-fat, Mr Edward HO, Mr
Ronald ARCULLI, Mrs Miriam LAU, Mr CHIM Pui-chung, Miss Emily LAU,
Mr Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Miss
Christine LOH, Mr James TIEN, Mr CHAN Kam-lam, Mr CHAN Wing-chan,
Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr CHEUNG
Hon-chung, Mr CHOY Kan-pui, Mr IP Kwok-him, Mr Ambrose LAU, Mr LEE
Kai-ming, Mr LO Suk-ching, Miss Margaret NG and Mr NGAN Kam-chuen
voted for the amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Frederick FUNG, Mr Michael HO, Dr HUANG
Chen-ya, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr
WONG Wai-yin, Mr LEE Cheuk-yan, Mr Andrew CHENG, Dr Anthony
CHEUNG, Mr Albert HO, Mr LAU Chin-shek, Dr LAW Cheung-kwok, Mr
LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr MOK Ying-fan,
Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE, Mrs Elizabeth WONG
and Mr YUM Sin-ling voted against the amendment.
THE CHAIRMAN announced that there were 27 votes in favour of the
amendment and 28 votes against it. He therefore declared that the amendment
was negatived.
LEGISLATIVE COUNCIL — 25 June 1997
781
CHAIRMAN (in Cantonese): As the amendments to clause 17(b) moved by the
Attorney General has been negatived, I now call upon Mr Andrew CHENG to
move his amendments.
MR ANDREW CHENG (in Cantonese): Mr Chairman, I move that clasue 17(b)
be amended as set out in the paper circularized to Members. I hope everyone
can continue to vote as they did.
Thank you, Mr Chairman.
Proposed amendment
Clause 17 (see Annex XII)
MISS EMILY LAU (in Cantonese): Mr Chairman, can I ask a question? If this
amendment is also negatived, what are we going to do?
CHAIRMAN: Then there will be no amendment in respect of clause 17(b).
The original clause 17(b) will stand.
MR RONALD ARCULLI: Mr Chairman, if the original clause 17(b) stands,
does it accord with 4:3:3 composition? If it does not, then that is nonsense.
MR FRED LI (in Cantonese): I hope everyone would vote for the Honourable
Mr Andrew CHENG's amendment; otherwise there will be serious consequences
because the proposal for four to six non-solicitors put forward by the
Government ......
CHAIRMAN (in Cantonese): It is not for you to make a speech, but you can
raise a point of order. Can you point out the problem?
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LEGISLATIVE COUNCIL — 25 June 1997
MR FRED LI (in Cantonese): Yes, it is a point of order.
CHAIRMAN (in Cantonese): Please point out the problem.
MR FRED LI (in Cantonese): The question I wish to raise is that if Mr Andrew
CHENG's amendment is negatived we would go back to the original proposal set
out in the Bill, that is, there will be four to six non-solicitors as representatives.
Can the Government tell us whether that is the case?
CHAIRMAN: Attorney General, can you help?
ATTORNEY GENERAL: Mr Chairman, I think that the effect of the Council
unadvisedly not supporting my amendment, and in the event that it did not
approve Mr CHENG's, it would mean that the Costs Committee would consist of
four solicitor members and then no fewer than four and not more than six persons
appointed by the Governor, and then it would carry on as in the text of the
original Bill.
What the previous amendment was to fix the number of solicitor members.
We are now on to the second part of the amendment dealing with the lay persons.
The clause would make sense, but it would not be in accord with, I think, the
wishes of the Council.
MISS MARGARET NG: Mr Chairman, if I could ask a question. If Mr
CHENG's motion is not approved, then the original clause 17(d) would stand and
17(d) refers to the quorum under ......
CHAIRMAN: 17(b), not (d).
MISS MARGARET NG: Sorry, I have got the wrong question.
LEGISLATIVE COUNCIL — 25 June 1997
783
MR BRUCE LIU (in Cantonese): Mr Chairman, a point of information. My
understanding is that since the Attorney General's amendment was negatived, it
is impossible to add three to six persons to the list of appointed persons. So, if
we vote down the Honourable Mr Andrew CHENG's amendment we would go
back to the beginning when we had three solicitors and three governemnt
officials, without any addition. Is that the case?
6.05 pm
CHAIRMAN (in Cantonese): I now suspend the sitting for 10 minutes.
Committee suspended.
6.17 pm
Committee then resumed.
CHAIRMAN (in Cantonese): This Council is still in Committee. After seeking
legal advice, the conclusion is that the Attorney General was right. In other
words, if the Honourable Andrew CHENG's amendment is carried, the
composition of the Costs Committee is the Judge of the High Court, the Registrar
of the Supreme Court, the Director of Intellectual Property or the Director of
Lands; the other four persons are the President, vice-President and two members
of the Law Society. Three persons are appointed by the Governor to represent
the consumers. If the amendment is negatived, the first two categories of
members of the Committee remain the same, that is, the Judge, the Registrar, the
Director of Intellectual Property or the Director of Lands and the four members
from the Law Society, while the rest comprise four to six persons as detailed in
the Bill. Furthermore, if, at the end of the day, the motion to include clauses
17(b) or 17, as amended or unamended, in the Bill is negatived, the situation will
be completely different. So, be careful when you vote. There is no problem
legally. Even if there is, it is that we have put in place a law that cannot
operate. We will have to amend it later. Committee will continue to vote.
784
LEGISLATIVE COUNCIL — 25 June 1997
MR RONALD ARCULLI (in Cantonese): Chairman, if the Honourable Andrew
CHENG's amendment is not approved, we will vote on the original Bill. If
there is any contradiction, we may also vote against the original.
CHAIRMAN (in Cantonese): The amended clause 17 can be excluded from the
Bill. The exclusion applies to the entire clause 17, but not to clause 17(b) only.
I do not know what the result will be and further investigations are needed.
However, we cannot keep on investigating as our decisions are made
collectively. We have at least clarified that there is no legal problem. It is
difficult to say if the result meets the original ideas of the Honourable Members.
We shall now vote on the amendment to clause 17(b) moved by Mr Andrew
CHENG.
Question on Mr Andrew CHENG's amendment put and agreed to.
CHAIRMAN (in Cantonese): Both Mr Fred LI and the Attorney General have
separately given notices to move amendments to clause 17(d).
I propose that the amendments to clause 17(d), proposed separately by Mr
Fred LI and the Attorney General, be debated together in a joint debate.
Committee shall debate the amendments to clause 17(d), proposed
separately by Mr Fred LI and the Attorney General, in a joint debate. I will first
call upon Mr Fred LI to move his amendments in accordance with Standing
Order 25(4).
MR FRED LI (in Cantonese): Mr Chairman, this amendment seeks to provide
for the quorum of the meeting of the Costs Committee to be the Chairman and
five members, in accordance with the suggestion to increase the the number of
members on the Costs Committee, and the members are not separated into
groups. This amendment is moved by me on behalf of the Bills Committee.
Proposed amendment
Clause 17 (see Annex XII)
LEGISLATIVE COUNCIL — 25 June 1997
785
CHAIRMAN (in Cantonese): I will call upon the Attorney General to speak on
the amendment proposed by Mr Fred LI as well as his own proposed amendment,
but will not ask the Attorney General to move his amendment unless Mr Fred
LI's amendment has been negatived. If Mr Fred LI's amendment is agreed, that
will by implication mean that the Attorney General's proposed amendment is not
approved.
ATTORNEY GENERAL: Mr Chairman, the amendment moved on behalf of
the Bills Committee by the Honourable Fred LI would enable the Costs
Committee to operate in the absence of any lay members. This would defeat the
purpose of providing for lay participation. It has been argued that the
amendment is needed since, if the quorum were to include lay members, the lay
members could by absenting themselves prevent the Committee from
functioning.
The Administration can see no reason to assume that such a situation
would arise. The lay members are to be appointed by the Government and it is
safe to assume that responsible persons will be so appointed. I would not
suggest that solicitor members would boycott the Committee. It is unfair to
suggest that lay
persons may do so.
The Administration's proposed amendment provides for the quorum of the
Chairman, two solicitors, one lay person and one official. This will ensure that
each of the groups on the Committee is represented and is fair to all concerned.
I therefore urge Members not to support Mr LI's amendment. Thank you,
Mr Chairman.
MISS MARGARET NG (in Cantonese): Mr Chairman, let me explain why the
Bills Committee does not make a distinction. We do not wish to see any of the
members of a sector prevents the Committee from functioning by absenting
themselves. As there are judges and government representatives in the
Committee, we believe that it is not the case that decisions must be made even
when important members are absent, and there are no regulations to provide that
the Committee must make decisions. Therefore, the Bills Committee offers a
786
LEGISLATIVE COUNCIL — 25 June 1997
flexible approach during the deliberations. As the existing composition has
changed to 4:3:3, or a total of 10 persons, not 6:3:3, or 12 persons, it almost
gives a guarantee when the quorum is six persons. I hope that the Committee
can maintain some flexibility, particularly in case the non-solicitors or
non-government members are unable to attend the meetings or uninterested.
Does it mean that decisions cannot be made because they are not interested in
doing so? The case may possibly not require such participation. Mr
Chairman, after all, we wish to maintain flexibility only. Thank you.
Question on Mr Fred LI's amendment put.
Voice vote taken.
Mrs Selina CHOW claimed a division.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remember Members that they are
now called upon to vote on the question that the amendment to clause 17(d)
moved by Mr Fred LI be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Before I declare the result, Members may wish to
check their votes. Are there any queries? The result will now be displayed.
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr
Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr
Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Miss
Christine LOH, Mr James TIEN, Mr CHAN Kam-lam, Mr CHAN Wing-chan,
Miss CHAN Yuen-han, Mr Paul CHENG, Mr CHENG Yiu-tong, Mr CHEUNG
Hon-chung, Mr CHOY Kan-pui, Mr IP Kwok-him, Mr Ambrose LAU, Dr LAW
Cheung-kwok, Mr LEE Kai-ming, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK
LEGISLATIVE COUNCIL — 25 June 1997
787
Ying-fan, Miss Margaret NG and Mr NGAN Kam-chuen voted for the
amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily
LAU, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr
WONG Wai-yin, Mr LEE Cheuk-yan, Mr Andrew CHENG, Dr Anthony
CHEUNG, Mr Albert HO, Mr LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr SIN
Chung-kai, Mr TSANG Kin-shing, Dr John TSE, Mrs Elizabeth WONG and Mr
YUM Sin-ling voted against the amendment.
THE CHAIRMAN announced that there were 30 votes in favour of the
amendment and 24 votes against it. He therefore declared that the amendment
was carried.
CHAIRMAN (in Cantonese): The Attorney General, as Mr Fred LI's amendment
to clause 17(d) has been agreed, you may not move your proposed amendment to
clause 17(d) as it is inconsistent with the decision already taken.
MR FRED LI (in Cantonese): Mr Chairman, Clause 17 (e) and (f) are related to
scale fees for conveyancing. However, I think that we should not discuss it any
more. Mr Chairman, I hope that the Honourable Members should vote now
instead of discussing it further. I move an amendment to this Bill on behalf of
the Bills Committee to delete clauses 17(e) and (f) to allow the Costs Committee
to set all charges subject to sub-clause (3). That is to say, Members who agree
to retain scale fees for conveyancing should support Mr Fred LI's amendment.
If they do not want to retain scale fees, they should vote against the amendment.
Proposed amendment
Clause 17 (see Annex XII)
ATTORNEY GENERAL: My instructing solicitor, Mr Chairman, tells me I
should ask you for a "no" vote.
788
LEGISLATIVE COUNCIL — 25 June 1997
Mr Chairman, I will not delay the Council but for a minute. I just want to
take this opportunity to first of all urge Members to vote for the abolition of scale
fees and so to vote against this amendment.
And I would like to take this opportunity of repeating what I said earlier
on, as I have been asked about it and that is, that having regard to the many
expressions this afternoon and this morning, and support in principle for the
abolition of scale fees, the concern about the phasing and the timing, Mr
Chairman, of that abolition, that and bearing in mind that the Bill as drafted has a
delayed commencement date, I gave an undertaking on behalf of the
Administration that I am happy to repeat that, in the event that scale fees are
abolished, before any decision is made as to the time, as to the commencement
date for abolition, the Administration would consult the Legislative Council.
Clearly that would involve a process that may stretch over some time. I cannot
be more specific than that, but I hope that gives an answer to the Honourable
Member who questioned in somewhat exotic terms what the sense was of what I
said earlier.
Thank you, Mr Chairman.
MRS ELIZABETH WONG: May I seek clarification from the point just
mentioned by the Attorney General? I was one of those who also felt that
perhaps in principle I support the abolition but I am not very certain about the
decision.
I am more and more perplexed by what you said about your undertaking.
May I seek clarification: (a) whether your undertaking has any legal effect; and
(b) what about your departure? Would your successor be actually undertaking
your undertaking?
MR BRUCE LIU (in Cantonese): Mr Chairman, I wish to speak on this aspect.
As the Attorney General just said, once scale fees are abolished, he will consider
the question of implementation by stages. I wish to speak on this .....
CHAIRMAN (in Cantonese): I will regard this as a debate, not a request for
further explanation on a promise made by a Member or an official. Members
may express their opinions on the present motion on deletion of clause 17(e) and
(f). It is fine to ask for clarification on what was just said, but it is inappropriate
to ask for clarification on the whole matter. Just now I considered the
LEGISLATIVE COUNCIL — 25 June 1997
789
Honourable Mrs Elizabeth WONG to be expressing her personal opinion in the
form of a question, and it was related to the speeches made by others previously.
Do you wish to speak in the same approach?
MR BRUCE LIU (in Cantonese): Mr Chairman, I wish to speak.
CHAIRMAN (in Cantonese): Please speak.
MR BRUCE LIU (in Cantonese): I have read the Interpretation and General
Clauses Ordinance, Chapter 1 of the Laws of Hong Kong, clause 20 of which
relates to the effective date of the Ordinance. According to the Ordinance, it
will take effect on the date of publication. For subsidiary legislations, there are
detailed provisions in clauses 28 and 35. However, the Attorney General is
going to propose to take effect by stages, but in fact it cannot solve the problem
raised by the Hong Kong Association for Democracy and People's Livelihood
(ADPL) just now.
CHAIRMAN (in Cantonese) : Sorry, you have gone beyond the topic, but you
can repeat that when we discuss clause 1.
MR BRUCE LIU (in Cantonese): Mr Chairman, we are going to vote on this
clause. It is of substantial significance as we have to decide on the abolition of
the scale fees or otherwise.
CHAIRMAN (in Cantonese): You have to make decision now as you will have
to vote now. How you are going to vote for the clause will be decided when the
time comes.
MR ALBERT HO (in Cantonese): As far as I understood, the Honourable Mrs
Elizabeth WONG really wished to seek elucidation. Would the Attorney
General wish to reply?
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LEGISLATIVE COUNCIL — 25 June 1997
ATTORNEY GENERAL: Thank you, Mr Chairman, that undertaking is not
personal to me. That is an undertaking that I am authorized to give on behalf of
the Administration.
It is solemnly given in this Council with all the assurance and weight that
attaches to an undertaking given to the legislature by the Administration. I have
absolutely no reason to suppose that it would not be followed by the new
Administration.
Question on Mr Fred LI's amendment put.
Voice vote taken.
Mrs Selina CHOW claimed a division.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the question that the amendments moved by Mr Fred LI to
clause 17(e) and (f) be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Before I declare the result, Members may wish to
check their votes. Are there any queries? The result will now be displayed.
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr
Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr
Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Miss
Christine LOH, Mr James TIEN, Mr CHAN Kam-lam, Mr CHAN Wing-chan,
Mr Paul CHENG, Mr CHENG Yiu-tong, Mr CHEUNG Hon-chung, Mr CHOY
Kan-pui, Mr IP Kwok-him, Mr Ambrose LAU, Dr LAW Cheung-kwok, Mr LEE
LEGISLATIVE COUNCIL — 25 June 1997
791
Kai-ming, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan, Miss Margaret
NG and Mr NGAN Kam-chuen voted for the amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily
LAU, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr
WONG Wai-yin, Mr LEE Cheuk-yan, Mr Andrew CHENG, Dr Anthony
CHEUNG, Mr Albert HO, Mr LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr SIN
Chung-kai, Mr TSANG Kin-shing, Dr John TSE, Mrs Elizabeth WONG and Mr
YUM Sin-ling voted against the amendment.
THE CHAIRMAN announced that there were 29 votes in favour of the
amendment and 24 votes against it. He therefore declared that the amendment
was carried.
Question on clause 17, as amended, put and agreed to.
Part VII
CHAIRMAN (in Cantonese): The Honourable Fred LI has given notice to
amend part VII of the Bill, which is to delete this part consisting of clause 18
only. The Honourable Andrew CHENG has also given notice to move
amendments to clause 18. I propose that the amendments proposed separately
by Mr Fred LI and Mr Andrew CHENG be debated together in a joint debate.
Committee shall debate the amendments to Part VII, that is clause 18,
proposed separately by Mr Fred LI and Mr Andrew CHENG, in a joint debate. I
will first call upon Mr Fred LI to move his amendment, in accordance with
Standing Order 25(4).
MR FRED LI (in Cantonese) : Mr Chairman, I move that Part VII be amended
as set out in the paper circularized to Members.
Mr Chairman, Part VII of the Bill is about the amendment to the
Conveyance and Property Ordinance to invalidate the provisions to specify the
obligation of the purchaser to pay the fees of the seller.
792
LEGISLATIVE COUNCIL — 25 June 1997
The opinions of the Bills Committee members on this amendment are
diversified, and I have reflected these opinions during the resumption of Second
Reading of the Bill. However, a majority of the Members voted against the
amendment to Part VII in the Bills Committee. As the Chairman of the Bills
Committee, I will move an amendment to delete Part VII of the Bill on behalf of
the Committee.
Proposed amendment
Part VII (see Annex XII)
CHAIRMAN (in Cantonese): I now call upon Mr Andrew CHENG to speak on
the amendment proposed by Mr Fred LI as well as his own amendments, but will
not ask Mr Andrew CHENG to move his amendments unless Mr Fred LI's
amendment has been negatived. If Mr Fred LI's amendment is agreed, that will
by implication mean that Mr Andrew CHENG's proposed amendments are not
approved.
MR ANDREW CHENG (in Cantonese): Mr Chairman, the Government's
proposal seeks to invalidate the terms on the purchase of uncompleted flats or
new flats in an agreement, of which the purchaser is obliged to pay the legal fees
for the seller. The Committee disagrees with the Government's proposal, no
matter whether the same legal representative is shared between both the
purchaser and seller, or legal representatives are hired separately. Therefore,
the Honourable Fred LI moves the deletion of the entire proposal on behalf of the
Committee.
As we mentioned during the resumption of the Second Reading, the
Democratic Party has reservations on the Government's way to handle this
problem by invaliding the terms in the agreement. To balance consumer
interests, we think that it is unfair for the purchaser of uncompleted or new flats
be obliged to pay the legal fees of the solicitors representing the developer.
Therefore, we are asking for an amendment to the Committee's amendment — if
the purchaser has his own legal representative, he should not be obliged to pay
for the developer's legal fees.
As colleagues have debated for hours, we hope that we are clear about our
positions. Let me explain it more clearly. If Members think that the existing
LEGISLATIVE COUNCIL — 25 June 1997
793
approach is unfair, they should first vote against the amendment proposed by Mr
Fred LI. If Members think that the amendment by the Democratic Party is also
very conservative, and consider that even if the purchaser hires the solicitor of
the developer, the purchaser need not pay for the solicitor fees of the developer,
they can even reject our proposal. While our proposal is rejected, it implies that
the original Bill has not been amended at all. The consequence is that when any
person purchases new or uncompleted flats, he will not be obliged to pay the
legal fees for the developer, no matter whether he hires a solicitor himself, or he
uses the developer's solicitor. I hope that my colleagues will support the
Democratic Party or the Government's proposals.
Thank you, Mr Chairman.
MISS MARGARET NG (in Cantonese): Mr Chairman, I wish to ask the
Honourable Members to support the Honourable Fred LI's amendment by way of
a brief speech. According to clause 18, the purchaser should not be asked to
pay the solicitor fees for the seller even when both parties have agreed on such
arrangement in the agreement. This provision violates the principle of freedom
of agreement but brings no benefits. Although it seems to save some solicitor
fees on the part of the consumer, it is no more than an illusion. As we all know
that property prices are determined by supply and demand in the market, when
property prices rise, it means demand is greater than supply, and the sellers may
raise prices at any time. As the saying goes, "whatever is given is paid for", the
solicitor fees are reflected in the property price. On the other hand, when the
property market is slack, sellers will appeal to the purchasers by paying the
solicitor fees for them. Members must have seen this type of advertisements
before.
Moreover, this provision will end up with the taxpayers required to pay for
one more item. For the sale of Home Ownership Scheme (HOS) flats, the
purchasers will pay the solicitor fees for the sellers. The Bills Committee
comes to know that once the provision is approved, the Government will have to
grant a lump sum for paying solicitor fees for the sale of HOS. It is still
unknown if the parties concerned will collect solicitor fees from the purchasers
by raising the property prices.
Should it happen that while the consumers are not benefited at all, and the
taxpayers have to pay more, yet the principle of freedom to make agreements is
794
LEGISLATIVE COUNCIL — 25 June 1997
damaged? The Honourable Andrew CHENG's amendment has limited the
scope of the provision to situations where purchasers and sellers hire solicitors
separately. It seems that it aims to encourage consumers to hire solicitors
themselves. I agree that it is a better approach to protect consumers when both
parties hire solicitors separately. However, it is inappropriate to make this
mandatory through legislation, and it seems that the Government holds the same
view. I believe we all agree that intervention through financial means is a
mandatory approach. Therefore, I think that we should not support Mr Andrew
CHENG's amendment.
As such, I ask Members to support Mr Fred LI's amendment now.
Thank you, Mr Chairman.
MR RONALD ARCULLI (in Cantonese): Mr Chairman, I wish to add a few
points to the Honourable Margaret NG's speech. I agree fully to what she said.
But I still wish to ask Members if they know that the present suggestions made
by the Government apply not only to residential buildings but also to industrial
and commercial buildings. Do Members think that it is fair? This relates to
the so-called free market. In a free market, agreements can be negotiated freely.
If we do think so, why should there be such a special requirement in the
provision to include new buildings only, regardless of whether they are
commercial, industrial or residential ones?
Secondly, the Government's approach is not very desirable. As we all
know that when a person goes to the bank for a loan, it is the practice of the trade
to require that the borrower pay for the solictor fees of the bank. Why should
agreements for new buildings be dealt with differently?
These are my remarks. Thank you, Mr Chairman.
ATTORNEY GENERAL: Thank you, Mr Chairman. As I explained in my
main speech earlier today, a contractual provision requiring a purchaser to pay a
developer's legal costs is unfair for two reasons. Firstly, it discourages buyers
from obtaining the services of their own solicitor instead of using the one acting
for the developer, and secondly, it discourages developers from negotiating
reasonable legal fees.
LEGISLATIVE COUNCIL — 25 June 1997
795
Part 7 of the Bill will redress that unfairness by invalidating such a
provision. The Honourable Fred LI's amendment to delete that part would, if
passed, perpetuate that unfairness. I urge Members to vote against it.
Mr CHENG's amendment would limit the effect of clause 18 so that it
applies only where the buyer is separately represented. In other words, it will
provide that where a buyer is separately represented he or she cannot be made to
pay the developer's legal costs. This amendment, like the original clause, would
have the effect of encouraging separate representation. However, it would still
allow a developer to pass his legal fees to a buyer who chooses joint
representation. Those who, like the Administration, consider that consumers
should not be subsidising developers are therefore urged to support the original
clause in the Bill rather than Mr CHENG's amendment.
If Members are not prepared to support the original clause in the Bill I
would urge them to vote for Mr CHENG's amendment.
Thank you, Mr Chairman.
Question on Mr Fred LI's amendment put.
Voice vote taken.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the question that the amendment to Part VII moved by Mr
Fred LI be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Before I declare the result, Members may wish to
check their votes. Are there any queries? The result will now be displayed.
796
LEGISLATIVE COUNCIL — 25 June 1997
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr
Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr
Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Miss Christine LOH, Mr
James TIEN, Mr CHAN Wing-chan, Mr Paul CHENG, Mr CHENG Yiu-tong,
Mr CHOY Kan-pui, Mr Ambrose LAU, Dr LAW Cheung-kwok, Mr LEE
Kai-ming, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan and Miss
Margaret NG voted for the amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily
LAU, Mr LEE Wing-tat, Mr Eric LI, Mr Fred LI, Mr James TO, Dr YEUNG
Sum, Mr WONG Wai-yin, Mr LEE Cheuk-yan, Mr Andrew CHENG, Dr
Anthony CHEUNG, Mr Albert HO, Mr LAW Chi-kwong, Mr LEUNG
Yiu-chung, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE, Mrs
Elizabeth WONG and Mr YUM Sin-ling voted against the amendment.
Mr CHAN Kam-lam, Mr CHEUNG Hon-chung and Mr IP Kwok-him abstained.
THE CHAIRMAN announced that there were 24 votes in favour of the
amendment and 25 votes against it. He therefore declared that the amendment
was negatived.
Clause 18
CHAIRMAN (in Cantonese): As the amendment to Part VII moved by Mr Fred
LI has been negatived, I now call upon Mr Andrew CHENG to move his
amendments to clause 18.
MR ANDREW CHENG (in Cantonese) : Mr Chairman, I move that clause 18
be amended as set out in the paper circularized to Members.
Proposed amendment
Clause 18 (see Annex XII)
LEGISLATIVE COUNCIL — 25 June 1997
797
Question on Mr Andrew CHENG's amendment put and agreed to.
ATTORNEY GENERAL: Mr Chairman, I move that clause 18 be further
amended as set out in the paper circularized to Members.
Proposed amendment
Clause 18 (see Annex XII)
Question on the Attorney General's further amendment put and agreed to.
Question on clause 18, as amended, put and agreed to.
MR FRED LI (in Cantonese): Mr Chairman, since the Standing Orders stipulate
that any schedule shall be considered after the clauses of a Bill have been
disposed of, may I seek your consent to move, under Standing Order 68, that
Standing Order 46(7) be suspended in order that my amendment to clause 20 may
be considered together with my amendment to Schedule 2 as one single question,
because they are inter-dependent.
CHAIRMAN (in Cantonese): Mr Fred LI, as only the President may give
consent to a motion to be moved without notice to suspend Standing Orders, your
request cannot be dealt with in Committee. I therefore order that Council now
resume.
Council then resumed.
PRESIDENT (in Cantonese): Mr Fred LI, you have my consent.
your motion.
Please move
MR FRED LI (in Cantonese): Mr President, I move that Standing Order 46(7)
be suspended to enable the Committee of the whole Council to consider my
798
LEGISLATIVE COUNCIL — 25 June 1997
amendment to clause 20 together with my amendment to Schedule 2 as one
single question. This reason for this is that clause 20 and schedule 2 are
inter-dependent.
Question on the motion proposed, put and agreed to.
Council went into Committee.
Clause 20 and Schedule 2
MR FRED LI (in Cantonese): Mr Chairman, I move that clause 20 and Schedule
2 be amended as set out in the paper circularized to Members.
Mr Chairman, clause 20 and Schedule 2 of the Bill seek to abolish the
scale fees for conveyancing. The opinions of the Bills Committee members on
this amendment are diversified, and I have reflected these opinions during the
resumption of Second Reading of the Bill. A majority of the Members voted
against this proposal in the Bills Committee. As the chairman of the Bills
Committee, I now move an amendment to delete clause 20 and Schedule 2 of the
Bill on behalf of the Committee to reserve the scale fees.
Proposed amendments
Clause 20 (see Annex XII)
Schedule 2 (see Annex XII)
ATTORNEY GENERAL: Just to clarify, Mr Chairman. We are on clause 20
and Schedule 2?
CHAIRMAN: Clause 20 and Schedule 2.
ATTORNEY GENERAL: This is the proposed deletion of the provisions
abolishing scale fees. I would only reiterate what I have said many times today
LEGISLATIVE COUNCIL — 25 June 1997
799
that the Administration continues to believe that scale fees should be abolished.
These amendments propose to perpetuate scale fees at their existing level, as at
today, and I urge Members to vote against them.
MISS MARGARET NG (in Cantonese): Mr Chairman, my amendment aims to
amend section 56(1) of the Ordinance to remove the uncertain contradictions.
As the Honourable Members have earlier expressed their support to retain scale
fees, I sincerely request them to vote for the Honourable Fred LI's amendment at
this stage.
Thank you Mr Chairman.
MR FRED LI (in Cantonese): Mr Chairman, I just wish to clarify a legal
standpoint which I hope the Attorney General can explain. In case this
amendment is rejected, what will happen to our previous decision to retain scale
fees?
CHAIRMAN (in Cantonese): As I have said, if you do not understand a legal
standpoint, you have to consult your legal adviser. If you have a point of order
for problems which you think may arise in some situations, I will have to answer.
But if you ask the effects on previous parts or other laws after this part is
approved, it is an abstract question. You cannot ask the Attorney General or the
Government such an abstract question even during the question time of the
Legislative Council. As I have mentioned, Members should be responsible for
the provisions approved. If some provisions are self-contradictory after they
have been approved, we can only correct them in future, but there is no way out
now.
Question on the amendments put.
Voice vote taken.
Mr IP Kwok-him claimed a division.
800
LEGISLATIVE COUNCIL — 25 June 1997
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the question that the amendments to clause 20 and
Schedule 2 moved by Mr Fred LI be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Before I declare the result, Members may wish to
check their votes. Are there any queries? The result will now be displayed.
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr
Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr
Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Miss
Christine LOH, Mr CHAN Kam-lam, Mr Paul CHENG, Mr CHEUNG
Hon-chung, Mr CHOY Kan-pui, , Mr David CHU, Mr IP Kwok-him, Mr
Ambrose LAU, Dr LAW Cheung-kwok, Mr LEE Kai-ming, Mr Bruce LIU, Mr
LO Suk-ching, Mr MOK Ying-fan, Miss Margaret NG and Mr NGAN
Kam-chuen voted for the amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily
LAU, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr
WONG Wai-yin, Mr LEE Cheuk-yan, Mr Andrew CHENG, Dr Anthony
CHEUNG, Mr Albert HO, Mr LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr SIN
Chung-kai, Mr TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling voted
against the amendment.
Mr CHAN Wing-chan, Miss CHAN Yuen-han and Mr CHENG Yiu-tong
abstained.
THE CHAIRMAN announced that there were 27 votes in favour of the
amendment and 23 votes against it. He therefore declared that the amendment
was carried.
LEGISLATIVE COUNCIL — 25 June 1997
801
CHAIRMAN (in Cantonese): Attorney General, as Mr Fred LI's amendments to
clause 20 and Schedule 2 have been agreed, you may not move your proposed
amendments to add the Chinese texts of clause 20 and Schedule 2, as they are
inconsistent with the decision already taken.
Question on clause 20 and Schedule 2, as amended, put and agreed to.
ATTORNEY GENERAL: Mr Chairman, since the Standing Orders stipulate
that the Schedule should be considered after the clauses and any proposed new
clauses of a Bill have been disposed of, may I seek your consent to move under
Standing Order 68 that Standing Order 46(5) and (7) be suspended in order that
Schedules 1 and 3 may be considered ahead of clause 1 and the proposed new
clauses?
CHAIRMAN (in Cantonese): Attorney General, as only the President may give
consent to a motion to be moved without notice to suspend Standing Orders, your
request cannot be dealt with in Committee. I therefore order that Council now
resume.
Council then resumed.
ATTORNEY GENERAL: Mr President, thank you. I move that Standing
Order 46(5) and (7) be suspended to enable the Committee of the whole Council
to consider Schedules 1 and 3 ahead of clause 1 and the proposed new clauses.
Question on the motion proposed, put and agreed to.
Council went into Committee.
Schedule 1
802
LEGISLATIVE COUNCIL — 25 June 1997
ATTORNEY GENERAL: Mr Chairman, I move that Items 1 to 68, 70 to 127 in
Schedule 1 be amended as set out in the paper circularized to Members. The
amendments fall into two categories: those that are consequential to the
amendment that I have already moved; and those that are drafting improvements.
They also add a Chinese text to the Schedule.
Proposed amendment
Schedule 1 (see Annex XII)
Question on the amendment put and agreed to.
MR FRED LI (in Cantonese): Mr Chairman, I move that item 69 of Schedule 1
be amended as set out in the paper circularized to Members.
Mr Chairman, this amendment aims to amend section 56(1) and (1A) of
the proposed Legal Practitioners Ordinance which provides that in case there is
any difference between the scale fees set down by the Costs Committee and the
fees negotiated by the solicitors and the clients, the former shall prevail.
As the chairman of the Bills Committee, I move this amendment on behalf
of the Committee.
Proposed amendment
Schedule 1 (see Annex XII)
ATTORNEY GENERAL: Mr Chairman, the Administration considers that this
amendment would have profound implications for conveyancing fees and is
opposed to it.
Section 56 subsection 1 of the Legal Practitioners Ordinance provides that
whether or not any rules made under section 74 are in force, a solicitor and his
client may make an agreement as to the remuneration of the solicitor in respect
thereof.
It seems clear on the face of the section that it allows a solicitor and a
client to agree on an amount or method of remuneration that differs from that set
LEGISLATIVE COUNCIL — 25 June 1997
803
out in rules made under section 74 of the Ordinance. Those rules which are
made by the Costs Committee include the scale fees for conveyancing. Section
56 subsection 1 therefore reveals a clear legislative intention that a solicitor and a
client can agree a fee for conveyancing work that may be higher or lower than the
scale fee. This proposed amendment would limit the freedom to agree on
remuneration by reference to the rules made by the Costs Committee.
Rule 3 paragraph 5 of the current cost rules purports to prevent
remuneration being charged at a rate less than that chargeable under the scale
fees. Given that this appears to contradict section 56(1), there is a doubt as to
the validity of this rule. However, if section 56(1) were amended as proposed,
Rule 3(5) would effectively prevent a solicitor and a client from agreeing
remuneration for conveyancing that is less than that provided for in the fee
scales. This prohibition would be absolute and would apply regardless of
whether there were special circumstances that justified a lower fee.
Scale fees in Hong Kong have never been strictly enforced. According to
some solicitors, many consumers are now charged less than the prescribed fees.
However, if there is to be a blanket prohibition on contracting out of scale fees, it
is possible that consumers will be obliged to pay more under revised scales than
they do in practice pay now. It is also possible that consumers will be obliged
to pay fees that are, in the circumstances of the case, excessive.
If a system of scale fees is to continue, it does not follow that undercutting
must be prohibited. It is not inconsistent with the system of scale fees to permit
contracting out. Before 1973, a system of scale fees for conveyancing existed
in England. Under that system solicitors were generally precluded from holding
themselves out as being prepared to do conveyancing work for less than the scale
fee. However, they could charge less than the scale fee where they were of the
opinion that the scale fee would, in the circumstances, be an excessive charge.
If fee scales are to be retained it is essential that there should be flexibility
within the system to prevent injustice in particular cases. This amendment if
passed would eliminate any such flexibility. I therefore urge Members,
including those who support the retention of scale fees, to reject this amendment.
MISS MARGARET NG (in Cantonese): Mr Chairman, when I mentioned
clause 20, I might have some misunderstandings because it should apply to this
804
LEGISLATIVE COUNCIL — 25 June 1997
section. As I have said, the amendment aims to amend section 56 of the
Ordinance. It is similar to what the Attorney General has said. I ask the
Honourable Members to support the amendment proposed by the Honourable
Fred LI on behalf of the Bills Committee.
What uncertainties and self-contradictions should we do away with?
Firstly, according to the understanding of the Law Society, after being approved
by the Costs Committee and legislated, the legal service fees will be binding.
Solicitors shall observe the prescribed fees, and the clients should also pay the
fees as set. We believe that this is also how the Government understands it. If
not, we need not involve so many people today to abolish the scale fees through
legislation. As the Attorney General has said, despite the scale fees, if so
agreed by both the solicitor and the client, the fees charged can be less than the
scale fees.
Mr Chairman, whether scale fees should be abolished has been consulted
and discussed for two years. Since the Attorney General published the
consultation papers two years ago, neither the Attorney General nor any
Government officials have proposed such views. It has never been said that
with the agreement of the clients and solicitors, though there are scale fees, they
may not observe them. If the Attorney General had said this at the beginning,
the direction of the debate would have been different. During the whole
deliberation process in the Bills Committee, the government officials never
introduced this argument. Though the Government suggests that only upon
mutual agreement between the client and solicitor will they be allowed not to
observe the scale fees or charge less, we find that the Government basically
thinks that the correct way is to abolish scale fees. If the government officials
had introduced this view for the Bills Committee's consideration during the
deliberation process of the Bills Committee, the Law Society would have
certainly made relevant responses. However, this view, which has not been
mentioned before, is introduced abruptly. Mr Chairman, it is totally unfair. I
also believe that the Government's view has all along been consistent. During
the whole consultation process, the Government has never mentioned it. We
think that the Government has no need to do it now. If the Government is
allowed to do so today, our discussion will have to start all over again.
However, contradiction arises because section 56(1) seems to have such
meaning. If today Members support the retention of scale fees, they should
support Mr Fred LI's amendment so that the law can be specific. Section 56(1)
LEGISLATIVE COUNCIL — 25 June 1997
805
is not limited to the scale fees for conveyancing; it applies to all the fees
approved by the Costs Committee. As the number of consumer representatives
has been increased, with four solicitors versus three consumers, and the Costs
Committee has become a mechanism for collective negotiation, we should not
leave the matter incomplete by allowing the fees to be observed or otherwise.
Mr Chairman, these are my remarks.
support Mr Fred LI's motion.
I hope that the Members will
ATTORNEY GENERAL: Mr Chairman, if I can just respond very briefly to the
point made by the Honourable Miss Margaret NG about commenting on the point
that I made in my speech on the inter-relationship between section 56 of the
Legal Practitioners Ordinance and Rule 3 sub-rule 5 of the costs rules. I see
that this was extensively set out in the paper which we presented to the Bills
Committee in January this year at Pages 8 and 9, so I just want the Council to be
aware that this was an issue before the Bills Committee and the arguments were
set out some six months ago. Thank you, Mr Chairman.
Question on Mr Fred LI's amendment put.
Voice vote taken.
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the question that the amendment to item 69 in Schedule 1
moved by Mr Fred LI be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below.
CHAIRMAN (in Cantonese): Before I declare the result, Members may wish to
check their votes. Are there any queries? The result will now be displayed.
806
LEGISLATIVE COUNCIL — 25 June 1997
Mr Allen LEE, Mrs Selina CHOW, Mr NGAI Shiu-kit, Mr LAU Wong-fat, Mr
Edward HO, Mr Ronald ARCULLI, Mrs Miriam LAU, Mr Frederick FUNG, Mr
Eric LI, Mr Henry TANG, Dr Philip WONG, Mr Howard YOUNG, Mr CHAN
Kam-lam, Mr Paul CHENG, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr
David CHU, Mr IP Kwok-him, Mr Ambrose LAU, Dr LAW Cheung-kwok, Mr
LEE Kai-ming, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan, Miss
Margaret NG and Mr NGAN Kam-chuen voted for the amendment.
Mr Martin LEE, Mr SZETO Wah, Dr LEONG Che-hung, Mr Albert CHAN, Mr
CHEUNG Man-kwong, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily
LAU, Mr LEE Wing-tat, Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr
WONG Wai-yin, Mr LEE Cheuk-yan, Mr CHAN Wing-chan, Miss CHAN
Yuen-han, Mr Andrew CHENG, Mr CHENG Yiu-tong, Dr Anthony CHEUNG,
Mr Albert HO, Mr LAW Chi-kwong, Mr LEUNG Yiu-chung, Mr SIN
Chung-kai, Mr TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling voted
against the amendment.
THE CHAIRMAN announced that there were 26 votes in favour of the
amendment and 26 votes against it.
CHAIRMAN (in Cantonese): According to the 1867 Speaker DENISON
principle, I now use my casting vote to oppose the amendment. The amendment
is therefore negatived.
ATTORNEY GENERAL: Mr Chairman, I move that Item 69 in Schedule 1 be
amended by adding the Chinese text as set out in the paper circulated to
Members.
Proposed amendment
Schedule 1 (see Annex XII)
Question on the amendment put and agreed to.
LEGISLATIVE COUNCIL — 25 June 1997
807
Question on Schedule 1, as amended, put and agreed to.
Schedule 3
ATTORNEY GENERAL: Mr Chairman, I move that Schedule 3 be amended as
set out under my name in the paper circularized to Members.
This amendment is consequential to the deletion of the provisions
concerning interest on solicitors' clients accounts. It also adds a Chinese title
for the expression "Senior Counsel" found in the Schedule.
I beg to move.
Proposed amendment
Schedule 3 (see Annex XII)
Question on the Attorney General's amendment put and agreed to.
MR FRED LI (in Cantonese): Mr Chairman, I should have moved Schedule 3,
but Part VII or clause 18 of the Bill has been amended by the Honourable
Andrew CHENG earlier. Hence I would not propose the amendment again.
CHAIRMAN (in Cantonese): The amendment to Schedule 3 is ......
MR FRED LI (in Cantonese): To delete section 5. Mr Chairman, it is the
amendment to delete section 5 of Schedule 3. It is a consequential amendment
to the deletion of Part VII of the Bill. As the amendment to delete Part VII has
not been approved, I would not propose the related amendment to Schedule 3.
Question on Schedule 3, as amended, put and agreed to.
Clause 1
LEGISLATIVE COUNCIL — 25 June 1997
808
ATTORNEY GENERAL: Mr Chairman, I move that clause 1 be amended as
set out in the paper circularized to Members.
The amendment to clause 1 will bring the provision to the Bill that relate
to the new status of Senior Counsel and to Barristers Disciplinary Tribunals into
operation when the Ordinance is gazetted.
Mr Chairman, I beg to move.
Proposed amendment
Clause 1 (see Annex XII)
ATTORNEY GENERAL: Mr Chairman, I moved an amendment to clause 1 to
provide that the new provisions relating to the status of Senior Counsel and to
Barristers Disciplinary Tribunal should come into operation upon the Ordinance
being published in the Gazette.
CHAIRMAN: We are on clause 1.
ATTORNEY GENERAL: Clause 1, yes, Mr Chairman.
CHAIRMAN: There must be some mix-up here. Oh, yes.
Question on the amendment put and agreed to.
Question on clause 1, as amended, put and agreed to.
New clause 20A
Amendment of Legal Officers(Fees
and Costs) Rules
New clause 20B
Amendment of Legal Aid Ordinance
LEGISLATIVE COUNCIL — 25 June 1997
809
New clause 20C
Amendment of Legal Aid Ordinance
New clause 20D
Amendment
of
Solicitors
(Professional Indemnity) Rules
New clause 20E
Amendment of Legal Aid in Criminal
Cases Rules
Clauses read the First time and ordered to be set down for Second Reading
pursuant to Standing Order 46(6).
ATTORNEY GENERAL: Mr Chairman, I move that new clauses 20A, 20B,
20C, 20D and 20E as set out under my name in the paper circularized to
Members be read the Second time.
These new clauses make consequential amendments to subsidiary
legislation which refer to the status of Queen's Counsel. The amendments
reflect the creation of the new status of Senior Counsel.
Question on the Second Reading of the clauses proposed, put and agreed to.
Clauses read the Second time.
ATTORNEY GENERAL: Mr Chairman, I move that new clauses 20A, 20B,
20C, 20D and 20E be added to the Bill.
Proposed additions
New clause 20A (see Annex XII)
New clause 20B (see Annex XII)
New clause 20C (see Annex XII)
810
LEGISLATIVE COUNCIL — 25 June 1997
New clause 20D (see Annex XII)
New clause 20E (see Annex XII)
Question on the addition of the new clauses 20A, 20B, 20C, 20D and 20E
proposed, put and agreed to.
Council then resumed.
Third Reading of Bill
THE ATTORNEY GENERAL reported that the
LEGAL
SERVICES
AMENDMENTS) BILL 1996
LEGISLATION
(MISCELLANEOUS
had passed through Committee with amendments. He moved the Third Reading
of the Bill.
Question on the Third Reading of the Bill proposed, put and agreed to.
Bill read the Third time and passed.
Resumption of Second Reading Debate on Bill
LEGAL PRACTITIONERS (AMENDMENT) BILL 1996
Resumption of debate on Second Reading which was moved on 14 February
1996
MISS MARGARET NG: This Committee formed to study the Legal
Practitioners (Amendment) Bill 1996 first met on 16 April 1996. It met the
Administration 10 times and, together with the Administration, met the Hong
LEGISLATIVE COUNCIL — 25 June 1997
811
Kong Society of Notaries (HKSN) twice. The Bills Committee studied the Bill
in great length, in particular on the following three areas:
(a)
mandatory membership of the HKSN
(b)
specifying the role of HKSN; and
(c)
governance and regulatory framework of notaries public.
First, on the mandatory membership of HKSN, the Hong Kong Bar
Association (the Bar), the Law Society of Hong Kong (Law Society) and the
HKSN support the proposed local appointment system for notaries public as set
out in the Bill. HKSN, however, submits that there should be a provision in the
Bill to stipulate its membership to be mandatory to enable it to continue to
monitor the professional standards of notaries public and for its position to be in
line with those of the Bar and the Law Society in Hong Kong, and the Scriveners
Company in England.
The Bar and the Law Society support HKSN in this respect because it is in
the public interest to do so. The then Chief Justice, when consulted in October
1995 by the Society, was also agreeable to the proposal.
The Bills Committee notes that all notaries public were members of the
Society until recently when one notary public refused to enrol as a member.
The refusal has caused concern that if notaries may choose not to be a member of
the society then the Society may not be able to perform a regulatory function
over the profession effectively.
The Administration, however, does not support mandatory membership of
the Society. Its reasons are that:
(a)
The law will provide for the Chief Justice and not the Society to
exercise ultimate appointment or disciplinary power with regard to
notaries public. In doing so the Chief Justice may seek necessary
advice and assistance from the Society as well as other legal
professional bodies.
The present advisory role of the Society can therefore be ensured
even with voluntary membership. It is therefore not necessary for
LEGISLATIVE COUNCIL — 25 June 1997
812
the Society to have compulsory membership and it will be a change
to the existing system if the Society is granted mandatory
membership;
(b)
Article 22(2) of the International Covenant on Civil and Political
Rights (ICCPR) provides that no restrictions may be placed on the
right to association unless they are prescribed by law and necessary
in a democratic society in the interests of national security or public
safety, public order, the protection of public health or morals or the
protection of the rights and freedoms of other.
The Administration does not regard that mandatory membership of
the Society is necessary for achieving any of these purposes since it
is the Chief Justice who will possess the ultimate authority in
appointing or disciplining notaries public, and since the Society will
not possess such authority;
(c)
If the Society becomes a regulatory or disciplinary body it may
create an undesirable situation whereby notaries public will be
subject to dual disciplinary control from both the Society and the
Law Society as most of notaries public are also practising barristers;
and
(d)
The unique position of the Scriveners Company in England should
not be taken as a model for Hong Kong since there are no statutory
provisions for compulsory membership of notaries' societies in
general in the commonwealth jurisdictions.
In short, the Administration is not supportive of the proposal on policy and
legal considerations. The Society, the Bar and Law Society, however, do not
agree with the Administration's legal view point that compulsory membership of
a professional organisation will necessarily infringe the right to freedom of
association or disassociation.
The Society further points out that since the Law Society cannot enquire
into alleged breach of exclusive notarial rules and practices, the case that notaries
public will be subject to dual disciplinary control will not exist. As a matter of
fact the Law Society has so far not taken any disciplinary action against any
notary public for unprofessional conduct in relation to notarial work. The
LEGISLATIVE COUNCIL — 25 June 1997
813
Society feels that the Hong Kong environment has given a strong case for its
membership to be mandatory in spite of the practice of other commonwealth
jurisdictions.
The Society also assures the Bills Committee that if granted mandatory
membership, it will not exercise its powers unreasonably in directions such as to
increase its membership fee unnecessarily and make it difficult for members to be
admitted as these will not promote its interest.
The Bills Committee then separately obtained legal opinion of legal
principles governing mandatory membership under the ICCPR and considered
the issue carefully. It notes that the systems for notaries in other common law
jurisdictions such as Singapore are wholly different from the system for Hong
Kong. Its conclusion is that Hong Kong will need an effective and a
long-standing notarial society to monitor and standardise professional rules and
practice of notarial work from both the consumers' and professionals' point of
view. This is a public interest to protect and there is the public interest to
justify the restriction of the right to association or disassociation.
There is a need to ensure the Society have the necessary membership and
in this light mandatory membership of the Society is consistent with Article 22 of
the ICCPCR. The Society has subsequently sought a separate Counsel's opinion
which is that mandatory membership does not breach the ICCPR.
Regarding the policy consideration raised by the Administration that there
is no need for such mandatory membership, the Bills Committee holds the view
that without mandatory membership the continued existence of the Society and
its effectiveness in ensuring that the standard of notarial practice in Hong Kong
meets that of international practice will be put at risk. In any event this is a
matter for Honourable Members of the Legislative Council to decide.
The Bills Committee has unanimously asked me to move an amendment at
the Committee stage to add new section 41(A) in order to include mandatory
membership of the Society in the Bill. The provision has a flexibility such that
in exceptional circumstances when the notary public cannot get himself qualified
for admission as a member of the Society or cannot maintain such membership
through no fault of his own he could still practise as a notary public without
giving rise for a cause for complaint to the Chief Justice leading possibly to
disciplinary sanctions against himself.
814
LEGISLATIVE COUNCIL — 25 June 1997
The Administration, however, remains of the view that the membership
provision in the Bill is unjustified and unnecessary. It still runs the risk of a
challenge against its validity under Article 7(5) of the Hong Kong Letters Patent
and remains a very real restriction on the right to freedom of association
protected by Article 22 of the ICCPR.
The Administration has indicated to the Bills Committee that it will not
proceed with the Bill if this Council agrees to the proposed Committee stage
amendment. In reaching the decision the Administration has recognized that it
is unlikely that any other locally-based system for appointing notaries public can
be put in place before 1 July 1997, but it still regards that it is better on balance
to live with a possible consequence of the gap than to set a precedent by enacting
legislation containing a clause that the Administration believes to be vulnerable
to challenge in court and considers to have no merit in policy terms.
Having carefully considered the stance of the Administration the Bills
Committee remains clearly, strongly and unanimously of the position that the
public interest element can justify the restriction of the right to association or
disassociation, and it upholds its recommendation to Honourable Members.
The Society has been informed of this and has indicated its content for the
position the Bills Committee is maintaining, notwithstanding the possible
consequences.
The second area of concern of the Bills Committee is the specified role of
the Society. The Bills Committee considers the society should play a role in the
proposed regulatory frame work in the Bill in recognition of its professional
status and the assistance it has hitherto given to the Archbishop of Canterbury in
appointing and disciplining notaries public.
The Administration then agrees that the Society could be invited to give
comment to the Chief Justice on any application for admission to a notarial
examination. In this regard, the Administration will move a Committee stage
amendment to add section 40(A) subclause 1(b)(iii) to stipulate that the Chief
Justice may also notify the Society and invite it to comment on an application.
Regarding the role of the Society in the Enquiry Panel, the Administration
officially holds the view that it will not be appropriate to stipulate in the Bill that
any Enquiry Panel should have a Society member or members or majority of
Society members since the full range of its issues, including the size of the panel
LEGISLATIVE COUNCIL — 25 June 1997
815
and its membership, including the proposed representations of the Society,
should be further considered when the disciplinary rules are made by the Chief
Justice, and since there is no precedent in the relevant legislation of other
jurisdictions which requires consultation with the Society of Notaries Public or
defines the composition of the Enquiry Panel to include any member from such
Society.
The Administration subsequently agrees to include at least one member of
the Society in the Enquiry Panel subject to a qualification that the Chief Justice
shall not do so if there is a good reason for not doing so in particular
circumstances. The Bills Committee, however, regards it is of primary
importance to ensure that the future system of appointment of notaries public is
workable and it is essential that the Hong Kong Society of Notaries, being the
most relevant party should have membership in the Enquiry Panel. It therefore
unanimously agrees that I should move a Committee stage amendment on its
behalf to propose section 42 subsection 6(a) to include at least one member of the
Society in the Enquiry Panel in the principle ordinance. It would then be for the
judiciary to specify inclusion of other number of members of the Society in the
Enquiry Panel in the rules, which will be enacted subsequently by way of
subsidiary legislation. The Bills Committee is assured by the Administration
that the judiciary will be advised to consult the legal profession when it draws up
such rules.
Lastly, on the governance and regulatory frame work of notaries public the
Bills Committee considers that the Bill should provide for the criteria and
procedure for the Chief Justice to follow when a complaint is received or when
he needs to consider disciplinary action against a notary public or even to strike a
notary public off the register.
The Bills Committee studied how disciplinary action against notaries
public is made in England and other countries such as Singapore, the Australian
state of New South Wales, South Australia and Western Australia and South
Africa. The Administration agrees to move a Committee stage amendment to
propose section 42, that is removal from registration and suspension of notaries
public and restoration, in order to set out the disciplinary criteria, circumstances
for enquiry, disciplinary sanctions, restoration criteria and enquiry procedures.
The Bills Committee also discussed with the Administration whether there
is a need to update the term "bankruptcy" which is set out as a ground for
816
LEGISLATIVE COUNCIL — 25 June 1997
complaint for the Chief Justice to give direction, including disciplinary sanctions,
whether unsound mind should be included as a ground of such complaint and
whether a fine should be included as a disciplinary sanction against a notary
public.
The Administration agrees to update the term "bankruptcy" along the
formulation of that of the Bankruptcy Ordinance (Cap. 6) and unsound mind,
along with the formulation of that of the Engineers Registration Ordinance (Cap.
409). The Administration, however takes the view that it is not necessary to
include a fine in the Bill. The Bills Committee then decided to move a
Committee stage amendment to propose to section 42 to include a fine of up to
$50,000 as a disciplinary sanction in order to provide a fuller range of options to
the Chief Justice.
Mr President, subject to Committee stage amendments, I commend the Bill
to Honourable Members.
7.25 pm
THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.
MR ALBERT HO (in Cantonese): Mr Deputy, the Democratic Party supports
the Second and Third Readings of the Bill, and supports the amendments
proposed by the Committee.
The Honourable Miss Margaret NG has just made a detailed report, so
there is no need for me to give much supplementary details. I think that the
main argument with the Government on this occasion lies on whether mandatory
provisions, which require each member to join in the Hong Kong Society of
Notaries (HKSN), should be added to relevant legislation. The Government is
strongly opposed to this issue on legal grounds, saying that mandatory provisions
will contravene the International Covenant on Civil and Political Rights
(ICCPR). Therefore, the Government says that it does not accept the proposal
of the Bills Committee regarding mandatory membership. The Bills Committee
has in fact consulted the opinions of some legal bodies, and sought advice from
the Bar. It is indicated clearly that it will not contravene the ICCPR. During
the deliberations, we thought that if the HKSN operated well, if it monitored its
LEGISLATIVE COUNCIL — 25 June 1997
817
members effectively and ensured that the regulations would be respected, we
absolutely have sensible grounds to include the mandatory membership
provisions. Of course, the Government does not agree with this opinion.
Nonetheless, the Bills Committee of this Council gives its unanimous support,
and accepts the advice from the lawyers we hired. Therefore, once this
legislation is approved, the Legislative Council will surely take up the
responsibility. We think that, firstly, the Government is not absolutely correct;
and secondly, even though the Government is afraid that problems may arise and
it has to bear the consequence, it should also understand that its suspicion on the
legality of this amendment provision has been clearly put on record today. At
the same time, I think the Government should respect the opinion of the
Legislative Council because we all know that the Bills Committee supports this
amendment unanimously. Once the Government withdraws this legislation, I
believe that serious effects will be resulted. There is no way to establish a
statutory system to continue the notary system before the transfer of sovereignty
in 1 July 1997. Therefore, I hope that the Government should not be so
stubborn. The Legislative Council has given unanimous support and that has
been clearly put on record. Our Committee requests unanimously and we have
received support from some legal bodies and independent barristers. We do not
believe that the Legal Department is unquestionably correct on this issue. Some
laws of the Government have been successfully challenged in courts, and these
things have happened. Since the Bill of Rights was passed, quite a number of
ordinances have been challenged successfully. Things written on the statute are
not always legitimate; they can be flawed. Therefore, I hope that the
Government will not withdraw this legislation so as to allow the amendments
moved by the Bills Committee can be approved without a hitch.
Thank you, Mr Deputy.
MR IP KWOK-HIM (in Cantonese): Mr Deputy, with the return of sovereignty
in 1 July 1997, many laws will have to be localized and adapted. The notaries
in Hong Kong are all along appointed by the Archbishop of Canterbury in Britain
and regulated by the Scrivener in England. However, these arrangements will
have to be localized before 1 July. Therefore, this legislation is introduced to
bridge the gap at this time.
In the course of the deliberations on the Bill, the part which aroused most
dispute between the members of the Bills Committee and the Government was
the latters' strong opposition to include mandatory provisions requiring all the
818
LEGISLATIVE COUNCIL — 25 June 1997
notaries to become members of the Hong Kong Society of Notaries (HKSN).
During the deliberations on the Bill, the Bills Committee had all along held the
same view to support the Society to have mandatory membership. The
Democratic Alliance for the Betterment of Hong Kong (DAB) thinks that from
both perspectives of the consumers and the legal professionals, Hong Kong needs
a Society of Notaries which is effective with long standing to monitor the
notaries' professional conduct and code of practice. At the same time, a
mandatory membership system will enable the notaries to be more responsible to
the public, and helps effective control of the notary's professional integrity and
standard. One of the reasons why the Government insists on opposing the
mandatory membership is that the relevant proposal will contravene Article 22 of
the International Covenant on Civil and Political Rights (ICCPR) on the
protection of freedom of association or disassociation. But in fact, the Hong
Kong Society of Notaries and the Legal Adviser of the Legislative Council have
clearly expressed that the provisions of mandatory membership conforms to the
content of related covenants.
The provisions of mandatory membership is indispensable to the members
of the HKSN, in the same ways as legal practitioners are required to join in the
Law Society of Hong Kong. Therefore, on the premises that public interests
should be safeguarded, and the legal status of the HKSN should be confirmed,
the DAB agrees with the need for the provisions of mandatory membership.
Therefore, the DAB supports the amendment introduced by the Bills Committee.
These are my remarks.
MR RONALD ARCULLI: Mr Deputy, I just want to say a few words on this
particular Bill. I think the depth of feeling in the profession is fairly clear and
the only thing I really have to say is that the Government has adhered to its view
that if there is compulsory membership of notary publics then it would infringe
the Bill of Rights and, based on that, it is likely to withdraw this Bill.
I think that is a regrettable step to take because if we believe in handing to
our professional bodies in Hong Kong the right to self-regulate, the right to
self-discipline, I would have thought that as a matter of policy the Government
would do its utmost towards promoting this aspect rather than to take a
"father-knows-best" attitude and say to us, "sorry, young people, you can't
behave as you wish to behave, responsibly, because I say you can't."
LEGISLATIVE COUNCIL — 25 June 1997
819
Up to now, we still have not heard a satisfactory explanation from the
Administration as to why it opposes compulsory membership of notary publics,
particularly with the background that notary publics themselves have actually
asked for this requirement. So, it seems to me, Mr Deputy, that it really
behoves the Administration to explain why not and why if it does, which I hope
it will not, withdraw the Bill.
Thank you very much.
MR BRUCE LIU (in Cantonese): Mr Deputy, I speak to support the Second and
Third Readings of the Bill on behalf of the Hong Kong Association for
Democracy and People's Livelihood. During all the deliberations of the Bills
Committee, the most controversial part was on whether the local notaries public
should be required to become members of the Hong Kong Society of Notaries
(HKSN), which is the so-called provision of "mandatory membership". To deal
this issue, I have raised a solution in the Bills Committee.
The Administration considers that this provision should not be included
because its legal advisers have pointed out that this will infringe the Bill of
Rights, in particular the provision related to the freedom of association or
disassociation. This is the legal advice it has obtained. In considering the Bill,
we have had vigorous discussions on this point. We have paid special attention
to a submission prepared by a legal scholar, Mr Andrew BYRNES. I have read
it in details several times. It is pointed out in the submission that any restriction
proposed by us should be in line with the principles of the Bill of Rights. In
other words, any restriction should be reasonable and necessary. It is mentioned
at the end of the submission that when we consider adding the restriction this
time, we should, first of all, admit that it is really a restriction. However, the
restriction is reasonable and necessary because we will achieve a policy target in
which the HKSN can have an appropriate status to monitor the conduct of its
members. This is a good social effect. If someone challenges this new
restriction, the court will consider three things. First, detailed consideration
was given to the Bill during its scrutiny by the Legislative Council. Second,
when this provision was introduced in the Legislative Council, the Honourable
Members considered it a balance among various social needs and reasonable.
Third, the Legislative Council considered that the social effect concerned was
desirable and Members also considered that this restriction could achieve such
820
LEGISLATIVE COUNCIL — 25 June 1997
social effect. In paragraph 23, Mr Andrew BYRNES pointed out that someone
might challenge this restriction in courts. However, after a thorough analysis,
the possibility of a successful challenge is very low. As such, how should the
Government handle this matter? The Administration may face a very
embarrassing situation. On the one hand, it understands that the Bill of Rights
may be infringed, but in legislation, the Administration should declare that it will
not raise any issues in contravention of the Bill of Rights. I consider that it is
right to do so. As a result, the Administration just stood by with folded arms in
this matter and let the Legislative Council raise this motion and add the provision
after consideration.
Being a legislature, the Legislative Council will consider all factors and
then make a judgment. Same as the situation when we formulate other
legislation, someone may challenge them in courts. All laws, no matter
loopholes are found or not, are subject to challenges. Therefore, after the
Legisltive council considers to make such decision, even someone really
challenges it, we should trust the determination made by courts. When faced
with possible challenges, how can the problem be solved? I propose that the
Administration should let the Legislative Council raise this motion. And after it
is passed, the Administration must not withdraw the whole Bill by virtue of the
possible challenges. In fact, Hong Kong needs this legislation very much to
establish a localized system of notaries. This is also a law urgently needed
before 1997. Under this situation, if our new clause 41A is passed in the
Second Reading later, I urge the Administration not to withdraw the Bill.
Thank you, Mr Deputy.
ATTORNEY GENERAL: Mr Deputy, I would like to thank Members of the
Bills Committee, especially its chairman, the Honourable Miss Margaret NG, for
their hard work and thorough examination of this Bill. The Administration has
responded positively to most of the ideas put forward by Members of the Bills
Committee, and this is reflected in the Committee stage amendments which I will
move later this evening. Those amendments are as follows:
The Administration's amendments
Firstly, the Administration accepts that the Hong Kong Society of Notaries
(HKSN) should have an advisory role in the new system for examining and
appointing applicants as notaries public in Hong Kong. I shall therefore move a
LEGISLATIVE COUNCIL — 25 June 1997
821
Committee stage amendment to add a provision in proposed new section
40A(1)(b) (contained in clause 3 of the Bill) to provide that the Chief Justice may
notify the Society of an application for appointment, and invite the Society to
comment on that application. The Administration considers that the Chief
Justice should be given the discretion to decide whether to consult the Society or
not. This is appropriate because an applicant has yet to be admitted as a notary
public and therefore cannot be a member of the Society at the time of the
application. There may also be instances where the Society may not be in the
best position to advise the Chief Justice.
Secondly, the Bills Committee suggested that the Bill should provide
detailed criteria and procedures for handling complaints against notaries public,
including a list of circumstances in which disciplinary action may be taken.
Members also proposed that a range of disciplinary sanctions available to the
Chief Justice should be provided for in the Bill. The Administration agrees that
the Bill should set out the circumstances in which disciplinary action may be
taken against notaries public, and the possible disciplinary sanctions. At the
Committee stage, I shall therefore move amendments to proposed new section 42
to set out the circumstances in which disciplinary action should be taken; the
sanctions that may be imposed by the Chief Justice; the inquiry powers of the
Chief Justice; and the procedure for the appointment of a panel to make inquiries
on behalf of the Chief Justice.
In addition, the Bills Committee suggested a number of technical
amendments to clarify certain provisions of the Bill. The Administration
accepts these suggestions. I will therefore move amendments to proposed
sections 40A and 41 to improve the Bill. I shall also propose a number of other
technical and consequential amendments to the Bill.
Honourable Miss Margaret NG's amendments
Mr Deputy, I now turn to the amendments to be moved by Miss Margaret
NG. The Administration does not support those amendments.
The purpose of this Bill is to introduce a local appointment system for
notaries public, which will replace the existing system under which appointments
are made in England. The HKSN does not at present have any regulatory
function in respect of notaries. Membership of that society is voluntary. The
Bill does not propose to change either of these fundamentals.
822
LEGISLATIVE COUNCIL — 25 June 1997
Under the new system, the appointment and disciplining of notaries public
will be the responsibility of the Chief Justice. The Bill provides that a notary
may be disciplined by being removed or suspended from the Register. The
Committee stage amendment that I will move to the proposed new section 42 will
further provide that a notary may be censured, ordered to pay compensation to a
complainant, and ordered to pay the costs of the inquiry and disciplinary
proceedings.
However, Miss Margaret NG will propose a Committee stage amendment
to add a further disciplinary sanction, namely a fine of up to $50,000. The
Administration considers that all the circumstances which may give rise to
disciplinary action against a notary can be appropriately dealt with by one or
other of the sanctions in the Administration's amendments. For example, it
would be meaningless to impose a financial penalty on a notary who is bankrupt,
while the appropriate way of dealing with one who had engaged in fraudulent
conduct is removal from the register together with an order to pay the costs of the
disciplinary proceedings. The criminality of that conduct should be a matter for
the courts. Again, activities on the part of a notary which are prejudicial to the
administration of justice should be visited with the penalty of suspension or
removal from the register. The addition of a financial penalty is therefore
unnecessary and I would urge Members to vote against that amendment.
Miss Margaret NG will also propose a Committee stage amendment to
proposed section 42(6)(a) to require that, of the three persons appointed by the
Chief Justice to the inquiry panel to investigate a complaint against a notary
public, at least one must be a member of the HKSN. The Administration agrees
to this proposal subject to allowing the Chief Justice discretion not to include a
member of the Society on the Panel if he considers that there is a good reason in
the particular circumstances. This modification of the honourable Member's
proposal is necessary to cover a situation where there may be a conflict of
interest between the Society and the person who is under investigation. A
provision which enabled a member of the Society to sit on the Panel as of right
on every occasion could operate unfairly and is contrary to well-recognized
principles of administrative law. Such a conflict of interest would arise, for
example, if the Society itself had initiated a complaint against a notary and was
therefore an interested party in the disciplinary proceedings. I shall therefore
move a Committee stage amendment which is designed to provide the Chief
LEGISLATIVE COUNCIL — 25 June 1997
823
Justice with the necessary flexibility to appoint a panel which is appropriate to
the circumstances of a particular case.
Finally, Miss Margaret NG will move a Committee stage amendment to
provide that every notary public on the Register of Notaries Public shall, as far as
is allowed by the HKSN, acquire and maintain membership of that Society, and
to provide that failure to comply with the membership requirement may be a
ground for disciplinary action by the Chief Justice.
Mr Deputy, the Administration believes that this is a bad proposal, and is
firmly opposed to it. Why should any person be compelled to join a certain
society before he or she can lawfully offer services to the public? If the society
in question has a regulatory function, as does the Bar Association and Law
Society, then compulsory membership of that society may be justified. But, as I
just explained, the HKSN has no such regulatory function.
The Administration therefore believes that there is no justification for
forcing notaries to join the HKSN. Notaries should have the freedom to decide
for themselves whether they should join the society. Freedom of association is,
in fact, a fundamental human right guaranteed by Article 22 of the International
Covenant on Civil and Political Rights (ICCPR).
The Bills Committee apparently considers that this freedom should be
restricted by the mandatory membership requirement, on the grounds that
otherwise there is a risk of the HKSN becoming ineffective. With the greatest
respect, the Administration does not consider that this is a sufficient justification
for restricting a right guaranteed by the ICCPR. If the HKSN performs a useful
service to notaries public in Hong Kong, that I am sure it does, then individual
notaries public will wish to be members of it. We do not see why they should
be forced to become members of the Society.
In our view, compulsory membership of the HKSN is not "necessary" in
the interests of the public, as opposed to the interests of the HKSN itself. As a
result, this proposed amendment would, if enacted, run the risk of a challenge on
the ground of inconsistency with the ICCPR.
Mr Deputy, the present constitution of Hong Kong prohibits the making of
any law which restricts the rights and freedoms enjoyed in Hong Kong in a
manner which is inconsistent with the Covenant as applied in Hong Kong. The
provisions of the Covenant will remain in force in future under Article 39 of the
824
LEGISLATIVE COUNCIL — 25 June 1997
Basic Law. The legal expert consulted by the HKSN, also admits this danger,
although he does not agree with our assessment of the degree of such danger. It
is, of course, up to the court to decide whether legislation is inconsistent with the
ICCPR. However, it would clearly be irresponsible for the Administration to
proceed with legislation that we believe is open to challenge, especially when
such a challenge, in all likelihood, would likely be in respect of disciplinary
action taken by the Chief Justice.
Mr Deputy, with a view to meeting the Bills Committee's concerns, I shall
nevertheless move a Committee stage amendment to add a new section, namely,
section 43B. It seeks to address Members' concerns about the promotion and
maintenance of notarial standards in Hong Kong, and the protection of the
interests of Hong Kong registered notaries. This amendment originated from a
suggestion made during a recent visit to Hong Kong by Sir John OWEN, who as
Master of the Faculties under the Archbishop of Canterbury, is responsible at
present for issuing faculties authorizing the performance of notarial functions
and the exercise of notarial powers in Hong Kong. The Administration
considers that this amendment provides an appropriate role for the HKSN in
these matters. We do not believe that there is any good legal or policy reasons
for the Bills Committee's insistence on the mandatory membership provision.
Indeed, as I have said, we believe it would run the risk of being challenged as
being in breach of the ICCPR. I therefore strongly urge Members to adopt my
Committee stage amendment and to reject Miss NG's amendment. Should Miss
NG's amendment be passed by this Council, the Administration will have no
alternative but to withdraw this Bill before its Third Reading.
We have carefully considered the effect that this would have. We
recognize that, given the limited time available, it is unlikely that any other
locally-based system for appointing notaries public can be put in place before 1
July 1997. We have considered the possible consequences of a gap in the
appointment of notaries public following the last notarial examination organized
by the Master of Faculties in March this year, and have come to the view that
these consequences are less significant than the dangerous precedent of enacting
legislation that we know is vulnerable to challenge in the courts. This does not
mean, that no new notaries public will be appointed after 30 June 1997. The
new Hong Kong Special Administrative Region Government will of course be
free to draw up its own legislative procedures in respect of notaries public and
the absence of legislation on this topic for a short period would not be a serious
problem.
LEGISLATIVE COUNCIL — 25 June 1997
825
Mr Deputy, I would urge all Members to consider the objections to this
amendment that I have mentioned. The issue is whether individuals should be
forced to join a society which has no regulatory function in respect of them.
The Administration would rather have no legislation in respect of notaries public,
than thoroughly bad legislation.
I urge you to vote for the Administration's amendments so that acceptable
legislation can be put in place before the transfer of sovereignty.
Thank you, Mr Deputy.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order
43(1).
Committee stage of Bill
Council went into Committee.
8.03 pm
MISS MARGARET NG: Mr Chairman, I wonder if it is possible, in view of
what the Attorney General has just told this Council, to have a short break of
about 10 minutes before we go to the Committee stage amendments?
CHAIRMAN (in Cantonese): I order a suspension of 10 minutes.
Sitting suspended.
8.13 pm
THE PRESIDENT resumes the Chair.
826
LEGISLATIVE COUNCIL — 25 June 1997
Council then resumed.
Committee stage of Bill
Council went into Committee.
LEGAL PRACTITIONERS (AMENDMENT) BILL 1996
Clauses 1, 2, 4, 5 and 6
ATTORNEY GENERAL: Mr Chairman, I move that the clauses specified be
amended as set out in the paper circulated to Members.
The amendments to clauses 1, 2, 5 and 6 aim to provide a Chinese version
of the clauses.
The amendment to clause 4 is to clarify the meaning of "qualified notary
public" in proposed section 44(3). It also seeks to provide a Chinese version of
the clause as amended by the substantive amendment.
Proposed amendments
Clause 1 (see Annex XIII)
Clause 2 (see Annex XIII)
Clause 4 (see Annex XIII)
Clause 5 (see Annex XIII)
Clause 6 (see Annex XIII)
LEGISLATIVE COUNCIL — 25 June 1997
827
Question on the amendments put and agreed to.
Question on clauses 1, 2, 4, 5 and 6, as amended, put and agreed to.
Clause 3
CHAIRMAN (in Cantonese): Both the Attorney General and Miss Margaret NG
have separately given notices to move amendments to clause 3.
I propose that the amendments to clause 3, proposed separately by the
Attorney General and Miss Margaret NG, be debated together in a joint debate.
Committee shall debate the amendments to clause 3, proposed separately
by the Attorney General and Miss Margaret NG, in a joint debate. I will first
call upon the Attorney General to move his amendments, as he is the public
officer in charge of the Bill.
ATTORNEY GENERAL: Mr Chairman, I move that clause 3 be amended as
set out under my name in the paper circulated to Members.
The purpose of the amendments is sixfold. Firstly, instead of giving the
Chief Justice a discretion to admit as those applicants who pass the examination
and satisfy other criteria, the amendments provide that the Chief Justice shall
admit such persons. The Chief Justice will, however, retain a discretion over
whom to allow to sit the notarial examination, and he may make relevant
enquiries before making his decision. This will be achieved by amendments to
the proposed sections 40A(1)(a) and 40A(1)(b).
Secondly, in order to recognize the advisory role of the Hong Kong
Society of Notaries (HKSN) in the new appointment system, it is proposed that
proposed section 40A(1)(b) be amended to provide that the Chief Justice may
notify the Society of an application and invite it to comment on the application.
Thirdly, amendments to proposed section 42 set out the circumstances in
which disciplinary action may be taken against a notary public and the
disciplinary sanctions available to the Chief Justice. The power of the Chief
828
LEGISLATIVE COUNCIL — 25 June 1997
Justice for the purpose of making inquiries in respect of a notary public,
including the power to appoint a panel to make inquiries on the Chief Justice's
behalf, are also provided for. In relation to this, provision is included to ensure
that, of the three persons appointed to the Panel by the Chief Justice, at least one
should ordinarily be a member of the HKSN, but it allows the Chief Justice a
discretion not to include a member of the Society on the Panel where he
considers that there is good reason for not doing so in the circumstances of any
particular case.
Fourthly, proposed section 43B seeks to address the Bills Committee's
concerns about the promotion and maintenance of notarial standards in Hong
Kong, and the protection of the interests of Hong Kong registered notaries.
Fifthly, a number of minor or technical amendments are proposed to
improve the Bill. For example, instead of allowing the public to inspect the
Register of Notaries Public only by appointment, it is proposed that the public
should be able to do so during office hours. And it is proposed to widen the
rule-making powers of the Chief Justice under new section 43A.
And lastly, Mr Chairman, the amendments seek to provide a Chinese
version of clause 3 as amended by the above substantive amendments.
Proposed amendment
Clause 3 (see Annex XIII)
CHAIRMAN (in Cantonese): I will call upon Miss Margaret NG to speak on the
amendments proposed by the Attorney General as well as her own proposed
amendments, but will not ask Miss NG to move her amendments unless the
Attorney General's amendments have been negatived. If the Attorney General's
amendments are agreed, that will by implication mean that Miss Margaret NG's
proposed amendments are not approved.
MISS MARGARET NG: I will, later on, I hope, have the opportunity to move
my amendments.
LEGISLATIVE COUNCIL — 25 June 1997
829
Members of the Bills Committee unanimously agree that mandatory
membership of the Hong Kong Society of Notaries be included in the Bill for the
reasons advanced in my earlier speech introducing the resumption of the Second
Reading debate. Although the new proposed section 43(b) to be moved by the
Attorney General regarding functions of the Chief Justice is a move in the right
direction by recognising the role of the Society, it cannot be a replacement of the
requirement that every notary public should be a member of the Society.
I therefore urge Members to support my proposed amendment as
mandatory membership of the Society is essential to maintain notarial standards
in Hong Kong.
As pointed out in my earlier speech the purposes of my amendments are to
include, apart from mandatory membership of the Society, at least one member of
the Society in the Enquiry Panel without any qualification and a fine of up to
$50,000 as one of the options of the disciplinary sanction to be imposed by the
Chief Justice.
Mr Chairman, I take the opportunity to say at this point that, as Chairman
of the Bills Committee, I will vote in accordance with the clear, strong and
unanimous view it has expressed and maintains, and that is against the Attorney
General's amendment and in favour of the amendments if I should have a chance
to move them later.
Thank you, Mr Chairman.
DR LEONG CHE-HUNG: I rise to speak on the issue of mandatory
membership. On that basis I will have to apologise to the Bills Committee. I
will not be able to vote along the same line. The reason is very, very simple.
Some two years ago, when the Medical Registration Ordinance was passed
there an issue relating to specialist registration. At the same time within the
medical profession, there is a statutory body known as the Academy of Medicine
which is the body to train and vet specialists. The argument then was whether
to be specially registered you need to be a compulsory member of the Academy
of Medicine.
830
LEGISLATIVE COUNCIL — 25 June 1997
On that basis the Administration used the same reason to say that it is
against the issues of the Bill of Rights, and on that particular occasion there was
no argument within the Bills Committee. The Bills Committee actually
accepted the explanation of the Administration, as a result of which the
compulsory membership issue was dropped.
And on that basis, Mr Chairman, I would have to vote "no" against the
decision of the Bills Committee. Thank you.
ATTORNEY GENERAL: Mr Chairman, I explained in my speech on the
resumption of the Second Reading debate on this Bill why the Administration
objects to the additional elements included in the Honourable Margaret NG's
Committee stage amendments, particularly the Administration does not agree
with the amendment requiring notaries to be members of the Hong Kong Society
of Notaries (HKSN).
This is unjustified and unnecessary since the HKSN does not have any
regulatory role under the Bill. The requirement would also be vulnerable to
legal challenge as restricting the right to freedom of association protected by
Article 22 of the International Covenant on Civil and Political Rights.
I strongly urge Members to oppose Miss Margaret NG's amendments to
clause 3, and I repeat that if Miss NG's amendments are agreed to by this
Council, the Administration will have no option but to withdraw the Bill before it
is given its Third Reading.
Question on the amendment put.
Voice vote taken.
THE CHAIRMAN said he thought the "Noes" had it.
Miss Emily LAU claimed a division.
LEGISLATIVE COUNCIL — 25 June 1997
831
CHAIRMAN (in Cantonese): Committee will now proceed to a division.
CHAIRMAN (in Cantonese): I would like to remind Members that they are now
called upon to vote on the question that the amendment moved by the Attorney
General be approved.
Will Members please register their presence by pressing the top button and
then proceed to vote by pressing one of the three buttons below?
CHAIRMAN (in Cantonese): Before I declare the result, Members may wish to
check their votes. Are there any queries? The result will now be displayed.
Dr LEONG Che-hung and Miss Christine LOH voted for the amendment.
Mr Allen LEE, Mrs Selina CHOW, Mr Martin LEE, Mr NGAI Shiu-kit, Mr
SZETO Wah, Mr LAU Wong-fat, Mr Edward HO, Mr Ronald ARCULLI, Mrs
Miriam LAU, Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Frederick
FUNG, Mr Michael HO, Dr HUANG Chen-ya, Miss Emily LAU, Mr LEE
Wing-tat, Mr Eric LI, Mr Fred LI, Mr James TO, Dr Philip WONG, Dr YEUNG
Sum, Mr Howard YOUNG, Mr WONG Wai-yin, Mr LEE Cheuk-yan, Mr CHAN
Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, Mr Andrew CHENG,
Mr Paul CHENG, Mr CHENG Yiu-tong, Dr Anthony CHEUNG, Mr CHEUNG
Hon-chung, Mr CHOY Kan-pui, Mr David CHU, Mr Albert HO, Mr IP
Kwok-him, Mr Ambrose LAU, Mr LAW Chi-kwong, Mr LEE Kai-ming, Mr
LEUNG Yiu-chung, Mr Bruce LIU, Mr LO Suk-ching, Miss Margaret NG, Mr
NGAN Kam-chuen, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr John TSE
and Mr YUM Sin-ling voted against the amendment.
THE CHAIRMAN announced that there were two votes in favour of the
amendment and 48 votes against it. He therefore declared that the amendment
was negatived.
832
LEGISLATIVE COUNCIL — 25 June 1997
DR LEONG CHE-HUNG: I move under Standing Order 37(4) that in the event
of further divisions being claimed in respect of the remaining motions at the
Committee stage of the Legal Practitioners (Amendment) Bill 1996 at this sitting
that Committee do proceed to each of such divisions immediately after the
division bell has been rung for one minute.
Question on the motion proposed, put and agreed to.
CHAIRMAN (in Cantonese): As the amendment to clause 3 proposed by the
Attorney General has been negatived, I now call upon Miss Margaret NG to
move her amendment to clause 3.
MISS MARGARET NG: Mr Chairman, I move that clause 3 be amended as set
out in the paper circularized to Members.
Proposed amendment
Clause 3 (see Annex XIII)
Question on Miss Margaret NG's amendment put and agreed to.
Question on clause 3, as amended, put and agreed to.
Heading before New clause 5A
New clause 5A
Oaths and Declarations Ordinance
Interpretation
Clause read the First time and ordered to be set down for Second Reading
pursuant to Standing Order 46(6).
ATTORNEY GENERAL: Mr Chairman, I move that Heading before new
clause 5A and new clause 5A as set out in the paper circularized to Members be
read the Second time.
This new clause 5A is a consequential amendment to the Oaths and
Declarations Ordinance to bring the definition of "notary" in that Ordinance in
LEGISLATIVE COUNCIL — 25 June 1997
833
line with the meaning given to "notary public" in the Legal Practitioners
Ordinance.
Question on the Second Reading of the clause proposed, put and agreed to.
Clause read the Second time.
ATTORNEY GENERAL: Mr Chairman, I move the Heading before new clause
5A and new clause 5A be added to the Bill.
Proposed addition
Heading before new clause 5A and new clause 5A (see Annex XIII)
Question on the addition of the Heading before new 5A and new clause 5A
proposed, put and agreed to.
Long title
ATTORNEY GENERAL: Mr Chairman, I move that the Long Title be
amended as set out in the paper circularized to Members.
The amendment aims to provide a Chinese version of the Long Title.
Proposed amendment
Long title (see Annex XIII)
Question on the amendment put and agreed to.
Question on Long title, as amended, put and agreed to.
Council then resumed.
Third Reading of Bill
834
LEGISLATIVE COUNCIL — 25 June 1997
ATTORNEY GENERAL: Mr President, as I have explained during the Second
Reading debate and the Committee stage, the Administration cannot accept the
amendment agreed to by the Council to require that every notary public on the
Register of Notaries Public shall acquire membership in the Society and maintain
such a membership, and to stipulate that failure to comply with the membership
requirement may be a ground for disciplinary action. The Administration
therefore has no option but to withdraw this Bill.
The Administration regrets that it has been necessary to take this action
after so much time and effort have been spent in scrutinizing the Bill over the
past 15 months. We would very much like to have had a local appointment
system for notaries public in place before 1 July 1997. However, given the
serious policy and legal implications of the Honourable Miss Margaret NG's
amendment, we consider that it would be better to withdraw the Bill now and sort
out the problem of establishing a local appointment system for notaries in slower
time.
Mr President, I hereby withdraw the Legal Practitioners (Amendment) Bill
1996.
PRESIDENT: As the Legal Practitioners (Amendment) Bill 1996 has been
withdrawn in accordance with Standing Order 52, no further proceedings will be
taken.
Resumption of Second Reading Debate on Bill
SUPREME COURT (AMENDMENT) BILL 1997
Resumption of debate on Second Reading which was moved on 5 March
1997
MISS MARGARET NG: Mr President, may I have a brief moment, please.
Mr President, I seem to have lost my speech. Mr President, can I ask for an
adjournment of five minutes so that I could find my speech? I am very ashamed
of myself.
LEGISLATIVE COUNCIL — 25 June 1997
835
8.31 pm
PRESIDENT: I order a suspension of five minutes.
8.36 pm
Council then resumed.
MISS MARGARET NG: Mr President, the main purpose of the Supreme Court
(Amendment) Bill 1997 is to re-enact in an updated form the provision of the two
United Kingdom Acts, Habeas Corpus Acts 1679 and 1816 insofar as those acts
are relevant to Hong Kong.
A Bills Committee chaired by me was formed to study the Bill. The
Committee has met the Administration, the Hong Kong Bar Association and the
Law Society of Hong Kong. I am grateful for the views of the two legal
professions, particularly Mr Gerard McCOY of the Bar Association for his
valuable contribution to the studying of this Bill.
The Bills Committee, the Bar Association and the Law Society are gravely
concerned about the proposed section 22A subsection 11. The proposed section
in effect allows the person having custody of the detained person to remove the
detainee from Hong Kong under the authority of an enactment or of the High
Court where habeas corpus proceedings are underway. We object to the
provision.
Firstly, only the Executive has the power to remove persons from Hong
Kong. It is inappropriate to confer on the High Court the executive power to
order the removal.
Secondly, it is fundamentally wrong to permit the removal of a person
under the authority of an enactment when habeas corpus proceedings have
commenced. It undermines the whole purpose of the writ, namely to have the
person released if he is wrongly detained.
836
LEGISLATIVE COUNCIL — 25 June 1997
Once habeas corpus proceedings are in train, the detaining authority has
no jurisdiction to remove the person from Hong Kong except with the direction
of the court. We have therefore proposed to remove qualifications in a
proposed section 22A subsection 11, enabling removal under the authority of an
enactment or the High Court.
While agreeing to deleting the reference to the High Court, the
Administration, however, does not agree to delete the provision enabling removal
under the authority of enactment. The Administration takes the view that this
would be a radical departure from the existing legal position under which the
purpose of habeas corpus proceedings is to bring an illegal detention to an end,
not to challenge or frustrate the removal of a detainee.
In the context of administrative detention under the Immigration
Ordinance, it has been accepted that the statutory duty of the Director of
Immigration is to end detention by removing from Hong Kong as soon as
practicable whether or not habeas corpus proceedings are in train. Persons who
consider that they should not be removed could apply for an interim injunction
preventing removal.
The Administration is particularly concerned about the impact in respect of
illegal immigrants if the Director of Immigration does not have such a removal
power. The Administration is worried that the illegal immigrants and would-be
illegal immigrants may take advantage of the habeas corpus proceedings to delay
immediate repatriation or prevent removal. The Administration considers it
necessary for immigration control to preserve an authority to remove a detained
person even when habeas corpus proceedings are in train.
Mr President, the Committee agrees with the Administration that people
who have no right to stay in Hong Kong should be removed. However, that
removal should not be carried out without the court's permission once habeas
corpus proceedings have commenced. At present the detaining authority can,
under a number of enactments, remove persons from Hong Kong, namely the
Immigration Ordinance, the Mental Health Ordinance, the Fugitive Offenders
Ordinance and the Repatriation of Prisoners Overseas Territories Order 1986.
Clearly the detainees are not just illegal immigrants or Vietnamese
migrants. They may be Hong Kong citizens who have the right to stay here. If
the Administration is concerned that applications for the writ of habeas corpus
LEGISLATIVE COUNCIL — 25 June 1997
837
will be made even when it is inappropriate to do so, the proper course to take is
to assist the court to rapidly dispose of such applications. The separate
proceedings for a judicial review and an injunction, as suggested by the
Administration are unnecessary and undermine the precedence of habeas corpus.
The Committee is also unable to accept the Administration's initial
proposal to limit the exception to removal from Hong Kong under an enactment
to removal under the Immigration Ordinance.
Habeas Corpus is the
fundamental protection of the liberty of individuals, and that remedy should not
be compromised simply because of the fear of possible abuse by illegal
immigrants.
After considerable deliberations, the Administration has proposed an
amendment to provide that once a writ has been issued the detaining authority is
not permitted to exercise the power of removal until the writ has been discharged
or the proceedings are concluded.
The Administration wishes to preserve the authority of the Director of
Immigration to remove a detained person before a writ of habeas corpus had
been issued by the court. The Bills Committee is still concerned that the
detainee who has made an application may still be spirited away without his legal
representative's knowledge before the writ could be issued.
The Administration has assured us that this would not happen, that is, once
an application for habeas corpus has been made and solicitors are acting for the
applicant, the applicant will not be removed from the jurisdiction without prior
notice to his solicitors. The Attorney General has agreed to give an assurance
on this point when he speaks later on today. With this assurance, the Bills
Committee has finally accepted the amendment as proposed by the
Administration.
On proposed section 22A subsection 12, the Administration has agreed to
move an amendment to provide that if a person who is formally detained on the
particular ground is released upon an application for habeas corpus, the person
shall not be re-detained on the same or similar ground unless there is material
change in the circumstances justifying detention.
As regards the Bar Association's suggestion of specifying in the proposed
section 22A subsection 5, a time limit of 48 hours for persons holding custody of
838
LEGISLATIVE COUNCIL — 25 June 1997
the applicant to comply with an order for production and return, the
Administration has explained that it will pose practical difficulties, particularly in
mass actions involving a large number of people. It prefers to leave the matter
to the discretion of the court, having regard to the circumstances of the case. As
the current rules have been tested over a long period of time the Administration
sees no need to change them.
When Members consider it desirable to specify a time limit of 48 hours,
the Committee has agreed that the matter should be left to the discretion of the
court. In view of the importance of the writ of habeas corpus sub judicium I
should be glad if the Administration could undertake to have the relevant forms
adapted for use before 1 July 1997, even if the modernization of the form's
exercise could not be completed by then. Mr President, subsequently I
understand that this has in fact been done and I would be grateful for the
confirmation of the Attorney General later on.
With these remarks, Mr President, and subject to the amendments to be
moved by the Attorney General, I commend the Bill to this Council.
Mr President, may I now add a few words of my own? I regard nothing
so dear to a man as his liberty. As a lawyer there is no duty so fundamental to
me as defending a person's liberty under the law. The court in our common law
system has no role more sacred than this, that it protects the liberty of the subject.
There is no instrument so powerful at the court's command for this purpose as the
writ of habeas corpus. Although the first habeas corpus act was passed in
England only in 1640, under the common law the writ pre-dated even the Magna
Carta. It has therefore a very special place constitutionally. Indeed it has
become the symbol of personal liberty and the release from illegal imprisonment
under the rule of law. At the eve of the handover it has become of exquisite
significance that we should preserve the right to obtain a writ of habeas corpus
under the common law in Hong Kong's statute books.
We are today not just enacting a piece of legislation, we are pledging
ourselves to the supremacy of the rule of law and that is why, Mr President, we
cannot afford to weaken the writ of habeas corpus. We cannot allow any
exception to the extent of its protection. If one exception is allowed today for
administrative convenience, no matter how attractive and harmless it may seem at
the moment, tomorrow another less attractive and less harmless exception will be
LEGISLATIVE COUNCIL — 25 June 1997
839
made. Soon, we shall not know how to draw the line. The law as it is now
admits of no exception. A Hong Kong legislation which admits of an exception
simply cannot claim to preserve the common law.
That is why in the Bills Committee when the Administration insisted on
such an exception together with a provision under the proposed section 22A
subsection 14 that, "the right to obtain a writ of habeas corpus under the
common law is preserved and is affected by this section only insofar as it is
inconsistent with this section". It is clear to me that an attempt was being made
to change, not to preserve, the common law, and that is why together with the
Bills Committee's amendment to remove that exception, I propose to move an
amendment to remove the words "and is affected by this section only insofar as it
is inconsistent with this section". This section should not be inconsistent with
the common law.
I am thankful that the Administration has changed their stance even if it
was at the eleventh hour. At least the final Committee stage amendment is not a
blatant transgression of the present law, and I can breathe again.
But Mr President, preserving the common law is not just preserving the
letter of the law but also what the law is in practice. In practice, although a writ
of habeas corpus is not issued, once an application is made the court will not
allow the detaining authority to do anything which will preempt the court's final
decision. This includes not allowing the person detained to be spirited away.
The Court of Appeal in England had made clear that compulsory removal from
the jurisdiction "necessarily involves some deprivation of the liberty concerned".
It is therefore not at all the same thing as setting the person free.
Under present Hong Kong practice, when an application is made, the court
does not usually issue the writ forthwith but sets a return date for the detaining
authority to appear before the court for arguments first. So, under the
Administration's earlier Committee stage amendment, the detained person can
still be spirited away and so rendering the habeas corpus proceedings
meaningless. The application could even be taken as alarm bells to hasten the
detaining authority to remove the detained person from Hong Kong. A
protection of the court will then be turned into a weapon of injustice.
In England, the Home Secretary assured the court that as a matter of policy
a person who has applied to the court challenging the lawfulness of his detention
840
LEGISLATIVE COUNCIL — 25 June 1997
for removal will not be removed until the proceedings have been concluded.
Any process in train to remove him will be stayed until that time.
I am told that, given Hong Kong's special immigration concerns, the
Administration cannot give the same policy assurance, but in my view, they can
at least give the assurance that no applicant will be removed without prior notice
to his legal representative. This will at least allow him to make an urgent
application to the court for an injunction at that stage. Without this assurance it
will simply mean that every application for a writ of habeas corpus in future will
be accompanied by an application for an injunction or for an undertaking not to
remove the detained person from Hong Kong. It will waste more court time and
probably taxpayers' money in legal aid costs.
Were the Administration to refuse to give that assurance today then refusal
in itself would be a strong indication of the intention to spirit away the detained
person without warning.
Mr President, I am relieved that the Attorney General is prepared to give
that assurance. The Committee stage amendment the Administration will move
later today, together with that assurance, may respectively be said to preserve the
common law. I want to thank the Attorney General for appreciating the concern
of myself, the Bar and the Bills Committee.
Mr President, for these reasons I have also withdrawn the Committee stage
amendment to 22A subclause 14 which I originally proposed. It would have
been a matter of deep regret if I had to be at variance with the Attorney General
on a matter of such constitutional importance.
Thank you, Mr President.
MR ALBERT HO (in Cantonese): Mr President, I speak to support the Second
and the Third Readings of the Bill on behalf of the Democratic Party and also
support the amendments proposed by the Bills Committee and the
Administration. We base our support on the Attorney General's open assurance
on behalf of the Administration to be made later that once an application for
habeas corpus proceedings is made, the Administration will not suddenly remove
the applicant without prior notice to his solicitor.
LEGISLATIVE COUNCIL — 25 June 1997
841
Mr President, in fact, I believe that a lot of the Honourable colleagues have
been waiting for this Bill for a long time. We think that this is an indispensable
law for the protection of human rights. In the speech of the Honourable Miss
Margaret NG made just now, she also pointed out very clearly that this law has a
long history which can even be traced back to the thirteenth century. Actually,
the legal sector has a view that the legislation concerning habeas corpus is, in
fact, more effective that the 100 laws concerning human rights. It is because
even there is legislation or declaration to protect human rights, if no effective
system and proceeding is available to protect those whose habeas corpus and
safety are being threatened, those clauses or declaration will all become empty
words. Therefore, we are very glad to see that this Bill can be approved before
the handover of sovereignty.
During the deliberation of this Bill, the major controversy was whether the
Administration could remove him during his application when a person was
detained and had applied for habeas corpus. We concerned this issue most
because in drafting this Bill, the Administration said that it could do so and
thought that there was nothing wrong as there was a need for the immigration
control of Hong Kong. We were very surprised because if the Administration
really did so, it would seem that it could makes use of legal or illegal means
intentionally to detain the people they considered necessary to be removed, and
then removed them immediately when they applied legally for habeas corpus.
Even if the application were justified, the habeas corpus of that person would
become useless as he had already been removed.
We really could not accept this and were very surprised at the
Administration's reply at that time. Of course, the Administration made
concessions afterward. At present, not only will the subject be released after
habeas corpus has been issued, as it is its responsibility to follow and respect the
decision made by the court, it will aslo notify his solicitor immediately once it
takes action to repatriate or remove him and knows that application for habeas
corpus is being made. In this case, the solicitor can apply for an interim
injunction from the court expeditiously, or request the court to issue an interim
habeas corpus. I think this is very important.
I would like to raise two points. First, when facing judicial review, the
Administration should make similar arrangements, under which the person
affected should be given some time to apply for a court order or declaration to
protect himself. I think only in this way can fairness be achieved. I think that
it will not take up much time for the solicitors to apply for these writs from the
842
LEGISLATIVE COUNCIL — 25 June 1997
court, especially habeas corpus, which is usually prompt and urgent. The
Administration should consider making similar arrangements, that is, to give the
person reasonable rights and opportunities to appeal to the court.
Second, as we all know, before applying for habeas corpus, the applicant
usually needs some legal aid. I think legal aid services should be improved in
future so that they can be granted expeditiously under urgent situations. Of
course, this has gone beyond the scope of this Bill. However, I think this point
is also very important.
In conclusion, we consider that if this Bill is approved, it will be very
important to the people of Hong Kong. We hope that this legislation can be
exercised continuously in Hong Kong in future so that everyone can be fully
protected by habeas corpus proceedings.
MR IP KWOK-HIM (in Cantonese): Mr President, what is so valuable about
Hong Kong is that all its residents can enjoy adequate freedom, be it freedom of
speech or of the person. The main purpose of the Supreme Court (Amendment)
Bill 1997 is to incorporate the Habeas Corpus Acts 1679 and 1816 of the United
Kingdom into the Supreme Court Ordinance, so that the right to apply for habeas
corpus under these two Acts can be maintained after 1 July 1997 for the purpose
of safeguarding the freedom of the person.
The most controversial issue relating to this Bill concerns clause
22A(11)(b). This clause involves the question of whether or not the
Government authorities having custody of a person who has applied for a writ of
habeas corpus should have any power to be exempted from the force of habeas
corpus without the authorization of the court. Some of my colleagues in this
Council are afraid that if this particular clause of the Bill is passed, the
effectiveness of habeas corpus will inevitably be reduced.
I think the circumstances of Hong Kong are quite unique, and one must
give special consideration to the possible threat of an influx of illegal immigrants
during the transition period. For this reason, we must seek to maintain effective
immigration controls and remove all illegal immigrants from Hong Kong as soon
as possible within practicable limits. The purposes of our detention policy are
to prevent the entry of illegal immigrants and to facilitate their removal from
LEGISLATIVE COUNCIL — 25 June 1997
843
Hong Kong. If the power of Government authorities to remove illegal
immigrants is restricted, the purposes of the detention policy will be defeated.
If the Government does not introduce the amendments contained in the Bill,
habeas corpus may be abused by illegal immigrants; they may get a wrong
message and think that they can prolong their stay in Hong Kong by applying for
a writ of habeas corpus.
If habeas corpus were applicable to the Immigration Ordinance, we would,
in effect, be unable to impose any controls on those illegal immigrants coming
from the Mainland, Vietnam and other countries. And, if our existing
immigration policy thus failed to work effectively any more, Hong Kong might
face the threat of an influx of illegal immigrants. If the situation got out of
control, the safety of our community and its people would be adversely affected.
At present, an average of 65 illegal immigrants from the Mainland are
arrested every day. If most of these illegal immigrants apply for writs of habeas
corpus in order to defer their removal, the Government and the Court will face
immense difficulties in managing and detaining these illegal immigrants and in
handling the related legal proceedings, and this will lay a big burden to the
community. This is inconsistent with public interests and we must consider this
point. Since the Government has accepted the views of our colleagues in the
Bills Committee, the Democratic Alliance for Betterment of Hong Kong will
support the Bill and the proposed amendments.
With these remarks, I support the Bill and the proposed amendments.
MR ALBERT HO (in Cantonese): Mr President, having listened to the
Honourable IP Kwok-him's remarks, I cannot help giving my responses.
Although he concluded that ......
PRESIDENT: You are not allowed to speak for a second time. We are the full
Council now.
MR MARTIN LEE (in Cantonese): Since the Honourable Albert HO is not
allowed to speak, let me speak for him then!
844
LEGISLATIVE COUNCIL — 25 June 1997
Mr President, writs of habeas corpus apply not only to illegal immigrants.
Everyone of us may need them. One day, if the totalitarian rulers want to deport
us, we will have to apply for a writ of habeas corpus. So illegal immigrants are
not the only people who want to apply for writs of habeas corpus. If the
totalitarian rulers want to deport us arbitrarily, we who were born in Hong Kong
will also have to make use of this most valuable "protection" given to us by the
Common Law. Therefore, we should never use possible abuses as an excuse.
The fundamental spirit of the law is that even if there may be possible abuses,
even if we may have to let 99 guilty people go unpunished, it is still far better
than throwing an innocent person into prison out of mistakes. We must realize
that this is the fundamental spirit of the Common Law, the implementation of
which is guaranteed by both the Joint Declaration and the Basic Law.
ATTORNEY GENERAL: Mr President, on 5 March this year, I introduced the
Supreme Court (Amendment) Bill 1997 into this Council. The Bill aims to
amend the Supreme Court Ordinance so as to re-enact, in an updated form, those
provisions of the English Habeas Corpus Acts 1679 and 1816 that are relevant to
Hong Kong, and to make consequential amendments to the Application of
English Law Ordinance.
Freedom of the person is a fundamental human right. Effective
mechanisms have to be put in place to protect it. This is echoed in Article 9(4)
of the International Covenant on Civil and Political Rights which states that
"anyone who is deprived of his liberty by arrest or detention shall be entitled to
take proceedings before a court, in order that that court may decide without delay
on the lawfulness of his detention and order his release if the detention is not
lawful." The object of the Bill is to preserve the remedy of habeas corpus by
which such proceedings may be instituted. We believe that the protection of
liberty made available by habeas corpus will be preserved and improved with the
enactment of this important Bill.
The Bills Committee, chaired by the Honourable Miss Margaret NG,
attaches great importance to the Bill and has carefully studied its provisions with
expedition and care. In conjunction with the legal profession, it has proposed a
number of suggestions to the Administration. Most of these suggestions are
very helpful and have been accepted by us with gratitude.
LEGISLATIVE COUNCIL — 25 June 1997
845
As Miss Margaret NG has outlined the major proposed changes to the Bill
following discussion with the Committee, there will be a number of Committee
stage amendments to be moved by me at the Committee stage. For the time
being, I shall only highlight the one to amend proposed section 22A (11)(b).
This provision allows for the removal of the detainees from Hong Kong under
the authority of an enactment or of the High Court pending habeas corpus
proceedings. In response to the Committee's suggestions, my proposed
amendment will seek to delete the reference to the High Court.
As regards the statutory exception, Miss Margaret NG, the chairman of the
Committee, originally put forward a Committee stage amendment which seeks to
remove the statutory exception.
However, having considered the
Administration's latest proposed amendment, the Committee has agreed that she
should withdraw her Committee stage amendment. To address the concern of
the Committee on civil liberty as far as practicable, whilst maintaining our
immigration control, my proposed amendment seeks to limit the authority of the
Director of Immigration after the court has issued a writ of habeas corpus.
Whilst it preserves the Director's authority to remove a detained person before a
writ of habeas corpus has been issued by the court, our latest proposal provides
that once a writ has been issued, the Director may no longer exercise the power
of removal until the writ is discharged or the proceedings are concluded. This
amendment strikes the right balance between the protection of civil liberty and
our immigration control. This is essential given the unique situation in Hong
Kong, particularly in view of the need to guard against the threat of illegal
immigration.
The proposed Committee stage amendment gives the court the opportunity
to assess the strength of the applicant's case and decide whether a stay of the
removal of the detained person is warranted. This would prevent unmeritorious
claims being successful. It is consistent with the approach under the existing
law in judicial review whereby the court may stay the Director's decision to
remove upon granting of leave to judicial review if there is a prima facie case
supporting the granting of an interim injunction. It is also consistent with the
position in the United Kingdom, where the court assumes control over the
custody of the detained person on the return and production of him before it as
required by a writ of habeas corpus.
As Members have heard, both Miss Margaret NG and the Bar Association
have expressed concern that a detained applicant may be removed without his
846
LEGISLATIVE COUNCIL — 25 June 1997
legal representative's knowledge before the writ of habeas corpus could be
issued. Members may wish to note that as a matter of practice, once an
application of habeas corpus has been made and solicitors are acting for the
applicant, the applicant will not be removed from the jurisdiction without prior
notification to the solicitors. Mr President, I am extremely happy to place that
practice publicly on the record in this Council tonight.
We believe that our latest proposal represents the right balance between
the protection of an individual's right to apply for a writ of habeas corpus and the
maintenance of our immigration control.
Finally, on the point concerning the forms on which Miss Margaret NG
asks for my assurance, I can confirm that the forms concerned with habeas
corpus to which she refers have indeed been modernized and I believe they were
tabled in this Council last week.
Mr President, with these remarks and subject to the amendments that I
shall move, I commend this important and fundamental Bill to Honourable
Members.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order
43(1).
Committee stage of Bill
Council went into Committee.
SUPREME COURT (AMENDMENT) BILL 1997
Clauses 1 and 2
LEGISLATIVE COUNCIL — 25 June 1997
847
ATTORNEY GENERAL: Mr Chairman, I move that clauses 1 and 2 be
amended as set out in the paper circularized to Members.
Amendments to these two clauses aim to provide a Chinese version of
them. Apart from that, clause 2(b) is also amended to clarify the meaning of
"detention". This is a technical amendment.
Proposed amendments
Clause 1 (see Annex XIV)
Clause 2 (see Annex XIV)
Question on the amendments put and agreed to.
Question on clauses 1 and 2, as amended, put and agreed to.
Clause 3
ATTORNEY GENERAL: Mr Chairman, I move that clause 3 be amended as
set out in the paper circularized to Members.
Firstly, amendments to this clause aim to provide a Chinese version of it.
Secondly, the amendment seeks to provide in proposed section 22A(4) that
unless the Court, in exceptional circumstances specified by the Court, orders
otherwise, all habeas corpus proceedings are to be conducted in open court. It
also seeks to provide that all orders and decisions made in respect of those
proceedings conducted in camera, and the reasons for such orders and decisions,
have to be announced in open court. This amendment is in line with our policy
of open justice.
Thirdly, the amendment seeks to provide in section 22A(5) that the judge
to whom an application for a writ of habeas corpus is made may either issue the
writ forthwith or arrange for the person having the custody of the detainee to be
notified of the application and be given an opportunity to justify to the Court the
lawfulness of the detention. This serves to incorporate the current arrangement
LEGISLATIVE COUNCIL — 25 June 1997
848
under Order 54, Rule 2 of the Rules of the Supreme Court in proposed section
22A(5). I put forward this amendment in response to the Bills Committee's
suggestion.
Fourthly, the amendment seeks to delete the provision in the originally
proposed section 22A(9) on the making of consequential orders. This
amendment is also in response to the Bills Committee's suggestion.
Fifthly, the amendment seeks to rewrite proposed section 22A(10). The
Administration proposes that the new section 22A(10) should expressly provide
that if a person having the custody of another persons fails to satisfy the Court
that the detention is lawful, the Court must order the immediate release of the
person. In addition, the amendment seeks to provide in proposed section
22A(12) that a released person should not be redetained on the same or a similar
ground unless there is a material change in the circumstances justifying
detention. The proposed formulation of these two sections has been agreed by
the Bills Committee.
Mr Chairman, as I said when moving the resumption of the Second
Reading debate, in order to address the Bills Committee's concern on civil liberty
as far as practically possible, we propose to delete in proposed section 22A(11)
the reference to the High Court and to limit the Director's authority so that if a
writ of habeas corpus has been issued in respect of a detained person, he may not
be removed until the writ is discharged or the proceedings are concluded. The
proposal gives the Court the opportunity to assess the strength of the applicant's
case and to decide whether a stay of the removal of the detained person is
warranted. This would prevent unmeritorious claims being successful. And
perhaps if I can reemphasize the point, I will repeat the practice, the undertaking
that I gave in the Second Reading debate, about notice to solicitors when it has
been instructed once an application has been made.
Mr Chairman, I beg to move.
Proposed amendment
Clause 3 (see Annex XIV)
9.10 pm
LEGISLATIVE COUNCIL — 25 June 1997
849
THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.
MR ALBERT HO (in Cantonese): Mr Deputy, with respect to the point raised
by the Honourable IP Kwok-him on possible abuses of writs of habeas corpus, I
wish to make a brief reply and put in on record.
Mr Deputy, just now, Mr IP Kwok-him expressed the worry that the
problem of illegal immigrants might become more serious. According to him, a
legal provision forbidding the removal of an illegal immigrant who has
succeeded in applying for a writ of habeas corpus and the assurance of the
Attorney General will probably induce some people to abuse the proceedings.
I must emphasize, first, that however serious the problem of illegal
immigrants may be, we should always tackle it through lawful channels, and we
must never resort to unlawful arrest and unlawful detention as solutions. We
maintain that human rights are extremely important, and for this reason, we must
never deprive any person of his right to apply for a writ of habeas corpus on the
ground that he is an illegal immigrant. This may not be the intention of Mr IP
Kwok-him. However, the point remains that whoever the person is, if he is
unlawfully detained, or if he is unlawfully deprived of his freedom of the person,
he should have the right to apply for a writ of habeas corpus and to be protected.
We must not point to the problem of illegal immigrants and then say that we
should thus be worried about possible abuses of the habeas corpus proceedings.
What we should emphasize is the rule of law. And, the essence of the rule of
law is that all should be equal before the law regardless of who they are.
Actually, it will not take too long to apply for a writ of habeas corpus.
What I mean is that the time required will not be very long. What is more, not
everyone will have the means to hire a lawyer to lodge an application. And,
more importantly, not everyone will succeed in applying for legal aid. In view
of these considerations, I would say that all worries about possible abuses are in
fact unnecessary. And, in any case, such worries should never give the
Government nor the Immigration Department any excuse to arrest and remove
any person arbitrarily and unlawfully. As pointed out by the Honourable Martin
LEE just now, it is possible that the Government may arrest some people whom it
thinks are illegal immigrants but in fact they are not. These people may have
proof to show that they have the right of abode in Hong Kong. Without the
LEGISLATIVE COUNCIL — 25 June 1997
850
protection under a writ of habeas corpus, they may be removed from Hong Kong
and thus lose their right of abode all together.
My only purpose is to put this particular point on record. I am, of course,
very happy that Mr IP Kwok-him has finally agreed to support these
amendments. I hope Mr IP kwok-him will reconsider this concept very
thoroughly.
Question on the amendment put and agreed to.
Question on clause 3, as amended, put and agreed to.
Clauses 4, 5 and 6
ATTORNEY GENERAL: Mr Deputy, I move that the clauses specified be
amended as set out in the paper circularized to Members.
Amendments to these clauses aim to provide a Chinese version of them.
Proposed amendments
Clause 4 (see Annex XIV)
Clause 5 (see Annex XIV)
Clause 6 (see Annex XIV)
Question on the amendments put and agreed to.
Question on clauses 4, 5 and 6, as amended, put and agreed to.
New clause 5A
Amendment of Schedule (Writs)
New clause 5B
Amendment of Rules of the Supreme
Court (Forms)
LEGISLATIVE COUNCIL — 25 June 1997
851
Clauses read the First time and ordered to be set down for Second Reading
pursuant to Standing Order 46(6).
ATTORNEY GENERAL: Mr Deputy, I move that new clauses 5A and 5B as
set out in the paper circularized to Members be read the Second time.
These new clauses seek to delete two obsolete writs of habeas corpus and
repeal their two obsolete forms within the Rules of the Supreme Court.
Question on the Second Reading of the clause proposed, put and agreed to.
Clause read the Second time.
ATTORNEY GENERAL: Mr Deputy, I move that new clauses 5A and 5B be
added to the Bill.
Proposed additions
New clause 5A (see Annex XIV)
New clause 5B (see Annex XIV)
9.17 pm
THE PRESIDENT resumed the Chair.
Question on the addition of the new clauses proposed, put and agreed to.
Long title
ATTORNEY GENERAL: Mr Chairman, I move that the long title be amended
as set out in the paper circularized to Members.
852
LEGISLATIVE COUNCIL — 25 June 1997
Proposed amendment
Long title (see Annex XIV)
Question on the amendment put and agreed to.
Question on Long title, as amended, put and agreed to.
Council then resumed.
Third Reading of Bill
THE ATTORNEY GENERAL reported that the
SUPREME COURT (AMENDMENT) BILL 1997
had passed through Committee with amendments. He moved the Third Reading
of the Bill.
Question on the Third Reading of the Bill proposed, put and agreed to.
Bill read the Third time and passed.
Resumption of Second Reading Debate on Bill
VETERINARY SURGEONS REGISTRATION BILL
Resumption of debate on Second Reading which was moved on 15 May 1996
MR LAW CHI-KWONG (in Cantonese): Mr President, in my capacity as the
Chairman of the Bills Committee on the Veterinary Surgeons Registration Bill, I
would like to report to this Council on the deliberations of the Bills Committee,
and I would also like to thank all those organizations which submitted
representations on the Bill, in particular those organizations which actually met
with the Bills Committee to explain their views.
The Bill establishes a system for registration of veterinary surgeons and
provides for the disciplining of registered veterinary surgeons who do not
LEGISLATIVE COUNCIL — 25 June 1997
853
maintain reasonable professional standards. The Bill also protects the use of the
expression "registered veterinary surgeons" or "註 冊 獸 醫 ".
The Bills Committee supports the enactment of an ordinance to regulate
the business of veterinary practice in Hong Kong because this is in line with the
welfare of animals and the interests of the veterinary profession and consumers in
general. However, in the course of its deliberations, members of the Bills
Committee noticed several problems which the Government should make
attempts to tackle.
The Bill stipulates that, for the purposes of registration, the Veterinary
Surgeons Board (the Board) shall be the one and only authority responsible for
setting approved qualification standards, verifying the qualifications of persons
applying for registration, and determining and specifying how qualifications
from other parts of the world can be recognized. Members of the Bills
Committee are of the view that if the Bill does not specify the required
professional qualifications for veterinary surgeons, much will have to be done to
convince the public that the Board will really set down qualification standards
which are in line with the welfare of animals and the best interests of the
community. The Administration explains that only professionally trained,
experienced and highly reputable people who can thus act in the best interests of
Hong Kong and command the trust of their fellow professionals will be
appointed to the Board. And, all these people will be appointed in their
personal capacity, not as the representatives of any particular organizations.
Under the Bill, the Board shall consist of a chairman, three persons who
are medical practitioners or pharmacists or persons who can represent the
interests of persons who utilize veterinary services, and six persons who are
veterinary surgeons. The Bills Committee does not agree to this allocation of
membership within the Board, and advises that for the sake of achieving
uniformity with similar provisions in the registration ordinances of other
professions, at least 20% of the members of the Board should have a
non-veterinary background. In particular, the Bills Committee advises that of
the three non-veterinary members of the Board, one must be a medical
practitioner or a pharmacist, and the remaining two should be users of veterinary
services or consumers. The Administration has accepted the advice of the Bills
Committee and will accordingly move a Committee stage amendment.
854
LEGISLATIVE COUNCIL — 25 June 1997
The Bill does not specify that the six veterinary surgeons appointed to the
Board must "register" as veterinary surgeons at an appropriate time, because it is
the view of the Administration that registration of veterinary surgeons can start
only after the Bill has been enacted. However, the Bills Committee maintains
that it is necessary to incorporate such a provision at the very beginning, so as to
make sure that the six veterinary surgeons on the Board shall become registered
veterinary surgeons as soon as the initial work on registration is completed.
The Administration has accepted the advice of the Bills Committee and has
proposed to move a Committee stage amendment to specify a transitional
arrangement for the establishment of the Board. Under such an arrangement,
the first batch of Board members shall be appointed for a term of 12 months, or
terms not exceeding in the aggregate 18 months, and their appointment to the
Board shall not be further renewed unless by then they are registered. The Bills
Committee has accepted this proposed Committee stage amendment.
The Bills Committee notes that the background of the initial members of
the Board will produce a direct bearing on their decisions relating to approved
qualification standards. The Bills Committee considers it very important that
veterinary surgeons holding Commonwealth qualifications and those who hold
non-Commonwealth qualifications should both be equally represented on the
Board. Consequently, the Bills Committee advises that during the initial period
following the establishment of the Board, no less than three veterinary surgeons
holding non-Commonwealth qualifications should be appointed.
The
Administration has agreed to implement the advice of the Bills Committee, and I
understand that the speech to be delivered by the Secretary for Economic
Services today will include the Administration's commitment to such an
arrangement.
Besides, following the completion of the Bills Committee's deliberations,
Dr the Honourable HUANG Chen-ya has decided to move an amendment in his
own name. I understand that after some negotiations, members of the Bills
Committee have agreed to support Dr HUANG's amendment. I shall leave the
details of the amendment to Dr HUANG himself.
Mr President, I hereby call upon this Council to support the Bill and the
Committee stage amendment to be moved by the Secretary for Economic
Services.
Thank you, Mr President.
LEGISLATIVE COUNCIL — 25 June 1997
855
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President,
the Bills Committee chaired by the Honourable LAW Chi-kwong has studied the
Veterinary Surgeons Registration Bill in detail and I would like to extend my
thanks to its members here.
The Bill seeks to regulate the practice of veterinary surgeons in Hong
Kong and establish statutory registration for veterinary surgeons, provide for
discipline and supervision as well as establishing a system for setting up a
professional standard. The Bill also proposes to set up a Veterinary Surgeons
Board, the main functions of which include establishing and maintaining a list of
registered veterinary surgeons, setting the qualification standards for registration,
accepting or rejecting applications for registration as a registered veterinary
surgeon, making rules for the professional conduct and discipline of registered
veterinary surgeons, as well as dealing with disciplinary offences.
We propose that the Board should comprise a chairman and nine other
persons. We also share with the recommendation of the Bills Committee that
the composition of the Veterinary Surgeons Board should be spelt out in more
concrete terms. In addition to the chairman, the nine members of the Board
should include one medical practitioner or pharmacist, two persons who
represent the interests of persons who utilize veterinary services and six
registered veterinary surgeons. We also agree that, when the Board is initially
set up, at least three out of the six appointed veterinary surgeons should be
non-Commonwealth qualified veterinary surgeons. To further ensure that the
membership of the Board will be able to represent veterinary professions all over
the world and give fair comments in respect of registration qualifications, the
Administration will also consider appointing an overseas-based veterinary
surgeon among those with non-Commonwealth qualifications.
We share the views of the Bills Committee that it is necessary to introduce
a transitional provision to the effect that, as a transitional arrangement, there is
no need for the veterinary surgeons appointed to be registered veterinary
surgeons when the Board is initially set up until the procedures for setting up
registration qualifications and standards as well as establishing the register are
completed. We propose that, when the Board is initially set up, each appointed
veterinary surgeon, unless he is already a registered veterinary surgeon, will only
be allowed to serve on the Board for an aggregate period of not more than 18
months.
856
LEGISLATIVE COUNCIL — 25 June 1997
Some people expressed concerns that the veterinary profession would still
remain closed during the transition period. This means that under the
Antibiotics Ordinance and the Pharmacy and Poisons Ordinance, only members
of the Royal College of Veterinary Surgeons of the United Kingdom are allowed
to prescribe antibiotics, anaesthetic and other controlled drugs. We hold the
view that prior to the setting up of a new registration system, the existing
arrangement should remain unchanged during the transition period. However,
we will do our best to shorten the transition period. Our goal is that the Board
should, by the end of this year, complete the procedures for formulating the
registration qualifications, inviting relevant people to submit registration
applications as well as issuing registration certificates and practising certificates.
We estimate that the first batch of veterinary surgeons allowed to be registered
under the new ordinance will include people from both the Commonwealth and
non-Commonwealth regions.
Thank you, Mr President.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order
43(1).
Committee stage of Bill
Council went into Committee.
VETERINARY SURGEONS REGISTRATION BILL
Clauses 2, 4 to 11, 13 to 16, 19 to 23, 25 to 34 and 42 were agreed to.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, since the Standing
Orders stipulate that any proposed new clause should be considered after the
clauses of a bill have been disposed of, may I seek your consent to move under
LEGISLATIVE COUNCIL — 25 June 1997
857
Standing Order 68 that Standing Order 46(5) be suspended in order that my
proposed new clause 29B may be considered ahead of the other clauses of the
Bill.
CHAIRMAN (in Cantonese): As only the President may give consent for a
motion to be moved, without notice, to suspend Standing Orders, your request
cannot be dealt with in Committee. I therefore order that Council shall now
resume.
Council then resumed.
DR HUANG CHEN-YA (in Cantonese): Mr President, I move that Standing
Order 46(5) be suspended to enable the Committee of the whole Council to
consider my proposed new clause 29B ahead of the other clauses of the Bill.
The proposed new clause is related to clause 1 of the Bill.
Question on the motion proposed, put and agreed to.
Council went into Committee.
New clause 29B
Transitional
Clause read the First time and ordered to be set down for Second Reading
pursuant to Standing Order 46(6).
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, I move the Second
Reading of clause 29B as set out in the paper circularized to Members.
I now move an amendment to the effect that during the transitional period,
anyone, in addition to members of the Royal College of Veterinary Surgeons of
Great Britain (RCVS), who holds a certificate issued by a veterinary institution
upon completion of a five-year degree course can be regarded as a veterinary
surgeon and permitted to use substances controlled under the Antibiotics
Ordinance and the Pharmacy and Poisons Ordinance. Why is this necessary?
858
LEGISLATIVE COUNCIL — 25 June 1997
First of all, according to the transitional provisions in his proposed amendment,
the Secretary for Economic Services can appoint non-registered veterinary
surgeons to be members of the first Veterinary Surgeons Board. The Secretary
for Economic Services has also pledged that among the six persons to be
appointed, three will be non-members of the RCVS. However, the immediate
question is: Who is a veterinary surgeon? According to the existing Antibiotics
Ordinance and the Pharmacy and Poisons Ordinance, only members of the RCVS
are recognized as veterinary surgeons. In other words, veterinary institution
graduates who are not members of the RCVS are not recognized as veterinary
surgeons and will not be qualified for the appointment by the Secretary. Hence
the promise made by the Secretary today can never be materialized unless my
proposed amendment is passed. The Bill does not provide a definition for a
veterinary surgeon. Even if the Bill is enacted, it only states that there will be
six veterinary surgeons on the Board. Under this situation, if the Secretary
today promises us that he will appoint persons who are not lawfully admitted as
veterinary surgeons to join the Board as representatives to the profession, I am
afraid we will subject ourselves to legal challenges. Litigation will possibly
delay the completion of the whole veterinary surgeons registration process.
This is not only unfair to the graduates of the non-Commonwealth and
non-European Union veterinary colleges, but also unreasonable to the welfare of
the animals in Hong Kong.
It is the common concern of the members of the Bills Committee that the
views of the veterinary professional cannot be fully reflected if all veterinary
surgeons on the Boards are members of the RCVS only. However, the
Administration does not want to have its promise laid down in black and white,
and therefore a verbal undertaking will be made by the Secretary. In case my
proposed amendment is negatived and the Secretary's verbal promise is held null
and void by court, the good intentions and efforts of the Bills Committee will be
of no avail.
Secondly, will my proposed amendment lead to a lowering of the requisite
professional standard? The name of the RCVS indeed sounds pleasant to the
ears, but in fact, the qualification granted by the institution is not of a
post-graduate level. Veterinary graduates of European Union, same as those
from veterinary institutions all over the United Kingdom, Australia, New
Zealand, South Africa and Canada, are entitled to the membership without
having to sit for any further examinations. In other words, under the present
legislation, if you do not mention the noble and adorable name of RCVS,
LEGISLATIVE COUNCIL — 25 June 1997
859
veterinary surgeons are actually referring to the degree holders of the
Commonwealth and European Union veterinary institutions while the veterinary
diploma holders from all other countries are not included. The objective of my
proposed amendment is to accept the degree holders from all
non-Commonwealth and non-European Union veterinary institutions as
veterinary surgeons during the transitional period. However, I am not trying to
lower the basic training requirements because the qualification required is still a
degree from a veterinary college. What I am trying to do is to enlarge the
region of academic recognition with a view to eliminating the discrimination and
unfairness arising from geographical or national boundaries. My proposed
amendment does not pre-suppose any training from any place being superior or
inferior to elsewhere. But there is an implicit understanding that my
amendment will remove discrimination faced by those graduated from the
veterinary colleges in Taiwan and Mainland China. So far the Government is
unable to prove that veterinary institutions in the United Kingdom, European
Union or the Commonwealth enjoy a higher educational standing than those in
Mainland or Taiwan. Apparently, the extant requirement is discriminatory and
unfair. It is never a matter of academic standard.
Thirdly, my amendment will not pose any restriction on the decisions made
by the future Board. In fact, the Board can stipulate higher academic
requirements for veterinary surgeons in Hong Kong, even higher than a degree
awarded by a veterinary institution upon completion of a five-year degree course
as I have proposed. I do hope that the veterinary surgeons' standard can be
upgraded. Furthermore, I do not believe the Board will come up with
qualification requirements lower than those I propose. So if my amendment is
passed today, it would become the minimum standard laid down by the
Legislative Council. Anyone who has attained this academic standard will be
admitted as a veterinary surgeons regardless of the place he received training.
My amendment will strike a fair balance to remedy the situation that graduates
from certain regions will enjoy a higher status and registration is guaranteed
while graduates from the rest of the world will be excluded, no matter how
impressive their standards are. After the Board has been set up, anyone who
claims to be a veterinary surgeons has to go through rigorous assessment or
examination before registration is allowed. Through my amendment, everybody
will have his qualification assessed under the same criteria. Is it not more
equitable to all?
860
LEGISLATIVE COUNCIL — 25 June 1997
Fourthly, Mr Chairman, after I have proposed the amendment, some
people have kept telling me that the continuous deterioration of the standard of
veterinary practice in Hong Kong is equivalent to cruelty to animals. What is
our current situation like? As a matter of fact, almost anyone can perform
operations for animals because there is basically no regulations to control it.
This has nothing to do with my proposed amendment today and my amendment
is not concerned with any surgical issue. At present, the Agricultural and
Fisheries Department can issue licences to farmers or any person to facilitate the
purchase of antibiotics, substances and poisons. They do not have to satisfy any
academic requirement in order to be granted a licence. If there is a problem of
abuse, the problem has already been with us. Now the Government says that
admitting degree holders from other veterinary institutions to be registered as
veterinary surgeons can impose a potential danger because allowing people who
have received no formal training to use antibiotics, substances and poisons can
bring pains and cruelty to animals. Where does the Government derive such
justification from? Farmers are allowed to use antibiotics, substances and
poisons. Have they received any veterinary training? Is it a kind of cruelty to
animals since they are permitted to use those drugs? Why are you allowing an
ordinary farmer to have the right of access to those drugs on the one hand and
deny veterinary graduates from Mainland China or Taiwan the right of access on
the other? The Government even brings out the excuse of potential danger. If
this is not discrimination, what else is?
I hope Members can support my amendment because the current definition
of a qualified veterinary surgeon is after all discriminatory and exclusive. The
Bills Committee is worried that the discriminatory and unfair phenomenon will
persist. As I have said, our worries are well justified. I urge Members to
support my proposed amendment. Otherwise, the unfairness and discrimination
will never be removed, even if the Board is subsequently established.
MR MICHAEL HO (in Cantonese): Mr Chairman, I have just learnt that the
Government will propose an administrative arrangement. I would like to move
a short suspension of the sitting so that we, together with Dr the Honourable
HUANG Chen-ya, can have a brief discussion with the government officials.
CHAIRMAN (in Cantonese): Would it be more appropriate for Dr HUANG
Chen-ya to propose this question? Furthermore, you cannot move a motion to
LEGISLATIVE COUNCIL — 25 June 1997
861
suspend the sitting, Mr Michael HO. Rather, you should make a request for
that. If you move a motion to that effect, I will have to grant you an exemption
of notice. In fact, I have received a note asking for a suspension of the sitting
and I am prepared to give you a five-minute break to allow discussion over the
matter. Should I now propose the Second reading of the new clause 29B? Or,
if I suspend the sitting to allow negotiation on Dr HUANG Cehn-ya's proposal,
and when an agreement is reached, even the Second Reading of the new clause
29B will become unnecessary?
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, if the Government has
sincerity to make some proposal, I am, of course, ready to listen to their views
before ......
9.41 pm
CHAIRMAN (in Cantonese): Since you have moved the Second Reading
motion, you cannot withdraw it if I have proposed the question on the motion in
order for the Government to make response, unless there is objection. I now
suspend the sitting for five minutes.
Committee suspended.
9.59 pm
Committee then resumed.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, the representatives of
the Government would like to speak first. Can I listen to their views before I
decide whether we should proceed?
CHAIRMAN: It is a highly irregular event. You are not moving it. Since I
have not proposed the question on the motion, we just keep it.
862
LEGISLATIVE COUNCIL — 25 June 1997
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, if I am not allowed to
listen to the Government first, does it mean that I have to move my proposed
amendment now? Can I move my amendment after the Government has
clarified its stance? If I am not allowed to move my motion after the
Government has spoken ......
CHAIRMAN (in Cantonese): After you have moved the Second Reading of the
new clause 29B, I have not yet proposed the question to Members. Now we are
in Committee. When Mr Michael HO moved a suspension of the sitting for five
minutes, I said that this question should be moved by you, Dr HUANG, so that
you can discuss the matter with the Government. So, it is up to you now, Dr
HUANG. It is not up to the Government. I have suspended the sitting as you
wished. If you wish to proceed, please say so and I will propose the question.
Otherwise, I will keep the Second Reading of your proposed new clause 29B.
DR YEUNG SUM (in Cantonese): Mr Chairman, I hope you can exercise your
discretion because during the break, Dr HUANG Chen-ya and representatives of
the Government reached some kind of understanding. I hope Mr Chairman can
exercise your discretion so that the Government can present their new
arrangement to us and have it put on record. I believe Dr HUANG would then
withdraw his proposed amendment. But it is still my hope that you can exercise
your discretion, Mr Chairman, because you did allow a break for their discussion.
Thank you, Mr Chairman.
CHAIRMAN (in Cantonese): It is all right for me to grant a break. To invite
the Government to speak, there must be a motion first. I now suggest that I
propose a question on the motion and then the government official can speak.
After that, Dr HUANG can make a request for the withdrawal of his motion. If
there is no dissenting voice, he can withdraw his motion.
DR LEONG CHE-HUNG: Mr Chairman, I apologise just now for not speaking
at the Second Reading debate simply because I was trying to negotiate with the
Government on the new clause that Dr HUANG would like to propose.
LEGISLATIVE COUNCIL — 25 June 1997
863
Now, I am a little bit sceptical about Dr HUANG's amendment, but should
the Administration be willing to make a statement of alteration then hopefully
that Dr HUANG would withdraw his amendment.
Mr Chairman, currently only those vets approved by the Director of Health
are allowed to use antibiotics and poisons while others who might be able to look
after animals are not allowed to do so. In other words, currently there might be
people who act as vets, not registered as vets, they look after animals but they
cannot use antibiotics or poison.
What Dr HUANG aims to move in his amendment is to allow any person
who holds a five year's degree in a course of vet science college to have the right
to use antibiotics and poison until a proper system is set up. Now, while this
may be a good thing for the so-called bona fide vets who are not yet registered
and this will give them the fair chance, yet it also opens the floodgates for it is
extremely difficult in my mind to authenticate certificates, and furthermore, the
standards of the different so-called vet colleges around the world are not
monitored by Hong Kong and we do not know their standards whatsoever. In
short, the right to use antibiotics and poison might be inadvertently given to
possibly unqualified persons and therefore become an abuse.
I would therefore hope that if a fair situation could be given to the
so-called bona fide vet surgeons who are not registerable, the Government could
take perhaps two steps. Obviously the first step, which is perhaps the most
legal way or legalistic way, is to quickly establish a registering system and a
board to minimize the so-called unfair period for these people to as short as
possible.
The second way is, as the Administration is trying to consider, an
administrative way. In other words, anybody who claims that they are vets, who
can produce a certificate to say they are a vet, are firstly enrolled by the
Administration. After their enrolment the Administration can actually vet the
certificate, vet, perhaps even ask those applicants to give proof of the fact that
such a vet college exists around the world, to receive letters from, for example,
those colleges to prove the fact that there are really qualified people in those
places. And with that as a basis, then the Administration can use an
administrative direction to give them a temporary licence, as it were, to use drugs
like antibiotics and poison. But with the understanding, and I must put that as a
very strong proviso, with the understanding that on the day registration is
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LEGISLATIVE COUNCIL — 25 June 1997
established that temporary approval use of anybody would immediately expire.
I thought that could well be one of the things that we can perhaps at this late hour
to ensure that we have a fair system to all and yet minimise the possible abuse.
Even that, Mr Chairman, I still have my doubts but I would be willing to accept
that if the Administration make that sort of statement. Thank you.
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr Chairman,
should the amendment moved by Dr the Honourable HUANG Chen-ya be
passed, we will be extremely concerned. This is because this amendment
involves not only the qualifications of veterinary surgeons, but also issues
pertaining to controlled drugs, and these drugs include antibiotics, anaesthetic,
drugs and so on. By virtue of this amendment, any person who has completed a
five-year degree course in any veterinary institutions will be allowed to acquire
and use these types of controlled drugs. What this amendment refers to are any
veterinary institutions and no regulation whatsoever is imposed in respect of the
level of these institutions or relevant courses and training. Neither are there any
rules provided for professional conduct and discipline. As a result, no
guarantee is given in respect of the professional knowledge and conduct of the
people concerned. Furthermore, as the proposal qualification is very general, it
will be very difficult to detect falsely reported academic qualifications. As a
result, it will easily lead to the problem of having some people "fishing in
troubled waters".
This amendment will undoubtedly create an enormous loophole in the
aspect of supervising antibiotics, anaesthetic and other controlled drugs. What
worry us most are not those people who have received appropriate veterinary
training. Instead, we are worried that some unscrupulous people might take
advantage of this loophole to acquire the abovementioned controlled drugs for
unlawful purposes other than treating animals. We believe Members do not
want to see such things happen. Neither should we provide opportunities to
allow these types of controlled drugs to fall into the hands of these people as the
consequences will be terribly serious. Even if the drugs are used for treating
animals, the appliance of these drugs to animals by people not properly trained
will very likely undermine the well-being of animals and bring unnecessary pains
to them.
One of the main functions of the Veterinary Surgeons Board is to set the
qualification standards for registration as a registered veterinary surgeon in Hong
LEGISLATIVE COUNCIL — 25 June 1997
865
Kong. The Administration and the Bills Committee have been trying very hard
to avoid this function from being replaced. This task should be carried out by
the Board as members of the Board will be able to assess in detail the level of
training received by veterinary surgeons world-wide and collect all relevant
information before setting the qualification standards for local veterinary
surgeons in future. This is very important indeed. I have mentioned earlier
that when the Board is initially set up, we will appoint at least three
non-Commonwealth veterinary surgeons out of the six appointed veterinary
surgeons so as to give the Board a proper balance. Just now, Dr HUANG
expressed that the Secretary for Economic Services could not appoint
non-Commonwealth veterinary surgeons as members of the newly established
Board. I cannot share this view at all. Would Members please be assured that
clause 29A amendment will give the Secretary this power.
We did discuss this issue during the adjournment earlier, and the
Government understands very well the concerns of Members in this respect.
We would like to undertake that if Dr HUANG Chen-ya rescinds his amendment,
we will take the following administrative arrangement: during the transition
period, the Government will certify those who are currently in Hong Kong and
who have attended a five-year recognized veterinary course and register for them
by means of administrative measures to enable them to acquire and use relevant
drugs. This registration exercise will in no way affect the qualifications of these
people for applying for registration in accordance with the criteria set by the
Veterinary Surgeons Board in future. In other words, if they do not meet the
requirements laid down by the Board, they will be barred from continuing to use
the identity. Furthermore, this arrangement will be abolished immediately upon
the setting up of the register for veterinary surgeons. I hope that Dr HUANG
will agree with this arrangement and rescind his amendment. Thank you, Mr
Chairman.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, there are some
ambiguous terms in the speech of the Government. If that is what the
Government can say, I find it unsatisfactory.
CHAIRMAN: I do not regard Dr HUANG Chun-ya's speech as the final reply.
In Committee, you are entitled to speak for a second time, a third time, and the
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LEGISLATIVE COUNCIL — 25 June 1997
Secretary for Economic Services can respond to that, but this is the first and the
last exchange. I do not wish to see this Council Chamber turn into a lobby hall.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, I would like to make
myself clear on a number of points. First, the Administration just mentioned the
so-called recognized institutions. I am not sure what kind of institutions the
Government is referring to. I hope the Administration can clarify on this.
Second, it is concerned with the use of antibiotics, medicine and drugs.
Under the existing legislation, the Agriculture and Fisheries Department can
issue licences to any persons, including farmers or non-degree holders, to
authorize them to use these drugs. But the authorities concerned do not regard
them as veterinary surgeons. If the Government says that licences are issued to
them for the use of these drugs, but they are basically not veterinary surgeons, the
question of striking a proper balance as I said earlier has not been addressed.
The balance remains tilted towards the graduates from Commonwealth
institutions. For the others, they are not veterinary surgeons anyway. They are
just licensees and no difference to farmers. This is hardly acceptable.
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Thank you, Mr
Chairman.
Perhaps let me clarify that the so-called recognized courses refer to courses
deemed to be appropriate by the Agriculture and Fisheries Department. They
are not unrealistic or sub-standard courses.
In addition, all these registered people will be called veterinary surgeons.
Thirdly, what drugs refer to are those drugs essential for giving treatment.
I hope these three points of clarification can satisfy Dr HUANG.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, if I got it correctly, the
Secretary for Economic Services was saying that administrative measure would
be taken so that licences could be issued to these people. However, they would
LEGISLATIVE COUNCIL — 25 June 1997
867
not be regarded as veterinary surgeons. This, in fact, differs from the definition
of veterinary surgeons under the extant Antibiotics Ordinance and the Pharmacy
and Poisons Ordinance. If that is the case, I would rather see them being treated
as farmers or ordinary people to whom licences are issued by the Agriculture and
Fisheries Department. As I have pointed out, such arrangement is not
acceptable. If the Administration intends to put this in practice, I would
proceed with my amendment because this shows that it still discriminates against
these people.
I would like to point out that under the present legislation, when a
veterinary surgeon wants to import some controlled drugs, he has to submit an
application together with documents showing his academic qualifications. The
Department of Health and the Agriculture and Fisheries Department will then vet
all documents before authorizing the import of these drugs. If import of
dangerous drugs is applied for, it will even need the authorization of the Director
of Health before a series of formalities can proceed. For drugs saleable in Hong
Kong, these must be procured through the distributors. Moreover, the purchaser
has to submit information about the permanent location of the clinic concerned
and supported by a registered veterinary surgeon's prescriptions before the drugs
can be procured. In other words, if the Department of Health and the
Agriculture and Fisheries Department have any doubt about the authenticity of
the documents, they can withhold the drugs, or hold off the authorization, or even
reject the application. It is extremely unlikely that once my amendment is
passed, there will be no more control as the Secretary said, unless the
Government accepts its incompetent in enforcing the laws due to its failure to
exercise any monitoring over the Agriculture and Fisheries Department or that
members of the Royal College of Veterinary Surgeons of Great Britain (MRVC)
have been accepted indiscriminately, without having their qualifications verified.
If that is not the case, the effect of my amendment is just to put more people
under its control. As a regulatory mechanism is already in place, why does the
Government find it difficult to exercise its control when more people come under
it? If a person comes to Hong Kong and claims to be a graduate from a certain
British college, would the Adminstration accept his qualification as claimed?
The Administration has also written to me, saying that if my amendment is
passed, some people who can practise as veterinary surgeons during the
transitional period may be unable to do so in future because they may fail to meet
the required standards. Dr the Honourable LEONG Che-hung is also worried
that these people may air grievances and there will be difficulty in enforcing the
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LEGISLATIVE COUNCIL — 25 June 1997
legislation. This is spelt out in the letter of the Adminstration and the China
(Hong Kong) Veterinary Association shares the same view. However, if no one
in Hong Kong is regarded as a veterinary surgeon, the Government's concern is
justified. If that is the case, we should not lay down the qualification
requirements of veterinary surgeons by legislation. But in reality, this is not the
case. At present, only graduates from the mainland China and Taiwan are not
regarded as veterinary surgeons while graduates from the Commonwealth
countries or European Union are recognized. The Administration added that if
graduates from China and Taiwan were allowed to register as veterinary surgeons
in Hong Kong, it would be very difficult to revoke their licences in future and
litigation may be resulted. It concluded that they should not be allowed to
register in Hong Kong. Is the Administration telling us that when the Board is
established in the future, all graduates from the Commonwealth countries or
European Union or MRVC should be accepted and recognized as veterinary
surgeons and we cannot revoke the registration of any one of them in Hong
Kong? Is that fair? Does this mean that the so-called veterinary surgeons
registration system in Hong Kong serves to protect the monopoly of graduates
from the Commonwealth or European Union colleges? I think such logic is
wrong. What do you label it if this is not discrimination or unfairness?
The Administration has just indicated its willingness to make
administrative arrangement, which I appreciate very much. I also understand
that none of us would like to have the definition widened during this period. I
have just mentioned that, currently, we have only very few veterinary surgeons.
In fact, I want to highlight, as I did at the outset, that we have to use the same
criteria to set out the qualification requirements of veterinary surgeons. We
should not say in the first place that graduates from the Commonwealth
veterinary institutions are veterinary surgeons while graduates from institutions
in the mainland China or Taiwan are no difference to farmers and ordinary
citizens holding licences issued by the Agriculture and Fisheries Department. If
the Government really comes up with such a decision, the following
consequences are possible. First, if one day the latter are appointed to sit on the
Board, the authorities concerned may be subject to legal challenges. Second,
problems may arise when registration qualifications are considered because we
have already categorized them into veterinary surgeons and non-veterinary
surgeons. People who have been defined as non-veterinary surgeons will never
be veterinary surgeons. So, their status quo will remain unchanged unless they
are admitted as veterinary surgeons through examinations or other certifying
procedures. As for the other veterinary surgeons, they are not required to do so.
LEGISLATIVE COUNCIL — 25 June 1997
869
This is unacceptable to me. If, under the administrative arrangement, degree
holders who have received five years of training in accredited veterinary
institutions are granted the status of veterinary surgeons, the same as that of
MRCVS, I will withdraw my amendment. If not, the Administration is only
giving us a promise while in reality, it maintains its unfair and discriminating
attitude.
CHAIRMAN: That was the final reply, Dr LEONG Che-hung.
Question on the Second Reading of the clause put.
Voice vote taken.
CHAIRMAN: Committee will now proceed to a division.
CHAIRMAN: I would like to remind Members that they are now called upon to
vote on the question that new clause 29B be read a Second time. Will Members
please register their presence by pressing the top button and then proceed to vote
by pressing one of the three buttons below?
CHAIRMAN: Before I declare the results, Members may wish to check their
votes. Are there any queries? A few short. The result will now be displayed.
Mr Martin LEE, Mr SZETO Wah, Dr HUANG Chen-ya, Miss Emily LAU, Mr
LEE Wing-tat, Mr James TO, Mr Albert HO, Mr LEUNG Yiu-chung, Mr
TSANG Kin-shing, Dr John TSE and Mr YUM Sin-ling voted for the motion.
Mr NGAI Shiu-kit, Dr LEONG Che-hung, Mr Frederick FUNG, Mr Eric LI, Dr
Philip WONG, Mr Howard YOUNG, Miss Christine LOH, Mr LEE Cheuk-yan,
Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss CHAN Yuen-han, , Mr
CHENG Yiu-tong, Mr CHEUNG Hon-chung, Mr CHOY Kan-pui, Mr David
870
LEGISLATIVE COUNCIL — 25 June 1997
CHU, Mr IP Kwok-him, Mr Ambrose LAU, Dr LAW Cheung-kwok, Mr LEE
Kai-ming, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK Ying-fan and Mr NGAN
Kam-chuen voted against the motion.
Mr Albert CHAN, Mr CHEUNG Man-kwong, Mr Michael HO, Dr YEUNG
Sum, Mr WONG Wai-yin, Mr Andrew CHENG, Dr Anthony CHEUNG, Mr
LAW Chi-kwong and Mr SIN Chung-kai abstained.
THE CHAIRMAN announced that there were 11 votes in favour of the motion
and 23 votes against it. He therefore declared that the motion was negatived.
Clause 1
CHAIRMAN (in Cantonese): As the Second Reading of Dr HUANG Chen-ya's
proposed new clause 29B has not been agreed, that by implication means that Dr
HUANG's proposed amendment to clause 1, which is related to new clause 29B,
is also not agreed.
DR LEONG CHE-HUNG: I beg your pardon, a point of clarification, Mr
Chairman. In the event that Dr the Honourable HUANGChen-ya's amendment
is already negatived, does the statement that the Administration made still holds,
or is this out of order?
CHAIRMAN: It is not for me to say. Perhaps you can seek clarification at the
Third Reading.
Clause 1 was agreed to.
Clauses 3, 12, 17, 18, 24 and 35 to 41
LEGISLATIVE COUNCIL — 25 June 1997
871
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr Chairman, I
move that the clauses specified under the Veterinary Surgeons Registration Bill
be amended in accordance with the proposal as set out in the paper circularized
to Members.
The purpose of amending clause 3 is to re-formulate the composition of
nine members, other than the chairman, of the Veterinary Surgeons Board.
After amendment, the nine members shall include one doctor or pharmacist, two
persons who represent the interests of persons who utilize veterinary services and
six registered veterinary surgeons. Consequential amendments have also been
made to clauses 17 and 18. The purpose of amending clause 35 is to make
consequential amendment to the definition of "veterinary surgeon" under section
2 of the Antibiotics Ordinance so as to make it in line with the definition of
"veterinary surgeon" under the Veterinary Surgeons Registration Bill. The
residual amendments to clause 12, 24 and 36 to 41 either aim to make the
meaning of the relevant provisions of the Bill more specific, or are needed upon
the completion of the authenticated Chinese texts of other ordinances referred to
in the Bill.
I recommend these amendments to Members of this Council.
Proposed amendments
Clause 3 (see Annex XV)
Clause 12 (see Annex XV)
Clause 17 (see Annex XV)
Clause 18 (see Annex XV)
Clause 24 (see Annex XV)
872
LEGISLATIVE COUNCIL — 25 June 1997
Clause 35 (see Annex XV)
Clause 36 (see Annex XV)
Clause 37 (see Annex XV)
Clause 38 (see Annex XV)
Clause 39 (see Annex XV)
Clause 40 (see Annex XV)
Clause 41 (see Annex XV)
DR LEONG CHE-HUNG: I only want to say a few words and I do thank you
for this, and apologize for not speaking just now; but I thought this was a
relevant time to say what I need to say about this particular Bill.
I am saying this in support of the Bill, and in support of the fact that a
board should be established as quickly as possible to establish a proper
registration system because to me a proper registration system determines a
profession, and a professional practice is of utmost importance in two aspects.
Firstly, to give the proper professional status to those who are the genuine
professionals, and more importantly, secondly, to protect the public to the best of
their interests. Furthermore, there will be certainly improvement in the quality
of veterinary service offered to Hong Kong.
Mr Chairman, while it may be said that vets may only be dealing with
animals, yet they are no different in any way to the same privilege as offered to
LEGISLATIVE COUNCIL — 25 June 1997
873
doctors and dentists in the use of drugs and operating the irradiation operators at
practice, and so on. And because of that a proper control to ensure that only
bona fide and properly qualified personnel are given such a right is very
essential.
Yet for a proper registration system to work it must be based on a few
basic principles. Firstly, registration must be based on standards, and standards
alone. Secondly, standards could only be determined by the profession, and the
profession alone. It should not be determined by the Government who should
only be giving supportive directions. It should not be determined by the public.
Nevertheless the public should be welcome to give their views.
Thirdly, in the initial phase of implementation of registration consideration
must be given to those who are already in the trade and that their livelihood
should not be jeopardized overnight because of the establishment of a
registration system.
The setting up of a Vet Surgeons Board as part of the Bill with 50% of its
members being members of the profession is, therefore, to me, a step in the right
direction and a move towards the concept and spirit of professional autonomy.
It is imperative, therefore, that the board should be set up as early as possible to
avoid some of the problems that Dr the Honourable HUANG Chen-ya has
mentioned just now, the unfairness, and we do not want the unfairness to extend
into any length of time.
This board will have to shoulder the onerous task of setting criteria for
registration. I would support that this board should consist of properly trained
professionals of both Commonwealth graduates, which Hong Kong is
accustomed to, and non-Commonwealth qualified persons who we can prove that
they are from well-respected colleges. Together they should determine a system
and a standard for Hong Kong, of Hong Kong and for Hong Kong. Yes, in the
past, it may be based on the British system, but I think in the future we must base
on a Hong Kong system and this could only be done through the cooperation
between those who are graduates from the Commonwealth and those who are
coming from outside the Commonwealth.
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LEGISLATIVE COUNCIL — 25 June 1997
This board must also develop a system to accommodate those who are in
practice prior to the passing of the law and yet do not compromise the very much
needed standard.
Now, in the course of time, and I do hope that somewhere along the line
the Administration can reply, that I think there are two areas that I would like
them to develop too. Firstly is that the six vets in the board should ultimately be
elected by the profession and not appointed by the Government. And secondly
is that a self-declaration of no conviction be a requisite of yearly registration to
practice.
I mention these two because these two will be in line with the registration
system of the different statutory boards and councils of different professions, and
we see that the Social Workers registration is moving along this line, the Nurses
and Midwives registration are moving along this line and the doctors and dentists
are definitely moving in this line. So, I do hope that, somewhere along the line,
the Administration can respond to these two issues, that they will look into this in
the course of time.
I support the amendment, thank you.
MR MOK YING-FAN (in Cantonese): Mr Chairman, I would like to express
support for the Government's amendments on behalf of the Hong Kong
Association for Democracy and People's Livelihood (ADPL). It is, of course,
mainly because we have accepted the administrative arrangement proposed by
the Secretary for Economic Services just now.
Horse racing has become more and more popular in Hong Kong, and many
people here love pets. Some people who live in a housing unit of just 200 or
300 square feet still keep a collie at home; this can aptly show Hong Kong
people's enthusiasm for keeping pets. As a result, the demand for veterinary
services have increased. Like we human beings, animals are vulnerable to the
attack of diseases.
As the cases of some other professions, there is at present no formal
registration requirements for the veterinary profession. However, I think
LEGISLATIVE COUNCIL — 25 June 1997
875
veterinary surgeons are luckier than Chinese herbalists because the Veterinary
Surgeons Registration Bill can still be scrutinized in time in the current session
of the Legislative Council, and if the Bill is passed today, veterinary surgeons
will be able to enjoy professional status. While scrutinizing the Bill, the Bills
Committee received many representations from related organizations, and the
Government also put forward many views. Of all the representations received,
some welcomed the tabling of the Bill, while some others were dissatisfied with
the Government's discrimination against veterinary surgeons not trained in
Commonwealth countries. The Bill now put before this Council has basically
resolved most of the related problems, including the one pertaining to the
composition of the Veterinary Surgeons Board. Following the endeavour of
members of the Bills Committee, the Government has changed its position and
agreed that the membership of the Board should be divided equally between
Commonwealth veterinary surgeons and non-Commonwealth veterinary
surgeons. The only area where there is still a stalemate concerns the use of
drugs and the arrangements for non-Commonwealth veterinary surgeons during
the period of transition. Specifically, this concerns how non-Commonwealth
veterinary surgeons are to be given the same right to administer those drugs
necessary for treating animals. Our dispute with the Government over this issue
dragged on until 10 pm today, when the Government finally agreed to resolve the
problem by adopting an administrative measure. I think the Government's
proposal is acceptable.
Mr Chairman, it is getting very late now. So I shall be very brief. The
reason why we support the Government's amendments is very simple: the ADPL
has always been of the view that all those professions which provide services to
the people of Hong Kong should be subject to a uniform system of registration
and supervision, similar to the one specified in the Nurses Registration
Ordinance enacted last week. We believe that this is the only way to protect the
interests and health of all members of the public; and this Bill is especially
important because it is about the protection of the health and interests of animals.
Mr Chairman, I appreciate very much the attitude adopted by the Administration
today. With the proposed administrative arrangement, I think all parties will be
satisfied. I hope Honourable Members will all support this Bill. Thank you,
Mr Chairman.
876
LEGISLATIVE COUNCIL — 25 June 1997
MR LAW CHI-KWONG (in Cantonese): Mr Chairman, when the Bills
Committee scrutinized the Veterinary Surgeons Registration Bill, I already put
forward some views, and the Adminstration has accepted them after
consideration. So I will not repeat these views here. Furthermore, when Dr
the Honourable LEONG Che-hung spoke just now, his remarks already covered
some of the points which I would have wanted to put forward myself. However,
for record purpose, I still want to express my views here. In the process of
scrutinizing the Bill, I noticed one problem, and this problem was about the
definition and qualifications of veterinary surgeons. This problem can be
resolved only after the Veterinary Surgeons Board has been set up, and it is only
natural that different organizations will have different views. So I suppose that
our work on setting down the qualifications of veterinary surgeons will still face
a lot of difficulties for a considerable period ahead.
I think there is one problem with the Bill which makes veterinary surgeons
markedly different from other professionals in terms of professional registration:
all members of the Veterinary Surgeons Board are to be appointed. I find this
rather unacceptable. However, as pointed out just now, since there are so many
uncertainties, and since many issues cannot possibly be resolved until some time
later, I have refrained from asking the Administration to introduce any
amendments with respect to this particular problem. That said, let me put it on
record that I hope that the Administration will discuss with the future Veterinary
Surgeons Board on the possibility of introducing elected elements at an
appropriate time, so that all its six members will eventually be returned by
elections. Thank you, Mr Chairman.
MR NGAN KAM-CHUEN (in Cantonese): Mr Chairman, the importance of
regulating the veterinary profession has finally been recognized. In recent
years, pet-keeping has become increasingly popular in Hong Kong, and this has
resulted in an increasing demand for veterinary services. Unfortunately, for
many years, local veterinary practitioners have never been subject to any
statutory supervision.
Currently, our law permits members of the Royal College of Veterinary
Surgeons of Great Britain (RCVS) to administer antibiotics, dangerous drugs and
poison in the course of treating animals. However, it must be noted that it is in
fact very difficult for the RCVS, which is far away in the United Kingdom, to
LEGISLATIVE COUNCIL — 25 June 1997
877
effectively monitor the professional conduct of its members in Hong Kong.
What is more serious is that since Hong Kong does not have a mechanism of its
own to enable it to vet the registration applications submitted by applicants
holding veterinary qualifications awarded by institutions in other parts of the
world, only members of the RCVS have so far been permitted to practise in Hong
Kong.
That is why we can notice a strange situation under which
non-Commonwealth veterinary graduates are barred from practising in Hong
Kong despite our increasing demand for veterinary services. This is not only a
waste of talents in our community. More importantly, this has created a huge
disparity. I agree with some of my colleagues in this Council that it is fortunate
that the Administration will move a number of Committee stage amendments
pertaining to the composition of the Veterinary Surgeons Board. We all support
and commend the amendments moved by the Government.
The Veterinary Surgeons Registration Bill will establish a registration
system for veterinary surgeons and lay down provisions on the disciplinary
penalties to be imposed on conducts in breach of the professional standards.
The Democratic Alliance for the Betterment of Hong Kong hopes that the Bill
will give equal opportunities to all veterinary graduates from different parts of
the world who want to practise in Hong Kong. Furthermore, the Bill will also
enable the Government to prosecute unqualified veterinary surgeons in an
effective manner, thus reducing the number of animals which may have to suffer
under unprofessional hands. And, the standard of public hygiene will also be
raised when infectious diseases spread by animals are thus reduced.
Mr Chairman, with these remarks, I support the Bill.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, the setting up of the
Veterinary Surgeons Board will serve to ensure the professional standard of
veterinary surgeons in Hong Kong. For years, the well-being of animals has
been ignored in Hong Kong. People without any proper licences or training
can still perform surgical operations on animals whenever they like, and cruelty
against animals in pet shops is not uncommon at all.
With the establishment of the Veterinary Surgeons Board, we will be able
to set down the qualifications which a person has to obtain before he can practise
as a veterinary surgeon. In that way, those who are simply not qualified and
who have never received any relevant training will be barred from claiming
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LEGISLATIVE COUNCIL — 25 June 1997
themselves to be veterinary surgeons and from inflicting suffering on animals.
When viewed from this perspective, the setting up of the Board should be
considered as some kind of progress. We naturally hope that the professional
standard of veterinary surgeons in Hong Kong can be enhanced following the
passage of the Bill, but while seeking to raise the professional standard of
veterinary surgeons, we must at the same time make sure that the profession will
not be monoplized in Hong Kong by some people in future. This means the
avoidance of any unfair situation similar to the discrimination and unfair
situations which I described a moment ago.
Unfortunately, my amendment to this effect was negatived by Honourable
Members just now. Since this amendment was not passed, it will be impossible
for us to make sure that the qualifications set down for veterinary surgeons in
future will really be fair and impartial. That being the case, there is indeed a
possibility that only veterinary graduates from the Commonwealth and the
European Union will be allowed to continue their practice in Hong Kong. And,
although some of these graduates may well be a complete mess as veterinary
surgeons, they will all be able to work as such in Hong Kong for as long as they
are members of the Royal College of Veterinary Surgeons of Great Britain.
CHAIRMAN: Dr HUANG, according to Standing Order 31(3), "It shall be out
of order to attempt to reconsider a specific question on which the Council has
taken a division". I think you have made your point. I suggest you should
rather reconsider it in the future.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, what I am trying to say
is that there is a real possibility that in contrast to those veterinary graduates I
have just referred to, veterinary graduates from other places may have to pass
many examinations and stringent vetting before they are permitted to register as
veterinary surgeons. That is why I want to put forward one request to the
Administration, which is that the first batch of members of the Veterinary
Surgeons Board must be fairly selected so as not to tip the balance towards any
one side. If not, unfairness will surely be resulted.
Furthermore, I want to ask a question about the administrative
arrangements proposed by the Administration, and it can perhaps give us an
LEGISLATIVE COUNCIL — 25 June 1997
879
answer in its reply later. Is the Administration going to withdraw or shelve
these proposed arrangements following my attempt to move the amendment
concerned? In other words, is the Administration going to give up the idea of
permitting Mainland and Taiwan veterinary graduates who are already in Hong
Kong to administer drugs and antibiotics? I hope the Secretary for Economic
Services will give us a definite answer. If he says that the Administration is
going to withdraw these administrative arrangements, we will be able to see more
clearly that after all, it does not really want to permit Mainland and Taiwan
veterinary graduates to practise as veterinary surgeons in Hong Kong. This is
just like punishing a suspect by giving him "three hundred strokes of the cane"
before the court hearing; in other words, the Administration simply does not want
to discuss this issue. Actually, it has already made it clear that even if Mainland
and Taiwan veterinary graduates in Hong Kong are allowed to administer drugs
and antibiotics, they will at best be regarded as farmers only. Anyway, I still
want to know more about these administrative arrangements. Would the
Secretary for Economic Services please give a brief account?
The second point is about the representatives of veterinary surgeons on the
Veterinary Surgeons Board. I fully agree with Dr the Honourable LEONG
Che-hung that these representatives must be formally elected from within the
veterinary profession. They must be selected through democratic processes, and
Government appointment can hardly be justified.
The third point concerns the eligibility for registration. In this regard, I
hope that there will be a fair system in future. Efforts must be made to ensure
that no particular groups of people will be classified as seniors or veterans of the
profession. In other words, we must not adopt a registration system under
which existing veterinary surgeons in Hong Kong and members of the Royal
College of Veterinary Surgeons will all be granted automatic registration
regardless of their professional standard.
The requirements governing
eligibility for registration must be fair and equitable, and all applicants, be they
existing or intending veterinary surgeons, must be assessed according to the same
set of standards and requirements.
Mr Chairman, the last point I want to raise is that I am extremely
disappointed at the voting results of my amendment. July 1997 is fast
approaching, and the colonial era will soon come to an end. Regrettably, signs
are that the discrimination experienced by Mainland and Taiwan veterinary
surgeons during the colonial age is likely to perpetuate, to live on. I watched
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how Honourable Members belonging to the Hong Kong Association for
Democracy and People's Livelihood, the Democratic Alliance for the Betterment
of Hong Kong and the Federation of Trade Unions reacted to my amendment.
Very often, these Honourable Members talk about something that seems
righteous and argue eloquently for the cause of patriotism. However, when they
come to something which really matters, they will all betray their fellow
compatriots and allow the colonial ......
CHAIRMAN (in Cantonese): Dr HUANG Chen-ya, you are still lingering on
clause 29B, which has already been negatived!
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, I will stop referring to
this clause any more. I have said what I want to say, which are my
disappointment and regrets.
MR IP KWOK-HIM (in Cantonese): Mr Chairman, I want to seek clarification
on the accusation made by Dr the Honourable HUANG Chen-ya just now. He
referred to a "betrayal" of some kind. I hope you would make a ruling on that.
CHAIRMAN (in Cantonese): Dr HUANG, what did you say just now?
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, you have already ruled
that I should not use that kind of language any more because 29B is involved.
That is why I do not want to repeat the words. If the Honourable IP Kwok-him
is at all interested, he can read the Hansard records.
MR MOK YING-FAN (in Cantonese): Mr Chairman, I also want to seek
clarification. Since Dr the Honourable HUANG Chen-ya also referred to the
Hong Kong Association for Democracy and People's Livelihood, I just want to
know at whom his accusation was directed.
LEGISLATIVE COUNCIL — 25 June 1997
881
CHAIRMAN (in Cantonese): Mr MOK Ying-fan, do you have a point of order?
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, I will not apologize
because I did not ......
CHAIRMAN (in Cantonese): Dr HUANG, since you have admitted that the last
few sentences of your remarks are not relevant to the topic under debate, if these
sentences have caused any misunderstanding, you may give your apology.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, I believe that I was
speaking about the facts. What I said are the facts. Some people frequently
speak as if they are really very righteous, but in fact they are not.
MR IP KWOK-HIM (in Cantonese): Mr Chairman, a point of order. Since
what Dr HUANG said are not the facts, I hope the Chairman will clarify the
matter and make a ruling.
CHAIRMAN (in Cantonese): I may have to suspend the sitting for five minutes,
so as to listen to the playback.
10.50 pm
Committee suspended.
11.00 pm
Committee resumed.
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DR HUANG CHEN-YA (in Cantonese): Mr Chairman, it is now late at night,
and we still have to deal with lots of matters about cats and dogs. Lest you may
get too tired, I now withdraw that particular remark which I made just now.
DR YEUNG SUM (in Cantonese): Mr Chairman, Dr the Honourable HUANG
Chen-ya concerns very much about the veterinary surgeons from China and
Taiwan. That is why he very much hopes that the Adminstration will remove
the discrimination against them today. In this regard, the Administration has
responded positively. Let me therefore thank it on behalf of the Democratic
Party, and I think its reply later on may well contain some even more positive
responses. I hope that we will continue to pay attention to the issue of
veterinary surgeons, in particular matters relating to their registration and
supervision.
Thank you, Mr Chairman.
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr Chairman, I
would like to express my thanks to a number of Members who have expressed
their valuable opinions earlier, particularly with respect to the composition of the
Veterinary Surgeons Board (the Board). I can assure Members that the Board
will definitely set the criteria for registration qualifications on the basis of the
professional and training level instead of geographical location. As such, there
will not be any differentiation between Commonwealth and non-Commonwealth.
At the same time, we will set up the Board expeditiously. As what I have
mentioned earlier, we estimate that the formal establishment of the Board and
such work as completing the formulation of criteria, carrying out registration and
so on will probably be completed by the end of this year and it is only a few
months from now.
I made a commitment Just now, and I said I would honour the commitment
if Dr the Honourable HUANG Chen-ya rescinded his amendment. As I have
made such a commitment, I have no intention to dishonour it. I now repeat my
commitment. During the transition period, for any persons who have completed
a five-year course and have gained the recognition of the Agriculture and
Fisheries Department, the Administration will adopt administrative measures
and, after verification, register them as approved veterinary surgeons to enable
them to acquire the drugs needed for the purpose of providing professional
veterinary services. The registration will in no way affect the decision made by
the Veterinary Surgeons Board after the registration standards have been set. In
LEGISLATIVE COUNCIL — 25 June 1997
883
other words, if the qualifications set by the Board by then is different from the
requirements proposed by me at the moment, the relevant persons will not be
allowed to registered as registered veterinary surgeons simply because they were
approved veterinary surgeons.
Furthermore, this is only a transitional arrangement and it will be
abolished immediately upon the setting up of a register for veterinary surgeons.
I hope this commitment can clarify the part that Members did not understand
very well earlier.
I would to extend my gratitude to Members who support the Government
once again. Thank you, Mr Chairman.
Question on the amendments put and agreed to.
Question on clauses 3, 12, 17, 18, 24 and 35 to 41, as amended, put and agreed
to.
New clause 29A
Transitional
Clause read the First time and ordered to be set down for Second Reading
pursuant to Standing Order 46(6).
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr Chairman, I
move that the transitional provisions of new clause 29A as set out in the paper
circularized to Members be read the Second time.
This new provision aim to enable the Secretary for Economic Services to,
when the Veterinary Surgeons Board is initially set up, appoint veterinary
surgeons to sit on the Board. Unless the relevant veterinary surgeons are
already registered veterinary surgeons, they will not be allowed to serve more
than an aggregate of 18 months. The addition of this clause is essential as the
six veterinary surgeons appointed to the Board when the Board is initially set up
are not registered veterinary surgeons as provided for under section 3.
Thank you, Mr Chairman.
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MR IP KWOK-HIM (in Cantonese): Mr Chairman, I very much welcome the
commitment made by the Administration just now. As a matter of fact, with
respect to the composition of the Veterinary Surgeons Board, we really want the
Administration to take our point that it must also include veterinary surgeons
who are not members of the Royal Society of Veterinary Surgeons of Great
Britain. The Government has already made a commitment in this regard. The
Democratic Alliance for the Betterment of Hong Kong (DAB) has always
insisted very strongly that the Veterinary Surgeons Board must include trained
veterinary surgeons from mainland China and Taiwan. They must be allowed to
join the Veterinary Surgeons Board, and we stated our support for Dr HUANG
Chen-ya's proposal precisely because of this reason. We must reiterate that the
DAB has always supported the idea of allowing veterinary surgeons from
mainland China and Taiwan to join the Veterinary Surgeons Board.
Thank you, Mr Chairman.
DR HUANG CHEN-YA (in Cantonese): Mr Chairman, let me take this
opportunity to thank the Secretary for Economic Services. I hope he will really
implement the commitment which he has made before us, so that the Veterinary
Surgeons Board can be set up smoothly to handle the registration of all qualified
veterinary surgeons in Hong Kong in a fair manner.
Question on the Second Reading of the clause proposed, put and agreed to.
Clause read the Second time.
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr Chairman, I
move that new clause 29A be added to the Bill.
Proposed addition
New clause 29A (see Annex XV)
Question on the addition of the new clause proposed, put and agreed to.
Schedules 1 and 2 were agreed to.
LEGISLATIVE COUNCIL — 25 June 1997
885
Council then resumed.
Third Reading of Bill
THE SECRETARY FOR ECONOMIC SERVICES reported that the
VETERINARY SURGEONS REGISTRATION BILL
had passed through Committee with amendments. He moved the Third Reading
of the Bill.
Question on the Third Reading of the Bill proposed, put and agreed to.
Bill read the Third time and passed.
Resumption of Second Reading Debate on Bill
DOGS AND CATS (AMENDMENT) BILL 1996
Resumption of debate on Second Reading which was moved on 22 May 1996
MR MICHAEL HO (in Cantonese): Mr President, in my capacity as the
Chairman of the Bills Committee on the Dogs and Cats (Amendment) Bill 1996,
I would like to report to this Council on the deliberations of the Bills Committee,
and I would also like to thank all those organizations which have submitted
representations on the Bill. In particular, I must thank the Hong Kong Society
for the Prevention of Cruelty to Animals, the Hong Kong and Kowloon Kennel
Association Limited and Mr Nelson LAM, an experienced dog trainer, for
attending the meetings of the Bills Committee to explain their views.
Existing legislation on the control of dogs applies to dogs in general,
without reference to specific breeds. In view of the many cases of dog bites
causing varying degrees of bodily injury in recent years, the Bill seeks to regulate
the keeping and control of dangerous dogs, to be classified into the three
categories of "fighting dogs", "known dangerous dogs" and "potentially
dangerous dogs", each with specific controls. Following the passage of the Bill,
the Governor-in-Council will make the Dangerous Dogs Regulation (the
Regulation), which will provides details for the implementation of the Bill.
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LEGISLATIVE COUNCIL — 25 June 1997
Under the Bill, the Governor in Council may by regulation provide for
matters relevant to the control of dogs, including the classification, confinement,
identification, inspection, seizure, detention, destruction or forfeiture of dogs, the
control of the bringing of dogs into public places, and the insurance to be
effected in respect of dogs. In view of the wide public implications of these
matters, and since the Bills Committee has noticed during the course of its
deliberations that different groups and organizations do hold very divergent
views, the Bills Committee considers it important for this Council to have
adequate time to deliberate the issues and consult the affected parties when the
subsidiary legislation is submitted for its approval. However, since the
"negative vetting procedure" is adopted, the scrutiny period is limited to 28 days
and such a period can only be extended by one sitting at the most. In order to
allow more time for the scrutiny of the subsidiary legislation, the Administration
has accepted the request of the Bills Committee for any regulation made under
clause 5 of the Bill to be subject to the approval of this Council under the
"positive vetting procedure". On behalf of the Bills Committee, I will move
Committee stage amendments in this respect.
Under the draft Regulation, it will be an offence to allow a dog in any of
the three categories of dangerous dogs to go into or remain in a public place
unless it is on the leash or muzzled. These requirements are already in the
existing legislation, but the provisions relating to dangerous dogs will be made
more specific and explicit in the Regulation. Members of the Bills Committee
have reservations about the application of these requirements to "potentially
dangerous dogs". This category includes those breeds of dogs which do not
normally attack people without provocation, but their size, strength and potential
ferocity make them capable of inflicting serious injuries on people when they
attack. Members consider the classification of potentially dangerous dogs by
breed inappropriate. They are concerned that these breeds of dogs may not be
easily and immediately identifiable on the spot by staff of the Agricultural and
Fisheries Department, let alone members of the public. Some big dogs may
appear ferocious, but they may not belong to the category of potentially
dangerous dogs according to the classification in the Regulation. This will not
only make enforcement difficult, but also worsen conflicts between dog owners
and non-dog owners. Such a classification may also generate irrational fear
about dogs when people see big and ferocious dogs not on the leash and
muzzled, thinking that they belong to the category of dangerous dogs.
LEGISLATIVE COUNCIL — 25 June 1997
887
Members of the Bills Committee note that dogs might become agitated if
muzzled, thus becoming dangerous, and that poorly fitted muzzles might cause
cruelty. When members of the Bills Committee enquired about the relevant
legislative experience in other countries, the Administration could only cite the
example of Singapore, and it could not name any other overseas countries. As
the size of a dog alone already seems threatening to many people, Members
request the Administration to consider adopting weight and/or height as criteria
for imposing the physical constraint measures.
Following consideration, the Administration agrees to use weight alone as
the criterion for subjecting dogs to the stipulated physical constraint measures,
and the weight it recommends is 20 kilograms, which is the average weight of a
medium-sized Chow crossed. Members of the Bills Committee also agrees in
principle that in order to prevent people from being threatened, these big dogs
should be kept on the leash and muzzled in indoor public places, especially lifts
where space is more limited, but in outdoor public places these big dogs should
be kept on the leash only. The Administration also agrees to abolish the
category of potentially dangerous dogs. The Bills Committee finds the
proposals acceptable. However, in view of the much wider implication of
putting all breeds of dogs exceeding 20 kilograms under the required physical
constraint measures, members urge the Administration to consult the public
widely and consider the views of various concern groups before making the
Regulation. During the period of its deliberations, the Bills Committee received
the views from one concern groups, and these views have been referred to the
Administration.
The Administration will move Committee stage amendments for the
implementation of the Bills Committee's recommendation on abolishing the
category of potentially dangerous dogs and on using the sizes of dogs as the
criterion for subjecting dogs to the stipulated physical constraint measures. The
administration will also move other Committee Stage amendments to improve the
technical drafting aspects of the Bill.
Mr President, in the following part of my remarks, I am going to express
some opinions of my own on the issue. The recent cases of dog bites have
indeed aroused the concern of the public. I fully agree that legislation should be
enacted to regulate dog keepers, so that they can be subjected to heavier
responsibilities for the nuisance caused by the behaviour of their dogs. I have
been keeping dogs for more than 30 years, but I too hate those irresponsible dog
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owners. These dog owners do no keep their dogs under proper control.
Though their dogs may not always bite people, they may knock down old people
in the streets and run around scaring children. These scenes are sometimes
found in our streets. Therefore, I am a bit disappointed that the Bill and the
Regulation seek only to control dogs instead of their owners. I am also a bit
disappointed, because the Administration has depicted dogs as so ferocious and
potentially dangerous, and has thus sought to require them all to be muzzled.
The category of dangerous dogs laid down the in original Regulation will simply
send a wrong message to the public. If they really get the wrong message, their
next generations may well be scared to death at the sight of dogs. Mr President,
keeping electronic pets has become very popular recently, and such electronic
pets include electronic chickens, electronic dogs and even electronic dinosaurs.
It has been said that when children look after these electronic pets, when they
feed them and attend to their excretion, they will develop a sense of
responsibility and a loving heart. However, Mr President, if our children know
only how to raise these electronic dogs instead of real dogs in future, or if our
children fear real dogs, I must say that our education will be a failure. Mr
President, we must adopt the correct approach, and that is to promote proper
civic education with a view to making dog owners more responsible and the
public less over-sensitive to dogs. One important rule to bear in mind is that
one should never run at the sight of a dog, because if one runs, the dog will
certainly give chase. Mr President, in the course of the Bills Committee's
deliberations, one possibility was also raised, and this concerns whether or not it
is possible to set up some no-restriction zones for dogs in our vast country parks,
where dog-owners can go hiking without keeping their dogs on the leash. Mr
President, this is the map of Hong Kong. We can see that country parks indeed
cover very vast areas, stretching from Tsuen Wan to Tai Po, with Needle Hill,
Grassy Hill and Tai Mo Shan included. Over there, there are hedgehogs, snakes
and wild cats. So I just cannot imagine how a dog which is not kept on the
leash will pose any great danger. If we also look at Sai Kung, we will see that
from Nam She Tsim to the whole of the Sai Kung peninsular there are vast areas
of country parks. So I hope that the Agricultural and Fisheries Department will,
under appropriate circumstances, designate some areas in these country parks,
where dogs can stroll without being kept on the leash. Mr President, I think this
is a very reasonable request. I understand very well that it may not be very easy
to implement such a proposal. I just hope that the Administration will give
some appropriate consideration to it. These are my remarks.
LEGISLATIVE COUNCIL — 25 June 1997
889
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr President, I
would like to thank the Bills Committee, which is chaired by the Honourable
Michael HO, for deliberating cautiously the Dogs and Cats (Amendment) Bill
1996 and the proposed Dangerous Dogs Regulation.
The Government has listened carefully to the valuable opinions raised by
the Bills Committee and has made positive responses. I will move a number of
Committee stage amendments to reflect these opinions. All these amendments
have gained the support of the Bills Committee.
The Bill seeks to provide essential power and a system framework to
implement and enact regulation for the purpose of protecting the public from the
serious attacks of dogs.
After the passage of the Bill by this Council, the Dangerous Dogs
Regulation will be made in order to classify dangerous dogs into three categories:
namely fighting dogs, known dangerous dogs and potentially dangerous dogs,
each with specific controls.
The Bills Committee agreed with the parts relating to fighting dogs and
known dangerous dogs under the Dangerous Dogs Regulation. Therefore, we
will retain these parts in the Regulation. The Bills Committee, however, did not
agree with the part relating to potentially dangerous dogs under the Dangerous
Dogs Regulation. It proposed, as an alternative, dogs exceeding a certain body
weight should be on a leash and muzzled when in indoor public areas, and be
leashed but need not be muzzled when in outdoor public areas. It was initially
considered that 20 kilograms be used as a weight criterion.
We agree with this proposal in principle. However, as Mr Michael HO
said earlier, this proposal differs greatly from the original proposal and the scope
it covers is quite extensive, many large or medium-sized dogs may be affected as
a result. Therefore, we accept the views of the Bills Committee, and we will
consult the public again before a final decision is made in respect of this
proposal.
Just now, Mr Michael HO mentioned if it was possible to consider
designating some areas in country parks to allow dogs to run freely in these areas
without being put on a leash. We will consider this proposal.
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LEGISLATIVE COUNCIL — 25 June 1997
Thank you, Mr President.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order
43(1).
Committee stage of Bill
Council went into Committee.
DOGS AND CATS (AMENDMENT) BILL 1996
Clauses 1, 2, 3, 6, 7 and 9 were agreed to.
Clauses 4, 5, 8, 10 and 11
SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Mr Chairman, I
move that the clauses specified be amended as set out in the paper circularized to
Members. The major amendment to clause 4 seeks to delete the proposed
definite of "veterinary certificate" and ""veterinary surgeon". We consider it
more appropriate to incorporate these two definitions into the Dangerous Dogs
Regulation to be tabled later. This is because these two expressions will be
mentioned in the provisions relating to the sterilization of fighting dogs and
known dangerous dogs under the Regulation. The major amendment to clause 5
empowers us to enact regulation to control the bringing of dogs into any
specified areas such as indoor public areas. It also empowers us to weigh and
measure a dog. These provisions are essential for the purpose of implementing
the new proposal of supervising dogs as put forward by the Bills Committee.
The amendment to clause 8 seeks to re-define the expression "serious bodily
injury", so as to make the relevant provision easier to understand. Subject to the
LEGISLATIVE COUNCIL — 25 June 1997
891
amendment, police officers or authorized persons will, in cases where a dog
causes injury to a person, define whether the person is seriously hurt by using
whether there is "any bodily injury of a kind which reasonably requires his being
admitted to a hospital for treatment as an in-patient" after he is injured as a
criterion, as well as deciding whether there is a need to make a house search for
the relevant dog. As for the residual amendments, including consequential
amendments, the original regulation will be retained and Chinese equivalents
will be added. The way the provisions are drafted will also be improved so as
to make the relevant provisions clearer. I commend Members of this Council to
approve these amendments. Thank you, Mr Chairman.
Proposed amendments
Clause 4 (see Annex XVI)
Clause 5 (see Annex XVI)
Clause 8 (see Annex XVI)
Clause 10 (see Annex XVI)
Clause 11 (see Annex XVI)
Question on the amendments put and agreed to.
MR MICHAEL HO (in Cantonese): I move that clause 5 be further amended as
set out in the paper circularized to Members. Mr Chairman, this amendment is
moved on behalf of the Committee, mainly in the hope that when regulations are
made under clause 5 in future, they must be passed by the Legislative Council
such that when we meet different bodies and listen to their views in future, we do
not have to be subjected to the 28 days' restriction. The Administration has
indicated that it will not object to the proposed amendment.
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LEGISLATIVE COUNCIL — 25 June 1997
SECRETARY FOR ECONOMIC SERVICES (in Cantonese):
objection against this proposed amendment.
I hold no
Question on the amendment put and agreed to.
Question on clauses 4, 5, 8, 10 and 11, as amended, put and agreed to.
Council then resumed.
Third Reading of Bill
THE SECRETARY FOR ECONOMIC SERVICES reported that the
DOGS AND CATS (AMENDMENT) BILL 1996
had passed through Committee with amendments. He moved the Third Reading
of the Bill.
Question on the Third Reading of the Bill proposed, put and agreed to.
Bill read the Third time and passed.
MEMBERS' MOTIONS
INTERPRETATION AND GENERAL CLAUSES ORDINANCE
MR RONALD ARCULLI to move the following motion:
"That section 2 of the Government rent (Assessment and Collection)
Regulation, published as Legal Notice No. 296 of 1997 and laid on the
table of the Legislative Council on 11 June 1997, be amended by repealing
"as if the leased land were a tenement liable for assessment to rates under
LEGISLATIVE COUNCIL — 25 June 1997
893
the Rating Ordinance (Cap. 116)" and substituting "in accordance with
sections 7 and 7A of the Rating Ordinance (Cap. 116)"."
MR RONALD ARCULLI: Mr President, I rise to move the motion standing in
my name in the Order Paper. Section 7 of the Rating Ordinance sets out the
general rule in ascertaining rateable value: "The rateable value of a tenant shall
be the amount equal to the rent at which a tenement might reasonably be
expected to let from year to year."
Annex III of the Joint Declaration provides that all new leases of land
granted on or before 30 June 1997 shall not require payment of additional
premium after that date but, "an annual rent equivalent to three percent of the
rateable value of the property at that date, adjusted in step with any changes in
the rateable value thereafter" shall be charged. The same expression "an annual
rent equivalent to three percent of the rateable value of the property at that date"
is found in Article 121 of the Basic Law.
Initially, the Administration wanted to provide that the rateable value of
such land would be 5% of the capital value and therefore it follows that the rent
would be 3% of such rateable value. I believe that that was unacceptable and
with the able assistance of my colleague, the Honourable Albert CHAN, we were
successful in fighting against such formulation. As a result, the Administration
amended that clause into Regulation 2.
However, the position is still not satisfactory as it could be argued that the
Government can charge rent for undeveloped sites even if the sites are not liable
for assessment to rates under the Rating Ordinance. If that were the case,
Regulation 2 would go beyond the Joint Declaration and the Basic Law.
Regulation 2 is objectionable because it creates the notion that the leased land
before development is liable for assessment to rates.
The second objection is that, whether this is so depends on Section 7,
which I repeat, "the rateable value of a tenement shall be an amount equal to the
rent at which the tenement might reasonably be expected to let from year to
year."
My amendment seeks to clarify the position and a potential problem by
confining the basis of assessment of rateable value to section 7 and 7A of the
894
LEGISLATIVE COUNCIL — 25 June 1997
Rating Ordinance. These two sections respectively provide the formula and
assumptions in ascertaining rateable values. There is no other section in the
Rating Ordinance or in the subsidiary legislation that provide any basis for
ascertaining of rateable values of land before development.
The Administration may try to draw Members' attention to a clause in the
Conditions of Grant for all new land leases since 27 May 1985, the clause which,
for the purposes of rent collection, gives the Director of Land a power to fix the
rateable value for a tenement which is not included in the valuation list.
However, this clause stands as contractual term between the lessor and lessee,
whilst the regulation is going to turn this into public law. The Legislative
Council's duty is to ensure that the regulation is fully consistent with the Basic
Law and the Joint Declaration.
During my discussion with the Administration, the Administration raised
an interesting point: "The fact that for rating purposes there may be no rateable
occupation should not preclude the determination of a rateable value for the
purpose of determining Government rent." If this is the reason why the
Administration sticks to its drafting and rejects my amendments, this Council
must consider whether it is consistent with Annex III and Article 121, and that is,
whether these two documents warrant or call for a revision of the definition of
rateable value.
In my submission, it cannot and does not seek to do so. Furthermore, to
accept the Administration's position would be introducing into our rating laws
the new concept of paying Government rent for non-rateable occupation. This
is clearly wrong and inequitable.
I urge colleagues to support my amendment which will preserve the
existing position. Thank you, Mr President.
Mr ALBERT CHAN (in Cantonese): Mr President, the Government Rent
(Assessment and Collection) Ordinance has been under discussion for quite a
long time, and the Bills Committee on the Government Rent (Assessment and
Collection) Bill has also held long sessions to discuss the views expressed by the
Honourable Ronald ARCULLI, particularly the rateable value charged for leased
land before development. A very thorough and comprehensive review and
study on the amendment put forward by Mr ARCULLI has likewise been
LEGISLATIVE COUNCIL — 25 June 1997
895
conducted by the Democratic Party. As to whether the proposal put up by the
Government is an amendment to a new policy, just as Mr ARCULLI has stated,
or whether such an arrangement is fair, reasonable and legitimate, we have made
an assessment and come up with a conclusion.
Basically, even to us, the proposal of charging rateable value on land
before development, which the Regulation made under the Government Rent
(Assessment and Collection) Ordinance seeks to do, is a change to a certain
extent. But, on the rationale behind such a change, and whether such a change
to be made by the Government is appropriate, we have checked some information
about past developments and all relevant history, and learnt from the information
provided by the Administration that almost all the affected people are those who
are in possession of land sold after the Chinese and British Governments made
arrangements pertaining to Government rent in 1985. In the Conditions of
Sale of land by the Government in 1985 and thereafter, there are clauses clearly
stipulating that Government rent is payable by owners of the relevant lands, and
that Government rent is fixed according to the assessment of the Director of
Lands. He can determine the rateable value of the land as well as the relevant
details to be incorporated in the Regulation now proposed by the Government.
We have made a comparison of the clauses related to Government rent.
They appear in three different places, namely, the provisions made under the
Regulation by the Government, the amendment proposed by Mr ARCULLI and
the relevant clauses in the standard Lease for the Sale of Land by the
Government after 1985. We have also made in-depth studies on the relevant
clauses with a lawyer member of the Democratic Party. Our findings clearly
revealed that the arrangements of the Government as regards rateable value
charged on leased land before development as provided in the Regulation under
the Government rent (Assessment and Collection) Ordinance were almost the
same as the clauses on Government rent in the standard Lease. That is to say,
the arrangement of the Government as provided in this Regulation is basically in
line with the clauses in the standard Lease for the Sale of Land for the past 12
years, with no other people being affected. In fact, as the Government has told
us, apart from these people affected by the sale of land, only two other lots of
land have been affected, and those lots are lands in the industrial estates. After
studying all the clauses, we were of the view that the actions proposed by the
Government were basically in line with some contractual terms in the past, hence
it would be very difficult, as we found it, to oppose such arrangements by the
Administration.
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During the deliberation, we strongly criticized and objected to the proposal
made by the Government, who sought to determine the rateable value of lands by
a fixed percentage. At first, the Government proposed to determine the rateable
value of land at 5% of its capital value and then, on such a basis, the Government
rent at 3% of the value so determined. We reckoned that this initial proposal
of the Government was absolutely wrong, as it had no reason to presume that
rateable value should be assessed at 5% of the capital value of the land. Nor
should the Government allow the Commissioner for Rating and Valuation to
exercise his administrative powers to fix Government rent unilaterally, without
giving the owners of land any chances to lodge appeals and make
representations. Subsequent to our objections, the Government, just as Mr
ARCULLI said, amended the Regulation. It amended the former proposal made
by the Government and made a new arrangement whereby owners of land are
able to lodge appeals and raise objections under the Rating Ordinance.
After due consideration of all the arrangements and relevant details, the
Democratic Party is opposed to the amendment raised by Mr ARCULLI.
Thank you, Mr President.
MR NGAN KAM CHUEN (in Cantonese): Mr President, the arrangement for
payment of Government rent is stipulated in the Sino-British Joint Declaration.
Our discussion today centres around the Government Rent (Assessment and
Collection) Regulation which is made consequential upon the passage of the
Government Rent (Assessment and Collection) Ordnance by this Council last
month. The rules and guidelines made in pursuance of the Regulation seek to
specify the assessment of the rateable value of certain types of land. At the
drafting stage of the Regulation, the Government intended to set the rateable
value of leased but undeveloped lands at 5% of their capital value. However, it
decided not to write this 5% of capital value provision into the Ordinance having
taken onboard the opinion of the Real Estate Developers Association of Hong
Kong. Nevertheless, the Commissioner of Rating and Valuation may employ
this 5% of capital value as the criterion for assessing Government rent in future.
Any party dissatisfied with the Commissioner's assessment, however, may appeal
to the Lands Tribunal.
The Honourable Ronald ARCULLI's amendment, as proposed in the
motion, is founded on the notion that rateable value should be assessed on
occupation of the tenement. Therefore the rateable value for an undeveloped
LEGISLATIVE COUNCIL — 25 June 1997
897
site should be zero, thus exempted from payment of Government rent. I
understand very well the sentiment of Mr ARCULLI in protecting the interest of
the real estate developers and constructors ─ the very same sector through
which he has secured his seat in this Council. However, if Mr ARCULLI's
motion was passed, estate developers might be encouraged to lodge appeals with
the Lands Tribunal on each notification of the assessed Government rent in order
to avoid making the payment. This would unduly increase the workload of the
Tribunal, resulting in delay on cases which genuinely require adjudication by the
Tribunal. This is the last thing I would like to see.
Moreover, just as I said during the Second Reading debate on the
Government Rent (Assessment and Collection) Bill in this Council last month,
rates and Government rent are two entirely different matters that should not be
mentioned in the same breath. The liability to Government rent is independent
of the liability to rates. Furthermore, Annex III to the Sino-British Joint
Declaration has made no mention that an assessment of rates on a property is a
prerequisite for liability to payment of Government rent on that particular
property.
On the basis of these points, developers of leased undeveloped sites are
therefore exempted from payment of rates in accordance with the Rates
Ordinance. But they are liable to payment of Government rent on these sites.
The current arrangement by the Government whereby developers may appeal to
the Lands Tribunal on any assessment of Government rent has indeed look after
the interests of the developers.
With these remarks, Mr President, the Democratic Alliance for the
Betterment of Hong Kong opposes the motion.
MR ALBERT HO (in Cantonese): Mr President, I can well appreciate the
argument of the functional constituency represented by the Honourable Ronald
ARCULLI. They recognize that under Annex III to the Joint Declaration, all
new leases of land shall be required to pay an annual Government rent which is
to be fixed according to a certain percentage of the rateable value of the property.
But they argue that according to the laws at that time, no rateable value should be
ascribed to newly granted undeveloped sites because of the absence of rateable
occupation. That is why they maintain that the sudden introduction of the
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proposed Regulation seems to have altered the original intent of the Joint
Declaration.
No doubt, the proposed Regulation does specify that a rateable value must
be assessed for every lease, whether or not the land is developed and occupied.
But I do not think that this has in any way breached the Joint Declaration,
because the Government, I believe, should have the authority to introduce the
legal definitions required. The only problem which remains is whether or not
this will lead to any unfairness. I will certainly consider this problem very
seriously.
I have enquired in detail with the Government, and been told that the
proposed Regulation will only affect lands granted after 1984, and according to
the terms of these land leases, even though the lands in question may be vacant,
the Government will still have the right to assess their rateable value. Hence,
the proposed Regulation will produce no practical effects on these land leases.
The only difference is that following the enactment of the Government Rent
(Assessment and Collection) Ordinance, the terms of these land leases will be
replaced by some legislative provisions carrying the same effects. So, I must
say that there will not be any material differences, and the only difference is that
the terms of these leases will be replaced by statutory provisions. I believe that
when the Government grants any lands in the future, it will incorporate the same
provisions and requirements into the leases. The fact is that from the very
beginning, property developers who bid for and buy lands should have known
that no matter how the Joint Declaration is interpreted, they will have to pay
Government rent. They should have known that even if the lands concerned are
left undeveloped, they are still bound by the terms of the leases, and the lands
will still be assessed for rateable value.
Having given my position, I would like to state that we will oppose Mr
Ronald ARCULLI's motion for two reasons. First, the specification of the
rateable value of vacant lands by way of subsidiary legislation does not
contravene Annex III to the Joint Declaration. Second, the proposed Regulation
will not create any unfairness for anybody.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr
President, the Administration does not support the motion moved by the
Honourable Ronald ARCULLI.
LEGISLATIVE COUNCIL — 25 June 1997
899
I would like to explain the Administration's position.
As the
Administration explained to honourable Members in paragraph 3(b) of the
Legislative Council brief on the regulation which was sent to Honourable
Members on 5 June 1997, section 2 of the regulation has already been
substantially amended to take into account the concerns expressed to the Bills
Committee by the Honourable Ronald ARCULLI and the Real Estate Developers
Association (REDA).
The original wording of section 2 was to set the rateable value of newly
granted sites prior to completion of the development at 5% of the market value of
the land. After accepting the view of the Bills Committee the present wording
of section 2 already clarifies that the rateable value of these sites will be
ascertained as if they were assessable to rates under the Rating Ordinance. This
will ensure compliance with Annex III to the Joint Declaration which provides
that for all leases to which it applies the Government rent will be 3% of the
rateable value. A rateable value must, therefore, be ascertained for every such
lease. However, for rating purposes, no rateable value is ascribed to newly
granted sites prior to completion of the development as there is no rateable
occupation of construction sites.
By virtue of the present wording of section 2, developers will be able to
make an objection against the Commissioner of Rating and Valuations
Assessment under sections 17 or 25 of the Government rent (Assessment, and
Collection) Ordinance in the same way as for any other assessment and if
necessary, appeal against his decision to the Lands Tribunal and also make a
further appeal to the Court of Appeal on a point of law in accordance with
sections 26 and 27 of the Ordinance.
Mr Ronald ARCULLI and REDA are, however, not content with the
present wording of section 2. This is because as we understand it they consider
the rateable value and hence the Government rent for newly granted sites prior to
completion of the development should be nominal or nil because (a) there is no
rateable occupation and hence there should be no rateable value; and (b) to
impose a substantial rent now would be unfair as developers had no prior
warning of the proposal to impose this special method of valuation.
By and large, the only leases which will be affected by section 2 have been
granted or re-granted since the Joint Declaration came into effect on 27 May
1985. Our view is that the lease terms for all lots granted since 27 May 1985
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are quite clear, that as from 1 July 1997 the Government rent will be 3% of the
rateable value. There is no exception made for newly granted sites prior to
completion of the development.
There is a provision in the standard lease documentation that the Director
of Lands may fix a rateable value as if the tenement were assessable to rates
under the Rating Ordinance. The present wording of section 2 follows the
wording of the general lease conditions closely. We therefore feel that section 2
in its present form is fair to all parties and gives certainty and ensures compliance
with the requirements of the Joint Declaration and the Basic Law.
If the wording of section 2 is amended as proposed by Mr Ronald
ARCULLI, we will still argue that the rateable value must be ascertained for
these sites. If the proposed amendment is passed and the Lands Tribunal were to
rule that there is no rateable occupation for a newly granted site prior to
completion of the development and hence no rateable value this will strike at the
legal basis for us to demand of payment of Government rent in accordance with
Annex III to the Joint Declaration and Article 121 of the Basic Law. The
position would be uncertain until determined by the Court of Appeal. From the
lessor/lessee relationship point of view, the absence of a rateable value and hence
no Government rent being payable will put the legality of the lease into question.
Mr President, I would also like to make clear that for the explanation I
have just given the Administration does not accept Mr Ronald ARCULLI's
assessment that the present wording of section 2 would go beyond the Joint
Declaration and the Basic Law.
Honourable Members may wish to note that the general lease conditions
on which the present wording of section 2 is modelled closely has been approved
for use since the entry into force of the Joint Declaration by the Sino-British
Land Commission. There is no question of the Administration redefining the
rateable value. The purpose of section 2 is simply to enable the Administration
to ascertain the rateable value for the purpose of determining the amount of
Government rent payable as required by the Joint Declaration and the Basic Law,
yet leaves room for the situation where a minimal rateable value or new rateable
value is ascertained in which case it is accepted that no Government rent would
be payable.
Mr President, I wish to repeat that the Administration does not support this
motion, and we would appeal to honourable Members to vote against it. Thank
you.
LEGISLATIVE COUNCIL — 25 June 1997
901
MR RONALD ARCULLI: Very briefly, Mr President, I know it is late, so I will
not hold Members for too long.
Firstly, I would like to make very clear that the praise lavished on me for
defending my constituents' interests is wholly unmerited simply because I am not
doing this at their behest.
If you read regulation 2, it says "Where any land leased has not been
developed after commencement of the term of the applicable lease". That
applies to most land in the New Territories that are undeveloped, so to say, that
this only applies to new land sold is a mystery to me. So, for those that come
from the New Territories that favour the Government's position, well, all I can
say is that you had better start looking into your bank account to see whether you
can afford to pay the Government rent.
Second point, Mr President, is this, that in terms of the leases that expire
on 27 June this year there is, as it were, an automatic renewal for 50 years and in
the Joint Declaration and the Basic Law it is provided that no premium will be
paid, no premium will be paid. Instead it would be 3% of the rateable value.
So, here we are, we have a whole bunch of land in Hong Kong where no
premium will be paid, but on 27 June I bought a piece of new land, for which I
pay full market price, that is, premium, and yet on 1 July I will have to pay 3% of
the rateable value. Where is the fairness? Where is the equity? Where is the
demand in the Joint Declaration or the Basic Law that compels the Government
to collect an additional amount over and above premium for new land but not for
old land, except of course the exception that I mentioned about any land in Hong
Kong that has not been developed since the lease was granted?
The second point that I wish to make is this, whichever way you look at it
there can only be one rateable value. You cannot have one rateable value for
rates and another rateable value for rent. If you have no rateable value for rates,
how on earth do you get a rateable value for rent? The Government is asking
you to accept that notion, that fiction, that there are two rates. Well, as they say
in Cantonese"官 字 兩 個 口 ", now you know what it means.
As far as the conditions of sale of a contract relied upon by the
Government to say that, "Well, don't worry about it, if there is no rateable value
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Director of Lands can fix one. So, I have got you anyway." Mr President, this
is the first time I hear a government official saying that another government
official can act outside the law capriciously simply because there exists a term in
a contract that appears to give him the right to do so. We are talking about
public law.
So, I think for those colleagues of mine that think I am spouting nonsense,
and on the face of it, do not want to support my amendment, they have one last
chance. I hope I have been able to persuade them. If that does not work, right,
just think about this. For newly sold land Government rent will be payable.
What would that mean? That would mean that the developer's costs have
increased. Who then pays for that? Not the developers, but the people that
either rent the flats from them or buy the flats from them. Now, if that is what
Members want I rest my case.
Question on the motion put.
Voice vote taken.
Mr Ronald ARCULLI claimed a division.
PRESIDENT: Council shall proceed to a division.
PRESIDENT: I would like to remind Members that you are now called upon to
vote on the question that the motion moved by Mr Ronald ARCULLI, under the
Interpretation and General Clauses Ordinance be approved. Will Members
please register their presence by pressing the top button and then proceed to vote
by pressing one of the three buttons below?
PRESIDENT: Before I declare the results, Members may wish to check their
votes. Are there any queries? The result will now be displayed.
Mr LAU Wong-fat, Mr Ronald ARCULLI, Dr LEONG Che-hung, Mr Eric LI,
Mr Howard YOUNG and Miss Margaret NG voted for the motion.
LEGISLATIVE COUNCIL — 25 June 1997
903
Mr Martin LEE, Mr SZETO Wah, Mr Albert CHAN, Mr CHEUNG Man-kwong,
Mr Frederick FUNG, Mr Michael HO, Dr HUANG Chen-ya, Mr LEE Wing-tat,
Mr Fred LI, Mr James TO, Dr YEUNG Sum, Mr WONG Wai-yin, Miss Christine
LOH, Mr LEE Cheuk-yan, Mr CHAN Kam-lam, Mr CHAN Wing-chan, Miss
CHAN Yuen-han, Mr Andrew CHENG, Mr CHENG Yiu-tong, Dr Anthony
CHEUNG, Mr CHEUNG Hon-chung, Mr Albert HO, Mr IP Kwok-him, Mr
Ambrose LAU, Dr LAW Cheung-kwok, Mr LAW Chi-kwong, Mr LEE
Kai-ming, Mr LEUNG Yiu-chung, Mr Bruce LIU, Mr LO Suk-ching, Mr MOK
Ying-fan, Mr NGAN Kam-chuen, Mr SIN Chung-kai, Mr TSANG Kin-shing, Dr
John TSE and Mr YUM Sin-ling voted against the motion.
THE PRESIDENT announced that there were six votes in favour of the motion
and 36 votes against it. He therefore declared that the motion was negatived.
SUSPENSION OF SITTING
PRESIDENT: I now suspend the sitting for the day.
exactly 9.00 am this morning.
Suspended accordingly at two minutes past Midnight.
Council resumes at