Can lawyers enter into contingency or potential fees? Section 98U of the Arbitration Regulation (once in force) requires a portion by capitalization to notify in writing that a financing agreement has been concluded, as well as the name of the funder. Notification must be given to any other party to the arbitration and the arbitration tribunal, the court or the mediator (if any). The funded party must also resign when the funding agreement ends, except because the arbitration is over. In order to preserve the right to communicate under Hong Kong law, communication must remain confidential. Assuming that communication between a funder and the funded party is confidential (either on the basis of a confidentiality agreement or by other means), they should be protected by unit privileges. Legal protection privilege protects communication between a lawyer, the lawyer`s client and a third party when a dispute is pending or in consideration and communications are made for the “single or dominant” purpose of preparing or handling the dispute. (For the purposes of this test, “conduct of proceedings” includes both disputes and arbitration proceedings.) The consultation document states that conditional pricing rules cannot function properly without the availability of “after-the-event” insurance (“ATE insurance”). However, it indicates that atE insurance in Hong Kong may not be available at an affordable and long-term level. No no. Hong Kong lawyers and lawyers are not allowed to enter into contingency or contingency fee agreements to act in contentious cases.

The same restriction applies to foreign lawyers who are registered in practice in Hong Kong. In accordance with the second sentence, section 1 of the High Court Regulation provides that the court can only order the guarantee of costs against the applicant. The court does not have the power to order the guarantee of costs against a third-party funder. However, the funding agreement may provide that the lessor will reimburse the applicant for any amount that will be paid to the court in accordance with a cost guarantee. It is a matter of agreement between the funder and the funded party. The subcommittee also recommended the creation of a “non-governmental legal aid fund” (“CLAF”), which would likely be managed by an independent body, and that applicants would be subject to a “merit test” for proposed litigation, but would not be subject to any resource requirements.