News
News //
Submitted by // H Rogers, COO
07 August 2019

EU GDPR: Impact on Hong Kong?

The European Union's General Data Protection Regulation, or EU GDPR came into effect in May 2018 and fundamentally reshapes and expands data privacy regulations. Today, we focus on two of the main concerns that businesses have had with EU GDPR: the potential for high fines (up to €20 million or 4% of worldwide annual turnover, whichever is higher) and its extra-territorial effect. Both came into the spotlight in recent months. 

High Fines

In January 2019, France's data protection authority, the CNIL, fined Google €50 million under the GDPR. The French regulator ruled that Google violated transparency obligations and failed to obtain valid consent from users when processing their data in relation to personalised advertising. 

In July 2019, the UK Information Commissioner's Office levied a £183.4 million fine on British Airways, following a website failure that allowed hackers to steal the personal data of roughly 500,000 customers. Shortly afterwards, Marriott International was fined £99.2 million by the UK regulator after its security practices failed to protect the data of approximately 339 million customers. Both companies have said they will appeal.

Infringements that go against the core principles of the right to privacy and the right to be forgotten are seen as serious and more likely to attract higher fines.

Closer to home, and following the British Airways fine, it remains to be seen if the data leak affecting 9.4 million Cathay Pacific passengers will expose the airline to EU GDPR penalties; it is unlikely as the incident occurred in March 2018, whereas GDPR became effective in May 2018. However, this does raise an interesting point whether GDPR could apply to a non-EU company, and the answer to that is "yes", if Cathay Pacific offered services to data subjects in the EU.

The extra-territorial scope of the GDPR

This brings us to the second aspect of GDPR that has worried non-EU businesses. A significant development under the GDPR is its extra-territorial scope. When determining whether activities fall within its geographical reach, the GDPR considers not only the location of the data processing, but also the location of the individual whose data is being processed.  This means that the GDPR may apply to organisations located outside the EU.

Article 3(2) of the GDPR provides that "this Regulation applies to the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to: (a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union; or (b) the monitoring of their behaviour as far as their behaviour takes place within the Union."

"Targeting"

The processing of personal data of an individual in the EU is not in itself sufficient to trigger the application of GDPR; the element of "targeting" the individuals, either by offering goods or services or by monitoring their behavior must also be present. Here are some factors that will help you decide if your business is targeting a person in the EU in diagram form -

 Targeting diagram

Recent guidance, in consultation form, from the European Data Protection Board contains some useful examples :

A bank in Taiwan has customers that are residing in Taiwan but hold German citizenship. The bank is active only in Taiwan; its activities are not directed at the EU market. The bank's processing of the personal data of its German customers is not subject to the GDPR.

A U.S. citizen is travelling through Europe during his holidays. While in Europe, he downloads and uses a news app that is offered by a U.S. company. The app is exclusively directed at the U.S. market. The collection of the U.S. tourist's personal data via the app by the U.S. company is not subject to the GDPR.

Ultimately, whether Article 3(2) applies to a business in Hong Kong is a question of fact to be determined by the circumstances of each specific case.

Key takeaways:

• A company can be penalised, even though the breach of GDPR was the result of an external hack, rather than an internal leak. Are your company's security controls robust enough to detect and prevent external hackers?

• EU regulators may have been a little slow to start taking action but there is likely to be an increase in investigations and penalties in future.  

• It is a question of fact depending on the circumstances of each case as to whether Article 3(2) would apply to a business in Hong Kong. Have you considered whether GDPR applies and are you prepared for a GDPR investigation? Could such an investigation trigger inquiries by the Hong Kong Privacy Commissioner?

About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach. 

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

 

› read more
› minimize
News //
Submitted by // H Rogers, COO
01 August 2019

Howse Williams is delighted to announce that, with effect from 25 December 2018, corporate partners Brian Ho and Chris Yu have been appointed by the Ministry of Justice of the People's Republic of China as China Appointed Attesting Officers (CAAOs) and they can commence attesting documents from 1 August 2019. China Appointed Attesting Officers may certify, witness and execute documents originating in Hong Kong for use in Mainland China to ensure that the documents are compliant with Hong Kong and PRC laws.

The CAAO function compliments Howse Williams' existing notary function. For assistance with attestation or notarisation please contact:

For Attestation: all.CAAO@howsewilliams.com
T +852 2803 3737 or +852 2803 3663

For Notarisation: all.notarisations@howsewilliams.com
T +852 2803 3688

Howse Williams has 27 Partners, 5 Consultants, 2 China Appointed Attesting Officers, 1 Notary Public and a total headcount of approximately 200.


About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach. 

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

 

› read more
› minimize
News //
Submitted by // H Rogers, COO
10 June 2019

Howse Williams is delighted to announce that Kevin So has joined the firm as a Partner in the dispute resolution practice.

Kevin joins the firm from Davis Polk & Wardwell in Hong Kong. Kevin advises on a wide range of complex commercial litigation matters. He has extensive experience in civil and commercial disputes including banking, company, insolvency, trusts and estates and real estate matters. Kevin also advises on regulatory matters including criminal prosecutions and investigations by regulators and authorities including the Securities and Futures Commission, the Commercial Crime Bureau and the Independent Commission Against Corruption. Kevin’s clients include banks, large corporations and ultra high net-worth individuals both in Hong Kong and the PRC.

Kevin was named as the Rising Star of the Year at the Asialaw and Benchmark Litigation Asia-Pacific Dispute Resolution Awards 2018. He has also been named as a Future Star (Commercial and Transactions) by Benchmark Litigation Asia-Pacific in 2018 and 2019.

Chris Howse, the Senior Partner and a founding partner of Howse Williams commented “We are delighted to welcome Kevin So to the partnership. Kevin is an experienced litigator and a great fit for Howse Williams’ dispute resolution practice.”

With the addition of Kevin So, Howse Williams has 27 Partners, 5 Consultants and a total headcount of approximately 200.


Kevin So
Partner

T +852 2803 3688
D +852 2803 3602
F +852 2803 3608
E kevin.so@howsewilliams.com

About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach. 

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

 

› read more
› minimize
News //
Submitted by // P Yeung, Partner
21 January 2019

 

The Labour Tribunal's Power to Order a Claimant to Provide a Security Payment - a speed bump for parties with weak claims or who abuse the process

Hon Sau Har v. Lo Woon Bor Henry T/A Henry Lo & Co Solicitors, [2018] HKCU 3914

Introduction

Since 2014, the Labour Tribunal has had the power to order parties to provide security for awards or orders (see section 30(1) of the Labour Tribunal Ordinance). The grounds for making such an order are relatively broad and give the Labour Tribunal considerable discretion, including making an order for security for a party's costs.

There has been little case law on how this discretion should be exercised. In a 2015 case, an employee was ordered to pay security for payment of an award essentially because he had abused the process (see Lam Che Fu v The Chinese Kitchen (Sai Kung) Ltd). Clearly, the making of such an order against an employee can have a drastic effect on their ability to pursue their claim. A recent decision of the Court of First Instance, Hon Sau Har v. Lo Woon Bor Henry T/A Henry Lo & Co Solicitors, [2018] HKCU 3914, shed some further light on this area of law. This alert provides a summary of the case and highlights the principles which are to be considered in granting an order for security for payment of an award or order in a Labour Tribunal case.

Background facts

The Claimant was a secretary employed by the Defendant, which is a law firm. She worked for the Defendant for less than 2 years and was dismissed by the Defendant with one month's payment in lieu of notice.

The Claimant claimed for annual bonus, pro-rata payment for unused annual leave and termination payments. The Defendant argued that:

(1) annual bonus was discretionary depending on the financial situation of the law firm according to the employment agreement;

(2) the pro-rata payment for unused annual leaves should only be payable in the event that the Claimant had worked for more than 3 months in the year she was dismissed; and

(3) the termination payments should only be granted where the employee has been employed for a period of not less than 24 months, according to law.

In the call-over hearing before the Labour Tribunal, the Presiding Officer explained to the Claimant that both the Labour Department and the Labour Tribunal officer had informed her all her claims lacked merit. The Claimant insisted on pursuing her claims, so the Defendant applied for an order for payment of security for costs.

The Presiding Officer made an order for payment of security for costs against the Claimant on the basis that "the Claimant could not demonstrate that she has a high degree of probability of success at trial". The Claimant did not make the security payment and the Presiding Officer ordered her claims against the Defendant to be dismissed. The Claimant appealed against the orders to the Court of First Instance.

The Court of First Instance decision

In the Court of First Instance, Deputy High Court Judge Marlene Ng (as she then was) had to consider whether the order or determination by the Tribunal was (a) erroneous in point of law or (b) outside the jurisdiction of the Tribunal.

The Claimant argued that she had a low income and therefore it would be unfair to impose a security payment order against her. The Court considered whether there were any balancing factors which meant that a security payment order should not be imposed on the Claimant. Such balancing factors included considering whether the Claimant had a strong and valid claim.

The Court took the view that the Presiding Officer had not erred in point of law and agreed that the Claimant's claims lacked merit. Briefly, the Court's reasoning is as follows:

(1) The Claimant clearly had not been employed under a continuous contract for a period of no less than 24 months. Therefore, her claim for terminal payments was groundless. The Claimant was aware of this as she said she intended to drop this claim.

(2) In relation to the Claimant's claim for annual bonus, the Claimant did not dispute that the bonus provision was discretionary and binding. Accordingly, the Court agreed with the Presiding Officer's view that the Claimant was unlikely to succeed in her argument that the provision should be interpreted in her favour.

(3) As regards the claim for annual leave payments, the Claimant did not satisfy the requirement of working for more than 3 months in the year she was dismissed. This claim clearly lacked merit.

The Court also considered the Claimant's income level and financial situation, which posed a risk that she may not be able to compensate the Defendant's costs in the event that she was not successful in her claims. Meanwhile, the Defendant may also have to incur additional costs in seeking to execute any costs order, which would be unfair to the Defendant. Therefore, an order for security for costs was "just and expedient" in this case.

Takeaway points

In considering whether an order for security for payment of an award or order should be made, the Tribunal would consider the following:

(1) whether the claimant has sufficient financial means to pay for the defendant's costs if the claimant fails to prove his/her claim;

(2) whether the claimant has strong merits in his/her case; and

(3) if it cannot be determined that the claimant has a reasonable chance of success in his/her claim, whether there are any balancing factors which militate against an order for security being made.

When deciding on the amount of the security payment, the Tribunal will take into consideration the defendant representative's income and the amount of time expected to be spent on the case by such defendant representative.

The Presiding Officers have indicated a willingness to invoke this power in cases where they consider that employees are pursuing weak or meritless claims. It should not be forgotten that the Labour Tribunal can also make such orders against employers.
 


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

› read more
› minimize