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News //
Dispute Resolution Law Alert - September 2017
Submitted by // K Bowers, Partner / Solicitor Advocate
11 September 2017

 

The revision of the civil jurisdictional limit of the District Court is finally on the way. Last revised in 2003, the civil jurisdictional limit of the District Court is planned to triple from its current limit of HK$1 million to HK$3 million in 2018. The increase is aimed at reducing the workload of the High Court by transferring lower value cases to the District Court, increasing the efficiency of both Courts in the process.

Background

The last adjustment to the jurisdictional limit of the District Court was in 2003, when the limit was increased from HK$600,000 to HK$1 million. Since then, data published by the Judiciary shows that there has been a large increase in the number of civil cases being brought in the High Court, with little or no increase in the number of cases in the District Court. To illustrate, the number of civil cases filed in the Court of First Instance ("CFI") increased by 22% between 2011 and 2016. During the same period, there was a slight drop of about 2% in the total number of civil cases filed in the District Court. These figures show that there is a clear need to balance the workload of the two Courts, particularly in view of the general rise in the value of claims since 2003.

Proposal

Under the current proposal from the Judiciary, the jurisdictional limit will increase as follows:

(a) general financial limit of the civil jurisdiction of the District Court: from HK$1 million to HK$ 3 million;

(b) financial limit for District Court cases on recovery of and title to land: from HK$240,000 to HK$320,000;

(c) limit for the equitable jurisdiction in the District Court where land is not involved: from HK$1 million to HK$ 3 million, and

(d) limit for the equitable jurisdiction in the District Court involving land: from HK$3 million to HK$7 million.

Additionally, the limit for the Small Claims Tribunal will increase from HK$50,000 to HK$75,000.

Effect on litigation in Hong Kong

The planned increase of the jurisdictional limit of the District Court is likely to lead to more cases being heard in the District Court instead of the High Court. The Judiciary estimates that this should result in an 8% increase in the number of civil cases that will be heard in the District Court. Mortgage, personal injury and civil actions are expected to make up a significant part of the increase, as these cases made up 29% of the CFI's total caseload in 2016.

The proposal should also have an impact upon the waiting time in the Courts. Currently, the average waiting time between setting down and the start of trial is significantly longer in the CFI compared to the District Court. In 2016, the average waiting time in the Civil Fixture List of the CFI was 155 days, whilst the average waiting time in the Civil Fixture List of the District Court was 99 days. It is expected that the reallocation of cases from the High Court to the District Court will help to reduce the waiting time in the High Court.

Comments about the upcoming change

Thus far, the response to the proposed increase in the jurisdictional limit of the District Court has generally been positive. However, commentators have expressed some concerns about the upcoming change. For example, under Order 62, Rule 32 (1A) of the Rules of the District Court (CAP 366H), the rates allowed in a party and party taxation in the District Court are capped at two thirds of the rates allowed in the High Court. The Law Society has argued that as the value and complexity of cases in the District Court has increased since 2003, and is likely to further increase after the proposed jurisdictional increase, the limit should be revised to reflect the increased expense involved in litigating in the District Court. Alternatively, the Law Society suggests that the Solicitors' Hourly Rates should be reviewed so that the winning parties will not be left so much out of pocket, even when they succeed in the action.

The Bar Association has also expressed concerns about the increase in workload on the District Court, as the Court will become busier after the proposed jurisdictional increase. There will need to be a corresponding increase in the level of resources available to the Courts in order to avoid lengthening the time required for a case to be heard. The government will also need to train and recruit additional judges, judicial officers and support staff to cope with the increase in the number and complexity of cases in the District Court.

Next steps

The proposed amendment to the civil jurisdictional limit of the District Court is viewed as long overdue, especially in view of the growth of the economy and the gradual rise in the value of claims since 2003. The proposed amendment, when implemented, should help to alleviate pressures on the High Court and help to overall speed up the processing of claims through the Court system.

In a paper by the Judiciary Administration from April 2017, the Judiciary has expressed its desire to formally introduce the proposals to the Legislative Counsel in 2017, and to implement the revised jurisdictional limits in early 2018. Parties concerned should keep an eye on the legislative developments and anticipate the announcement of any transitional arrangements.

 

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