Welcome to the February edition of the Personal Injury and Fatal Accident Brief.

Two of the significant changes made by the Civil Justice Reform are:

1. Giving Courts the power to award indemnity costs against a plaintiff, together with enhanced interest on such costs where he fails to do better than the sanctioned offer or sanctioned payment. It is in fact mandatory for the Court to award indemnity costs with enhanced interest unless it is unjust to do so.
   
   
2. The Court will encourage and facilitate the parties to settle including encouraging the parties to attempt alternative dispute resolution, such as mediation.

The recent High Court decision in the case of Cheng Kai Kit –v- Kwong Kam Tim (2010) HKEC 153, shows that the Court will take into account the effort made by the parties to attempt settlement in determining whether it is unjust to award costs on an indemnity basis.

Cheng’s claim against the Defendant was dismissed after trial as he failed to establish liability. Prior to commencement of the trial, the following events happened:

• The Defendant made two sanctioned payments, one on 6 July 2009 (time limit to accept expired on 3 August 2009), and another on 6 August 2009. Trial commenced in less than 28 days from the second payment.
  
  
• On 30 July 2009, Cheng proposed mediation, which the Defendant agreed. Mediator was appointed, but Cheng was not able to obtain timely approval from the Director of Legal Aid to mediate. The mediation therefore did not proceed.

The question before the Court was whether it was unjust in the circumstance to award indemnity costs to the Defendant with enhanced interest for his costs. Having considered that:

1. Cheng accepted a calculated risk of being unable to establish liability at trial.
   
   
2. He could still have accepted both sanctioned payments after the trial commenced albeit with leave of the court unless liability for costs was agreed; but he never intended to accept such payments.
   
   
3. The Defendant acted reasonably in responding to the mediation proposal, and it is a conduct the Court will take into consideration.

The Court awarded the Defendant costs of the action, of which his costs from the commencement of the trial shall be on an indemnity basis with interest at 4% above the judgment rate until payment.

We are always looking for feedback so please feel free to email us your comments and/or suggestions for this newsletter.

Key Contacts

Kelly Wong
k.wong@kennedys.com.hk

Meiling Yip
m.yip@kennedys.com.hk
 

Lee Po Foon

DCPI 2342/2008
DoA: 08/09/2006

$200,000 / $835,762.50

Gurung Bhim Bahadur

HCPI 746/2005
DoA: 13/01/2010

Chan Chun Pong

HCPI 391/2008
DoA: 30/10/2006

Wong Ching Yau

HCPI 637/2008
DoA: 11/09/2005