A bar on competition

Is Hong Kong's bar under threat of extinction, or is it simply not prepared to compete? To some extent Hong Kong recognises, that its bar is too small to support specialists in some fields, so it continues to permit QCs from the UK to be admitted on an ad hoc basis. Although this is plainly in the interests of clients, the bar is not enthusiastic about the prospect of UK QCs being admitted to handle the most complex and therefore lucrative cases. Economics are often cited as a reason for retaining UK silks, as the best QCs in the UK are significantly cheaper than senior counsel (SCs) in Hong Kong – hourly rates exceeding $1,000 (£679) are routinely charged.

The bar's stance is important as it is the first body to be consulted when a QC is entering Hong Kong from the UK. Unsurprisingly, it takes a restrictive attitude towards these applications. Although the bar has eventually consented to most applications, during the past few years the number of applications has dropped dramatically despite the increase in Hong Kong's level of complex litigation. One reason is that solicitors and their clients know that the bar is likely to oppose the application and think it is simply not worth pursuing it.

Following consultation with the bar, an application is made to the courts. For an application to be successful, it is necessary to demonstrate that the QC has a level of expertise that cannot be readily found in Hong Kong. It is also preferred that a local lawyer is also retained for the matter, presumably so that there will be some element of technology transfer in the process.

During 2000, one application for the admission of a UK QC for a trial in Hong Kong attracted public attention after the bar raised the controversial issue of touting. To put the matter into context, earlier in the year the bar rejected a relaxation of its own advertising and marketing rules – Hong Kong barristers can do little or no marketing in the form of cocktail parties, brochures, advertising rates and so on. Around this time, a number of prominent UK chambers held cocktail parties of varying degrees of formality. This outraged the bar, which denounced these foreign barristers as touting for business. The bar complained that it had no jurisdiction over UK barristers and threatened to blacklist any chambers found to have been touting. It also said that it would oppose any application for a member of those chambers to be admitted in Hong Kong.

At about the same time, an application was made to admit a leading UK silk for a complex trial. The client was a sophisticated global litigant. It had been through an earlier trial, using a Hong Kong silk, dealing with broadly similar issues and had lost. The client decided that, before embarking on an appeal from that decision, it wished to use its regular UK QC for the "second" trial, in conjunction with the SC who had represented it at the first trial.

An application was made, and opposed by the bar. It raised the issue of touting, which was actually irrelevant in this case because the QC involved had never been to Hong Kong nor had any other member of his chambers. When this was made known the bar accepted that he could not be accused of touting, but nevertheless sought directions from the judge on the question of touting. Despite the admission application being persuasively argued by a leading SC, in the face of the bar's opposition and the smoke screen of touting, the application failed.

It is feared that the bar's trenchant opposition to the use of UK QCs, of which this is but one example, will only harden. It is in the interest of Hong Kong SCs to avoid competition from any quarter and ensure that their hourly chargeout rates are maintained. This is plainly, however, not in the interests of clients.

The bar's hostility to any form of competition extends to opposing any move to introduce solicitor advocacy in the higher courts. The Law Society of Hong Kong has made several attempts to introduce higher rights of audience for solicitors, but although these have met with support and approval from the Attorney General's Chambers (now the Department of Justice), they have been consistently opposed and defeated by the bar.

During 2000, in light of growing concerns about the quality of advocacy at the junior end of the bar, the Law Society presented a fairly radical proposal to the Chief Justice. It proposed that on qualification, all lawyers should enjoy the same rights of audience presently enjoyed by solicitors. To progress to higher rights an advocate would have to earn their spurs and be accredited, and they would remain in practices as either solicitors or barristers. In Hong Kong the training for solicitors and barristers is the same during the academic and vocational stages, it is only when they enter practices that they diverge.

It is widely recognised that the best law graduates prefer to join law firms rather than go to the bar. But it is clearly in the interests of the community that only the best lawyers present cases in court. The Law Society believes that if the best lawyers are not choosing a career at the bar, radical reforms are necessary.

The bar has not formally responded to the Law Society's proposal. It has, however, tried to confuse issues by stating that the Law Society is pushing for fusion and that Hong Kong is a unique legal society that, unlike any other jurisdiction in the world, needs an independent bar. What Hong Kong does need is a strong and independent legal profession, and that already exists, albeit split. It is patronising in the extreme to suggest that in jurisdictions where lawyers are both advocates and solicitors (for example Canada, Singapore, the US) that there are no lawyers prepared to fight for the rights of their clients. It is equally wrong to suggest that the extension of rights of audience inevitably leads to complete fusion. One only has to look to jurisdictions of equivalent size to Hong Kong – such as New Zealand or the individual states in Australia – where solicitors have rights of audience but there remains an independent bar of practitioners who have chosen to practise as such.

Because all that is sought by solicitors is the right to compete, the bar's only reason for resisting the extension of rights of audience can be the fear of competition. This fear is justified, because in many areas of law the only experts in Hong Kong are solicitors working within law firms. But clients must be frustrated by having to train a generalist barrister because their lawyer of choice is unable to present the case.

Hong Kong is at a turning point in the development of legal practices. It is feared that unless there is greater competition, clients will simply shy away from Hong Kong as a venue for dispute resolution. Singapore is only a few hours away, with a jurisprudence built on English common law, and lawyers of the very highest ability practising as advocates and solicitors. The bar's fanatical approach to anti-competitiveness may realistically lead to legal work moving away from Hong Kong. A marvellous own goal. n

Denis Brock is head of litigation at Clifford Chance's Asia office.