HONG KONG SAR, CHINA Law and Practice Contributed by: Gordon Chan
2.14 Rules for Payment of Costs in Product Liability Claims Hong Kong generally follows the rule that costs fol - low the event, so the unsuccessful party is usually ordered to pay the successful party’s costs, subject to the court’s discretion. These costs will be listed in the receiving party’s bill of costs covering court fees, expenses for the engage - ment of lawyers and experts, and other reasonable disbursements linked to the proceedings. Recovery is usually on a taxed basis rather than full indemnity. The court holds wide discretion when deciding costs orders. It reviews the conduct of both sides, including whether they acted reasonably or wasted court time. Partial success by the winning party, or a refusal to engage in mediation without good cause, could lead to a reduced award or different allocation. Assessment and Recovery of Costs If the parties cannot agree on the amount, the court conducts a taxation process to assess the bill of costs of the receiving party. It applies standard scales that limit recovery to a proportion of actual spending, typi - cally 60–70% on a party-and-party basis. In rare cas - es involving unreasonable behaviour, the court may award costs on a more generous indemnity basis, allowing higher recovery. 2.15 Available Funding in Product Liability Claims Third-party funding of ordinary litigation remains gen - erally restricted by the common law doctrine of main - tenance and champerty, which are both a crime and a tort. Hence, contingency fees and “no win, no fee” arrangements by solicitors are generally prohibited in Hong Kong civil litigation. Available Funding in Product Liability Claims Hong Kong offers limited options for funding product liability claims other than coverage by insurers, and there is no available funding in small claims tribunal claims. The Legal Aid Schemes operated by the Legal Aid Department may be available for claims in the dis - trict court and High Court.
to the Control of Exemption Clauses Ordinance (Cap 71). All contractual terms seeking to exclude liabil - ity for death or personal injury are void, while other exclusion clauses are subject to the requirement of reasonableness. 2.13 The Impact of Regulatory Compliance on Product Liability Claims Adherence to product safety regulations provides useful evidence in Hong Kong product liability cas - es. However, there are differences in the burden and standard of proof between civil and criminal cases. In parallel proceedings, this would raise important con - cerns. Civil courts regard compliance with requirements under the Consumer Goods Safety Ordinance and other standards as a factor showing that manufactur - ers, importers or suppliers took reasonable care. If such defendants are found not guilty of the relevant regulatory offences, this can strengthen the defence in negligence or contractual claims. However, due to the higher standard of proof in crimi - nal prosecution, the mere fact of an acquittal does not absolve the liability of the defendant in a civil action. Whereas if a defendant has been found guilty of a regulatory offence, it is strong evidence of breach of duty or standard in a civil action. Limitations of Compliance as a Defence However, meeting regulatory standards does not automatically protect against liability. The courts must still assess whether the defendant exercised reason - able care in all circumstances. Factors such as the adequacy of warnings for foreseeable risks remains relevant, even if basic rules were followed. Compli - ance alone does not guarantee that a product was safe for its intended or reasonably expected use. As civil liability may arise from multiple facets of a defendant’s duty, regulatory compliance only serves as a minimum baseline rather than an expected stand - ard.
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