HONG KONG SAR, CHINA Law and Practice Contributed by: Gordon Chan
Consumer Legal Action Fund Consumers can apply to the Consumer Legal Action Fund for financial support in meritorious product lia - bility or consumer claims. Established by the Hong Kong government and managed by the Consumer Council, this fund assesses applications based on the strength of the case, public interest, and the prospect of success. It can cover legal costs and, in appropriate cases, provide broader assistance to help individuals pursue claims they could not otherwise afford. Third-Party Funding Third-party litigation funding remains generally pro - hibited for court-based product liability claims. The common law rules against maintenance and cham - perty continue to prohibit unrelated third parties from financing litigation in return for a share of any recovery. However, these restrictions do not apply to arbitration or related proceedings, where funding has been per - mitted since 2019. As a result, parties in larger com - mercial disputes may prefer arbitration to access such funding. 2.16 Existence of Class Actions, Representative Proceedings or Co-Ordinated Proceedings in Product Liability Claims Hong Kong has no class action regime. However, rep - resentative proceedings are possible under Order 15, Rule 12 of the Rules of the High Court or the Rules of the District Court, where a representative may sue or defend a claim as a representative to multiple parties having the same interest. The mechanism is, however, rarely used in Hong Kong and is even rarer for product liability claims. The main requirement is the “same interest” test. One or more plaintiffs (or defendants) can represent a larg - er group if all members share the “same interest” in the claim. This requires that: • the issues of fact and law are essentially identical across the group; • members of the group have a common grievance; and • the relief sought is the same for everyone (courts interpret this requirement strictly, which often prevents a direct claim for damages, due to often varying degrees of injury or loss suffered).
Representative proceedings are rarely used in prod - uct liability disputes in Hong Kong. The strict “same interest” test makes them difficult to apply to typical consumer claims involving defective goods, where personal injuries or losses vary. Individual members will likely need to commence separate action to prove the damages suffered, following a declaratory relief from the representative action. Most cases proceed individually or in small groups, often supported by the Consumer Legal Action Fund managed by the Consumer Council for eligible con - sumers. There have been calls for reform and intro - duction of a proper class action system, particularly for consumer matters, but no comprehensive regime exists as yet. 2.17 Summary of Significant Recent Product Liability Claims Hong Kong has relatively limited, reported modern product liability case law, and most claims still pro - ceed through ordinary contract and negligence princi - ples. Recent cases have mostly been brought as con - tractual claims and the disputes are factual in nature. Courts continue to handle product liability disputes primarily through contractual claims with reliance on the Sale of Goods Ordinance, focusing on implied terms of merchantable quality and fitness for pur - pose. Recent cases illustrate how judges interpret these concepts in practice, often emphasising objec - tive standards of safety, conformity with descriptions or samples, and reasonable expectations based on the product’s intended use. Notable Recent Hong Kong Product Liability Cases Counterfeit electronic components – Smith & Associates Far East Limited v EZ Ram Technology Limited [2023] HKDC 435 The buyer purchased thousands of memory chips described as genuine Samsung products. Tests later confirmed they were counterfeits. The district court found breaches of both express contractual terms requiring original equipment manufacturer parts and the implied term under the Sale of Goods Ordinance that goods must correspond with their description. The seller was held liable for the full loss. This case
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