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Hong Kong’s Litigation Funding Agreements

Hong Kong’s Litigation Funding Agreements - Raafat Imam v. Life (China) Company Limited and Others [2018] HKCFI 1852

Prosecuting in Hong Kong to implement one’s rights and privileges can be costly. Against this scenery, can an offended party of limited financial means go into an third party civil action funding agreement to support his case? The appropriate response is exceptionally certainty delicate, and hence questionable. Looked with such vulnerability, can that plaintiff request that the Court award a declaration that a proposed funding agreement does not offend the law denying support, and have that agreement endorsed in advance?

This is the thing that occurred in the ongoing case Raafat Imam v. Life (China) Company Limited and Others. Judge sitting at the Court of First Instance, acknowledged the influential contentions driving the lawyers, and held that, on the realities of the case and maybe by and large, the appropriate response is in the negative.

The scholarly Judge communicated the view that in choosing whether the Funding Agreement would draw in criminal obligation for champerty, the Court would need to think about various realities over its terms – and it is difficult to decide such issues in an interlocutory application.

His Lordship thought about that the Plaintiff's supposed impecuniosity seems fake, and the reason for the access to justice exception is to guarantee that a prosecutor can access justice, not to encourage access to his optimal or favoured legal representation, anyway that was something the Plaintiff was wanting to accomplish. It is after all not the Court's capacity to balance litigation power between the Plaintiff and the Defendants.

This choice is critical to both parties, funders, and to be sure all Court clients. The Court thought about that it is generally improper for potential offended parties and additionally funders to look for the Court's approval on whether a proposed subsidizing understanding would annoy the law disallowing upkeep and champerty or potentially fall inside the perceived special case identifying with access to equity. This implies if any parties or funders wish to go into a case financing agreement, they would need to do it at their very own dangers. It is fitting that these dangers are considered into the business terms of the subsidizing understanding itself.