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LCQ14: Introduction of a mechanism for class actions

     Following is a question by the Hon Dennis Kwok and a written reply by the Secretary for Justice, Ms Teresa Cheng, SC, in the Legislative Council today (April 17):

Question:

     Since April 30 last year, the Listing Rules permit emerging and innovative companies with weighted voting right structures to apply for listing on the Main Board of Hong Kong. Some members of the securities industry have pointed out that given the absence of a class action regime in Hong Kong at present, the interests of the minority shareholders of such type of companies may not be adequately protected. On the other hand, the Law Reform Commission of Hong Kong (LRC) published in May 2012 a Report on Class Actions (Report), recommending the introduction, under an incremental approach, of a class action regime in Hong Kong. The Department of Justice has established a cross-sector working group (working group) to study and consider the recommendations made in the Report. In this connection, will the Government inform this Council:

(1) of the work progress of the working group in studying and considering the recommendations made in the Report;

(2) as the LRC has put forward in the Report that (i) a comprehensive regime for class actions should be established, and (ii) the scope of a class action regime may start with consumer cases and may be extended to other cases in the light of the experience gained, whether the Government will introduce a class action regime along these two directions; if so, of the details and timetable; if not, the reasons for that; and

(3) whether it will, by following the practices of certain countries (such as the United States), introduce a class action regime for cases involving listed companies, so as to protect the interests of the minority shareholders; if so, of the details and timetable; if not, the reasons for that?

Reply:

President,

     In respect of the three parts of the question, in consultation with the Financial Services and the Treasury Bureau, our consolidated reply is set out as follows:

     As regards the Law Reform Commission’s (LRC) Report on Class Actions (Report), the cross-sector Working Group established by the Department of Justice carries on studying and considering the Report. As at April 17, 2019, the Working Group has held 25 meetings since its inception while a sub-committee set up under the Working Group has met 30 times.
 
     The subject of class actions involves wide-ranging, complex and interrelated issues covering not only technical issues in law but also policy considerations. In relation to these two aspects, there is still room for deliberation regarding the details from the implementation angle, and time is required for more in-depth analysis.
 
     At this stage, the Working Group’s study mainly focuses on considering the LRC’s recommendation on an incremental approach to implementing a class action regime in Hong Kong starting with consumer cases. The Working Group’s study includes, among others, the proposed definition of “consumer cases”, certification criteria for a class action to be adopted by the Court, the design of the procedural rules and other ancillary measures. Upon completion of the study, the Working Group will put forward its recommendations for the Government to consider and map out the way forward.

     Although there is not yet a specific timetable for consulting the public, the secretariat of the Working Group has started compiling a draft consultation document in parallel based on the research papers and deliberations of the Working Group, and the Working Group has started reviewing the draft. At this stage, the draft consultation document proposes to cover the following specific issues:

*a close scrutiny of the LRC’s proposed definitions of “consumer” and “consumer cases”;
*how potential litigants may be included (or excluded) from an intended class action;
*the procedural features of a workable proposed class action regime that would also achieve the stated policy objectives of the regime;
*the interface of litigation by way of class action with other forms of dispute resolution;
*appropriate mechanisms for determining class action awards and distributing them fairly amongst the class members;
*costs implications; and
*the resulting draft bill.

     In facilitating companies from the emerging and innovative sectors to be listed in Hong Kong, the Government and financial regulators always take the premise that appropriate safeguards to the investors should be ensured. In this connection, the Stock Exchange of Hong Kong (SEHK) has put in place some additional safeguards for companies with weighted voting rights (WVR) structures in the new listing regime implemented in end-April 2018, including requirements for WVR beneficiaries, limits on WVR powers and enhanced corporate governance and disclosure requirements, etc.

     According to the LRC’s recommendation regarding the introduction of a class action regime in the Report, disputes among company shareholders or issues of shareholders’ rights would not be covered at the initial stage. In fact, in other financial markets (including the United States), class action cases were most often brought in relation to matters relating to the disclosure of information. The SEHK has already put in place additional disclosure requirements for companies with WVR structures. Under the existing rules, the Court may exercise discretion to handle proceedings involving the same interest of numerous persons through “representative proceedings” should the plaintiffs satisfy the threefold test of establishing “a common interest, a common grievance and a remedy which is beneficial to all the plaintiffs”. read more

Labour Department highly concerned about fatal work accident that happened yesterday

     The Labour Department (LD) is highly concerned about the work accident that happened in Pak Shek Kok, Tai Po, yesterday (April 16), in which a male worker was pressed by collapsed wooden planks inside a lift shaft of a residential building under construction. He was seriously injured and passed away last night in a hospital. The LD is saddened by the death of the worker and has expressed its deepest sympathy to the victim’s family.
      
     The LD’s spokesman said, “We commenced immediate on-site investigation yesterday as soon as we were notified of the accident and issued suspension notices to the contractors suspending all the works inside the lift shaft. The contractors cannot resume the work process until the LD is satisfied that measures to abate the relevant risk have been taken.”
      
     The spokesman added, “We will complete investigation as soon as possible to identify the cause of the accident, ascertain the liability of the duty holders and recommend improvement measures. We will take actions pursuant to the law if there is any violation of the work safety legislation.”

     The general duty provisions of the Factories and Industrial Undertakings Ordinance require employers to provide safe working environments, safe plant and safe systems of work for their employees. Those who contravene the above provisions are liable to a maximum fine of $500,000 and imprisonment for six months.
      
     In regard to yesterday’s accident, the LD will issue a Work Safety Alert through its website and email, giving a brief account of the accident concerned to duty holders, workers’ unions, professional bodies of safety practitioners and others, and reminding the industry of the importance of following safety precautionary measures to prevent recurrence of similar accidents.
      
     The LD will also remind the employer concerned of the liability for employees’ compensation under the Employees’ Compensation Ordinance, assist family members of the deceased to claim employees’ compensation and closely follow up on the case. For those with financial difficulties, the LD will assist them to apply for appropriate emergency funds. Subject to the needs and wishes of family members of the deceased, the LD will also liaise with the Social Welfare Department for financial or other assistance.
      
     For the sake of securing the safety and health of employees at work, the LD appeals to employers to provide plant and systems of work that are safe and without risks to health. Employees should co-operate with their employers, adopt all safety measures and use personal protective equipment provided properly to avoid endangering their own work safety and that of other workers. read more

CFS follows up on incident of French cheese suspected to be contaminated with Listeria monocytogenes

     â€‹The Centre for Food Safety (CFS) of the Food and Environmental Hygiene Department today (April 17) said that while following up on the incident of cheese imported from France suspected to be contaminated with Listeria monocytogenes, the CFS, according to the latest information provided by the Rapid Alert System for Food and Feed (RASFF) of the European Commission, confirmed that one more local importer was found to have imported the affected product. The CFS urged the public not to consume the product concerned and the trade should stop using or selling the affected product immediately if they possess it.
      
     Product details are as follows:
      
Product name: Brillat Savarin
Brand: Beillevaire
Place of origin: France
Importer: K-Element Limited
Lot No: 1900307B, 1900437B, 1901105, 1901542B, 1901757, 1901933B, 1902075B, 1902379B, 1902791 and 1903446B
Best-before dates: February 10 to April 21, 2019
      
     “The CFS announced yesterday that certain batches of cheese imported from France had to be recalled due to possible contamination with Listeria monocytogenes. The CFS later received a notification from the RASFF updating that another local importer, K-Element Limited, had also imported the affected product,” a spokesman for the CFS said.
      
     The CFS’ follow-up investigation confirmed that the importer had imported the above-mentioned batches of the affected product and all of them had been distributed. The importer has initiated a recall according to the CFS’ instructions. Enquiries about the recall can be made to the importer’s hotline at 3106 4722 during office hours.
      
     “Listeria monocytogenes can be easily destroyed by cooking but can survive and multiply at refrigerator temperature. Most healthy individuals do not develop symptoms or only have mild symptoms like fever, muscle pain, headache, nausea, vomiting or diarrhoea when infected. However, severe complications such as septicaemia, meningitis or even death may occur in newborns, the elderly and those with a weaker immune system. Although infected pregnant women may just experience mild symptoms generally, the infection of Listeria monocytogenes may cause miscarriage, infant death, preterm birth, or severe infection in newborns,” the spokesman said.
      
     The spokesman urged consumers not to consume the affected product if they have bought it. The trade should also stop using or selling the product concerned immediately if they possess it.
      
     The CFS will alert the trade to the incident, continue to follow up and take appropriate action. Investigation is ongoing. read more

Update on measles cases

     The Centre for Health Protection (CHP) of the Department of Health (DH) is today (April 17) investigating a case of measles infection.

     As at 4pm today, one case, which involves a 45-year-old woman, was recorded. The woman with good past health developed fever since April 12 and rash since April 15. She consulted a general practitioner on April 13 and attended the Accident and Emergency Department at Pok Oi Hospital on April 15 and was transferred to Tuen Mun Hospital for admission and treatment on the same day. A laboratory test of her respiratory specimen was positive for the measles virus. She has been in a stable condition. She has reported to have measles vaccination, and had travelled to Taipei during the incubation period and to Jiangmen, Guangdong, during the communicable period.

     According to the patient, she did not have contact with measles patients during the incubation period. The home contacts of the patient have remained asymptomatic so far and have been put under medical surveillance.

     Upon notification of the case, the CHP immediately commenced epidemiological investigations and conducted relevant contact tracing. Investigations are ongoing. The public place the patient visited during the communicable period is listed in the appendix.

     “The incubation period (the period from infection to appearance of illness) of measles ranges from seven days to 21 days. Symptoms of measles include fever, skin rash, cough, runny nose and red eyes. If symptoms arise, members of the public should wear surgical masks, stop going to work or school and avoid going to crowded places. They should also avoid contact with non-immune persons, especially persons with weakened immunity, pregnant women and children aged below 1. Those suspected to have been infected are advised to seek medical attention as early as possible and reveal relevant contact history of measles to healthcare professionals,” a spokesman for the DH advised.

     Regarding measles control measures implemented at Hong Kong International Airport (HKIA), a total of 20 persons received measles vaccination at the airport vaccination station as at 6pm today, bringing the cumulative number of vaccinations given to 8 206.

     From tomorrow (April 18) to April 28, the vaccination quota for the measles vaccination station at the airport remains at 500 doses daily. Vaccination for eligible airport staff will be provided to the following target groups who:

(1) Were born in or after 1967, and have not received two doses of measles vaccination, and have not been infected with measles before, and with evidence of living with infants under 1 year old or living with pregnant women; or

(2) Have laboratory evidence of testing not positive against measles antibody (IgG).

     Details of evidence are as follows:

(a) Supporting documents for living with infants under 1 year old: for example, birth certificate, discharge summary or vaccination card of the infant

(b) Supporting documents for living with pregnant women: for example, positive pregnancy tests or antenatal follow-up cards of the pregnant women

(c) Supporting documents for laboratory evidence: for example, blood results from the DH’s measles serology test or any laboratory within the past 12 months

     The venue and operation hours of the airport vaccination station are as follows:

 

Venue: Multi-function Room, HKIA Tower (Level 5, Terminal 2)
Hours: April 18 to 28
10am to 1pm
2pm to 6pm

     As for the blood test service, the DH will continue to arrange the provision of a measles serology test service for airport staff to identify those who need the measles vaccination. A DH contractor will provide the blood test service for about 200 airport staff who were born in or after 1967 daily from Tuesdays to Thursdays (April 16 to 18 and 23 to 25). Twenty-nine blood samples have been collected today. The DH will notify the participants individually of the serology results.

     The venue and operation hours of the airport blood test station are as follows:

 
Venue: South side before the Immigration Hall at Level 3 of Terminal 2 (non-restricted area)
Hours: April 16 to 18, 23 to 25
9am to 1pm

     A hotline (2125 1122) has been set up for public enquiries and operates during office hours from Mondays to Fridays. A total of 3 204 enquiries have been received so far. read more