HKSAR v. Ip Hon Ming and Others

DCCC 216/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 216 OF 2013

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REASONS FOR VERDICT

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1.There are in this case 26 charges of champerty contrary to Common Law and punishable under section 101(I) of the Criminal Procedure Ordinance Cap 221:-

(i) Charges 1 to 5 are against all the defendants;

(ii) charges 6 to 25 are against D1 and D2, the 1^st and 2^nd defendants;

(iii) Charge 26 is against D1 only.

2.The particulars of each charge allege the defendants in question unlawfully made a champertous bargain with the named party to unlawfully maintain a civil action in the HKSAR against the specified defendant to each action.

Background

3.All 26 civil actions are personal injury actions.  The victims or claimants, who nearly all gave evidence as prosecution witnesses (except the claimant for charge 3 who was too elderly and ill to give evidence) came into contact with D1. D1 was in charge of “Quickway Professional Consultants Limited” (QPCL).  D1 was a recovery agent who rendered services to claimants to pursue a legal claim arising from their injuries.  He introduced all claimants to Yeong & Co (“Y & Co”) solicitors. This firm is run by D2 and D3; a husband and wife team.

4.There were agreements signed between D1 and all claimants and documents signed at Y & Co as well.

5.Each case taken on or instigated by Y & Co was settled; some before any action was filed and the rest before any substantive litigation got underway.  Most of the claimants were told of the negotiated figure and agreed it. When the compensation money reached Y & Co they would prepare 2 cheques one for 80% of the award and the other for 20% of the award.

6.This split was pursuant to an agreement made between claimants and D1.  The claimant would pay D1 20% of any successful claim in return for D1 pursuing the claim on his behalf.  The claimant would not be required to pay any costs upfront or during the whole claim process. If the claim was unsuccessful the claimant was not required to pay any costs.  D1 would arrange a solicitor to make the claim.  There were penalty clauses I will later refer to.

7.Ultimately all the cheques for 20% of each award obtained were either made payable to the claimant (but a bearer cheque), left blank or payable to QPCL on 3 occasions.  It was not in dispute every cheque was paid into the defendant, D1’s bank account or he cashed it. The claimants only ever left Y & Co with one cheque and it was for 80% of the award, minus any money payable to any government departments.

8.The claimants were ignorant of the fact their costs incurred by Y & Co during the litigation process could be, would be if successful and in fact were borne by their opposition in each claim or action.  They were in the main ignorant of the fact they had incurred costs; there was an assumption by claimants that the 20% according to the agreement with D1 covered all costs incurred by D1 and the solicitors, Y & Co.

9.The prosecution says the conduct of all defendants point to champertous agreements between them and each claimant. The defendants worked together to successfully execute each such agreement. D1 does not dispute his service fee to assist claimants sue for personal injuries was 20% of a successful claim and no fee if there was no damages awarded or agreed. The issue is that his conduct did not amount to champerty. D2 and D3 say they did not have any knowledge of D1’s agreement with each claimant or the terms. They conducted the litigation for each claimant client according to their professional duty and code of conduct. They were not part of any champertous arrangement.

The offence of champerty

10.Champerty is an offence may have been abolished in many common law jurisdictions but in Hong Kong maintenance and champerty whether sued as torts or prosecuted as a criminal offence are still a part of the law here.

11.Maintenance, an offence in itself is one of assisting and encouraging a party in litigation by another who neither had an interest in the suit nor lawful justification.

12.Champerty is an aggravated form of maintenance where a part of or a percentage of any award gained as a result of the litigation is taken as consideration for the maintenance of the suit.

13.Lord Denning MR in 1963 in Re Trepca Mines Limited No 2 [1963] 1 Ch 199 gave a definition and an explanation why champerty is a criminal offence.

“Maintenance may, I think, nowadays be defined as improperly stirring up litigation and strife by giving aid to one party to bring or defend a claim without just cause or excuse.

Champerty is derived from campi partitio (division of the field). It occurs when the person maintaining another stipulates for a share of the proceeds. The reason why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses.”

14.What Lord Denning describes succinctly is the mischief targeted by champerty.  The arrangement may lead to a perversion of justice; there is a real danger.  Where the champertor is an officer of the court, there is a real danger a champertous agreement may give rise to conflicts between his interest in financial gain and his duties to the court as well as his lay client.  Justice may be undermined by such real conflicts.

15.The rationale of the offences has undergone changes and that is recognized by the courts.  These 2 offences stem from public policy so are subject to change and will evolve with that policy.  Public policy changes so the law must be constantly under review to be in line with any changes.

16.It has been noted that the scope of these offences has been narrowed by the courts creating exceptions to liability to reflect changed public policy considerations.

17.Before considering whether an exception applies an offence must be established.

18.In a most recent authority, Winnie Lo v HKSAR [2012] 1 HKC, Mr Justice Bokhary PJ set out the approach a court should adopt to determine if the ingredients of the offences of Maintenance and Champerty are established by the prosecution.

19.The 1^st posed question is to ask whether the defendant officiously intermeddled with someone’s litigation which no way concerns or belongs to him. If the answer is no, then there is no maintenance.  But if yes, there could be maintenance.  Mr Justice Bokhary PJ asks if the defendant’s motives were charitable, and if they were, then his involvement may not be maintenance.

20.At this stage, if the answer is yes, there is still the possibility the defendant’s conduct comes within a category that excludes such conduct from being an offence of maintenance or champerty.  There are exceptions.  Mr Justice Ribeiro PJ deals with those categories in detail in Unruh v Seeberger [2007] 2 HKC 609 (specifically at paragraphs 91 to 98 of his judgment). These are cited as (1) cases of legitimate common interest, (2) cases involving access to justice considerations and (3) a miscellaneous category of practices regarded as lawful such as the sale and assignment by a trustee in bankruptcy to a purchaser for value. In citing these excluded forms of conduct Mr. Justice Bokhary PJ in the Winnie Lo appeal emphasized whether it was necessary to go into the question of conduct being excluded depended upon the circumstances of the case and whether there was a real possibility it might.

21.Finally if the forgoing answers were against the defendant the final question to be posed was “did the defendant’s conduct pose a genuine risk to the integrity of the court’s process?” If “Yes” the jury was entitled to find the defendant guilty but if “No” the defendant must be acquitted.

22.Whilst the foregoing were directed at the offence of maintenance if the charge was champerty as in the present case the directions would cover one more ingredient namely a share of the proceeds of litigation maintained.

23.A genuine risk to the courts integrity is not limited to cases where the action has been filed in court. It is artificial to make a distinction between the time an opposition party is notified of a pending claim and intent to sue and actually reaching the stage of filing an action. The process before it gets to court must also be covered by this principle to protect the integrity of the courts process. The process before an action gets to court can be subject to the same risk. That is why I rejected D2’s submission of no case to answer for Charges 1, 9, 15 and 25. It was argued that because the claimants in those charges accepted a compensation offer before the claim was filed in court there could be no risk to the integrity of the courts process. If a solicitor’s conduct attracts liability it can and will be relevant and material even before any claim is actually filed in a court.

When does a solicitor attract liability?

24.In Wallersteiner v Moir (No 2) [1975] 1 QB 373 at 393, Lord Denning MR held;

“English law has never sanctioned an agreement by which a lawyer is remunerated on the basis of a ‘contingency fee,’ that is that he gets paid the fee if he wins, but not if he loses. Such an agreement was illegal on the ground that it was the offence of champerty. In its origin champerty was a division of the proceeds (campi partitio). An agreement by which a lawyer, if he won, was to receive a share of the proceeds was pure champerty. Even if he was not to receive an actual share, but payment of a commission on a sum proportioned to the amount recovered - only if he won - it was also regarded as champerty. Even if the sum was not a proportion of the amount recovered, but a specific sum or advantage which was to be received if he won but not if he lost, that too was unlawful. It mattered not whether the sum to be received was to be his sole remuneration, or to be an added remuneration (above his normal fee), in any case it was unlawful if it was to be paid only if he won, and not if he lost.”(emphasis added)

25.In Pittman v Prudential Deposit Bank [1896] 13 TLR 110, Lord Esher MR said:

“In order to preserve the honesty of the profession it was a rule of law which the court had laid down and would always insist upon that a solicitor could not make an arrangement of any kind with his client during the litigation which he was conducting so as to give him any advantage in respect of the result of the litigation......The responsibility of persons engaged in the profession of the law was very great, and their conduct must be regulated by the most precise rules of honour. The court thought that, unless the rule was carried out to the fullest extent, there would be a temptation to solicitors which they should not be subjected to. It was useless to say that in the particular case the solicitor was not tempted and that he acted from the most honourable motives. The law was universal that, without considering the motives of the particular solicitor, a solicitor must not persuade his client, or indeed accept from his client a voluntary offer, so as to obtain any advantage dependent upon the result of the litigation he was then conducting.”

26.Both Masters of the Rolls quoted above place great measure on the responsibility of persons engaged in the law as a profession.  Lawyers cannot enter into a champertous agreement even if their motives were altruistic in origin.

27.In Wallersteiner, Buckley LJ discusses the obvious risk to the integrity of the court’s process when a lawyer enters a champertous agreement.  He says at page 402 at F:

“First, in litigation a professional lawyer’s role is to advise his client with a clear eye and an unbiased judgment. Secondly, a solicitor retained to conduct litigation is not merely an adviser to his client, but also an officer of the court with a duty to the court to ensure that his client’s case, which he must, of course, present and conduct with the utmost care of his client’s interests, is also presented and conducted with scrupulous fairness and integrity. A barrister owes similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations.” (emphasis added)

28.D2 and D3 in the present case were at all material times solicitors. The question of when solicitors attract liability was extensively reviewed by Mr Justice Ribeiro PJ in the Winnie Lo appeal since Winnie Lo was a solicitor. It was clearly summarized by Mr. Mitchell for the prosecution in his final submissions. P 615 and I quote;

“18. A solicitor who has conduct of a piece of litigation may attract liability only when he transgresses his proper professional role for example where the action is brought in the client’s name but in reality was a suit conducted for the solicitor’s own purposes (paragraph 103 ( of the Winnie Lo appeal)).

19. A solicitor incurs liability where he seeks to make a profit out of another person’s action by taking the proceeds or part of them for himself (paragraph 104).

20. A solicitor is not liable for champerty where he agrees to act in litigation without charge or where he agrees to act for less than his ordinary charges on terms that he will merely be reimbursed his disbursements (paragraph 106).

21. This is also the case where the solicitor agrees to look for a hoped for favourable costs order against the other side to recover his costs and disbursements and seeks nothing from his client (paragraph 107).

22. Mere knowledge of the client’s participation in a champertous scheme does not taint the solicitor provided he keeps within his proper professional domain.

23. In this connection Mr Justice Ribeiro quoted from the judgment of Lord Denning in Re Trepec Mines Ltd( No 2) (1960) 104 CKR 186 at 203:

“When a solicitor is retained to conduct litigation on the ordinary terms, he is not debarred from acting in that litigation simply because he knows, or gets to know, that his client has made a champertous agreement to share the proceeds with another. He is entitled to conduct the litigation to the end and to recover his proper costs for so doing, unless he has himself in some way or other participated in the champertous agreement”. (emphasis supplied) (paragraph 110) ”

29.Admitted facts (P611) relate to all 26 charges.  Salient facts include the following;

30.Quickway Professional Consultants Limited (QPCL) was incorporated on 9 November 2001.  Y & Co commenced practice on 2 July 2002.  D2 and D3 were the partners and only registered solicitors of the firm.

31.QPCL had 2 directors.  D1 at all material times and D3’s mother between 9 November 2001 and 6 April 2005 also at all material times where these 26 claimants and charges are concerned.

32.According to Law Society Records, QPCL was not between July 2002 and December 2007 declared as a service company for Y & Co and between January 2003 and December 2007 D2 and D3 had not shared with any person not being a solicitors their profit costs.  The relevance is significant to the prosecution who say the solicitors firm profited from the champertous agreement by profit costs secured as a result of D1’s introduction of each claimant to their firm.

33.The admitted facts also dealt with the arrests and contents of subsequent interviews under caution of the defendants.

34.D1 told the police he set up QPCL in 2000 and it handled claims for victims arising from accidents and injuries at work.  His fee was 20% of any successful compensation amount claimed and paid. His office was searched and documents seized, many listed in the admitted facts.

35.D2 was interviewed twice under caution and admitted D1 referred many clients to him. He said each client was told of the firms’ fee structure and their rights to apply for Legal Aid.  He did not collect any fees on account as it was more convenient for the client if he claimed their fees incurred directly from the opposite party, the defendant of the claims.

36.D2 said he did not share any advantage with D1 nor did he know of the agreements between claimants and D1 nor the documents they signed.

37.D2 said his firm prepared 2 cheques for each award at the request of his clients.  He did not know D1 would take 20% of the compensation.  He was the one who told D3 to prepare 2 cheques.

38.In his 2^nd interview, he elaborated further and claimed he did not know what his clients did with the 2 cheques prepared.  If D1 was present at his office when claimants collected their cheques it was either at the clients’ request or he was asked to request D1’s presence.

39.D3 was also interviewed twice after her arrest.  She told the police she did not know D1 but had heard his name.  She did not know of QPCL.  She assisted D2 at work and handled tasks for him.  As for the 2 cheques prepared for each claim, this was done according to clients’ instructions.

40.The admitted facts dealt with relevant bankers affirmations.  The salient fact being that the cheques for 20% of all awards (or 17% in PW2’s agreement) ended up in D1’s personal bank account.

41.The facts at P611 also dealt with which claimants applied for financial assistance from the Social Welfare Department (SWD) under the Traffic Accident Victims Assistance Fund (TAVA).  If assistance is given each claimant had to agree to repay the amount granted from any subsequent successful civil award granted.  The evidence was that Y & Co would repay the SWD on behalf of each claimant.  The TAVA repayment was deducted from the 80% given to the claimant by Y & Co; not 100%.

42.The offices of Y & Co were searched.  The exhibits seized were listed in the admitted facts.  At paragraphs 172 to 175 the facts list 3 particularly relevant documents to the prosecution case who say they connect Y & Co to D1.  They were retrieved from D3’s computer and are pro forma copies of D1’s documents he had all claimant signed, Exhs P422 to 424.  P422 and P424 are essentially  the same document with 1 clause more in P422.

43.The offices of QPCL were searched. All exhibits seized were listed in the admitted facts. 2 documents of interest that were connected to Y & Co were found. P342 is a solicitors letter addressed to Y & Co, ref number PI/GY/0304110, “GY” I assume refers to D2. It offers terms of settlement for PW24’s claim (Charge23). P420 is a memo from D2 to members of his staff including DW1, listing many clients and refers to contacting D1 in connection to these clients.

44.The facts also dealt with the background and documents relating to all the claims for personal injuries, in particular court documents if any and the details of the settlement of each claim.  The details include award amounts agreed or negotiated and costs agreed and paid for by the defendant of each claim to Y & Co.

The prosecution case

45.This trial was set down for 20 days and concluded on the 21^st.  The prosecution called 27 civilian witnesses.  All gave evidence under immunity from prosecution. All except PW4 and PW28 were claimants of the 26 charges.  PW4’s mother was the claimant of charge 3 but too ill to give evidence.  He gave evidence of her claim.  PW28 was PW27’s daughter and gave evidence of her elderly mother’s claim related to charge 26 to supplement her evidence.

46.Despite the number of charges, the evidence of each claimant was very similar; from having an accident, suffering injuries, meeting D1, starting a claim for damages, being introduced to D2 at Y & Co and ultimately getting a sum of agreed damages.

47.Every one of the claimants described how after suffering injuries in a traffic accident, an accident or a work related accident they either met, were introduced to or came to know of D1.  D1 claimed to be able to sue for compensation on their behalf.

48.D1 set up his business QPCL as a service provider; specifically to assist claimants to finance a claim or an action until fruition. The fee for such a service was a percentage of the award ultimately received. The claimants were guaranteed if there was no award they would not pay any costs at all. D1 had brochures printed and designed to be for distribution, P399. D1’s name card, P400 declares his company QPCL “specializes in making claims for compensation on behalf of people who are injured due to accidents including work injuries, traffic accidents and other causes”. It pledges to “charge the most reasonable fees only after compensation is claimed successfully”. The champertous conduct is there in black and white.

49.After each person agreed to hire him for his services, D1 would take them personally to the firm Y & Co, solicitors. The firm would take them on as clients. There was evidence that D2 and D3 worked at Messrs. S H Chan & Co, solicitors, before they set up their own firm and D1 took claimants to that firm for representation. Some documents bear the name of S H Chan & Co. It seems such cases subsequently followed D2 to his own firm.

50.At some stage, either before arriving at Y & Co or as some recall at Y & Co’s offices, each claimant signed the 4 same documents; for example; PW1 of charge 1 signed:-

(1) P1 a document entitled “Authorization for claiming Accident Injury Compensation Application Form”. It is on QPCL letterhead paper. It is signed by D1 and PW1. It gives the personal details of PW1, accident details and nature of injuries suffered. It contains 5 terms:-

Particularly, it says PW1 “agrees to pay 20% of the compensation amount upon receipt as fee for making the claim”. It says “The above applicant (PW1) is not required to pay any application fee or handling charge during the claim process for injury and death compensation”.

(2) The 2^nd document (P2) is the official contract referred to in the 1^st document and entitled “Accident Claim Service Agreement” (the agreement). PW1 signed this as did D1 for and on behalf of QPCL. It contains 9 terms and conditions:-

Clauses 1, 2 and 6 concern referrals to professionals such as lawyers and PW1 agrees to fully co-operate with that lawyer.

Clause 3 and 4 clearly made PW1 liable for fees for medical reports and information collection charges but other than that PW1 will not be required to pay any other fees during the claim proceedings. This clearly means from start to finish.

Clause 5 has PW1 agreeing to pay QPCL 20% of any “successfully personal damages” and agreeing for the lawyer representing PW1 to pay it directly to QPCL when the lawyer receives the sum of money.

Clause 7 and 8 are penalty clauses making PW1 liable to pay charges and a penalty if PW1 changes solicitors and even heavier financial penalties if a claim has been filed with the court before PW1 changes solicitors.

(This document has 2 versions, 1 version has only 1 penalty clause, clause 7, for example, P22 signed by PW2. It was redrafted to include a clause 8 an additional penalty clause such as P2. Some claimants signed this amended document.)

(3) The 3^rd document PW1 signed (P3) is headed “Letter of Authorization”. It is a bilingual document that PW1 signed authorizing Y & Co to pay 20% of the total compensation money to QPCL directly. This 20% was described as a consultancy fee.

(4) The 4^th document PW1 signed (P4) is another letter of authorization. This provided authority to Y & Co to receive on behalf of PW1 all money recovered as a result of a claim from the relevant parties directly. PW1 did not recall clearly where he signed these 4 documents.

51.These 4 documents were signed by all the claimants of all 26 charges.  It is not necessary to repeat the similar evidence of each witness regarding the documents they signed suffice to say I have reviewed all their evidence in considering my findings. I appreciate that the charges and events date back many years.  Many were unable to say with any certainty where documents were signed and other such details.  Many were unable to recognize the defendants but identified their roles through documents produced. In any event, identity of the defendants was not in dispute. Not one prosecution witness or claimant to be more precise paid any money on account at Y & Co.  None were asked.  Some paid $800 on account which clearly covered the fee for requesting medical reports from the Hospital Authority.

52.The claimants were informed an agreed amount of damages had been agreed upon after negotiations. No case went to trial.  Some recall being consulted on the sum agreed, some recall getting a telephone call to collect their compensation agreed by the parties. All collected a cheque for 80% of the award after any deductions to the SWD’s TAVA scheme from Y & Co.  All signed an acknowledgement that displayed a copy of 2 cheques split into 80% and 20% but not many recall this acknowledgment.  Not one claimant left Y & Co with 2 cheques; only ever 1.

53.PW27 of charge 26 was in a different position because she pursued an action against a Government department and the Treasury insisted on paying her directly.  PW28 her daughter assisted her to pay 20% to D1 independent of Y & Co.  Payment did not go through Y & Co which is why only D1 faced charge 26.

54.To illustrate this payment methodology I will continue to use PW1’s evidence as an example.  PW1 was contacted over 2 years after engaging D1 and Y & Co to go to Y & Co to collect an amount of money.  He was given a cheque for $130,309 which he knew had taken into account the repayment of a sum to the TAVA scheme of the SWD.  This cheque he banked (P19) in his bank account. 

55.The evidence shows another cheque for $34,000 which is, and it is not disputed, 20% of the award. It was made payable to PW1 in his name but it is not a crossed cheque.  It was not disputed this cheque was cashed by D1.

56.PW1 had no recollection of this cheque or telling Y & Co to prepare a 20% cheque for D1.  He left Y & Co with P19 only, one cheque.

57.Exh D5 is an acknowledgment signed by PW1.  It states he agreed to a full and final settlement of $170,000.  It states $5,691 would be deducted for payment to the SWD.  It confirms PW1 received $164,309 from Y & Co.  This document was prepared by Y & Co.  The fact is he only received $130,309, the balance $34,000 or 20% of the award of $170,000 was received by D1 in the form of a cheque prepared by Y & Co. This acknowledgment, Exh D5 pointedly makes no reference to this deduction of a further 20% from the award amount or any reference to D1 or QPCL.

58.The payment of 20% is in accordance to Exh P3 which authorizes Y & Co to pay 20% directly to QPCL.

59.The prosecution pointed out that Y & Co insisted all monies were to be paid directly to them.  In PW1’s case, the insurance company of the defendant in PW1’s claim drew a cheque up for $170,000 in favour of PW1.  Y & Co insisted they re-issue the cheque in favour of Y & Co (Para 288 of the admitted facts and P9).

60.Exh P3 and P4 and D4, all authorize Y & Co to collect the compensation directly and pay PW1 through solicitor’s account.  This ensures Y & Co control the money that is then paid out and it facilities the champertous agreement to take 20% from the award by preparing 2 cheques.

61.Y & Co secured agreed costs of $55,000 from PW1’s action; Exh P8.

62.The prosecution points out that although there is no direct evidence D2 and D3 had any share of the 20% paid to D1.  They secured agreed costs for all the actions of each claimant.  Such costs could not have been earned without the introduction by D1 of each claimant. In some cases the claimants 80% was not a great deal more than the costs received by Y and Co, for example, PW16 received $90,299, SWD TAVA scheme was repaid $18,501, D1 received 20% being $27,200 and Y and Co $83,000. PW25 received $140,000, D1 was paid $35,000 and Y and Co negotiated costs of $152,000.

63.The modus operandi behind each claimant was the same.  They all signed an agreement and a set of documents (the same or very similar to P1 to P4) and then met D2 or a female solicitor at Y & Co. Other documents were signed there. They paid no costs upfront or at all during the process of their action.  Ultimately, they were paid 80% of their claim and 20% was always deducted as a service fee. This payment was facilitated by Y & Co preparing 2 cheques for collection.  Y & Co also secured agreed costs from each action.  None of the above was in dispute.

64.The prosecution says D1 set up a business and it was in essence to commit champerty. He was gambling on others litigation. D2 and D3 knowingly participated and facilitated in this conduct. D1 bought them business and they were rewarded with costs from the opposition at the end of the day. It was not a situation where any exception should come into play. This was not an access to justice scenario. Their conduct posed a risk to the integrity of the court process and legal system. Any situation where a claimant or a plaintiffs interest is not the only interest in an outcome there must be a risk of an abuse. Even if the risk does not materialize that is not relevant. The duty and interest of solicitors will obviously conflict if they act pursuant to such an agreement, there must be a risk of abuse of the legal process.

65.An enormous number of documents were produced during the course of this trial along with over 30 prosecution witnesses.  It is not in dispute many of these documents were duplicated for the sole reason that a certain number were all signed by 26 claimants.  It is simply not practical or necessary in the course of these reasons for verdict for me to repeat them or identify them all.  Nor is it practical to cover every aspect of events covered by every civilian witness; to identify individually and discuss every discrepancy, real or perceived; to deal with every argument or submission or comment passed by counsel for all parties. In any event, credibility is not an issue as the evidence of the witnesses was not materially contentious. Despite the claimants giving evidence under immunity I am sure they were honest, truthful and credible.

The defence case - D1

66.D1 does not challenge the evidence of each prosecution witness.  He does not challenge any documentary exhibit produced.  It is agreed D1 collected 20% of each successful award as his service fee.  The amount was either deposited into his own account or he cashed the cheque for 20%.  Cross examination of every witness was very similar.  Counsel for D1 sought to establish and emphasis several points.

67.It was established that most of the claimants contacted D1 for the purpose of making a financial claim on their behalf.  His business was advertised as providing this service.  As a result all signed up to and were agreeable to paying D1 20% of any subsequent award as his fee.  All agreed D1 had assisted them in some way to pursue a claim and obtain compensation.  They did not dispute the deduction of 20% from their compensation.

68.It was part of D1’s case that his documents he required clients to sign (P1 to P4) were signed before he introduced the client to a lawyer at Y & Co.  The defence sought to confirm the fee charged was reasonable for the work done; the work done genuinely lead to compensation and D1 acted ethically and fairly.  D1 did not act improperly, exert pressure on any claimants, make misrepresentations or defraud anyone.

69.In final submissions (D123) the defence submits D1 was not an officious intermeddler in another’s litigation but that if he was and there was a champertous agreement it was an exception; it was necessary so the claimants had access to justice. Lastly, there was no real risk to the integrity of the judicial process stemming from D1’s conduct and relationship with each claimant.

70.It was suggested D1’s role was limited to an introduction to a lawyer.  Once the solicitor took over he played no further role and therefore not a risk to subsequent court process.  He was “external to the substantive judicial process”.

71.It was suggested because the claimants approached D1 and it was not D1 that solicited their claim he was not meddling officiously.  He was not an ambulance chaser, not looking for victims to sign up because they contacted him for his help.

72.That is what the majority of prosecution witnesses said; that they were introduced to D1 by someone else who suggested they had a claim for compensation.  Many were friends, colleagues and in PW26 and PW27’s case a police officer referred them to D1.  However PW2, PW18 and PW22 said they first met D1 or possibly someone from QPCL whilst in hospital after their accidents. They were approached and offered his services to sue for damages.  PW25 received a phone call from D1 offering his services and had no idea how D1 came to know of his injuries and how he came to contact him.

73.D1 agrees there is no evidence he advised any claimant of their option to consider legal aid. However, he was not under any legal duty to so advise as he was not a lawyer. This should not be held against him nor viewed negatively.

D2 & D3

74.The defence for D2 and D3 went to great lengths during cross-examination to establish that each claimant signed D1’s documents and agreement before they came to Y & Co.  D2 and D3 were not part of or party to that agreement.  That agreement had nothing to do with the claimant’s subsequent engagement of services of Y & Co.

75.It was put to the claimants they were shown, explained and signed a retainer when they engaged Y & Co, Exhibit D1.  They would also have signed D3, an authorization so Y & Co could obtain any necessary information, reports or documents from official departments to assist in a claim for compensation. DW1, Ms Edith Lam, gave evidence of the documents used by and the workings of the firm as well as the habits of D2 and D3, her employers.

76.Exh D1 the retainer was a pro forma letter signed by all new clients.  Due to the lapse of time and storage of client files not all copies could be located but a sample was shown to all witnesses if no original was at hand such as to PW2, 5, 10 and 9.  PW1, 4, 11 and 12 acknowledge their signatures on a retainer. Exhibit D1 states in paragraph 1 that D3 had explained the right to apply for legal aid and each client had decided against that avenue.  It adds that the client can apply at any time during the course of the claim.  Paragraph 2 sets out legal fees will be calculated at HK$3,500/hour plus disbursements and other relevant expenses. It goes on to explain if the claim is successful costs will be claimed from the defendant.  If it is unsuccessful or the client withdraws the claim he is liable to pay both sides costs.

77.Many of the claimants had little or no recollection of this retainer document, Exhibit D1, even those who agree their signature appears on it.  Many of the claimants if not all were sure they only had to pay 20% of their compensation and no other fees.  Many articulated the 20% included legal fees.  Most said D1 explained that was the case to them.  As examples, PW16 a police officer said D2 also told him that the 20% covered all legal fees and there was no need to pay any other legal fees.  PW11 agrees he signed the retainer but has no recollection of it and its contents.  He is sure he would only have signed this if there were no fees to pay anyone even if his claim failed.  He was sure he was told 20% to D1 covered all fees including lawyer’s fees.

78.Defence counsel submits that this retainer is in stark contrast to the agreements (P1 and P2) of D1.  Moreover, D2 and D3 were not aware of that agreement and there is no evidence they shared the 20% with D1.  The fact D3’s mother was a director of QPCL does not prove any relationship between QPCL, D2 and/or D3.

79.It was also reiterated that D1 had a very different role than D2 and/or D3.  He introduced clients to them and there ended his involvement.  D2 and/or D3 represented them and acted within the boundaries of their legal responsibility and professional duties. They were governed by the retainer and not D1’s agreements with the claimants.

80.The fact compensation cheques were split into 2 cheques, 1 for 80% and one for 20% is suspicious but not enough to prove the charge beyond reasonable doubt.

81.It was argued even if they knew of D1’s agreement with the claimants was it champerty.  They adopted D1’s counsel’s submission on this ground.  In addition as Y & Co worked within the boundaries of their professional duties and the retainer they were not party to any champertous agreement if it was such.  It has been held in authorities that the fact a solicitors agrees to charge nothing or agrees to look to a hoped for favourable costs order against the opposition to recover his costs is not objectionable.  If a solicitor gets no more than their ordinary costs how can it be said they financially benefitted or had a share of the subject matter or proceeds thereof.

82.Moreover, it was suggested that if it was a champertous arrangement it was an exception, falling under the access to justice category; identified as one of 3 areas of exceptions and qualifications.  The exceptions were referred to and discussed in detail in the case of Unruh mentioned above.

83.Public policy should dictate in favour of ensuring access to justice. To say certain situations are champertous or constitute maintenance may result in a litigant being left with no means to pursue his claim; a claim that may be perfectly good.  Whether conduct can be within any excluded category or exemption will depend on the facts and circumstances of each case.

84.D2 and D3 see it as neither here nor there the claimants did not apply to Legal Aid to see if eligible; either out of choice or ignorance of that choice.  The fact that most prosecution witnesses said they would not have engaged QPCL and paid a 20% service fee if they had known they could apply for legal aid did not advance the prosecutions case.  It was said the real issue was not addressed and that is if the claimant had applied would they have qualified for legal aid and if they did how much of a contribution would be required to be paid.

85.D2 and D3 say that Legal Aid “performs a not altogether different function from a private claims agent such as D1 as both are doing the same thing”.

86.Legal Aid is not a free service so why should Legal Aid be allowed to conduct champertous agreements?  The only difference between D1 and Legal Aid is legal aid acts under the authority of the government and the law.

87.D2 and D3 also submit the prosecution has been unable to prove that each of the defendants have been dishonest, described as “the crucial issue of mens rea”.  The prosecution did not agree dishonesty was an element of this offence.

Findings

88.The prosecution has a duty to prove all elements of the offences beyond reasonable doubt. Dishonesty is not an element in this offence.  The charges stand independent of each other as do the defendants.

89.All 3 defendants have clear records and I have warned myself of the likelihood or propensity of persons with a clear record and honourable profession committing an offence of this nature.

90.No defendant elected to give evidence as is their right.  The failure of a defendant to give evidence is no evidence of his guilt, it proves nothing one way or the other. The consequence of doing so is to leave the prosecution case enjoying the advantage of not being undermined, contradicted as explained by any evidence from the defendant. However, this is a case where not much is in dispute factually.

91.The evidence of the prosecution witnesses were in the main not extensively challenged nor were the documentary exhibits. I said above it is not practical to repeat the evidence of all claimants. This is a case where the majority of the witnesses gave very similar evidence. They give very similar accounts of their individual dealings with the defendants.  All witnesses gave evidence of events that happened many years ago and were understandably vague or confused on some events, dates and conversations. I have considered it all carefully. I won’t identify evidence in relation to each separate charge. In fact the parties do to a high degree of accuracy in their respective written final submissions, P615, D123 and D124.  Neither the defendant’s exhibits nor defence witness were challenged. 

D1

92.I have carefully considered the evidence against D1.  I repeat, he does not dispute the prosecution’s case.  I have considered the defence submissions that in short submit D1 was:-

(1) Not an officious intermeddler;

(2) If there is a champertous agreement it was exempted by the access to justice principle and public policy;

(3) if that is rejected, he did not pose a genuine risk to the integrity of the court’s process.

93.I apply the approach set out by Mr Justice Bokhary PJ in the Winnie Lo appeal (Para 18 to 22 supa). The first question is has the defendant officiously intermeddled with someone’s litigation which in no way concerns him or belongs to him.  The submission the claimants approached D1 for help and D1 did not solicit the claimants holds no water.  D1 without exception gave assistance and encouragement to the claimants to pursue a claim when he neither had an interest in the action nor any other motive recognized by the law to justify his interference.  His contracts claimed to agree to maintain an action in consideration of a promise to give QPCL a share of subject matter or award if the action succeeded.

94.D1 offered aid to each claimant to commence an action without just cause, excuse, nexus or charitable motive.  He had no legitimate transparent interest in the claimant’s suits. His motive was purely financial. He set up a business with the sole purpose, judging by the text of his brochure and name card, of achieving just that.  His material and advertisement were designed to solicit persons like these claimants, it makes no sense to say because the majority of the prosecution witnesses made the initial contact with D1 he was only responding to their invitation or request for assistance and therefore not an intermeddler by definition.  His conduct and contract with each claimant of each charge can only be defined as champertous.

95.It is artificial to argue D1’s involvement ended before any legal action commenced.  His services were not “external to the substantive judicial process”.  His services included bringing any matter to its conclusion that being an award or damages or no award or damages.  If it was the latter he would have received no remuneration for any work done by him or those involved in the process that reached that conclusion.  If it was the former QPCL was entitled to 20% of the award or damages.  More importantly, according to the terms of the contract 20% was all the claimants had to pay to reach that conclusion, no other fees or charges would be payable.  D1 offered a complete package, not 20% for an introduction to a lawyer only; his services were not limited to that introduction.

96.I am sure D1 did officiously intermeddle with each claimants litigation which no way concerned or belonged to him.  His motive cannot be said to have been charitable or benevolent.

97.Did his conduct come within a category that excludes such conduct from being an offence of champerty?  The defence suggest it did, the access to justice category.  Every person’s right to have access to the courts is fundamental according to the Basic Law of Hong Kong (Article 35).  A good example for a case to be considered excluded is where without an arrangement that is either maintenance or champertous the claimant would be unable to pursue a perfectly good strong claim.  Mr Luk for D1 quotes from the authority of Ram Coomar Coondoo v Chunder CantoMookerjee [1876] LR 2 AC 186 at 210:-

“… a fair agreement to supply funds to carry on a suit in consideration of having a share of the property, if recovered, ought not to be regarded as being, per se, opposed to public policy. Indeed, cases may be easily supposed in which it would be in furtherance of right and justice, and necessary to resist oppression, that a suitor who had a just title to property, and no means except the property itself, should be assisted in this manner.

But agreements of this kind ought to be carefully watched, and when found to be extortionate and unconscionable, so as to be inequitable against the party; or to be made, not with the bona fide object of assisting a claim believed to be just, and of obtaining a reasonable recompense therefore, but for improper objects, as for the purpose of gambling in litigation, or of injuring or oppressing others by abetting and encouraging unrighteous suits, so as to be contrary to policy, – effect ought not to be given to them.” (per Sir Montague E Smith)

98.Those words of the Privy Council actually serve as a reminder and are cautionary as opposed to encouraging such conduct in the name of public policy and Access to Justice. D1’s contract contained penalty clauses locking in each claimant.  If that individual decided after signing a contract to change solicitors or to apply to Legal Aid then a financial penalty will follow.  Is that unconscionable or inequitable against a claimant?  It highlighted the business nature of the conduct.

99.It is just that businesslike approach to this arrangement that also highlights D1 did not have the “bona fide object of assisting a claim believed to be just”.  It is a considered gamble on litigation for financial gain. As Sir Thomas Bingham MR ( as he then was) said in Giles v Thompson (1993)  3 All ER 321 at 347;

“Ordinarily, an alleged maintainer or champertor cannot rely on the agreement alleged to be unlawful as giving him his legitimate business interest, an outsider will very probably become involved in the litigation by virtue of some agreement, and if such an agreement were held to confer a sufficient interest the exception would consume the rule..….It is plain that where an outsider has no legitimate business interest beyond such as derives from the agreement whose validity is in question, he is merely trafficking in litigation, an activity which in English Law continues to regard as contrary to public policy”

D1 is the outsider trafficking in litigation described by the Master of the Roll.

100.The claimants were either unaware of Legal Aid assistance in civil claims and did not consider it an option or were completely unaware of it.  There is no evidence any claimant applied, was refused and was left in a position where they had no ability to pursue a perfectly good claim. The situation here was not one where any claimant had no other option but to accept D1’s terms and conditions; they did not have access to justice only by virtue of the champertous agreement. Moreover, once they had accepted the terms they were bound by penalty clauses. They would be penalized for exercising their right to choose their own legal representation and change legal representation if desired. This cannot be condoned.

101.Having considered the submissions I am not convinced by it that D1’s conduct and contract can be exempted or considered pursuant to the access to justice category.  In the circumstances of this case this submission fails.  No exception applies in this case.

102.According to the approach to be taken I must lastly consider if D1’s conduct posed a genuine risk to the integrity to the courts process.

103.Mr Luk for D1 submits there is no evidence D1 stood to gain by influencing damages, suppressing evidence, suborning witnesses or undermining the ends of justice. Again it was re-iterated D1’s role ended after he arranged claimants to meet solicitors at Y & Co.  As a result D1 could not have in any way undermined the integrity of the judicial process or posed such a risk.

104.I will come back to this final question after I deal with D2 and D3’s submissions.

D3

105.D3 is only charged with 5 charges compared to 25 her partner and husband D2 faces. I have reviewed the evidence of the claimants related to these 5 charges. I accept defence submission that all but PW6 are unclear and uncertain as to what role D3 played. They recall meeting a female solicitor or staff member but cannot articulate what she said or did in connection to their claims. Part of PW6’s evidence is regurgitated accurately in D2 and D3’s final submissions Exhibit D 124 at Para. 20.

106.PW6 says D3 gave him 2 cheques and explained the 20% deduction but his evidence on the whole has to be said to be uncertain.  His recollection of timing of events, documents signed and such like were, not surprisingly, vague and somewhat contradictory. He was trying to recollect meetings and conversations ten years old.  Where D2 is concerned it was not the defence case he was not the solicitor who dealt with each claimant but D3 was rarely referred to or connected to claimants and claims. DW1, Miss Lam gave evidence that D3 mainly dealt with divorce and conveyancing cases whilst D2 dealt with the personal injuries clients.  On top of that, D3 was not in the office often opting to deal with their home and their daughter’s affairs instead.  D3 said in her interview to the police that she assisted D2 at work and usually she handled tasks he set her.  There were no documents that connect D3 to the claimants.  The retainer included her name but no claimant recalls her being the one who explaining its contents to them.

107.She is a partner of Y & Co but that in itself does not make her culpable.  Some reference to her by witnesses and evidence she dealt with payments of awards makes her likely to have known of the champertous agreements but it is not enough to prove beyond reasonable doubt she participated with knowledge of it where each claim and element is concerned.  That applies to all charges she faces.

D2

108.As I have said earlier, the defence did not seek to distance D2 from these claimants and claims like they did D3. It was not in dispute D2 was the solicitor responsible for these claims of these charges. The stance was he was not knowingly part of any of D1’s champertous agreements.

109.The defence will have me believe there were 2 sets of documents that applied and were in effect for each claimant.  D1 had the claimants sign his set, the equivalent of P1 to P4 and then Y & Co had claimants separately sign Exhibit D1 the retainer. This showed the solicitors were not connected to the recovery agent D1.  The terms in those documents were in stark contrast to each other.  D1’s fee and terms were on the basis of no win no loss; 20% of a successful claim cover all fees and charges from start to finish and this fee was only recoverable if there was a successful claim.  The Solicitors terms are that they charged $3,500/hour plus expenses. This hourly charge flies in the face of what was agreed by claimants with D1.

The question is what do I make of the conflicting documents before me:

110.In final submissions for D2 and D3 it was said that it was “crystal clear that a pattern has emerged (from the retainers), almost without exceptions, that most of the PWs have signed retainers with access to legal aid fully explained to them.” However, that is not what transpired from the evidence of the witnesses. What is noteworthy is that despite there being 2 such conflicting agreements or contracts in existence for each claimant, not once did any conflict arise in all 26 cases.

111.I asked myself why and the only plausible reasonable explanation is that the retainer was for the purposes of window dressing. I find the reality of the situation is the document was fiction. This retainer was for show only which explains why hardly one claimant clearly recalled its contents or recall signing it. Confusion reigned amongst the majority of witnesses when either shown a retainer they had signed or a sample letter. It also explains why the witnesses had vague or no or little recollection of being told they had a right to apply for Legal Aid. The only possible explanation is they were not informed properly of the contents of the letter and the hourly charge. They were not told because it was a superfluous document. I find this retainer was not meant to be enforced or apply to the claimants bought to Y & Co by D1.  These claimants were meant only to be bound by D1’s service fee and D2 represented them on that basis.

112.This is the only explanation for how so many identical individual arrangements with 2 very different fee structures succeeded or worked without any discussion or any argument or any dispute between parties as to costs. To suggest they co-existed side by side without any mention or any conflict ever arising is just implausible. Exhibit D1, the retainer was only for appearances; for there to appear to be separate relationships in place. It was a sham for the purposes of disguising the true nature of the scheme between D1 and D2 to deceive if necessary, a third party, the courts or a governing body such as the Law Society.

113.Other evidence supports this finding; I am sure Y & Co did not intend to enforce its own retainer but the terms of D1’s agreement when with each award negotiated and paid directly to Y & Co, it issued 2 cheques, one for 80% and one for 20%. This clearly facilitated the terms of D1’s agreement (P3).  They knew there was a 20% service fee and deducted it on behalf of D1.  That 2^nd cheque for 20% was never intended for any claimant only D1. There was care taken to not make D1 the payee so cheques were either blank or in the claimants name but a bearer cheque. I am sure that was deliberate. D1 was the only one to receive that 20% where all claimants are concerned.

114.In addition, I do not believe D2’s response under caution that it was their clients that had given instructions to prepare 2 cheques for collection.  I am sure as the witnesses all confirmed they did no such thing. It is noteworthy it was not put to any witness that they did give such an odd instruction to Y & Co.

115.These split cheques are more than just suspicious as submitted, they are damning.  It indicates very strongly that D2 worked together with D1 to fulfill the agreement D1 made with claimants.

116.Working together towards this agreement meant Y & Co could not collect any funds on account and they did not.  That fact alone would of course not be sufficient but when considered with other facts collectively it is very telling.

117.Another relevant factor that points to this collaboration is that all cases settled and all costs agreed without requiring taxation.  This would have to be the case to make the champertous agreement work to benefit all. It is noteworthy, the claims had to be settled and costs agreed or else Y & Co stood to lose the most financially. Therein lays the conflict of interest I will come to.

118.P1 to P4 may have been dealt with on the face of it by D1 only but copies of the form P2 and P3 were found in a computer in Y & Co.  The explanation by the defendant witness Ms Lam, a legal executive at Y & Co, was that their server was not secure and had no password security. D1 was friendly with the company secretary and she had seen him at some stage use one of their computers is a weak attempt to distance Y & Co from QPCL’s documents. Considering the event she claims to recall would be well over 10 years ago now I find her specific recollection of a seemingly innocuous event suspicious.

119.Besides these, there are other documents the prosecution relies on to connect D1 and D2 that suggest collaboration. I have referred to them above and they are P342 and P420 found in D1’s office, particularly P420 which is a list of clients DW1, Miss Lam confirms were all personal injury claim clients. It clearly connects D1 to this list of D2’s clients. There is also P342 which is a without prejudice letter from a solicitors firm seeking to settle PW24’s claim. Y & Co’s reference number and initials in it suggest it is Gary Yeong’s case. It has no connection to D1 except he took PW24 to Y & Co and ultimately received 20% of the award agreed.

120.I find D1 worked with D2 to implement this champertous agreement to benefit all mutually.  It was purely a commercial enterprise.  D1 could find claimants through QPCL, his work as an auxiliary police officers, contacts, hospitals and referrals.  He had to have a solicitor who knew of and agreed to his champertous conduct in order for it to work and succeed, to suggest otherwise is fanciful.  This is not a case where there is one claim only but 26 known claims subject to champertous terms dealt with by the same firm of solicitors.

121.I find D2 has tried to set up a façade to distance Y & Co from D1.  This being in the form of the retainer specifically and care taken to make no reference to D1 especially where the direct payment of 20% is concerned.  I find the attempts to do this unsuccessful. 

122.There is no admission from any defendant however an inference of guilt can be drawn against a defendant if it is the only reasonable inference to be drawn. I am sure from all the findings I have made above in relation to D2 when considered together and collectively I can draw an irresistible inference D2 participated knowingly in a champertous agreement scheme involving many clients.  I referred myself to the often-cited decision in R V Kwan Pin Bong 1979 HKLR1 where Lord Diplock said at p5;

“ The requirement of proof beyond all reasonable doubt does not prevent a jury from inferring, from the facts that have been the subject of direct evidence before them, the existence of some further fact, such as the knowledge or intent of the accused, which constitutes an essential element of the offence; but the inference must be a compelling one (and the only one) that no reasonable man could fail to draw from the direct facts proved”

In deciding if an inference of guilt can be drawn, the court must look at all the circumstances of the case which I have done carefully.

123.I also considered the observation made by Mr Justice Bokhary JA ( as he then was) in R v To Luen Sum 1995 1 HKCLR 318 at p323;

“When it comes to looking at all the circumstances of a case and considering whether an inference of guilt is the only reasonable inference to draw from the primary facts on which the prosecution relies and of which the tribunal of fact is sure, it is true that the piling of layer upon layer of unconvincing material cannot result in proof of guilt beyond reasonable doubt. But that is not to say that items of fact insufficient each in itself for the purpose of convicting may not, when taken together, form a body of fact upon which it would be proper to infer guilt and convict accordingly.”

124.I have said I adopted the approach suggested by Mr Justice Bokhary PJ in the Winnie Lo appeal to determine if the prosecution can prove the elements of champerty and find they did where D1’s conduct is concerned.  I found D1 a party who officiously intermeddled with someone’s litigation which no way concerns or belongs to him; 26 such someones.  Furthermore, I am sure D2 not only had knowledge of those champertous agreements but participated in them to see them to fruition.  D2’s intent and motives were not charitable or benevolent; it was by inference commercial. I am sure D2 has attracted liability by his conduct.

125.D1 bought clients, business to the firm.  There is no evidence the 20% was shared with D2 or Y & Co but Y & Co in each case agreed costs with the opposition and received it.  Y & Co acquired a financial interest in the outcome of the litigation.  Y & Co would suffer a loss if no award was negotiated or agreed.  Y & Co received an advantage if this took place in the form of costs. Defence Counsel submits Y & Co only received costs incurred and did not share in the awards or part of them. I referred myself to the passage from Lord Denning MR in Wallersteiner v Moir ( No. 2 )( at para 23 supra where emphasis added). There is no evidence the costs agreed were more than the actual costs incurred but the reality is D2 would not have agreed to participate in this scheme if it was not to his firm’s advantage financially.

126.It must be unlawful for D2 and Y & Co to work on the basis that they were only paid if they won or negotiated an award successfully and not if they lost even if this was unbeknownst to the claimants, their clients.  Those witnesses who were asked if they were consulted about the amount of costs to be agreed by the opposition party of their claim were in the dark about this. They were clueless. Clearly D2 negotiated the costs agreed without consulting his clients because it was a sum only relevant to him not them.

127.Mere knowledge of a client’s participation in a champertous scheme does not taint a solicitor provided he keeps within his professional role. However, my finding is D2 legally represented each claimant but according to a champertous agreement which must mean D2 attracts liability. He must have transgressed his professional role because he has participated and involved himself in a champertous agreement.

128.To a large extent I have already dealt with the submission the conduct was an exception and fell under the category of Access to Justice above in reference to D1. I find the same reasoning and my findings apply to D2 as they do D1. D2 cannot rely on this category of exception which might exclude conduct from being regarded as the criminal offence of champerty. This exception does not arise on the facts of this case for either D1 or D2.

Does this conduct pose a genuine risk to the integrity of the judicial process?

129.Much has been made of D2 and D3 working for claimants and discharging their professional duties properly and appropriately.  It would appear on the face of it all clients received damages that were satisfactory and Y & Co received no more than their costs incurred from the opposite party. It was argued they did nothing but execute their duty in acting on behalf of the claimants. It was suggested the claimants were properly represented and their claims were genuine. It may be difficult to prove an actual abuse of process but that is not the point, it is the obvious risk that existed and might have occurred, not had or did occur. This policy is summarized in the passage from Lord Esther MR in Pittman v Prudential Deposit Bank ( at para 24 supa) as well as by Buckley LJ in Wallersteiner v Moir ( No2) ( at para 26 supa).

130.I also referred myself to HKSAR v Mui Kwok Keung CACC133/2013, where Macrae JA at para 65 succinctly stated;

“A solicitor or barrister who acquires a personal financial interest in the outcome of litigation may obviously find himself in a situation in which his interest conflicts with his obligations to his client and to the court….(para 66) With respect, in many cases of champerty, that (abuses envisaged in the authorities) might be difficult to show. But that is not the point. What is exposed by such arrangements is the obvious risk that such abuses might occur.”

When a clients interest is not a lawyers primary interest than a genuine risk of abuse exists. When a lawyer also has to look after his own interest where the outcome of a claim is concerned then that risk is real and genuine.

131.I have found there to be a champertous agreement made between D1 and 26 claimants. I have found that D2 knew of the agreements and its terms. I am sure D2 knowingly facilitated and participated in the agreements with the aim of seeing the agreements to their conclusion and fruition. I am sure D1 and D2 were working towards this together. There was no justification for this conduct to be exempted under the category of Access to Justice. The conduct of both defendants posed a genuine risk to the integrity of the judicial process. The submission that differentiates the roles of the defendants fails. I reject the submission that D1 only introduced D2 to claimants and his participation was external to any legal process.

132.I add that Defence Counsel suggested the Legal Aid Department and its terms offered a claimant can amount to champertous agreements. Is the fact the claimants chose D1s services over Legal Aid relevant and does it go some way to de-criminalize any offence? The defence submission presupposes the claimants made an informed choice or decision. I have already said I do not believe that was the case. In any event, the Legal Aid Department is a statutory body governed by law and cannot be equated to a private recovery agent dictating champertous terms, the choice of legal representation and imposing penalty clauses.

133.Having considered the prosecution’s evidence for each charge and the submissions made for each defendant, I find the prosecution can prove beyond reasonable doubt there was a champertous agreement offered to each claimant and it was in place for each claimant of each charge. It can prove D1 and D2 worked together to see the champertous agreement to fruition for each claimant and charge. I am sure their conduct did pose a genuine risk to the integrity of the courts process. Where D3 is concerned, as I said, I am suspicious but not satisfied the prosecution can prove the charges she faces against her to the appropriate standard of proof. D3 is acquitted of the 5 charges she faces. Accordingly and despite D1 and D2’s clear records, D1 and D2 are convicted as charged.

Please refer to CAAR3/2014 for the relevant appeal(s) to the Court of Appeal.