Lead-in-water crisis highlights the need for class-action suits

July 25, 2015 08:00
If a class-action mechanism was available, it would make it easier for residents of Kai Ching Estate affected by lead in their water to sue the government and others responsible. Photo: HKEJ

As a member of the Housing Authority, I’ve been closely following the lead contamination scandal in Kai Ching Estate.

It reminds me of the Hollywood movie Erin Brockovich, starring Julia Roberts, more than a decade ago.

[Editor's note: The film was based on a true story about the “Hinkley groundwater contamination incident” that took place in California between 1952 and 1966.

A class-action suit ended in a multimillion-dollar settlement in 1996 by the company that allowed groundwater to be polluted by a toxic chemical.]

This Hollywood blockbuster is a classic primer on class-action lawsuits.

A class action is a type of lawsuit in which the plaintiff sues a defendant on behalf of a larger group of individuals who suffer similar losses as a result of mistakes or negligence by the defendant.

In other words, the plaintiff is a group of people represented collectively by a member of that group.

Class actions allow the claims of all the victims in a lawsuit to be resolved collectively in a single proceeding.

They have existed for a long time in legally advanced countries like the United States, Britain and Australia.

Surprisingly, Hong Kong, which is well-known for its longstanding tradition of the rule of law and its mature judicial system, has never implemented a class-action mechanism.

The victims of the lead contamination in Kai Ching and several other public housing estates cannot file a class-action lawsuit against the Housing Department or the Housing Authority, because Hong Kong simply doesn’t have such a legal procedural device.

Over the years, the legal sector in Hong Kong has been calling for the introduction of class actions.

In 2006, the Law Reform Commission set up a special committee to study the feasibility of introducing such a procedural device.

In 2008, the Legislative Council panel on administration of justice and legal services carried out studies to compare different class-action lawsuit mechanisms in other countries.

In 2009, the panel called a special meeting to discuss the issue, during which members from various political parties all spoke in favor of the idea.

In the same year, the Law Reform Commission launched a consultation on the issue and published a report in 2012 that supported the introduction of the class-action device, saying it can open more channels through which the public can seek justice, reduce the cost of filing civil lawsuits and increase the chance of getting unanimous court rulings.

In fact, Hong Kong is not entirely without any class-action lawsuit mechanism.

For example, the conditions for approval of funding by the Consumer Legal Action Fund under the Consumer Council bear some resemblance to the principles of class action, except that the plaintiff cannot represent any absent party or anyone who hasn’t taken part in the lawsuit.

Hong Kong has already missed many opportunities because of the absence of a class-action device.

For example, as I mentioned last week, the main reason why Hong Kong is unable to implement “weighted voting rights” in the stock market is because it doesn't have a class-action lawsuit mechanism, depriving individual shareholders of the necessary legal protection against investment risk.

The Hong Kong Stock Exchange has said that the existence of a class-action device is not a  prerequisite for the implementation of weighted voting rights, and some in the financial sector have also argued that class actions are complicated and difficult to implement.

However, as I said at the beginning, the legal sector has already reached a consensus on the necessity to introduce a class-action device.

It has put forward a detailed proposal for its implementation, so all that is needed is the green light from the government.

It remains intriguing why the Department of Justice has continued to turn a blind eye to the repeated requests of the local legal sector for something that is clearly in the public interest.

This article first appeared in the Hong Kong Economic Journal on July 21.

Translation by Alan Lee

[Chinese version 中文版]

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Legco member representing the Legal functional constituency (2016-2020) and a founding member of Civic Party