Will the National Security Law endanger our common law system?

Bernard Chan June 15, 2020 10:37

As a Hong Kong businessman, I’ve naturally been following closely the legal issues surrounding the National Security Law (NSL). Due to be drafted this month, the law will be promulgated as early as next month when it is added to Annex 3 of our Basic Law.

From owners of modest SMEs to CEOs of multi billion dollar corporations, my colleagues in the business world are wondering what this might mean for them. Some are expressing concern and even anxiety about the coming changes. Hong Kong’s attraction as a global business center depends on our system of common law, which has helped our city to thrive as a commercial centre for over 150 years.

About a third of the world’s population now lives under some form of common law. It is valued for transparency and simplicity. Disputes and violations of law are presented before independent judges, who then review the cases and decide them according to past legal precedents. A common law judge today can draw upon a deep well of wisdom; centuries of case precedents across jurisdictions that span the globe.

The common law system has supported the growth of trade and commerce for centuries because it is well-suited to helping businesses grow and thrive. When we enter into a contract with another person or another company, we want to be confident that both parties will honor the promises made within. When we invent or design or innovate something we want to be sure it won’t be stolen by a competitor. We want business regulations to be clear and fairly enforced to ensure a level playing field. Everything we do is built upon the expectation of a common law system and independent judges that rule “without fear or favor.”

Will the upcoming National Security Law have any negative impact on this legal structure so fundamental to Hong Kong’s role as a global business city?

Before I tell you my answer, let me be clear: I’m a businessman, not a legal scholar. And of course as we know, the law is being drafted now, and no one, including me, has had access to it. Nevertheless, based on what I learned from government officials about the intentions of this security law during my recent trip to Beijing for the NPC meetings, I think it is very, very hard to argue that this forthcoming legislation is going to impact Hong Kong’s vital common law legal system.

In fact, I think that the NSL may even be a stroke of good fortune that will enable Hong Kong to continue operating under this business-friendly legal system well past the handover date of 2047.

Here’s why. As I mentioned above, common law is the bedrock of our city’s business-friendly environment. It connects us, like a common language, to the rest of the world, allowing us to be a service center for businesses of all types, from the financial industry to manufacturing. Our legal professional talent drives Hong Kong’s success as one of the world’s top five global arbitration centres. In 2018, our arbitrators settled over 6.8 billion dollars worth of international legal disputes. Recognizing Hong Kong’s importance in this area, the Central Government has singled out Hong Kong to be developed even further as an arbitration center in the Greater Bay Area plan.

In other words, our Hong Kong common law system is the foundation of our city’s economy now, and into the future. It’s crazy to think that the Central Government would do anything to risk something so beneficial to all of us.

Will the National Security Law do anything to compromise Hong Kong’s famously independent judiciary? Again, I am confident the answer is no. Hong Kong judges are the guardians of our legal system, and they will remain that way. Even Kemal Bokhary, the CFA judge famous for sometimes being outspoken, agrees on this point. Earlier this year he was asked about judicial independence and he responded, “If the courts are not independent, then they could just be told quietly behind the scenes what to do, and they would do it. But everybody knows that is not how it works in Hong Kong.”

Looking to the future, the National Security Law may even have an unexpected upside for the future of common law in Hong Kong, because it helps draw the line between national and domestic legal matters. In his recent book “Is The Hong Kong Judiciary Sleepwalking to 2047?,” retired CFA judge Henry Litton writes that Hong Kong courts and judges have strayed too far into areas of judicial review and constitutional interpretation that belong to national, not local, jurisdiction. By returning to the roots of common law--finding practical solutions for domestic legal matters--Hong Kong’s independent common law system has a strong chance of continuing past 2047.

And that would be an excellent thing indeed--for our businesses, and for Hong Kong.

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Bernard Chan

Executive Council member and former legislator; Hong Kong delegate to the National People’s Congress