Admission of Overseas Counsel and Adverse Costs Orders

As we reported in our September 2015 Industry insights (“Bar’s Revised Guidelines for Ad Hoc Admission”), last year the local Bar Association revised its Practice Guidelines with respect to applications by overseas counsel for ad hoc admission to practise in Hong Kong. One new provision that raised a few eyebrows was an express reservation of rights to seek costs against an applicant in the event that the Bar Association refused to consent to an application which was later dismissed by the court.

This provision was recently considered in Re Application of Mr. David Perry QC [2016] HKEC 638, HCMP 1830/2015.

In Re Perry QC, the applicant (no stranger to Hong Kong) applied for ad hoc admission for the purpose of (among other things) advising and appearing on behalf of two appellants in their appeal against convictions in the magistrates’ court. One conviction was of a company, pursuant to s. 114(1)(b) of the Securities and Futures Ordinance (Cap. 571) (to hold oneself out as “carrying on a business in a regulated activity”); the other conviction was of an individual for consequential liability as an officer of the corporation (s.390(1)).

One of the principal issues in the appeal would involve the requisite mens rea (if any) for the s. 114(1) offence. The applicant justified his application on the basis that the appeal raised complex issues of legislative interpretation that would (among other things) impact substantially on Hong Kong law or raise issues of unusual difficulty or complexity. His application was opposed by the Bar Association and the Secretary for Justice.

Prior to the hearing, the Bar Association wrote to the applicant’s lawyers expressing its strong opposition and stating that it would seek costs against the applicant in the event that his application was dismissed by the court. An extract from the Bar Association’s letter to the applicant’s lawyers, referred to in Re Perry QC, is worth noting:

“Further, we are unable to justify the involvement of a legal team on a pro bono basis just to resist wholly unmeritorious applications of this nature. We hereby put you on notice that the Bar Council will seek an appropriate costs order against your client should the application be unsuccessful, as we believe it will be. The Bar Council will also reserve its right to apply for a higher level of costs against your client or against such party as may be responsible for the wastage of costs, if so advised.”

The application for ad hoc admission was dismissed by the court. However, the court rejected the Bar Association’s application for costs. The application for ad hoc admission was not so lacking in merit (taking into account all the circumstances) so as to justify an adverse costs order against the applicant. Indeed, in a more measured tone, counsel for the Secretary for Justice noted that an adverse costs order in such proceedings should only be made in “exceptional circumstances”.

Applications for ad hoc admission are not uncommon nor are they supposed to be adversarial; they are governed by a higher public interest. This raises queries about the tone of the Bar Association’s letter to the applicant’s lawyers. Bona fide applicants (QCs) and their instructing solicitors in a similar situation should be resolute.

* Editorial Note: If it is correct that the power to award costs in such proceedings is one-sided (ie, against the unsuccessful applicant but not against the Bar Association) and the Bar Association makes a habit of seeking its costs, then this is a matter that needs to be looked at. See – Re Perry QC, at para. 39; s. 3(2)(b) of the Barristers (Admission) Rules (Cap. 159AA); and “White Book” 2016, volume 2, commentary at E1/52A/4. Applicant QCs should carry suitable “protection” eg, an indemnity (for any adverse costs order) from the prospective client they seek to represent.


Senior Consultant and Accredited Mediator, RPC