When the Legal Industry Meets Technology

INTRODUCTION

Technological developments have bettered our lives and contributed to the modern world in which we are living. While we enjoy the convenience that technology brings and utlitise electronic means in every aspect of our lives, the legal industry in Hong Kong seems to exist in a parallel universe as it is still very much a paper-based system.

Filing and serving legal documents in Hong Kong means filing and serving physical documents. However, jurisdictions around of the whole have allowed service and filing through electronic means. Is it time for Hong Kong to rethink about the use of technology in the legal industry?

THE MISALIGNMENT

The Court has unprecedentedly allowed the Plaintiffs to serve documents on the Defendants by access to data room in a decision of Hwang Joon Sang and another v. Golden Electronics Inc. and others [2020] HKCFI 1233 handed down in June 2020.

The Court exercised its power under Order 65 rule 5(1)(d) of the Rules of High Court (the “RHC”) which provides that service of any documents, not being a document which is originating process or is required to be served personally, may be effected in such manner as the court may direct. When exercising its power, the Court paid heed to the underlying objectives of the RHC, and some of which are to increase the cost-effectiveness of any practice and procedure and to promote a sense of reasonable proportion and procedural economy in the conduct of the proceedings.

Whilst this is a historic move which is conducive to the catching up of the legal industry with the world and credits should be given to the solicitors’ firm which made such an application to the Court, the decision also reflects a structural problem of the industry – a misalignment between the rules of civil procedures and the technological advancement.

The system as it is today depends on lawyers proactively making applications to dispense with the traditional methods of serving physical documents and on courts exercising its power under some general provisions. The Court in Hwang Joon Sang also mentioned that service by use of email, Facebook Messenger or WhatsApp Messenger were also allowed before in a small number of cases.

However, other jurisdictions around the world have made it black and white in their rules of civil procedures that electronic means may be utilised when it comes to the filing and serving of legal documents.

TECHNOLOGY IN THE LEGAL INDUSTRIES AROUND THE WORLD

The United States

In the United States, the Federal Rules of Civil Procedure (FRCP 5(b)(2)(E)) permit service by electronic means through the Case Management/Electronic Case Files (the “CM/ECF”) system. It is a system maintained by the court and is similar to a data room.

Registered attorneys can file documents 24/7 and the documents are served when attorneys in a case receive an email containing a hyperlink to the documents.

The CM/ECF system aims to reduce paper, photocopies, postage, and courier costs, to allow immediate access to information and to allow attorneys to maintain low out-of-pocket costs for participation. Since 1 December 2018, the FRCP was amended to make the filing and serving of almost all interlocutory documents through the CM/ECF system mandatory.

Electronic filing and service is not confined to the federal level. The California Code of Civil Procedure and the California Rule of Court allow electronic service through direct email or through a court-approved e-filing and service provider (Cal. Civ. Proc. Code §§ 1010.6(a)(1)(A) - (C) and 1013(g); Cal. Rules of Court, rule 2.251(a)). A party’s consent is generally needed for electronic service but the court may order parties to electronically file and serve documents in certain case (Cal. Rules of Court, rule 2.251(b)(1); Cal. Civ. Proc. Code § 1010.6(c); Cal. Rules of Court, rule 2.251(c)(1)).

The New York State Unified Court System also maintains an electronic filing system, the New York State Courts Electronic Filing System (“NYSCEF”), for filing and serving legal documents. For certain types of cases, documents must be filed and served through NYSCEF, and for other cases, consent of the other party is required (New York Consolidated Laws, Civil Practice Law and Rules, Rule 2103).

Canada

The United States’ counterpart, Canada, too provides for electronic service of documents under its Federal Court Rules as long as consent is obtained (Rule 141). Provinces of Canada also have their civil procedures rules governing electronic service.

For example, in Alberta Treasury Branches v Elaborate Homes Ltd, [2014] AJ No 597, 2014 ABQB 350, 14 CBR (6th) 199, 243 ACWS (3d) 80, 2014 CarswellAlta 921, 590 AR 156, the judge recognised the essentiality of electronic service in today’s world and said:-

I would add that in today's world, electronic service is a reflection of practical realities. The Alberta Rules of Court and the BIA Rules recognize this reality. Perhaps there is no area of practice where electronic service of documents is more appropriate than the bankruptcy and insolvency area. I say this because of the volume of documents that are often produced in such matters, and the need for receivers, trustees, monitors and counsel to act expeditiously and often in the face of very short deadlines. Given the commercial and legal realities of bankruptcy and insolvency matters, there is an obvious need to exchange documents electronically. In my view, a party involved in such matters cannot ignore these realities by refusing to move effectively into the electronic age.” (emphasis added)

Australia

Similarly, Part 3 of the New South Wales Uniform Civil Procedure Rules 2005 entitled “Electronic case management” provides for the electronic filing and serving of legal documents when consent of the other party is obtained.

There are several electronic case management systems being maintained, including Comcase, e-Court, JusticeLink, NCAT Online and Online Registry, and the Electronic Transactions (ECM Courts) Order 2005 clearly stipulates what kind of documents under civil and criminal proceedings in which court can be filed and served through which electronic case management system.

CONCLUSION

When the world has embraced technology and amended its rules to reflect the reality, the case of Hwang Joon Sang serves as an alarm and teaches us a lesson – whilst changes in the RHC may not happen overnight, lawyers should think out of the box and make applications that would ultimately serve clients’ best interest and be the driving force of changes.

Solicitor, ONC Lawyers

Joshua Chu is a Litigation Solicitor qualified to practice in Hong Kong. Before becoming a lawyer, Joshua worked in the healthcare industry serving as the IT department head at a private hospital as well as overseeing their procurement operations.

Since embarking upon his legal career, his past legal experience includes representing the successful party in one of Hong Kong’s first cryptocurrency litigation cases as well as appearing before the Review Body on Bid Challenges under the World Trade Organization Government Procurement Agreement concerning a health care industry related tender.

Today, Joshua’s practice is mainly focused in the field of dispute resolution and technology law.

Aside from his legal practice, Joshua is currently also a Senior Consultant with a regulatory consulting firm which had been founded by ex-SFC Regulators as well as being a management consultant for the Korean Blockchain Centre.

Trainee Solicitor, ONC Lawyers