Litigation is a legal process by which the parties’ disputes are adjudicated by a judicial officer or a judge sitting in a tribunal or a court. When it comes to using litigation as a method to resolve a business dispute, a party usually institutes civil proceedings against another party, who may be a business or an individual. The courts and tribunals in Hong Kong adopt a common law adversarial approach in adjudicating cases.
Common areas of dispute
Some areas of dispute are more common than others, so it is important for business owners to be aware of these areas to prevent them at the outset. Some of these areas include:
- Employment disputes
- Contractual disputes
- Bankruptcy
Initiating litigation
When a person is involved in a business dispute, they may wish to commence litigation rather than to participate in mediation or arbitration for various reasons, such as:
- Failure in reaching an agreement in mediation or arbitration
- More predictable litigation outcome based on the decisions of similar precedent-setting cases
- Fuller participation in the litigation process from their representative lawyers
Which court or tribunal should I go to?
The venue at which you can initiate litigation varies depending on the type of dispute that you are involved in:
- Employment disputes: Employment disputes may arise from payment of wages, termination of employment, Mandatory Provident Fund, leave, end of year payments and other employment conditions. If you are involved in a dispute in relation to employment contracts and you wish to initiate legal action against another party, your case will be heard by the Labour Tribunal. For claims relating to work-related injuries, they will be brought before the District Court. An employment claim may be brought under the Employment Ordinance (Cap. 57), the Factories and Industrial Undertakings Ordinance (Cap. 59), the Employees’ Compensation Ordinance (Cap. 282), the Occupational Safety and Health Ordinance (Cap. 509), the Minimum Wage Ordinance (Cap. 608), and other employment-related ordinances.
- Contractual disputes: Contract disagreements may arise between businesses and contractors, suppliers, purchasers or other businesses or individuals. A party may then bring a civil case against the other party to claim monetary compensation. If the monetary claim does not exceed $75,000, the case will be heard by the Small Claims Tribunal. If the claim is over $75,000 and not more than $3 million, the case will be heard by the District Court. If the claim is over $3 million, the case will be heard by the Court of First Instance of the High Court.
- Bankruptcy: Another way to make a claim against someone is to file bankruptcy petition, a method but of the last resort. Bankruptcy is an insolvency legal process taken against a person (e.g. a business owner). Matters relating to bankruptcy are primarily governed by the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and the Companies Ordinance (Cap. 622).
Key takeaways
- To initiate litigation in Hong Kong, you need to file an application to the suitable court.
- The venue at which you can initiate litigation depends on the type of dispute that you are involved in as well as the amount of compensation that you wish to claim.
Bibliography:
- Department of Justice, ‘Litigation’: https://www.doj.gov.hk/en/legal_dispute/litigation.html
