Provisional Legislative Council

PLC Paper No. CB(2) 1414
(These minutes have been
seen by the Administration)

Ref : CB2/BC/10/97

Bills Committee on
Legal Practitioners (Amendment) Bill 1998

Meeting on 9 March 1998 at 10:45 am in Conference Room B of the Legislative Council Building

Members present :

Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
Dr Hon LEONG Che-hung, JP
Hon Kennedy WONG Yin-ho
Hon Bruce LIU Sing-kee

Members absent :

Hon IP Kwok-him
Dr Hon LAW Cheung-kwok

Public Officers attending :

Mr Peter H H WONG
Senior Assistant Solicitor General

Mr Jonothan ABBOTT
Senior Assistant Law Draftsman

Miss Anita S C NG
Government Counsel

Attendance by invitation :

The Hong Kong Society of Notaries

Mr MARK Wei-hing, Peter

Mr AU Fu-kuen
Vice President

Mr Robin Miles BRIDGE
Council Member

Mr CHAN Bing-woon
Council Member

Mr Angus Hamish FORSYTH
Council Member

Mr Timothy HANCOCK
Council Member

Mr Lester Garson HUANG
Council Member

Mr Jesse KWOK Hong-yee
Council Member

Mr LI Mang-wah, Paul
Council Member

Mr MA Ching-nam
Council Member

Ms CHU Wing-shuet, Christine
Honorary Secretary

Clerk in attendance :

Ms Doris CHAN
Chief Assistant Secretary (2)4

Staff in attendance :

Mr Arthur CHEUNG
Assistant Legal Adviser 5

Mr Stanley MA
Senior Assistant Secretary (2)7

The Chairman informed members that due to other commitments, Mr Ambrose LAU Hon-chuen had resigned from the Bills Committee with effect from 5 March 1998.

IMeeting with the Hong Kong Society of Notaries

2. The Chairman welcomed representatives of the Hong Kong Society of Notaries (HKSN) to the meeting. She informed representatives of the HKSN that members would like to have their views on the following provisions of the Bill -

  1. the arrangements for professional indemnity insurance for notaries public; and

  2. the HKSN ' s regulatory powers in making rules providing for the practice, conduct and discipline of notaries public and their employees, and the financial implications of the proposals in respect of investigations and inquiries into the conduct of notaries public.

Indemnity rules for notaries public

3. In response to the Chairman ' s enquiry about the indemnity rules for notaries public, the President of the HKSN said that the simplest and most practicable way to resolve the matter was to have a joint scheme with the Law Society of Hong Kong (the Law Society) by amending the indemnity rules of the Law Society to include notaries public under the definition of practice. As insurance premium for professional indemnity was calculated as a percentage of the gross fee income of the legal practices concerned, the premium for the share of fee income of the practice arising from notarial work could be assessed and paid on the same basis. In reply to the Chairman ' s further enquiry, the President of the HKSN said that there had not been a single claim for indemnity against loss in respect of notaries public and no complaint about the conduct of any notary public had ever been received by the HKSN. He was therefore confident that the proposed arrangement would be accepted by authorized insurers. He added that some 1 500 practising solicitors had indicated their wish to be admitted as a member of the HKSN and they all looked forward to the early passage of the Bill.

4. Assuming that the Law Society would agree to amend the relevant professional indemnity rules to provide for a joint scheme, the Chairman enquired whether the new section 73E on indemnity rules for notaries public could be deleted in its entirety. In response, Senior Assistant Solicitor General (SASG) said that the new section 73E was essential in that it empowered the HKSN to maintain a joint insurance scheme with the Law Society against indemnity claims. Referring to the new section 73E(2)(c) by which the HKSN was empowered to make rules requiring notaries public or any specified class of notaries public to take out and maintain insurance with authorized insurers, the Chairman asked whether the HKSN would change its policy on professional indemnity of notaries public in the future. The President of the HKSN said that given the current level of resources, it would not be feasible for the HKSN to set up and maintain a separate indemnity scheme for practising notaries public. He requested members to accept the provisions on indemnity rules for notaries public as proposed in the Bill. A representative of the HKSN supplemented that every rule to be made by the HKSN under the new section 73E would be subject to the prior approval of the Chief Justice.

Powers of the Council of Society of Notaries to make rules and financial implications of the Bill

5. In response to the Chairman ' s enquiry, the President of the HKSN said that the HKSN was satisfied with and ready to take up the statutory powers conferred by the Bill. Given a membership size of around 400 which was about one-tenth of that of the Law Society, the Chairman enquired whether additional income by way of increasing the annual membership subscription was needed for the HKSN to implement the regulatory rules providing for the practice, conduct and discipline of its members in the long term. A representative of the HKSN replied that the HKSN at present had no plan to increase its annual membership fee. Depending on the detailed arrangements on the conduct of the notarial examination, the number of applications to be processed, the criteria and procedures for assessment of applicants, etc., the HKSN might consider the need to increase its source of income at a future date.

6. Responding to Dr LEONG Che-hung ' s concern about the large expenses which would be incurred by the Notaries Public Disciplinary Tribunal (NPDT) and the HKSN in connection with proceedings before a NPDT and any relevant appeal to the court, SASG said that in line with the approach for discipline of solicitors and barristers under the Legal Practitioners Ordinance (Cap.159), the Bill provided that such expenses would be paid out of general revenue upon a certificate issued by the Secretary for Justice that he/she was satisfied that the expenses were necessarily and reasonably incurred by the NPDT and the HKSN and the expenses could not reasonably be recovered from the notary whose conduct was the subject of the disciplinary proceedings. He added that the Department of Justice anticipated that additional resources required in connection with such proceedings were unlikely to be significant and would be met from within the Department ' s global allocation. Similarly, the Judiciary would absorb the additional work arising from the need to receive and process applications for appointment as notaries public from within its existing resources. The Chairman pointed out that expenses incurred for the appointment of inspector(s) to carry out the necessary investigative work in response to a complaint about the conduct of a notary public or its employee(s) might not necessarily justify reimbursements from the general revenue, particularly when the results of the investigation did not warrant disciplinary proceedings. In response, two representatives of the HKSN said that since notaries public were experienced solicitors who mainly engaged in attestation of documents and there was no complaint against the existing notaries public so far, it was most unlikely that a NPDT would be required to be set up in the future. Noting that the costs of legal proceedings before a NPDT would be paid out of the general revenue, Dr LEONG expressed reservations about the autonomy of the HKSN in its future judgement on whether an inquiry should be conducted. In response, SASG said that members of a NPDT were appointed by the Tribunal Convenor of the Notaries Public Disciplinary Tribunal Panel from among the panel members. They would conduct the proceedings and conclude its adjudication impartially and independently. He stressed that as far as inquiries into the conduct of notaries public were concerned, the HKSN largely played the role of prosecutor.

7. Responding to the Chairman ' s concern, the Vice-President of the HKSN said that since the Bill in effect did not enlarge the scope of work of notaries public, there would not be a substantial increase of administrative workload on the part of the HKSN. He envisaged that the HKSN was capable of enforcing the rules made under the regulatory powers conferred by the Bill with its existing resources. The President of the Council supplemented that the Law Society had allowed the HKSN to use its staff and office premises in the past. Notwithstanding the additional role and functions conferred to the HKSN by the Bill, he saw no reason why such arrangements would not continue in the future.

IIMeeting with the Administration

(PLC Paper Nos.CB(2)1148 (01), (02) and (03))

8. Members went through the Administration ' s three responses to members’ concerns raised at the previous meeting held on 24 February 1998. Dr LEONG Che-hung thanked the Administration for providing members with a point-by-point comparison between the Bill and the Hong Kong Academy of Medicine (HKAM) Ordinance (Cap.419) in respect of compulsory membership and regulatory role of the HKSN and the HKAM. Given that the HKAM was a statutory body responsible for the conduct of postgraduate and continuing medical education in Hong Kong and the accreditation of specialist status, and its powers as set out in the Ordinance included the power to make recommendations to the Medical Council of Hong Kong on matters relating to the recognition of specialist designations, Dr LEONG asked why compulsory membership of the HKAM was not required for statutory registration of medical specialists in Hong Kong. SASG replied that after studying the relevant minutes of meetings, he found that the matter had not been raised for discussion at the meetings of the LegCo Ad Hoc Group formed to study the Bill in 1992. In this connection, he undertook to relay Dr LEONG ' s concern to the Health and Welfare Bureau and in collaboration with colleagues in the Bureau, to provide further information on the issue. Dr LEONG stressed that as a medical practitioner who advocated professional autonomy all along, he supported the Bill in principle and in particular the provisions on compulsory membership of the HKSN for every practising notary public. Adm

IIIClause-by-clause examination of the Bill

Section 40A - Qualifications for appointment

9.Noting that an applicant for notary public should have, within a year before his application for appointment, passed the examination(s) prescribed by the Council of the HKSN, Mr Kennedy WONG was concerned about the international recognition of such qualifying examination(s) and consequently the professional standard of locally appointed notaries public as a whole. In response, SASG said that in order to maintain the current status of Hong Kong notaries in the international arena, the Administration had proposed that the appointment of notaries in Hong Kong after the change of sovereignty should rest with the Chief Justice. Under the proposed self-regulatory system, the HKSN would be responsible for ensuring that the standards of the qualifying examination(s) were comparable to those organized by major notaries organizations in overseas countries. As regards compulsory membership, the HKSN would, subject to the approval of the Chief Justice and the negative vetting of the LegCo in session, set out a list of rules providing for the requirements to be complied with by applicants of notaries public. He added that according to his knowledge, the HKSN had approached the examination authority for notaries public in England for assistance and would, in conjunction with the University of Hong Kong, work out a professional examination scheme which could assist the HKSN in assessing candidates’ competence in taking up notarial work. The Chairman supplemented that like those qualifying examinations organized by the Law Society of Hong Kong and the Hong Kong Bar Association for solicitors and barristers, the organization and grading scheme of the notarial examination(s) should rest with the HKSN. Mr WONG commented that in order to achieve international recognition in the long run, the responsible bodies should make references to models which were being adopted by reputable notary authorities in overseas jurisdictions.

10. Noting that the name of person applying for appointment of notary public must have been on the roll of solicitors continuously for a period of seven years immediately before the date of application for appointment, Mr WONG enquired whether there was an internationally-accepted threshold of years of practice for solicitors applying for notary public status. SASG replied that the Administration had no such information in hand but pointed out that such requirement would vary from jurisdiction to jurisdiction. The Chairman supplemented that any such change in the threshold for appointment of notaries public would have to be supported by the profession, and would be subject to an open debate before the appropriate legislative amendment could be presented to the LegCo. At Mr WONG ' s request, SASG agreed to provide further information on qualifications for appointment of notaries public in commonwealth countries such as Singapore and Malaysia. Adm

11. Referring to the new section 40A(1)(a)(i) which specified that one of the basic requirements for appointment of notaries public was that the name of the person had been on the roll of solicitors continuously for seven years immediately before the date of application for appointment, Mr WONG pointed out that this would mean that persons who were members of the Law Society but had not practised for a period of seven years could also be eligible for appointment. SASG explained that in addition to the two basic requirements as specified in the new section 40A(1)(a), the new section 40A(1)(b) had provided that the HKSN could make rules under section 73D relating to additional requirements such as a threshold of seven-year practice as a solicitor in respect of appointment as a notary public. In effect, this provision allowed the HKSN to recommend additional requirements which were justified as a result of changes in the legal environment or propositions which were popularly supported by the international communities of notaries public. Members unanimously agreed to preserve the threshold of seven-year practice as a solicitor for appointment of notaries public. SASG undertook to consult the HKSN and provide a written reply to members as soon as possible. Adm

Section 73E - Indemnity rules for notaries public

12. As advised by the representatives of the HKSN earlier (paragraph 3 refers), the Council of the HKSN had no intention to take out insurance on professional indemnity for notaries public at this stage and would proactively seek the agreement of the Law Society to maintain a joint scheme with the HKSN for indemnity against loss arising from claims in respect of any description of civil liability. Members noted that the HKSN had the power to make rules to require notaries public or any specified class of notaries public to take out and maintain insurance with authorized insurers as and when it considered necessary. But since such rules would have to be approved by the Chief Justice and were subject to negative vetting by the LegCo, members had no objection to the provisions in the section.

Consequential Amendments

13. SASG advised that as a result of the coming into force of the Bankruptcy (Amendment) Ordinance 1996 (76 of 1996) in April 1998, the Administration would propose technical amendments to clause 3 and clause 7 of the Bill. Adm

Section 40S - Inconsistency between the provisions of the Bill and the Memorandum and Articles of Association of the Society of Notaries

14. Assistant Legal Adviser 5 enquired whether the term "Council of Management of the HKSN" as used in the Memorandum and Articles of Association of the HKSN (the Memorandum) was equivalent to "the Council of the HKSN" under the Bill. Senior Assistant Legal Draftsman replied that they were the same body as provided under clause 5(1)(d) of the Bill. SASG supplemented that the new section 40S had provided that the provisions of the Bill should prevail in the case of any inconsistency between the provisions in the Bill and the Memorandum.

15. Members completed the clause-by-clause examination. Subject to a positive response from the Administration regarding the threshold of seven-year practice as a solicitor for appointment of notaries public, members agreed to report the deliberations of the Bills Committee to the House Committee on 27 March 1998.

16. The meeting ended at 12:00 noon.

Provisional Legislative Council Secretariat
23 April 1998