LU YANG YANG v. YIK TAK CONSTRUCTION ENGINEERING LTD AND ANOTHER

DCEC 2174/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2174 OF 2014

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ASSESSMENT OF COSTS

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Introduction

1. This is about an application for compensation under the Employees’ Compensation Ordinance, Cap 282 (“the Ordinance”).  The applicant acts for herself and on behalf of members of the family the Chan Chun Ming (“the deceased”) who died in an accident arising out of and in the course of his employment.  The respondents were the deceased’s employer and the principal contractor respectively.

2. A settlement has been reached.  The parties have agreed on the quantum of the compensation, the apportionment of which is to be done according to the statutory formula laid down in the Ordinance.  The only outstanding issue is the assessment of the applicant’s costs which the respondents have agreed to pay on common fund basis.

3. Pursuant to the order made by this court on 19 March 2015, the applicant’s solicitors have filed a statement of costs for the purpose of summary assessment.  They have also agreed to waive the right to any further sum of money (including common fund costs) in respect of these proceedings: see O 62, r 9C, Rules of the District Court, Cap 336.  The respondents’ solicitors have also filed their list of objections to the statement of costs.

The relevant principles

4. The relevant principles for assessment on common fund basis are well-established: it is a more generous basis than the party and party basis, there should be allowed a reasonable amount in respect of all costs reasonably incurred: see Hong Kong Civil Procedure 2015, at §§62/App/7 and 62/App/15.

5. As regards the approach to be adopted in summary assessment, reference is made to Poon Shu Fan v Wong Tin Yan[1]. See also Hong Kong Civil Procedure 2015, §§62/9/10-12.

The assessment

6. To start with I note that apart from the applicant who is the survivor widow, the family of the deceased (for the purpose of employee’s compensation) consists only of his parents and his minor daughter whose mother is the applicant. 

7. As regards the action, the settlement came at an early stage.  No counsel had been engaged.  What the applicant had filed were the application for employees’ compensation, notice to the insurer and mediation certificate.  These are standard documents and are not complicated.  The respondents had not filed any reply.  No witness statements had been obtained.  No discovery had been made.  As such, the number and amount of documents to be considered were very limited.  Then, there was the consent summons setting out the terms of the settlement for approval.  As is required by usual practice, the application for approval of settlement was supported by a memorandum, the applicant’s affirmation and the affirmation of the handling solicitor.  I note, however, that the affirmation of the handling solicitor is a three-page document and most of its contents are just a recitation of factual matters.  Both the memorandum and the applicant’s affirmation are simple and brief and their contents are very similar.  No documents proving the identities and relationships of the claimants are exhibited to any of the affirmations.  The records were only shown at the hearing at the request of the court.  It does not appear that any of the documents referred to in the above required a great deal of effort for their preparation. 

8. The process of the application was relatively straight-forward, apart from the fact that the respondents had made a sanction payment which was not accepted by the applicant within the stipulated time limit.  The sanctioned payment could not be accepted earlier as the applicant had to obtain leave from the court before that, a minor’s interest being involved.  It appears also that the solicitors for the applicant had some difficulties obtaining confirmation in time from the deceased’s parents for the settlement.  That said, the problem regarding accepting a sanctioned offer or payment when a minor’s interest is involved has been identified ever since 2009[2] and the problem is now well-known among practitioners[3].  During the hearing, the assistance which the applicant’s handling solicitor provided to the court was limited.  In the event, the problem does not need to be resolved, as an agreement was reached at the hearing that the respondents pay the applicant’s costs. 

9. Bearing the above in mind, I now come to the items contained in the statement of costs.  The applicant’s solicitors are asking for solicitors’ costs in the total amount of $107,050.  That is based on an hourly rate of $2,600 of the handling solicitor and an hourly rate of 900 of the legal executive. Besides, there is also a claim for disbursements in the total amount of $779. 

10. I have no difficulty with the hourly rates or the disbursements. 

11. However, in my view the solicitors’ costs claimed are far more than what can be considered as reasonable and is plainly disproportionate.  This is in view of the simple nature of the claim, the early stage at which the settlement was reached, the amount of the settlement sum, the limited number of family members involved and the amount of preparation required of and paid by those representing the applicant as evident by the documents produced and submissions made. 

12. In particular, I find that time spent on the following items are unreasonable and excessive, having regard to what a competent practitioner should be able to achieve without undue difficulty:-

Item	Brief description	Time spent
A3	Preparation of court documents	660 min
A5 A6	Communications including conferences, telephone calls and letters with the applicant and other eligible members of the family, preparing authorization letter, written instructions on Notice of Sanctioned Payment. Communications including conferences, telephone calls and letters with Legal Aid Department	630 min 120 min
A7	Considering all relevant documents provided by the applicant, other eligible members of the family and the legal aid department throughout the proceedings	240 min
A11	Conducting legal research	180 min
A13	Drafting statement of costs	180 min

13. Adopting a global and broad brush approach, in my view a reasonable amount for solicitors’ costs reasonable incurred in a case like this would be no more than $40,000 in total.  This is the amount that I allow in the present case.  I also allow the disbursement of $799 in full.  Therefore, the applicant’s costs awarded in this case is $40,799.