RE JAMES BADENOCH QC

HCMP 1890/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1890 OF 2012

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J U D G M E N T

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Facts

1.  This is an application to admit and enrol Mr James Badenoch QC, a leading London silk in the field of clinical negligence, as a barrister in Hong Kong for the purposes of advising and representing the Hospital Authority in the trial of HCPI 228/2010, a medical negligence claim, and in any appeal arising therefrom; as well as in any hearing for substantive arguments or appeal in relation to the issue of discount rate.  The trial is scheduled for 8 to 9 and 23 to 30 November 2012 before Bharwaney J.  The question of discount rate will be tried as a preliminary issue (together with two other cases also raising the same issue) on 6, 7 and 16 November 2012 before the same judge.

2.  The medical negligence claim has been conveniently summarised in the supporting affidavit as follows:  The plaintiff will be 12 years old this year and she makes the claim by her grandmother and next friend.  She was born before complete maturity and unfortunately, with multiple congenital abnormalities and features suggestive of VACTER associated syndrome.  She had severe right lung hypoplasia, tracheo-oesophageal fistula, congenital heart disease, presence of 13 pairs of ribs (as opposed to 12 pairs in normal people) and prominent renal pelvis.  She had a stormy neonatal and infancy history, including emergency or elective operations for tracheo-oesophageal fistula, feeding intolerance with episodes of aspiration and pneumonia, and respiratory conditions which required on and off oxygen supplementation and nasal continuous positive airway pressure (CPAP) ventilation.

3.  Allegations of negligence are focused on 21 October 2001 when the plaintiff was around 10 months of age.  She was then suffering from respiratory distress with a clinical condition of acute bronchiolitis.  Despite increased ventilation by way of nasal CPAP, the respiratory distress worsened and a decision for intubation for ventilation purposes was made.  The plaintiff’s case is that during the process, there was either the case of (or a combination of) endotracheal tube (ET tube) being misplaced, direct trauma to the lung or bronchus, insertion of the ET tube into the stump of the repaired fistula, or unnecessarily excessive ventilation volume and/or pressure.  It is alleged that the intubation was done so negligently that it led to the unnecessary outcome of pneumothorax and cardiac arrest.  The plaintiff also relies on the fact alone of the pneumothorax having occurred as evidence in itself of negligence (res ipsa loquitur).

4.  According to the plaintiff, the negligent performance of intubation led to catastrophic results including hypoxic-ischaemic encephalopathy, cerebral palsy, spastic quadriplegia with dystonia, epilepsy and severe mental retardation.  The plaintiff’s claim is “possibly in the order of or above thirty million”.  Both liability and quantum are contested.

Applicant’s arguments

5.  Mr Alfred Fung, junior counsel in the action, submitted on behalf of the applicant in his detailed written submissions that both liability and causation raise complex and difficult issues due to the plaintiff’s abnormalities, congenital diseases, stormy neonatal infancy history before the incident and events leading to the intubation process.  The numerous allegations of fault as pleaded require detailed examination and understanding of her abnormal anatomy and her underlining condition – for instance, how the severe right lung hypoplasia and the 13 pairs of ribs would have impacted on the interpretation of various X-rays on the position of the endotracheal tube and whether it was possible to have caused direct trauma to the lung or bronchus or to have placed the tube into the stump of the repaired fistula under the circumstances.  Counsel submitted that issues of liability and causation require in-depth analysis of the complex factual matrix prior to and leading up to the performance of the intubation process, the cardial-respiratory decompensation and cardiac arrest and the resuscitation steps taken including the plaintiff’s responses to these resuscitative efforts.

6.  Counsel explained all these complex and difficult issues call for in-depth analysis of the expert evidence advanced in support, looking into difficult issues such as the appropriate medical clinical standards of skill, care and supervision required at the material time for the preparation for and performance of the intubation process, assessment into the difficulty and level of the intubation process, the risks of intubation, the risks and causes of tension pneumothorax and the relationship between the positioning and placement of the endotracheal tube and the occurrence of tension pneumothorax.  Counsel reminded the court that no less than four medical experts on liability are engaged by the parties.  They are all leading experts in their respective fields in the United Kingdom.  Counsel also submitted that there will be difficult and complex legal arguments in relation to the presence of tension pneumothorax during intubation based on res ipsa loquitur. 

7.  The Hospital Authority was originally represented by Mr John Bleach SC (leading Mr Fung).  Mr Bleach was instructed on 14 April 2011 and has had various conferences with the witnesses in the preparation of the case.  However, Mr Bleach is not available to conduct the case on behalf of the Hospital Authority in November.  In those circumstances, the Hospital Authority decided in around mid-June 2012 to retain the applicant for the trial (subject to his admission being approved).  According to the evidence, the applicant has seen and discussed with the defendant’s experts on a number of occasions.  Indeed it was emphasised at the hearing that the role of liability experts is crucial in the trial and the very difficult and complex issues of the case would mean that it is necessary for the counsel conducting the trial to be working closely with the experts in the lead-up to the trial.  It was pointed out that the experts are all working in the United Kingdom and would not easily find the time to come to Hong Kong to prepare for the case.  The applicant, the court was told, has already worked closely with the experts and, if admitted, he will be able to devote sufficient time to meet and work closely with them in order to prepare properly and fully for the trial.  This is something, for obvious reasons, that counsel locally based cannot do, so it was stressed.  Apart from the liability experts, the life expectancy experts engaged by the parties are also leading experts in the area and they are based in the United Kingdom.  So it was submitted that the applicant, if admitted, will have ample opportunities to meet with the defendant’s life expectancy expert in the lead-up to the trial in November.

8.  But not only that.  The plaintiff has very recently obtained leave to adduce expert evidence for the purpose of reviewing the performance of investment in Hong Kong as well as the inflation trend so as to assist the court to determine the discount rate.  The question of discount rate will be heard as a preliminary issue in November 2012.  Leading authorities in the area, including the local Court of Appeal decision in Chan Pui-ki v Leung On [1996] 2 HKLR 401, the House of Lords’ decision in Wells v Wells [1999] 1 AC 345 and the very recent Privy Council decision in Dylan Simon v Manuel Paul Helmot [2012] UKPC 5, will be re-visited by the court.  It is said that any revision of the discount rate in Hong Kong (set at 4.5% by Chan Pui-ki 16 years ago) will have a significant impact on the level of awards of damages in Hong Kong not only for the present case but also for all other cases in future.

9.  Mr Fung asked the court to adopt a flexible approach to the present application for admission. He informed the court that Mr Selwyn Yu SC has been approached and will probably act for the Hospital Authority together with the applicant if his application for admission is approved. 

The Bar’s opposition

10.  The Hong Kong Bar Association opposes the present application for admission.  Mr Raymond Leung (Mr Jeffrey Chow with him) submitted that whilst the case is difficult and complex, there is no “unusual” difficulty and complexity involved.  Neither the plaintiff’s claim nor the Hospital Authority’s defence, according to counsel, is unusual.  No doubt the result of the claim would depend on the assessment of the court on the extensive expert evidence to be adduced by both parties.  However, that is not “unusual” for a medical negligence case.  So far as res ipsa loquitur is concerned, counsel reminded the court that it is merely a method of inferential reasoning, which, in the context of medical negligence cases, has already been authoritatively stated in Yu Yu Kai v Chan Chi Keung (2009) 12 HKCFAR 705.  

11.  As regards the involvement of experts, counsel submitted that local counsel are of course experienced in handling complex medical negligence cases, which involve the resolution of conflicting evidence from experts.  Existence of expert evidence, even if voluminous, cannot, without more, render the case to be unusually difficult and complex.

12.  As regards the applicant being able to work closely with the UK based experts in the run up to trial in a way that Hong Kong counsel cannot, Mr Leung pointed out that Re James Badenoch QC, HCMP 1834/2006, 4 October 2006 (Ma CJHC), a case heavily relied on by Mr Fung, is distinguishable.  In the 2006 case, the plaintiff there went to settle in the UK with her parents and at the time of application for admission, the applicant had already been retained to render advice to the plaintiff for some time.  Significantly, in that case, the admission was based on the “unusual difficulty and complexity” ground, which was accepted by the court.  

13.  Counsel pointed that in the present case, the decision to brief the applicant was only made in June and Mr Bleach was originally earmarked to conduct the trial for the Hospital Authority.  There is therefore not much to be said about the advantage of the applicant having had worked on the case or easy access to the UK experts.  Mr Leung also pointed out that experts these days are used to communicating by emails and video-conferences.  In any event, with suitable arrangement, local counsel can meet the experts in person in good time before giving evidence at trial.

14.  As regards the issue of discount rate, Mr Leung submitted that local counsel are more than able to argue the issue.  Mr Leung reminded the court that in Chan Pui-ki, both parties were represented by local counsel.  Even assuming for the sake of argument that the engagement of an overseas specialist was justified, Mr Leung submitted, he nonetheless doubted (respectfully) whether the applicant would “fit the bill”.

The Secretary for Justice’s position

15.  The Secretary for Justice also has his doubts about the present application for admission.  Mr Louie Wong for the Secretary for Justice accepted that the availability of overseas counsel to meet the medical experts based also in his country can be a significant feature and a decisive factor in admitting the counsel for the trial of a personal injury case involving issues of unusual difficulty and complexity.  However, he pointed out that a difficult and complicated medical negligence claim may not be one of unusual difficulty and complexity if the chances of success of the plaintiff depend very much on expert opinions, and the difficulty is in fact the plaintiff’s difficulty in successfully persuading the court based on such evidence that the hospital was negligent: Re Badenoch QC [1999] 2 HKLRD 209, 213D/E.  Mr Wong reminded the court that there are in the present case, as compared with the 2006 Badenoch case, fewer experts involved, and the applicant’s client (the Hospital Authority) is obviously not residing in the United Kingdom.

16.  Mr Wong also questioned whether the discount rate argument must necessitate the retaining of overseas counsel.  He also doubted whether overseas counsel would be able to bring or add a significant dimension to the debate on whether Hong Kong courts should or should not follow the English approach on discount rate.

17.  Mr Wong, like Mr Leung, also queried whether sufficient attempts have been made in locating suitable local senior counsel to replace Mr Bleach.

The principles

18.  The principles governing the admission of overseas counsel are well established and it is not necessary to rehearse them here: Re Flesch QC [1999] 1 HKLRD 506; Re McGregor QC [2003] 3 HKLRD 585.  It suffices to remind oneself that where the case would involve the determination of principles which might impact substantially on the development of local jurisprudence, or where the matter involved is one of “unusual difficulty and complexity”, the court is likely to exercise its discretion in favour of admission.  Nonetheless, the court must adopt a flexible approach and the public interest is the overriding consideration.

The medical negligence trial

19.  I will first focus on the medical negligence trial.  When pressed during argument, Mr Fung frankly accepted that whilst the evidence and issues involved in the case are difficult and complicated, they are not so unusually difficult and complex as to justify the retaining of overseas counsel on that ground.  Rather he put his case on the footing that because of the way the trial dates have been fixed, the Hospital Authority’s preferred counsel Mr Bleach, who has had the conduct of the case on its behalf since 2011, is unable to conduct the trial in November.  Efforts have been made locally to find a replacement but to no avail.  Mr Fung therefore submitted that in those circumstances, it is justifiable to admit a London silk to represent the Hospital Authority in the forthcoming trial. 

20.  I agree that the present medical negligence claim involves difficult and complicated issues of law and evidence.  I also agree, however, that they are not so unusually difficult and complex as to justify the retaining of overseas counsel on that footing.  The fact that the Hospital Authority was satisfied with being represented by Mr Bleach is the best evidence that this is so.

21.  Everything therefore boils down to whether local senior counsel with the requisite expertise and experience can be located to replace Mr Bleach, who is unavailable for the November trial dates through no fault of his.  In the latest evidence filed in support of the application for admission, some details were given of the efforts made to retain local senior counsel.  Mr Fung gave some additional information from the Bar table during argument.  Still some further information was supplied, post-hearing, by those instructing Mr Fung.

22.  The burden is squarely on the applicant’s side to show reasonable efforts to locate suitable local senior counsel to replace Mr Bleach, this not being a case of unusual difficulty and complexity, but rather a case of unavailability of suitable local counsel.  At the end of the day, I am not satisfied that reasonable efforts have been made, although I bear firmly in mind that reasonable efforts do not mean that each and every counsel has to be approached.  The piecemeal disclosure of the efforts made, with little accompanying details, is quite insufficient to satisfy the court that all experienced local silks have been approached and they are all unavailable.  According to Mr Fung, there are some who have not given a reply yet.  The undeniable fact remains that by as early as June, the applicant has already been instructed by the Hospital Authority (in replacement of Mr Bleach) to advise on the case, with a view to representing the Hospital Authority at the November trial.  I do not know to what extent this has affected the efforts made to locate suitable local counsel.

23.  As matter now stands (and subject to what I am going to say at the end of this judgment), I am not prepared to admit the applicant to conduct the trial in November.

The discount rate issue

24.  Does the recent introduction of the discount rate issue tilt the balance in favour of the present application?  The importance of this issue, in terms of money, cannot be overstated.  It may also have implications beyond damages in personal injuries cases.  It may, potentially, affect awards in other areas of law, such as matrimonial cases. 

25.  In Hong Kong, the last time the issue was seriously argued was in 1996 – Chan Pui-ki, supra.  Since that local decision of our Court of Appeal, both the House of Lords and the Privy Council have had the opportunity to examine the same issue: Wells v Wells and Dylan Simon, supra.

26.  Given that the matter will be fully debated before Bharwaney J in November, I will abstain from discussing the arguments involved in any detail.  However, one can see for oneself from the law report of Wells v Wells that the arguments and issues are by no means straightforward.  The appeal itself lasted 6 days before the House of Lords.  The judgments of the Law Lords ran to over 40 pages.

27.  When the matter was re-visited by the Privy Council earlier this year, in a case on appeal from the Court of Appeal of Guernsey, the arguments took 1 day, but the judgments still ran to 119 paragraphs in total.  And the result was “shocking” – to borrow the word of Mr Raymond Leung – in the sense that the Privy Council endorsed a discount rate of negative 1.5% (in Wells v Wells, the discount rate was lowered from the conventional 4.5% – a rate still adopted in Hong Kong – to 3%).

28.  I find the issues involved in the discount rate debate both important and complicated.  No doubt, the discount rate in Hong Kong has to be argued by reference to local economic and other considerations.  It is true, as Mr Leung pointed out, that in Hong Kong, there is no index‑linked government stock (based on which the House of Lords worked out the 3% discount rate in England).  But this, in my view, simply makes the debate over the local discount rate (if it is to be revised) even more difficult.  Everything considered, I believe that the discount rate debate justifies the engagement of overseas counsel on the footing that it involves unusually difficult and complex arguments both on legal principles and on evidence, requiring the expertise of experienced and specialist counsel.

29.  Furthermore, its determination might impact significantly on the development of local jurisprudence.  It is also something which is likely to end up in the Court of Final Appeal.  

30.  But then Mr Leung, on behalf of the Bar, queried whether the applicant has the necessary experience and expertise to argue the discount rate.  Mr Leung pointed out that the applicant was not involved in either Wells v Wells or Dylan Simon.  I should point out that Mr Leung did not for one moment doubt the applicant’s experience in conducting heavy medical negligence claims.  However, counsel submitted that on the materials presented before the court, there are doubts whether the applicant “fits the bill”, as counsel put it, so far as the discount rate argument is concerned.

31.  In my view, the eminence of the applicant in personal injuries litigation cannot be disputed.  According to the evidence, he was actively involved in discussions and debates with judges and colleagues preceding and leading up to Wells v Wells.  He has continued to build on his experience and knowledge in advising on these issues in view of the changing world economic climate and he has been involved in hundreds of damages claims where discount rate has been applied.  Although more details could have been given, I have no reason to doubt this information appearing in the supporting affidavit of the solicitor concerned.  And I have every reason to believe that as a leading personal injuries practitioner in the United Kingdom, the applicant is, as the evidence says, most interested in and conversant with the legal arguments on discount rate.  It is true that he did not appear in either of the two leading cases on the subject matter, but it does not follow that he does not “fit the bill” to argue the matter in Hong Kong. 

32.  I note that the Hospital Authority will also instruct a local silk together with a junior to appear with the applicant at the discount rate hearing if the admission is approved.  This is a factor that should be taken into account in considering the overall public interest involved in the present application.

Outcome

33.  Looking at the matter in the round, I am prepared to admit the applicant for the purposes of advising and representing the Hospital Authority but only limited to the November hearing on the question of discount rate.  Subject to what I am going to say in the next paragraph, he is not admitted for the purposes of conducting the main trial starting immediately thereafter. 

34.  On the peculiar facts of the present case, it will not serve the interest of anybody if the Hospital Authority cannot find suitable representation to defend the main trial.  And it cannot be denied that the pool of suitable local counsel is relatively small and time is running out rapidly.  It is of course true and right that the court will not allow itself to be “held to ransom” by a late application.  Nonetheless, since I am already admitting the applicant for the limited purposes described above, I am prepared to take the very exceptional course of giving the Hospital Authority liberty to file and serve further evidence by 17 October 2012 (if so advised) to update the court of its efforts to instruct local senior counsel.  If despite its best efforts still no suitable senior counsel can be located, the court will likely be minded to vary the limitation on the applicant’s admission to allow him to represent the Hospital Authority in the main trial in November as well.  The further evidence must provide sufficient particulars of the efforts made and the responses of the individual counsel approached.  Those who have been approached at an earlier stage should be contacted again just in case there is a change in counsel’s diary position.  The matter will be decided by the court on paper (unless otherwise directed) with liberty to both the Bar and the Secretary to put in and serve evidence/submission (if any) in response no later than 24 October 2012.

35.  I so order.