29 October 2019

Hong Kong sets it sails for success

New arbitration “success fees” are being studied by the Law Reform Commission co-chaired by two lawyers from Herbert Smith Freehills.

The Law Reform Commission of Hong Kong has appointed Herbert Smith Freehills' Kathryn Sanger and Briana Young to co-chair a study on the introduction of outcome-related fee structures - or "success fees" - in arbitration.

Success fees

The study will be conducted by a new sub-committee of the Law Reform Commission, which recognises that arbitration is an important industry in Hong Kong, which it notes is consistently ranked among the top four venues for tribunal hearings worldwide. “Success fees are now standard in many of Hong Kong's competitor markets, such as the US and the UK, so this is an important element in the industry's future competitiveness,” said co-chair Ms Sanger. “I'm honoured to chair the sub-committee with Briana, and to lead the consultation on possible changes to the system in Hong Kong.” By permitting success fees, lawyers can share with clients in the risk and reward of complex arbitration cases. “As practitioners, we are seeing increased demand for these types of pricing structures from clients,” said co-chair Ms Young. “The study will allow us to carefully assess the risks and benefits for Hong Kong, and outline any legislative and regulatory changes required.” The study follows the recent innovative changes that allow parties to Hong Kong-seated arbitrations to apply to the Chinese courts for injunctive relief in support of the arbitration. No other arbitral seat benefits from such support from the Chinese courts.

Committee members

Kathryn Sanger has over 15 years' experience of advising clients on arbitration and litigation proceedings in Asia Pacific. A partner at Herbert Smith Freehills since 2016, she also sits as an arbitrator, is listed on the Hong Kong International Arbitration Centre's (HKIAC) List of Arbitrators, and is also a member of the Users Council of the Singapore International Arbitration Centre. She was a Council Member of the HKIAC between 2008 and 2019, and served on the HKIAC Executive Committee. Briana Young is a foreign legal consultant at Herbert Smith Freehills, advising colleagues and clients on all aspects of international arbitration law and public international law. She has also been closely involved in the development of Hong Kong's third-party funding legislation, and of the HKIAC Administered Arbitration Rules. The other members of the sub-committee are: CM Chan, consultant at Anthony Siu & Co; Matthew Gearing QC, partner at Allen & Overy; and barristers Dr Benny Lo and José-Antonio Maurellet, SC.