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New Hong Kong legislation on outcome-related fee structures for arbitration

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Hodgson Matthew
Matthew Hodgson

Partner

Hong Kong

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Joanne Lau

Partner

Hong Kong

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Image of Sheila Ahuja
Sheila Ahuja

Partner

Singapore

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Mainwaring-Taylor Christopher
Christopher Mainwaring-Taylor

Partner

Singapore

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Suh Jae Hee
Jae Hee Suh

Senior Associate

Singapore

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Rainbird John
John Rainbird

Counsel

Tokyo

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Jiang Jane
Jane Jiang

Partner

Shanghai

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07 July 2022

On 30 June 2022, [1] Hong Kong enacted framework legislation which introduces legislative amendments aimed at allowing outcome-related fee structures (ORFS) in arbitration and related proceedings (the Amendments).

The Amendments are expected to bolster Hong Kong’s status as a key hub for arbitration since, once fully operational, they will offer increased flexibility for end users of arbitration to adopt conditional fee agreements and damages-based agreements in arbitrations.  Further details of the new OFRS regime will be fleshed out by subsidiary legislation. 

Following our previous update on similar reforms in Singapore,[2] this bulletin sets out an overview of the key features of Hong Kong’s ORFS reforms by considering the following questions:

1. What are ORFS?

2. Is there a cap on “uplift fees”?

3. Can “uplift fees” be recovered from the unsuccessful party?

4. What are the requirements for an ORFS agreement?

5. How does Hong Kong’s ORFS regime compare with the ORFS regimes in other jurisdictions?

Footnotes

1. Arbitration and Legal Practitioners Legislation (Outcome Related Fee Structures for Arbitration) (Amendment) Ordinance 2022 – Ordinance No. 6 of 2022, issued on 30 June 2022 (the Amendment Ordinance), available at https://www.gld.gov.hk/egazette/pdf/20222626/es1202226266.pdf

2. See our update on the Singapore reforms here: https://www.allenovery.com/en-gb/global/news-and-insights/publications/singapore-allows-no-win-no-fee-and-no-win-less-fee-arrangements-for-arbitration-and-sicc-proceedings-from-4-may-2022.