Matters to be considered before starting a civil action
You may need to spend considerable time and money in bringing and concluding a civil action. You may not always be able to obtain what you want at the end, and you may be held responsible for the other party's huge legal costs if you lose. Hence, you should consider very carefully before you decide to start a civil action, and it is generally advisable for you to first obtain legal advice to guide your decision. If you are not be able to afford the legal costs, you may consider trying to obtain some free or subsidised legal services provided by the Legal Aid Department, Duty Lawyer Service or the Hong Kong Bar Association.
Do I have sufficient legal basis to start a civil action? Will it be possible for my opponent to sue me back in respect of the same case?
Before you start a civil action, you should first consider whether or not you have a sound legal basis for a claim. Apart from considering the legal basis of your claim you should also bear in mind that sometimes both you and your opponent may have respectively committed some faults in relation to the same event. For example, let us say you have entered into a contract to sell some toy cars to your customer. Your customer did not pay you for any of the goods because some of the toy cars manufactured by you were defective. If you start a civil action against your customer to recover the price of the goods sold, your customer may "counterclaim" against you in the same civil action. Your customer might seek monetary compensation from you for any damages which he has suffered due to some of the toys cars which you supplied being defective. If this happens, you may have to face a prolonged lawsuit and may end up gaining nothing.
Therefore, in order to ascertain whether you have any legal basis to start a civil action and in order to assess whether your opponent would have a valid "counterclaim" against you, you should seek legal advice before starting a civil action. You may also consider settling the dispute out of court in order to minimise the legal costs.
Is there any deadline for starting a civil action?
There is always a deadline for starting a civil action against another. The deadline to start a civil action is prescribed in the Limitation Ordinance. For example, a civil action for breach of a commercial contract must be instituted within 6 years from the date on which the breach of contract happened. In respect of a claim which causes personal injuries, the time limit is 3 years. Action for employees' compensation/work-related injuries must be brought within 2 years from the date of the accident that causes the injury.
The time limits set out in the Limitation Ordinance can only be extended in exceptional circumstances, such as where the plaintiff was mentally incapacitated for a certain period or the action is based upon the fraud of the defendant (the time limit only begins to run after the plaintiff has recovered from the mental illness or has recognised the fraud).
Despite the time limits set out in the Limitation Ordinance, you should always start your claim as early as possible and should not wait until the last minute. If you are not sure about the time limit for your case, you should consult a lawyer.
Can I obtain what I want if I win the case?
Remember, even if you win your case and obtain a court judgment in your favour which awards you all sums which you have claimed, there is no guarantee that you will be able to recover all the sums that have been awarded by the court.
Before you start a legal action, it is important to consider at the outset whether or not the person, firm or company you are going to sue is likely to be able to pay you if you win the civil action. If they
- are unemployed, bankrupt or wound up;
- have no money of their own; no personal property and nothing else of value belonging to them (such as a car) which is not hired or subject to a hire purchase or lease agreement;
- have ceased to trade;
- have already been taken to court by others and have not paid; or
- have other substantial debts to pay
you may have little chance of getting your money even if you win a civil action.
The Official Receiver's Office will be able to tell you whether a person is bankrupt, or whether a limited company is in compulsory liquidation/winding-up (meaning that the company has stopped trading and probably has neither money nor other assets). Limited companies can also be wound-up voluntarily. To check whether a company has been wound up voluntarily, you can contact the Companies Registry.
On the other hand, you may be able to get some money if you are prepared to accept small instalments over a period of time. You should therefore try to negotiate with your debtor (or the defaulting party) for payments by instalments first, before considering going to court.
Can I afford the expenses?
You will usually need to pay a fee to the court in order to start your claim. (However, if the person you are suing (the defendant) surrenders and pays you, you may recover this fee as well.)
If the defendant defends your claim, you may need witnesses to help tell the court what happened. You have to pay a deposit to the court for the witness expenses. You may also need to obtain a report from an expert (e.g. a doctor, mechanic or surveyor) and ask this expert to go to court to give evidence on your behalf. You will have to pay the expert's expenses and charges. (But if you win, the court may order the defendant to pay towards these.)
In addition, you have to bear your own expenses for going to court (for filing documents or attending hearings) and for travelling expenses and meals. If you engage a lawyer to represent you, you will have to pay for the legal services rendered. You may ask the court to order the defendant to reimburse you if you win your case. But usually, you will only get a portion (about 70% on average) of your lawyer's fees and expenses.
You should also note that the court will not automatically take steps to ensure that the losing party pays the winning party. So if you win your case but the defendant does not pay, you will need to ask the court to take action to enforce your judgement, for which you will have to pay another fee.
What will happen if you are the losing party?
If you are the losing party, you will normally be ordered to pay the costs (this generally means legal costs) to the winning party. It makes no difference if you are a litigant in person (without appointing a lawyer). The costs are the expenses that the winning party has had to spend on the preparation and hearing of the matter. These include the expenses for the lawyers representing the winning party (if any). The amount of these costs can be substantial, depending on the complexity of the case, the preparation work required and the length of the hearing.