Following is a question by the Hon Chan Kin-por and a written reply by the Secretary for Justice, Mr Wong Yan Lung, SC, in the Legislative Council (February 18):
It has been reported that some recovery agents (“RAs”) (i.e. organisations which assist victims, usually of personal injury cases, in recovering damages in return for a fee as a percentage of the damages recovered) have recently been touting for business by claiming that their services are provided on a “no win, no charge” basis. When assisting employees injured at work and victims of traffic accidents in claiming damages, they often abet the injured to exaggerate the degree of injuries sustained so as to claim for a higher amount of compensation. Such act will not only bring losses to insurance companies, but will also harm the interests of insurance policyholders in the end because of increase in insurance premium. In this connection, will the Government inform this Council:
(a) of the respective numbers of reports received and arrest operations mounted against RAs by the Police in each of the past three years, and the progress and results of the cases concerned; and
(b) given that the acts of RAs may constitute criminal offences such as “maintenance” or “champerty”, whether the Government will adopt counter measures to eradicate the activities of RAs; if it will, of the details; if not, the reasons for that?
(a) The Police do not keep statistics on reports received against recovery agents. However, reports on champerty have been received by the Police in the past three years. As a result, a total of 21 persons were arrested and charges were laid against two of them. The trial of the two charged persons will take place at the District Court in May 2009. Other cases are still under investigation.
(b) The Administration is taking a three-pronged approach to address the problems caused by recovery agents. These are public education, law enforcement through investigation and prosecution, and possible legislation.
On public education, Announcements in the Public Interest (APIs) have been broadcast on television and radio since July 9, 2008 in order to increase public awareness of the risks of the activities of recovery agents.
As for prosecution, the Police mounted an operation to combat the illegal activities of recovery agents in July 2008. A total of 21 persons were arrested and 22 premises were searched. Eleven computers and more than 900 box files of various documents were seized. Of the 21 persons arrested, two were charged with offences including maintenance and champerty. Investigations are continuing.
The Administration will review the need for legislation pending the outcome of prosecution actions.
The Administration will be briefing the Legislative Council Panel on Administration of Justice and Legal Services on the subject of recovery agents in its meeting on February 23, 2009.