Hong Kong’s new apology law and its implications for financial institutions

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apology law

The new Apology Ordinance came into operation in Hong Kong on 1 December 2017. Prior to this ordinance, an apology was admissible as evidence in civil, regulatory and disciplinary proceedings and could have been relied on to determine legal liability, but the potential prejudicial effect might have deterred parties from making apologies to aggrieved claimants. The Apology Ordinance will change this position by making evidence of an apology inadmissible for determining fault or liability in civil, regulatory and disciplinary proceedings. The ordinance aims to encourage the making of apologies to prevent the escalation of disputes and facilitating their amicable resolution.

The Apology Ordinance applies to an apology made on or after 1 December 2017. This is regardless of whether the apology relates to a matter which arose before, on or after that date.

Definition. The Apology Ordinance defines “apology” made by a person as an expression of regret, sympathy or benevolence in connection with the matter. The expression may be oral, written or by conduct. The “apology” also includes any part of the expression that is an express or implied admission of fault or liability or a statement of fact.

For example, in the context of handling complaints received by financial institutions, a response with any expression of regret, sympathy or benevolence provided to an aggrieved complainant together with the explanation of the circumstances of the matter would fall within the definition of “apology” under the ordinance.

Restrictive admissibility. The Apology Ordinance provides that evidence of an apology is not admissible in any judicial, arbitral, administrative, disciplinary and regulatory proceedings for determining fault or liability. This includes disciplinary proceedings, proceedings before the Securities and Futures Appeals Tribunal and proceedings before the Market Misconduct Tribunal conducted under the Securities and Futures Ordinance.

The only proceedings excluded from the application of the Apology Ordinance are criminal proceedings, proceedings of the Legislative Council and proceedings conducted under the Commissions of Inquiry Ordinance, the Control of Obscene and Indecent Articles Ordinance and the Coroners Ordinance.

It is important to note that the ordinance does not affect the investigation powers of regulatory bodies such as the Securities and Futures Commission and the Hong Kong Monetary Authority. Financial institutions will remain under a duty to disclose all relevant information (including any statements of apologies) in regulatory investigations.

When is an apology admissible? In exceptional cases, the Apology Ordinance allows a statement of fact contained in an apology to be admissible as evidence in applicable proceedings at the discretion of the decision maker (the person having the authority to hear, receive or examine evidence in the proceedings, e.g., a court).

If the decision maker is satisfied that it is just and equitable to do so, having regard to the public interest or the interests of the administration of justice, the decision maker may exercise a discretion to admit a statement of fact contained in an apology. The ordinance cites the situation where there is no other evidence available for determining the issue as an example.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at danian.zhang@bakermckenzie.com