Hong Kong Student Law Gazette Fall 2014 Issue by Hong Kong Student Law Gazette

Hong Kong Student Law Gazette Fall 2014 · Issue 5

Feature Interview with The Honourable Mr Justice Joseph Paul Fok

Articles Extended State Acquiescence: a Redress for Unenforceable Rights? A Glimpse into the Sharing Economy: an Uber Case Study The ‘Right to be Forgotten’: Mediating Between Fundamental Human Rights

LETTER FROM THE EDITOR

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TABLE OF CONTENTS P4. Yes Means Yes: Sexual Consent and the Need for Legal Reform in Hong Kong P6. Slipping Through the Cracks: Hong Kong’s Legislative Gap in Combating Human Trafficking P8. Reform on Privity of Contract in Hong Kong P10. Legal Aid in Hong Kong: Problems, Analyses and Suggestions

Hong Kong

P11. Hong Kong Competition Ordinance: Is the Teeth Lost Due to Limited Scope of Private Enforcement? P12. The Case for Charity Legislations in Hong Kong: from the Perspective of an NGO P14. Is Legislation the Elixir to Protect Sexual Minorities from Discrimination? P16. Class Action Arbitration: an Alternative to Representative Proceedings P18. Extended State Acquiescence: a Redress for Unenforceable Rights? P20. Regulating ‘Room-Escape’ Games

China

P22. Navigating Mainland’s State Secret Laws after Standard Water

Feature

P24. Interview with The Honourable Mr Justice Joseph Paul Fok

P31. Corporate Manslaughter in Construction Law P32. Scottish Independence Referendum: a Catalyst for Britain’s Constitutional Reform P33. Protecting Data in the Clouds

International

P34. The Annexation of Crimea: How Russia Sowed the Seeds for Secession P36. A Glimpse into the Sharing Economy: an Uber Case Study P38. Sovereignty as the Normative Basis of International Law P40. The ‘Right to be Forgotten’: Mediating Between Fundamental Human Rights P42. Constitutionality of Obama’s Declaration of War Against the ISIL

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LETTER FROM THE EDITOR

ver the short span of two years, the Gazette has gained the status as Hong Kong’s leading student-run law publication. Practitioners, judges and the media continue to hold the Gazette in high regards, and this reputation is owed to our forerunners’ philosophy of upholding legal scholarship with integrity. Following in their footsteps, our objective is to provide a professional platform for our fellow students to express their views and opinions on various legal issues. Indeed, it is my great pleasure to serve as this year’s Editor-in-Chief, carrying the hopes of my predecessors and paving the way for the future boards. For this issue, we were graced with the opportunity to interview the Honourable Mr Justice Joseph Paul Fok, a permanent judge of the Court of Final Appeal. We were given an exclusive tour of the various facilities, including the judges’ deliberation room and the Court of Final Appeal Library. We then settled into a conference room where Justice Fok – citing Lord Bingham’s The Rule of Law – gave us his insightful views on various private and public law developments, along with a few words of advice to our readers. We would like to thank Justice Fok for his thoughtfulness and hospitality, given his Lordship’s busy schedules and various duties. As in the case with any publication, the Gazette would not be possible without those ensuring its quality and success. In particular, we would like to thank Clifford Chance LLP for their invaluable support in allowing the Gazette to be published in print and on our online platform at hongkongstudentlawgazette.com. I would also like to extend my gratitude to our writers and my trusted Editorial Board, as this issue would have not been possible without their tireless effort. Finally, the Gazette is only as successful as its readers. On that note, we would like to thank you – the readers of the Gazette – for your support in our past, present and future publications. We hope you enjoy this issue, and we wish you the very best for your upcoming exams!

James Ng Editor-in-Chief

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EDITORIAL BOARD

Editorial Board

James Ng

Keith Cheung

Alan Lee

Cynthia Or

Natalie Lau

Louisa Wong

Layout Team

Lemon Lin

Cynthia Or

Additional Thanks (in alphabetical order)

Clifford Chance LLP CUHK Faculty of Law

Professor Christopher Gane Ms Jeannie Kow

Mr Justice Joseph Paul Fok Mr Richard Morris HKSLG 路 FALL 2014 路 ISSUE 5

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Yes Means Yes: Sexual Consent and the Need for Legal Reform in Hong Kong

Christina Ling

land and South Australia. The list could go further, but it is apparent that there is a convergence of international standards requiring sexual consent to be evinced by positive actions of choice and voluntary agreement. Where does Hong Kong stand?

n September 2014, California welcomed the passage of Senate Bill 967 (SB 967), a new law requiring universities and post-secondary institutions receiving state funds for students’ financial assistance to adopt an affirmative consent standard in the adjudication of sexual offence cases. SB 967 is dubbed ‘Yes Means Yes’, since the Bill creates a shared sexual responsibility by requiring both parties to show ‘affirmative, conscious, and voluntary consent’ to sexual activity. In other words, silence or a lack of protest does not amount to consent. This replaces the ‘No Means No’ approach, often adopted by college boards, which places the burden on the victim to demonstrate explicit signs of resistance for proof of sexual assault. HKSLG · FALL 2014 · ISSUE 5

While California’s affirmative sexual consent standard may seem too progressive for some, the Bill’s definition of consent is not a major deviation from the international norm. For instance, Rule 70 of the Rules of Procedure and Evidence of the International Criminal Court echoes that ‘consent cannot be inferred by reason of the silence of, or lack of resistance by, a victim.’ Similar language is used in other jurisdictions: under England’s Sexual Offences Act 2003, a person consents only if he ‘agrees by choice, and has the freedom and capacity to make that choice’; in Canada, consent is the ‘voluntary agreement…to engage in the sexual activity in question’, which parallels the requirements of free and voluntary agreement in Scot-

Meanwhile, legislative reforms in Hong Kong are stagnant. The Crimes Ordinance (Cap. 200), the principal piece of legislation governing sexual offences, has remained unchanged since 1972. Most importantly, it contains no concrete definition of sexual consent. Consent is only referenced in the context of rape under s. 118(3), which states that ‘a man commits rape if (a) he has unlawful sexual intercourse with a woman who at the time of the intercourse does not consent to it; and (b) at that time he knows that she does not consent to the intercourse or he is reckless as to whether she consents to it.’ Not only does s. 118(3) lack a prescribed form for the expression of consent, but s. 118(4) also allows the perpetrator to raise a defence if there are ‘reasonable grounds’ for him to believe that consent is present. The capacity to give consent is another important aspect that the Crimes Ordinance fails to address. In adjudicating this issue, courts in common law jurisdictions often take into account factors such as force, intoxication, mental soundness, or age of the victim, since

HONG KONG they impact an individual’s ability to make a genuine choice. However, there has been considerable confusion and inconsistency in English cases on intoxication because England’s Sexual Offences Act 2003 does not contain a definition of capacity. Similarly, in HKSAR v Tang Siu Fung (No. 1) [2002] 2 HKLRD 1013, the Court of Appeal struggled in determining an intoxicated victim’s ability to indicate consent. It held that consent is valid if given by a victim who was self-induced to intoxication and remained capable of consent, whereas consent is invalid if given by a victim who fell unconscious temporarily. While this appears to be a satisfactory formulation of a legal test, there remain some ambiguities. For example, the Court noted that challenges lie in differentiating between a voluntarily intoxicated victim and one who was ‘plied…with lots of alcoholic beverages.’ Since case law is not adequate to fill the gaps in the current legislation, statutory guidance on valid consent is much needed. Insufficient reform attempts In 2012, the Review of Sexual Offences Sub-committee of the Hong Kong Law Reform Commission (the LRC) issued a Consultation Paper on Rape and Other Non-Consensual Sexual Offences (the Paper) as the first of a series of consultation papers to review sexual offences in Hong Kong. It addressed the importance of sexual consent among other issues. Drawing from existing legislation from overseas jurisdictions, the Paper proposes a statutory definition of ‘consent’ to sexual activity to help juries better understand its meaning. It also emphasises the need for free and voluntary agreement and capacity to determine consent.

the Sub-committee is now drafting subsequent consultation papers on other aspects of the review. There is no definite timetable available on when final proposals on the issues raised in the first consultation paper will be formulated or when they will be implemented by the Government. Thus, the prospects of a legislative bill and consequent administrative action are nebulous. There is also a lack of social discussion and media attention on the issue of sexual consent, which may be attributed to the seemingly low prevalence of rape and indecent assault cases in Hong Kong. According to Hong Kong Police Crime Statistics, reported rape cases per year in the last decade have never exceeded 0.18% of overall crime, while cases of indecent assault have remained under 2.01%. This contrasts with jurisdictions considered to have high sex crime rates such as the United States, where reported rape cases per year in the last decade have reached almost 7% of total violent crime. However, the reality in Hong Kong may be bleaker than the statistics suggest as sexual offences are often underreported since victims are deterred by fear or embarrassment. According to a 2013 survey conducted by the Hong Kong Women’s Coalition on Equal Opportunities, almost half of the

surveyed women had been sexually harassed, but fewer than 3% had reported the incident. Therefore, statistics are not a basis for accepting the status quo or trivialising sexual offences. While its effectiveness in curbing sexual offences may be debateable, introducing a statutory definition of consent is undoubtedly a much needed first step for further reforms. The LRC acknowledges that such definition would at the very least ‘reflect the principles of sexual autonomy and protection and serve an educational purpose.’ Concluding remarks Progressive legislations such as SB 967 serve as reminders that the Crimes Ordinance falls short of international standards. As a cosmopolitan city, Hong Kong should take reform actions not only to clarify the law, but also to enhance its general consideration of human rights. Voluntary agreement and capacity to sexual consent are key elements of sexual responsibility and freedom that trace back to the broader principle of individual free will. This autonomy is a fundamental aspect of basic human rights which the law should recognise and protect in accordance with global standards.

According to the LRC Secretariat, HKSLG · FALL 2014 · ISSUE 5

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Slipping Through the Cracks: Hong Kong’s Legislative Gap in Combating Human Trafficking

ollowing the issue of the Trafficking in Persons Report 2014 (the Report) compiled by the US Department of State, the Hong Kong Government came under fire this year for not making sufficient effort in combating human trafficking. For the first time, the Report identified Hong Kong not only as a transit and destination point, but also a source territory for forced labour and sex trafficking. Since 2009, Hong Kong has been demoted from a Tier 1 to Tier 2 status, aligning itself with countries such as Afghanistan and Uganda, whose governments fail to

comply with the minimum efforts prescribed by the US Trafficking Victims Protection Act (the Act). Falling short of the Act’s prescription signifies a jurisdiction’s failure to meet an internationally recognised standard, since the Act incorporates and supplements the United Nation’s Palermo Protocol, formally known as the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children (the Protocol). Hong Kong’s demotion, coupled with recent cases of labour exploitation of domestic helpers, exposed the lack of a stringent legal framework in countering human trafficking. It triggered concerns that the scope of legislative provisions on human trafficking was too narrow and fragmented to adequately protect victims and prosecute perpetrators. Lack of a stringent legislative framework In response to the Report, the Government issued a press release on 20 June 2014, denying that Hong Kong is a destination, transit, or source territory. It continues to assert that crimes of human trafficking are rare occurrences under a comprehensive legislative framework. The Government’s reluctance to identify human trafficking as a subject of concern further aggravates its failure to tackle the issue. Unlike Macau and Taiwan, Hong

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Brigitte Kiu

Kong does not have a dedicated legislation on anti-trafficking. While labour trafficking is criminalised under the Employment Ordinance (Cap. 57), other relevant provisions are dispersed among the Crimes Ordinance (Cap. 200), Immigration Ordinance (Cap. 115), and Offences against the Person Ordinance (Cap. 212). Such a scattered legal framework thus leads to ‘significant legislative gaps and critical difficulties with enforcement’, according to a 2014 joint report by Liberty Asia and Justice Centre Hong Kong. Inadequate statutory definition Hong Kong’s definition of human trafficking also falls short of international standards. Previously, human trafficking was defined under s. 129 of the Crimes Ordinance to only include trafficking for the purpose of prostitution. The Government supplemented this definition in 2013 by adding a provision to the Prosecution Code, which is a set of guidelines for the conduct of prosecution. The new provision is titled ‘Human Exploitation Cases’ and set out in paragraph 18 of the Prosecution Code. It expanded the definition to include a wider spectrum of trafficking activities, such as enforced labour, domestic servitude, debt bondage, and organ harvesting. However, with the Prosecution Code being only a procedural guideline, this provision must be entrenched in legislation for it to have any legally binding effect.

HONG KONG

Issues of enforcement In addition, Hong Kong has yet to follow the lead of 170 countries to sign the Protocol, which would demand accountability to an international body for adherence to international standards. Due to the lack of legislative support and international scrutiny, there is little impetus to monitor human trafficking. Despite increased reports of forced labour, the Government has yet to mobilise law enforcement efforts to investigate labour trafficking crimes. Intertwined with the above issues is the problem of the trafficked victims’ legal status. Since many victims are illegal workers, their immigration offences create an additional layer of complexity for combating human trafficking. This problem is highlighted in the UK case of Hounga v Allen [2014] UKSC 47, which involved a trafficked victim suing her former employers for physical abuse and wrongful dismissal. The Court of Appeal held that Hounga was barred to claim against her former employers because she was an illegal worker and thereby prevented from enforcing an illegal employment contract. This decision, however, was overturned by the Supreme Court. Allowing Hounga’s claims, the Court concluded that the former employers’ defence of illegality was outweighed by the public policy in favour of protecting trafficked victims. In light of this case, the Hong Kong Government and law enforcement authorities should ensure that their priority is the protection, not criminalisation, of trafficked victims. Developing a plan of action The Hong Kong Government needs to recognise the necessity of legal reforms and develop an

overarching framework compliant with international standards. Taking the UK as an example, despite its lack of a specific legislation on anti-trafficking, it has acknowledged this deficiency by introducing the Modern Slavery Bill 2014-15. The Bill provides a wide mandate to assist victims, introduces life imprisonment as the maximum penalty, and creates an anti-slavery commissioner to hold law enforcers accountable. To bridge the legislative gap, Hong Kong may begin by reviewing its existing legal framework with a view to amending its anti-trafficking laws. Setting up consultative groups with organisations which target human trafficking may help contribute to the evaluation process. Given Hong Kong’s broad definition of human trafficking, there is a need to identify the issues and solutions for each kind of trafficking activities. Measures should be adopted to improve victim

protection procedures, increase investigations into trafficking, improve data management systems, and strengthen collaboration with NGOs for sheltering victims. The Labour Department should continue to publicise workers’ rights, the responsibilities of employment agencies as well as services available in cases of suspected exploitation. Initiatives to encourage victims’ participation in the investigation and prosecution processes without fear of deportation should be increased. Greater collaboration with source and destination territories of human trafficking could further facilitate such measures. Implementing these measures would require concerted effort from different stakeholders, and only then can Hong Kong truly call itself a defender of basic human rights.

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Reform on Privity of Contract in Hong Kong George Lau

couple was getting married. The father of the husband and the father of the wife entered into a rather uncommon agreement: they would each pay a sum of money to the husband and give the husband full power to sue them for the respective sums. Unfortunately, the wife’s father died before making the payment. The husband, in an attempt to enforce the purported contractual right, sued the estate. This was what happened in Tweddle v Atkinson [1861] EWHC QB J57, the landmark case on the doctrine of privity of contract at common law (the Doctrine). Even though the agreement was entered into for the benefit of the husband, he failed his claim because he was not a party to the agreement between the fathers. In the words of Wightman J, ‘no stranger to the consideration can take advantage

of a contract, although made for his benefit’. The House of Lords affirmed the Doctrine in Dunlop Pneumatic Tyre v Selfridge & Co [1915] UKHL 1 and Scruttons v Midland Silicones [1962] AC 446. Privity of contract and its anomaly The Doctrine prescribes that 1) a contract cannot confer rights to persons who are not parties to it, and 2) a contract cannot make third parties liable . While the rationale of the doctrine is to limit the obligations from the contract to those who are parties to it, the anomaly of the Doctrine arises when it combines with the rules of remedy for breach of contract. As a general rule, an aggrieved party could only recover the actual loss which would have been avoided had the contract been performed

in full. Where no actual loss is caused by the breach, the aggrieved party will only be entitled to nominal damages. The combined effect of the rules of remedy and the Doctrine may frustrate the express intention of the contracting parties at times, as illustrated in Tweddle. On one hand, the husband has no standing to sue because he was not a contractual party. On the other hand, the father of the husband, albeit a contractual party, could only recover nominal damages because he had suffered no actual loss. The strict application of the Doctrine may also cause injustice to third parties who have acted in detrimental reliance of the contract due to reasonable expectations of their legal rights. Developments in other common law jurisdictions To address the anomaly, a number of common law jurisdictions have modified the application of the Doctrine. For example, UK has enacted the Contracts (Rights of Third Parties) Act 1999 to create statutory exceptions to the Doctrine, while Singapore has enacted the Contracts (Rights of Third Parties) Act in 2001, modelled substantially on the English Act. Another notable development is found in Canada, where the Supreme Court relaxed the Doctrine in Fraser River Pile & Dredge Ltd v Can-Dive Services Ltd [1999] 3 SCR 108. Bounded by both

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of the premises under construction. However, it does not mean that a third party can be identified by implication. It would be uncertain to ascertain from the minds of the contracting parties whether third party rights were conferred on someone whose identity was to be implied. Hence, if a contract only benefits an identified warehouseman, it could not be implied that employees of the warehouseman are also benefited.

common sense and commercial reality, Iacobucci J commented that courts may undertake appropriate analyses and relax the Doctrine with respect to third-party beneficiaries in certain circumstances. Similarly, in Trident General Insurance Co Ltd v McNiece Bros Propretary [1988] HCA 44, the High Court of Australia also loosened the Doctrine. Toohey J pointed out that the law which precluded a third party to sue was based on shaky foundations and lacked support both in logic and jurisprudence. Reform in Hong Kong In light of recent developments in other common law jurisdictions, the Contracts (Rights of Third Parties) Bill (the Bill) was introduced in February 2014 as a first step for reforming the position in Hong Kong. The Bill provides a two-limb enforceability test: a third party may enforce contractual terms if the contract either 1) expressly provides for such possibility, or 2) purports to confer a benefit on the third party. Under the first limb, it does not matter whether the third party enjoys any benefit from the contract. The

third party may enforce the contractual terms as long as the contracting parties have expressly allowed so. This respects the intention of the contracting parties and recognises their freedom of contract. The second limb involves a rebuttable presumption. It presumes that the contracting parties have intended to allow third-party enforcement where the contractual terms appear to benefit the third party directly. However, enforcement is not available to a third party if it merely benefits from a collateral side effect of the contract’s performance. This presumption may be rebutted if the court finds, on an objective interpretation of the contract, that the contracting parties have no such intent. In order to be eligible, the third party must be expressly identified in the contract either by name, description or reference to a class of persons. It is also possible to confer rights on a third party which was not in existence at the time of the contract’s conclusion, provided that its identity is adequately defined. For example, an employer and a contractor may enter into a construction contract to confer rights on future occupiers

Moreover, the Bill aims to strike a proper balance between the contracting parties’ freedom to change the contract and the third party’s interests. The Bill sets out conditions for crystallisation of third party rights: once these conditions are met, the contracting parties cannot vary or rescind the contract without the third party’s consent. This restriction can be overridden if the contract contains an express term to the contrary, or if the parties specify their own criteria governing the crystallisation of third-party rights. Conclusion The enactment of the Bill will bring a significant change to the legal relationship between contracting parties and third parties, enabling the latter to enforce contractual terms. It aims to optimise Hong Kong contract law and bring it in conformity with other common law jurisdictions. However, the Bill’s practical impact remains to be seen as contracting parties may exclude third-party rights by inserting an express term in the contract. This is in fact a common practice in many commercial contracts. Nonetheless, given the developments in other common law jurisdictions and the effort to bring Hong Kong into conformity, it is likely that the proposed changes are welcomed.

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Legal Aid in Hong Kong: Problems, Analyses and Suggestions Timothy Poon

he right to justice in Hong Kong is firmly ensured in Article 35 of the Basic Law. To realise this right, the Legal Aid Ordinance (Cap. 91) was enacted purports to grant legal aid ‘to persons of limited means and ‘for purposes incidental thereto or connected therewith.’ The Problems

dependence of the LAD from the HAB. Despite urges and detailed reform proposals from lawmakers and the legal community, the HAB has been reluctant to implement any substantial changes. Seeing that the HAB has maintained this questionable attitude for almost twenty years, the inertia will likely perpetuate.

However, rules and promises do not always translate well into reality. One of the main criticisms of the legal aid scheme is its neglect of the people in the ‘sandwich class’ : those who can barely afford litigation fees, but fail to qualify for legal aid because their financial resources exceed the statutory maximum amount. Past attempts to increase the said upper limit have been futile, as there will always be potential litigants who cannot keep up with the ever-increasing legal fees. Moreover, many eligible applicants for legal aid are still denied the means to legally fend for themselves. Since the Legal Aid Department (LAD) is subordinate to the Home Affairs Bureau (HAB) , legal aid officials are often compelled to adhere to rigid administrative guidelines in selecting cases instead of focusing purely on the legal questions and individual merits. As a result, successful applicants usually have to go through numerous red tapes in order to realise their constitutional right to justice. Attempted Solutions Therefore, the intuitive way forward would be to secure the inHKSLG · FALL 2014 · ISSUE 5

plex cases or those heard in higher courts. These shortcomings result in a considerable number of unrepresented litigants. Thus, efforts should be directed to making quality legal services more available to the underprivileged and the exploited. One way to do so is to call for pro bono contribution from legal practitioners. Sadly, the profession in Hong Kong is largely apathetic to non-remunerative endeavours. It will also be infeasible in the long run, as access to justice is too fundamental a right to be safeguarded by the occasional appearances of Good Samaritans. Suggested Solutions

In an effort to remedy the situation, the Duty Lawyer Service was established. Unfortunately, its performance does not live up to the city’s demands. The free legal advice given is reported to be superficial and unhelpful. Moreover, the duty lawyers are unable to provide legal support for more com-

A more plausible solution would be to dedicate a larger portion of the fiscal budget for such a cause. This could incentivise more experienced lawyers to accept legal aid cases. Should this ‘easy way’ of paying more prove unworkable, a harsher method can be employed. The Law Society and the Bar Association can considering adopting the policy recently enforced in the State of New York: demanding fifty hours of pro bono work as a prerequisite for gaining admission to the jurisdiction. Although both suggestions are controversial, they are workable compromises given the constraints.

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Eddie Ng

Hong Kong Competition Ordinance: Is the Teeth Lost Due to Limited Scope of Private Enforcement?

Stand-alone actions vs. follow-on actions

lthough the Competition Ordinance (Cap. 619) was enacted two years ago, many key provisions, including the right of private enforcement, has yet to come into effect due to phased implementation. Private enforcement was highly controversial during the consultation period in 2008. In particular, small and medium-sized enterprises (SMEs) were worried that the stand-alone right of private action, originally included in Part 7 of the legislative bill, may be exploited by larger companies to initiate countless lawsuits to drive SMEs out of their businesses. Ultimately, a compromised solution was reached to only include the follow-on right of action under s. 110 of the Competition Ordinance. It allows private parties to claim against parties in breach of the Ordinance, provided that the alleged breach was adjudicated before and affirmed by the relevant authorities, which include the Competition Tribunal, the Competition Commission, and the higher courts of Hong Kong. This is in contrast with the stand-alone right of action, which allows the aggrieved party to initiate lawsuits against any party even in the absence of public enforcement. Impact of the limited scope of private enforcement Excluding the stand-alone right of action arguably reduces the Ordinance’s private enforcement

provisions into a mere paper tiger. Antitrust regimes in overseas jurisdictions usually feature standalone right of action as the centerpiece for private enforcement. Among 27 of all European Union (EU) member states, stand-alone actions constitute 85.3% of the total number of private enforcement cases within the EU in the 19992012 period. In particular, Member States featuring higher number of private enforcement cases are predominated by stand-alone actions. For instance, Germany contributed nearly 50% of the EU’s total number of private enforcement cases, and more than 95% of Germany’s private enforcement came from stand-alone actions. These statistics imply that there is likely to be a lack of private enforcement actions in Hong Kong since follow-on right of actions is the only available venue. However, limited private enforcement does not necessarily impair the effectiveness of the Ordinance as a whole. While stand-alone actions may be more prevalent than follow-on actions, the effectiveness of Hong Kong’s antitrust regime is largely reliant on public, rather than private enforcement. From the EU’s experience, there have been relatively few private antitrust litigations – indeed, only one-fourth of all aggrieved parties sought private enforcement from 2007 to 2013.

were brought by private actors in the 2006-2007 period. This sharp distinction is attributable to characteristics unique to the US legal system, such as the availability of treble damages, class actions, contingency fees, and its strong litigation culture. The absence of these features in Hong Kong’s legal system suggests that even if stand-alone actions are available, aggrieved parties may be deterred by the costs and risks of litigation to engage in private enforcement. Therefore, the lack of stand-alone right of actions may only affect the number of private enforcement cases but not the overall effectiveness of the Ordinance. This is because the predominant source of enforcement effort will come from the Competition Tribunal and the Commission. Rather than the preclusion of stand-alone actions, it is the costs and uncertainties of litigating claims under a new Ordinance with little direct case precedents that would limit the number of private enforcement cases.

In contrast, private enforcement played a more significant role than public enforcement in the US: 1150 out of 1165 antitrust cases HKSLG · FALL 2014 · ISSUE 5

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The Case for Charity Legislations in Hong Kong: from the Perspective of an NGO Introduction

GOs are commonly regarded as non-governmental and non-profit-making organisations which contribute to public interests. Despite their social contributions, they often have difficulties defining themselves as ‘charities’ in Hong Kong due to the absence of a unified ordinance for the classification, registration, and oversight of charities. This ultimately deprives NGOs of certain benefits, and could discourage some of their activities which may yield high social utility. This article advocates prompt charity legislation to resolve confusions arising from regulations on NGOs’ operation. Status quo and problems Since charity work promotes desired values and civil education, it should be highly encouraged. However, it becomes a problem when NGOs are faced with uncertainties as to whether they are qualified as a charity to begin with. In Hong Kong, the only way for an NGO to be recognised as a ‘charity’ is to obtain tax exemption from the Inland Revenue Department (the IRD). In granting this exemption, the IRD follows the ruling by the House of Lords in Special Commissioners of Income Tax v Pemsel [1891] AC 531, a case which for the first time provided a legal definition of ‘charitable purposes’. Lord Macnaghten identified four categories of work which could be regarded as havHKSLG · FALL 2014 · ISSUE 5

ing charitable purposes: relief of poverty, advancement of education, advancement of religion, and other purposes beneficial to the community. Nowadays, the scope of charity work has broadened beyond the four categories laid out in Pemsel, such as protection of human rights, the environment, and animal welfares. NGOs serving these purposes faced considerable difficulties in claiming tax exemption under the category ‘other purposes beneficial to the community’, because the definition of this all-encompassing category is uncertain and controversial. For instance, the Hong Kong Polytechnic University Student Union, having been a charity since 1979, was requested by the IRD in 1995 to delete the clause ‘promoting democracy and autonomy’ from their constitution. It was further required to stop organising memorial activities for the June 4 incident, because tax-exempt charities are not permitted to involve in political activities. Non-compliance with the request would result in recovery of the tax exempted. This incident reflects that the current definition of charitable purposes is too loose that it leaves excessive discretionary power to the administrative authorities. Therefore, it is necessary to develop a broader and more concrete statutory definition for charitable purposes. Lack of official registration of charity is another difficulty faced by

Sandy Lai

NGOs. Even though they could obtain tax exemptions, there is no legal or official status of charities. In addition, the lack of standardised supervision also weakens the public’s confidence in NGOs, especially in light of the reported misconduct of certain charities. To address these pressing issues faced by NGOs, the Hong Kong Law Reform Commission (the LRC) issued a report last December for the introduction of charity law legislation with recommendations drawn from overseas legislative reforms. Introducing a statutory definition of charitable purposes The Charities Act 2011 of England and Wales has codified a nonexhaustive list with 12 categories of charitable purposes, while the Australian Charities Act 2013 provided a similar list with ten categories. Examples of these categories include the advancement or protection of citizenship or community development, human rights, health or savings of life, and amateur sport.

HONG KONG In light of the introduction of statutory definitions in England and Wales and Australia, Hong Kong should follow in their footsteps and adopt a more generous definition to bring a broad spectrum of charity work within the scope of legislation. A more expansive list of charitable purposes would facilitate NGOs’ operation by easing confusions in relation to their legal status. Heightening financial disclosure requirements Good corporate governance of an NGO generally involves compliance with proper accounting and financial disclosure requirements, since improper use of donations would undermine donors’ future support for the NGO. Moreover, appropriate regulations on governance of NGOs are particularly important for ensuring fairness to other taxpayers due to charities’ tax-exempt status. England and Wales, Australia, and Singapore have all imposed duties on the governing members of charities to conduct proper account keeping and to submit financial statement to the Commissioner annually. Charities are required to preserve the record for a certain number of years and any violation of the legislative requirements may lead to criminal liabilities. Australia has taken an extra step to classify charities into small, medium or large registered charities based on their annual income, with the medium and large ones having to submit audited financial reports. Based on these foreign practices, the LRC suggested that the Hong Kong Government should collaborate with professional accounting bodies to formulate appropriate financial reporting standards for charities. It also proposed classify-

ing charities according to their annual income, such that those with an annual income exceeding HKD 500,000 must file their financial statements with an auditor’s report. Charities with an annual income below HKD 500,000 should at least have their financial statements certified by their directors. In addition, it is recommended to establish an online platform where financial reports of the charities would be published regularly for public scrutiny. Greater transparency and accessibility to charities’ financial status could help enhance public confidence, and heightened disclosure requirements could motivate charities to utilise their funds more cautiously.

Establishing a charity commission There have been some controversies about the need to establish a charity commission in Hong Kong to administer charity registrations, as well as to enforce and advise on related policies or regulations. Mixed opinions have been received by the LRC, and a consensus has not yet been reached. Most foreign jurisdictions have in place an independent commission with objectives to ensure effective use of charitable resources, regulatory compliance of charities and their accountability to donors. In England and Wales, the commis-

sion is operated on behalf of the Crown, but not the Minister or any governmental departments. Similarly, the Australian Charities and Not-for-profits Commission (ACNC) is directed by the ACNC Commissioner, whom the Governor-General appoints without the intervention of the Minister. These practices suggest that administration of charities should be politically neutral and free from the government’s interference. Despite legitimate concerns regarding the potential redundancy of a charity commission and the budget involved in its establishment, they are outweighed by the benefits of having a comprehensive administrative system maintained by such commission. The independent status of such commission can ensure that it operates to advance social benefits, as evidenced by examples in foreign jurisdictions. Moreover, the commission facilitates the charities serving to supplement the government’s role in ancillary aspects of public interests, such as the promotion of arts, blood donation, as well as the protection of civil and human rights. Conclusion In the 2013 World Giving Index, Hong Kong was ranked tenth in terms of donation by population and achieved a high overall rank of 17 among 135 countries . There are over 7,500 IRD-recognised charities with a trend suggesting continuous growth in years to come. The increasing number of charities warrants a legal regime which introduces a concrete, statutory definition of charitable purposes, heightened control over the charities’ financials, as well as the establishment of a charity commission. Therefore, Hong Kong should act timely to catch up with its counterparts in the area of charity law. HKSLG · FALL 2014 · ISSUE 5

HONG KONG

Is Legislation the Elixir to Protect Sexual Minorities from Discrimination? Background

he recent public consultation of Discrimination Law Review has once again stirred up heated debate on the issue of lesbian, gay, bixsexual and transgender (LGBT) rights. LGBT supporters have called for enacting a legislation against the discrimination of sexual minorities so to promote principles of equality and the protection of individual rights. On the other hand, the opposition argued against such legislation on the grounds that it would potentially limit their freedom of expression. While legislative reforms may be one of the more effective means to protect LGBT rights, it is not the best way forward. Rather, there are more viable alternatives in achieving social equality.

the respondents reported being rejected for a job, being fired or asked to leave work, or being mistreated in the assignment of tasks due to their sexual orientation. Legislation would solve such problems because it codifies sexual minority rights, and shields these individuals from discrimination.

In addition, legislation gives explicit rights to the minorities as they are clearly stated in the laws. Legislation acts as protection for minorities’ rights and thus further achieves social equality. In a 2010 research report focusing on employment discrimination, 29% of HKSLG · FALL 2014 · ISSUE 5

munities.’ Legislation, therefore, demonstrates a pioneering effect in raising public awareness of LGBT issues, generating acceptance of the minorities and reducing discrimination when the laws are widely known to the public. What are the limitations of legislation? One of the major concerns voiced by the opposition is that anti-discrimination laws could potentially inhibit the freedom of speech. As the argument goes, the freedom of speech is guaranteed by the Basic Law, and should not be unduly restricted. If anti-discrimination laws are enacted, any potentially offensive opinions or comments would entail a legal consequence. For example, depending on how the laws are drafted, a parent trying to communicate her personal views about homosexuality to her child may be convicted of discrimination. Thus, the rights on freedom of expression may conflict with the legal protection of sexual minorities.

What can legislation achieve? The most profound effect of legislation is its role as a deterrent. In this case, legislation against discrimination can reduce acts of discrimination against sexual minorities given the accompanying legal consequences imposed on such acts.

Jasmine Chan

Legislation also has an impact on social acceptance and understanding of sexual minorities. In a phone survey carried out by the US Air Force Management Policy Division and Rice University, researchers found that the existence and awareness of anti-discrimination laws made people ‘less inclined to discriminate and more accepting of sexual minorities in their com-

Applying the proportionality test may assist in analysing legislation’s effect on the freedom of speech. There is no doubt that the aim of the legislation, which is to achieve equality, is legitimate. It is also certain that to reach social equality, protection of the minorities is essential. Since legislation can effectively deter discriminatory acts, it is rationally connected to the goal of social equality. However,

HONG KONG

depending on the scope and drafting of the legislation, it may pose limitations on individuals’ freedom of speech and religion. As such, legislation may be a disproportionate means to inhibit the freedom of expression in favour of minority rights. Another concern would be reverse discrimination, defined as ‘discrimination against members of a dominant or majority group, especially when policies established to correct discrimination against members of a minority or disadvantaged group.’ In 2001, an elderly street preacher in Bournemouth was subject to assault whilst proclaiming views against homosexuality. The angry crowd forced Mr Hammond onto the ground and poured mud and water on him. Later, police officers arrived and Mr. Hammond was arrested for his offensive act while no violent members of the crowd were arrested. Although reverse discrimination is a legitimate concern, it is questionable whether this issue would exist under a welldrafted legislation. After all, public debates in the legislative process would act to balance the protection of the majority and the minority. Are there any alternatives? Given the limitations of legislation, one must other methods which could better balance the interests of the two opposing parties while achieving the goal of social equality. Potential alternative 1: education Due to its long-term effects, education is a feasible alternative because it would equip society with a more extensive overview of LGBT issues along with a better understanding of related concepts such as equality and rights. Despite education’s

mild nature, some raise concerns that it could act as propaganda against the students’ impressionable minds. This concern is indeed plausible. In Taiwan, the Gender Equity Education Act was enacted in 2004 to promote substantive gender equality and protect gender identities. The Act stated that gender equality education curricula shall cover ‘affective education, sex education, and gay and lesbian education’. However, in 2011 the Ministry of Education cancelled plans to introduce LGBT issues in curricula of elementary and junior schools due to a ‘lack of social consensus’ over how such education should be administered. As shown by Taiwan’s example, while education can be a viable means of advocating social equality, extreme care must be given in designing the curriculum to ensure its success. Potential alternatives 2: mass campaigns Another efficacious method is to enhance public awareness through mass campaigns. Although Japan does not officially recognize recognising same-sex marriages, the government runs many campaigns to

increase public awareness of LGBT issues, ranging from gay pride marches to lesbian weddings at theme parks. Patrick Linehan, US Consul General for Osaka, expressed his view that ‘a wide lack of knowledge and awareness about homosexuality and gay culture… can be fixed by awareness campaigns and the gay community being openly out there.’ Hong Kong’s pluralistic community is likely to be able to adopt similar positive measures to promote social equality. Conclusion To effectively reduce discrimination against sexual minorities and protect their rights, it is necessary to raise public awareness and improve the majority’s understanding of LGBT issues. While legislation has its benefits, it requires a lengthy process and so alternatives must be considered in the mean time. While the alternatives themselves may be imperfect themselves, they are the vital first steps to achieving social harmony and equality in the long run.

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HONG KONG

Class Action Arbitration: an Alternative to Representative Proceedings

James Ng

to the Law Reform Commission that a more comprehensive regime for class action is needed. While the future of class action in Hong Kong has yet to be determined by the Law Reform Commission, interested parties have an alternative means to adopt a class action procedure. Since the 1980s, class action arbitration has been recognised in the United States as a more effective dispute resolution mechanism than conventional class action lawsuit. Due to the contractual nature of arbitration, parties to an arbitration in Hong Kong may agree to proceed by way of class arbitration pending legislative reforms on class action litigation. Introduction

n mass action cases such as product liability and securities fraud it is in the interest of both parties to have their disputes resolved in one proceeding. This is often the case where claimant’s loss is so small that individual litigation would not be economically viable, or where it is inefficient for the defendant to guard against individual claims from an enormous class of claimants. Class action provides an effective solution in these cases, for it allows one or more members of the class to represent everyone else, provided that the represented claims arise out of the same alleged wrong with similar questions of law or fact. Despite its procedural advantages, HKSLG · FALL 2014 · ISSUE 5

class action is currently unavailable in Hong Kong. The only provision that resembles class action is Order 15, Rule 12 of the Rules of the High Court (Cap. 4A) which provides for representative proceedings. Although Rule 12 is sufficient in cases involving a relatively small number of parties, it is inadequate as a framework for dealing with large-scale multi-party situations. For instance, Rule 12 does not provide a clear guideline on the criteria for recognising a multi-party situation. The Rule also lacks guidance on the issues of settlement and costs, as it is unclear on how the Court should make a cost order given a large number of litigants, or how the Court should account for any settlement offers made to some or the entire class. Given the deficiency of Rule 12, it was suggested

Class arbitration and its applicability in Hong Kong The viability and legitimacy of class action arbitration was first recognised in Keating v Superior Court [167 Cal. Rptr. 481, 490 (Cal. Ct. App. 1980)] by the California Supreme Court. The Court noted that class arbitration ‘must be evaluated, not in relation to some ideal but in relation to its alternatives.’ Since it would be unfair and inefficient to force hundreds of individuals to litigate its cause separately, the Court held that arbitration may be ordered on a class basis. This rationale was later endorsed by the Supreme Court of the United States in Green Tree Financial Corp. v Bazzle [539 U.S. 444 (U.S. S.CT. 2003)], which led to a surge in class arbitrations

HONG KONG being administered by the American Arbitration Association (AAA) and the Judicial Arbitration and Mediation Services (JAMS), two of the main arbitration organisations in the United States.

arbitration, the parties may benefit from greater certainty and consistency if the Arbitration Ordinance (Cap. 609) or the HKIAC Rules provide for a uniform set of procedural guidelines.

Although class arbitration has yet to be expressly recognised by Hong Kong courts or arbitral tribunals, there is no obstacle for a tribunal to conduct class proceedings in accordance with the parties’ consent. Unlike a national court that is bound by its lex fori, a tribunal generally has the freedom to adopt any procedure which is capable of resolving the parties’ dispute in a fair and efficient manner. This allows a tribunal to adopt procedures from other jurisdictions, even though they are not available under the applicable law. There is also no indication that ordering class arbitration would be contrary to the public policy of Hong Kong, an issue that would otherwise discourage a tribunal from conducting a class arbitration due to concerns over the class award’s enforceability. In light of these reasons, an arbitral tribunal in Hong Kong may adopt class arbitration when it deems that a situation calls for such procedure.

Another concern relates to the practicality of class arbitration over class action lawsuit. Unlike in litigation, all parties to an arbitration must have consented to have their disputes determined by an arbitral tribunal. However, no sensible defendant would consent to an arbitration agreement allowing the possibility of class arbitration, as doing so may result in a large payout to the entire class if the defendant is found to be liable. While this is a legitimate and strategic concern, the defendant may actually benefit from dealing with all the potential claimants in one proceeding. If the defendant has a strong claim and succeeds in defending the class arbitration, the arbitral award’s res judicata effect would bar all future claims against the defendant in relation to the same issue. By contrast, if the

defendant were to litigate each claim separately, the defendant may be held liable to compensate for the alleged wrong in some cases. Thus, the practicality concern in fact favours both parties, and it does not undermine the validity nor the viability of class arbitration. Future of class arbitration in Hong Kong While there may be no pressing need to legislate class arbitration, Hong Kong as a world-renowned arbitration centre, may benefit from having such a procedurally advantageous provision in the Arbitration Ordinance. The current reform efforts on class litigation may be considered a huge leap forward in the area of multi-party proceedings, but until the day class action is enshrined in the Rules of High Court, class arbitration remains a viable alternative to resolving mass action cases efficiently.

Concerns of class arbitration The lack of clear guidelines on the procedure to be undertaken by the arbitrators is one of the primary concerns of class arbitration in Hong Kong. In jurisdictions that have expressly accepted class arbitration, their arbitration laws or institutional rules often lay out specific requirements and procedures for class proceedings. In the United States, for instance, parties would adopt either the AAA or the JAMS rules as they provide guidance on class arbitration. While a tribunal in Hong Kong may refer to foreign rules when conducting HKSLG · FALL 2014 · ISSUE 5

HONG KONG

Extended State Acquiescence: a Redress for Unenforceable Rights? Keith Cheung

decade ago, the Hong Kong Court of Final Appeal held that ‘the right not to be subjected to torture or to cruel, inhuman or degrading treatment or punishment is a fundamental right’ (Secretary for Security v Sakthevel Prabakar [2004] HKEC 678). While freedom from torture is an absolute right in Hong Kong, the current law is inadequate at protecting torture victims. No matter the development, substantive human rights are worthless without enforcement. Recently, the courts had to examine how torture victims resulting from a state’s failure to enforce its laws are treated under the doctrine of extended state acquiescence (ESA). As judicial approaches have not been consistent and given a lack of appellant level decisions, the doctrine requires close attention as it could provide redress for torture victims where they could not otherwise.

Defining torture Art. 1 of the Convention Against Torture limits ‘torture’ to instances where ‘such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity’. Generally, a victim cannot claim torture unless a public official inflicts pain. But what if the state fails to prevent pain or suffering? What is the extent of ‘acquiescence’ needed to hold the state accountable? Extended state acquiescence (ESA) The Committee Against Torture in its General Comment No. 2 of 24 January 2008 (the Comment) has extended the definition of state acquiescence as: ‘…where State authorities…fail to exercise due diligence to prevent, investigate, prosecute and punish such non-State officials or private actors consistently with the Convention, the State bears responsibility… since the failure of the State to exercise due diligence to intervene… the State’s indifference or inaction provides a form of encouragement and/or de facto permission.’ The key element of ESA is a state authority’s or other officials’ failure to ‘exercise due diligence to prevent, investigate, prosecute and punish’. This imposes an active duty on governments to safeguard its citizens from pain and suffering. To establish ESA, however, there are two issues that the Court must address:

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firstly, to what extent should the Court hold that foreign police have failed their duties? Secondly, would it be appropriate for a local court to declare that another nation’s police fell below the required standards which has yet to be defined? Or should the Court only hold them accountable where the entire state has generally failed to enforce its laws? Hong Kong framework The Court first encountered ESA in the case of TK v Michael C Jenkins [2011] HKCU 2037, where a Pakistani entered into a fraudulent transaction and was subject to gang beating. Counsel for the applicant argued that the torture claim assessor failed, inter alia, to consider ESA. Lam J held that while European jurisprudence has extended nonrefoulement to cases where danger emanates from non-public officials and the state has failed to obviate such risks, these principles should not be followed as the Hong Kong scheme differs from the European Convention on Human Rights. However, the Court noted that the Comment was useful guidance and Lam J held that the assessor should have considered ESA even where the applicant did not advance such arguments. Subsequently, in R v Director of Immigration [2013] HKEC 851, the Court endorsed the notion that ESA should be considered in torture claim applications. Chan J cited the Comment and opined that ‘country conditions…are…relevant to whether the government…should

HONG KONG

be held responsible for consenting to or acquiescing in the impermissible acts of the extremists’. The Court then granted the claimant leave on this ground to commence judicial review.

as a change to culturally embedded attitudes’. As a result, the Court denied the claimant leave for judicial review as it did not amount to ESA.

the Court confirmed the importance of ESA, applicants now face a higher threshold to make out their claim.

Dangerous trend

Claimant-focused and state-focused approaches

With respect, this state-focused approach should not be favoured as it could potentially restrict the claimants’ means of redress. In the recent case of MI [2014] HKEC 1598, McWalters JA held that claimant’s lawyer relying on ESA ‘could be required to explain failure of due diligence by the State’ and ‘how such failure would subject the applicant to the risk of torture.’ Additionally, in order for decision-makers to assess ESA claims, the supporting materials ‘must be recent and must be adequate for the task’. This, however, imposes a crushing burden on torture claimants. Victims often flee their homes in fear with limited resources and the torture claim process could take a long time. Although

If ESA is a relevant consideration, then courts should accord it with a high standard of fairness post-Prabakar. ESA was developed out of an attempt to hold a state’s failure to protect citizens from torture legally accountable. Where the law respects human dignity and a citizen’s absolute freedom from torture, other considerations should be secondary. With careful judicial nurturing, ESA could be the missing redress for victims to enforce a right that should never have been taken away from them.

Even though recent decisions have held that ESA should be taken into account in torture claim applications, there is a divergent view as to the weight given to the doctrine. In AM v Director of Immigration [2013] HKCU 2677, McWalters J, as he then was, also considered the Comment but felt that ESA refers to ‘a failure by the government to exercise the authority of the State throughout its territory’. The Court stressed that when considering a state’s attitude and inaction, the question always returns to the position of the claimant himself and whether it has been established that ‘there are substantial grounds for believing that he would be subjected to torture’. For this reason, and others, the Court quashed the assessor’s findings as he had failed to consider passive acquiescence. While AM suggested the Court would favour the claimants, the courts have not consistently applied this view as demonstrated in JKF [2013] HKEC 693. In JKF, a Sri Lankan was subject to domestic violence despite the Prevention of Domestic Violence Act 2005. The claimant argued that ‘while the legislation is there, the effectuation is not’. However, the Court remarked that while enforcement is not always effective, the evidence did not go so far as to show that those efforts were completely ineffective. The Court opined that ‘every society struggles to come to grips with its problems and sometimes dealing with and overcoming those problems involves many challenges, such

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HONG KONG

Regulating ‘Room-Escape’ Games Jack Wong

required to perform acts that call for flexibility. In order to preserve elements of suspense and surprise, the players are not informed precisely what acts they are required to perform when certain tasks unravel during the course of the game. Since it is difficult for the players to evaluate their fitness and capabilities before participating in the game, it is conceivable that they may overestimate their abilities and get injured in the course of the game. There are also considerable doubts regarding the operators’ adherence to safety regulations and other statutory guidelines. For example, non-compliance with fire safety regulations may render the game operator’s premise an inherent source of hazard. Lack of regulatory oversight

oom-escape games have become a locus of excitement amongst the youth in recent years. Modelled after an online computer game, this real life version was introduced as an adventurous experience within tiny apartments located in major hubs of the city. To ‘escape from the room’, the group of players inside a confined space will have to solve puzzles and overcome challenges often under an hour. Hidden safety concerns Despite the game’s popularity, there are several hidden concerns. Operators of the game usually assign different themes and contexts to the HKSLG · FALL 2014 · ISSUE 5

rooms and decorate them accordingly: while some configure a murder scene, others design the setting at an abandoned mental institution. As a result, players are often placed at compressed, dark, and intense environments. They will inevitably experience adrenaline pump or dreadfulness, which in turn give them a surge of excitement or fear. Inherent and unknown illnesses, such as heart problems or claustrophobia, may be triggered. Besides, the game is more physically demanding than most participants would expect. Not only will the players be in constant movement during the game, but they are also

Injuries and accidents should be prevented and avoided before their occurrences. Unfortunately, current legislations in Hong Kong are inadequate to regulate the premises or facilities hosting room-escape games. The Fire Safety (Commercial Premises) Ordinance (Cap. 502), the Places of Public Entertainment Ordinance (Cap. 172), as well as the Public Health and Municipal Services Ordinance (Cap. 132) are among the legislations which may be potentially relevant to governing room-escape games and their operation. However, none of these legislations contain any provision which is applicable to room-escape games. None of the regulatory authorities of these legislations, such as the Fire Services Department and the

HONG KONG Buildings Department, has jurisdiction or duty to oversee the operation of such games. In other words, these games are operating in a legal vacuum while potentially inflicting harm or causing safety hazards to players and the community.

Apart from enacting new legislative provisions, there is also a need to amend existing laws to accommodate changing trends of entertainment. For instance, the definition of ‘entertainment’ in the Places of Public Entertainment Ordinance is relatively narrow as it does not cover any indoor amusement facilities, such as escape games or indoor playrooms, which are also hugely popular among young children. By broadening the meaning of ‘entertainment’, more amusement facilities will come under regulatory scrutiny.

Recommendations to pre-empt safety hazards Since ‘room-escape’ facilities are largely unregulated and unmonitored, participants may be left with no redress despite being subject to a considerable degree of risks of harm. Although no major accident has occurred since the launch of these types of games in Hong Kong, steps should be taken to address their inherent safety problems. The lack of applicable legislation poses problems for injured parties who wish to pursue legal redress. This would ultimately mean that plaintiffs would use a tortious cause of action. However, even this avenue of redress is inadequate. For example, a negligence claim may encounter problems when establishing the standard of care. Likewise, a claim in occupier’s liability could have difficulties in ascertaining the scope of the duty. These factors make the position so uncertain that injured parties would be discouraged from seeking compensation.

With targeted legal reforms, participants of indoor-games can be better protected by a comprehensive legal framework. Until then, extending the applicability of current regulatory provisions could hopefully tackle some of the pressing problems arising from the growing prevalence of indoor entertainment facilities.

First of all, it is necessary to regulate the operation of these facilities through legislation. There should be a set of safety standards, requiring such games to be equipped with fire escape routes, fire alarm systems, and adequate on-the-spot first-aid response. Imposing a cap on the number of players in each game should also be considered. These measures are reasonably feasible and enforceable through a licensing system. In addition, all game operators should be subject to a mandatory insurance scheme, such that injured parties can be properly compensated if their claim is established. HKSLG · FALL 2014 · ISSUE 5

CHINA

Navigating Mainland’s State Secret Laws after Standard Water Michael Leung

n The Securities and Futures Commission v Ernst & Young (a firm) [2014] HKEC 864, the Court of First Instance (CFI) issued a landmark judgment, ordering against Ernst & Young (EY) to submit documents sought by the Securities and Futures Commission (SFC) under s. 183(1)(a) of the Securities and Futures Ordinance (SFO) (Cap. 571). The Standard Water case In 2009, EY was appointed to perform audit engagements to prepare for the Hong Kong listing of Standard Water Limited (SWL), a company in the People’s Republic of China (PRC). EY subsequently contacted Ernst & Young Hua Ming LLP (HM), a Sino-foreign cooperative joint venture subject to the laws of the PRC, to perform the audit fieldwork of SWL in the PRC. In 2010, EY withdrew from the SWL audit, citing ‘inconsistencies in documentation in a number of areas that lead [the firm] to the conclusion that [they] can no longer continue as auditors’. The SFC began investigations into possible market misconduct and issued seven notices under s. 183(1) of the SFO, requiring EY to provide a detailed explanation of its resignation and all audit working papers relating to SWL’s listing application. EY refused to comply, arguing that any compliance ‘would violate PRC state secrecy laws’. Consequently, the SFC made an application under s. 185 of the SFO, HKSLG · FALL 2014 · ISSUE 5

asking the Court to enquire into the case and to order compliance with the notices if it is satisfied that EY has no reasonable excuse for non-compliance. The Key Issues The CFI was faced with three major issues, namely: 1) whether EY has an enforceable right under PRC laws to demand the audit documents from HM, a separate legal entity; 2) whether cross-border transmission of the documents or disclosure of their content by HM to EY are prohibited under the PRC laws ; and 3) whether EY or HM could obtain permission from PRC authorities to transmit the documents or to disclose their contents for satisfying the SFC’s request. The CFI’s Ruling In relation to the first issue, the

CFI held that HM was acting as EY’s agents during the audit engagement, since materials produced during the audit engagement were working papers produced by HM employees on behalf of EY. Based on the agency principle, EY has an enforceable right under PRC laws to demand the documents sought from HM. Therefore, the documents were within EY’s possession or control. The CFI then went on to find that the PRC laws do not provide a blanket prohibition on document transmission. It noted that whether or not the audit working papers contain state secrets or commercial secrets would depend on the contents of such documents. Therefore, to justify its refusal to comply with the SFC notices, EY had to discharge the burden to prove that the working papers contained such state secrets or commercial secrets under PRC laws.

CHINA

Finally, the CFI dismissed EY’s application for an order against the SFC to take all necessary steps to liaise with the Chinese authorities to obtain the audit working papers, on the grounds that it lacked the jurisdiction to do so. Under s.185 of the SFO, the CFI is only empowered to enquire into EY’s noncompliance with the notices and to make appropriate orders against EY in the absence of a reasonable excuse for non-compliance.

ed s. 106(e) of the Sarbanes-Oxley Act. Due to their failure to hand over audit documents requested by the SEC for fraud investigations U.S.-listed Chinese companies, the Chinese units of the accounting firms are suspended from practice in the US for six months. In response, the PRC Ministry of Finance (MOF) was reported in June 2014 to be in the course of reforming its auditing rules, which includes barring international accounting firms from sending their staff to audit a mainland company. In other words, all foreign audit firms may have to partner with PRC accounting firms such that PRC auditors will complete the substantive fieldwork. Such policy could serve to ensure that all auditors working within the PRC will comply strictly with the PRC secrecy laws. Analyses & conclusion

Recent developments abroad While the Standard Water case has clarified a Hong Kong auditor’s responsibilities to comply with SFC’s requests for the purpose of its investigation, there have been major controversies over the extra-territorial effect of PRC secrecy laws. In January 2014, Justice Cameron Elliot of the US Securities and Exchange Commission (SEC) held that BDO International, along with the Chinese units of the ‘Big Four’ accounting firms, had violat-

The ruling in Standard Water protected investors by upholding the transparency requirement on capital markets. However, the decision falls short of being satisfactory because it avoided determining whether submitting the documents requested by the SFC would breach the PRC secrecy laws. Therefore, it remains unanswered whether a breach of a foreign law constitutes a reasonable excuse for non-compliance with an order under s. 185 of the SFO. Besides, in light of the pragmatic circumstances, the CFI’s decision has limited impact in protecting the capital market’s transparency. The MOF’s auditing reform is seen as a protective measure against the US decision by the SEC, and perhaps even the CFI decision. The proposed auditing reform in the PRC is worrisome because it is not

conducive to overseas fundraising activities by PRC companies. Yet, the CFI had clearly stated that it did not intend to challenge the validity of any PRC laws or expose EY to the risk of prosecution under the PRC laws. If the MOF does in fact bar international auditors from servicing PRC companies, the financial transparency of and public confidence in PRC companies will be eroded. Moreover, since a large number of PRC companies are publicly listed overseas, the competing or overlapping layers of sanctions and penalties imposed by both the MOF and overseas regulators may lead to impracticalities for the accounting industry. PRC companies may find it extremely difficult to find an auditor capable of handling the complexity of public company audits without being subject to sanction. To maintain the transparency of global capital markets, the PRC government and foreign regulators must come to a pragmatic solution. Perhaps the starting point for the Chinese regulators is to better define what constitutes a breach of state secrecy laws, which currently has a wide definition ranging from accountants’ working notes to student examination papers. Last year, US and PRC regulators had come to an agreement, under which audit working papers were handed over to the SEC. This is a positive development because PRC companies are as dependent on global capital as international investors are dependent on accurate financial information. The solution to this problem must be solved politically through negotiations, but not by administrative orders or courtroom sanctions.

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FEATURE

Interview with The Honourable Mr Justice Joseph Paul Fok Alan Lee

Natalie Lau

uring his time as a private practitioner and a judge, Justice Fok dealt with a number of civil and criminal cases. On the day of the interview, we were lucky to get Justice Fok’s insights on some very pertinent issues in Hong Kong’s legal system. 1. What made you decide to take on the role as a judge in Hong Kong, especially since there is no turning back to private practice? It was a very individual decision based on a number of considerations. An important consideration was whether I would like the work of a judge. In Hong Kong, as in other jurisdictions, there is the opportunity to sit as a deputy or a recorder before you actually have to make the decision whether to join the Bench full-time, and that is something I had done. As a recorder for six years, I had the experience of sitting as a judge in the Court of First Instance (CFI) on a temporary basis before I made the final decision to apply to join the Bench.

One of the things that I discovered when sitting as a recorder was that you have a much greater sense of responsibility for the final work product of any litigation, namely the judgment. It is of course interesting and challenging to be an advocate in a case, and it is naturally enjoyable to win a case and be involved in the process on behalf of a client in order to get to that stage. But it is ultimately not quite as fulfilling as producing and writing the judgment. That was one motivating factor for my decision to become a judge. Another factor that played a part was, I think, the sense that, in terms of career progression, it can be considered a natural next step on the ladder certainly for a barrister, and theoretically also for a solicitor.

Judicial Career of Justice Joseph Paul Fok

r Justice Joseph Paul Fok is one of the three permanent judges who currently sits on the Court of Final Appeal.

• • • •

Appointed a Recorder of the Court of First Instance (2003) Appointed a Judge of Court of First Instance (2010) Appointed a Justice of Appeal of the Court of Appeal (2011) Appointed a Permanent Judge of the Court of Final Appeal (2013)

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2. As a recent addition to the Court of Final Appeal (CFA), do you find the elevation challenging? I think it would be odd for anybody appointed to the CFA not to think of it as a challenging role. That is not to diminish in any way the challenge that faces any member of the Judiciary. There are different pressures that apply to different levels of court. CFI judges, for example, have very busy lists; they sit alone and the turnover of their cases can be much higher. They also have, as one of their primary functions, the duty to assess the evidence and make findings of fact, sometimes a difficult task when the evidence conflicts. On appeal, the function is obviously different. You are stepping back and reviewing the decision of the court below but you are also looking at the case in the broader context of the law. The decisions that one makes create precedents binding on the lower courts, and that effect is magnified in the CFA. There is therefore a greater responsibility to reach the right decision. In the CFA, by definition, there is no further court of appeal to correct any mistake. So, yes, I think it is natural to regard appointment to this Court as bringing particular responsibilities.

FEATURE 3. As an active practitioner since pre-handover, did you think that the handover affected the legal industry from a practitioner’s point of view? I think this highlights a truly exceptional feature of the practice of law in Hong Kong over the past couple of decades lawyers in few places get to experience a change of sovereignty over the jurisdiction in which they are practising. The new legal order has obviously changed the landscape of Hong Kong’s legal system but I would stress two things: one is the sense of change, and the other is the sense of continuity. The sense of change is most obviously manifested in the fact that we now have a new constitution. That, in turn, has thrown up a huge growth in an area of law that did not really exist before 1997. I am talking here mainly about the

development and growth in constitutional and human rights litigation. But there have also been changes in legal practice arising from the greater links between Hong Kong and the Mainland in terms of cross-border business which has in turn resulted in new and additional legal work, particularly for solicitors.

So it is a very important part of the overall picture.

The other important aspect is the theme of continuity which is inherent in the Basic Law. It is important to keep in mind that, whilst there has been change, it is change within a legal system that has remained constant. The theme of continuity is of course written into the Basic Law, particularly Arts. 8 and 18, and it is part of the fabric of the constitution that has ensured that our separate system in ‘One Country, Two Systems’ has remained intact. If it were not for that continuity, then our system would have shrunk and eventually disappeared.

Acting for the Government in civil, public law litigation is different to normal private practice in at least the sense that it is not winning or losing the particular case that is of paramount importance. Unlike a private client, for whom the result of the individual case will likely be critical, the Government may have many other cases to consider which turn on the outcome of a single case. The single case may be lost but the principles established may assist resolve dozens or even hundreds of other cases. So acting for the Government often involves

4. During your private practice, you have represented the Government in a number of high-profile cases. How is it different as a counsel for the Government compared to acting for other clients?

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keeping an eye on the bigger picture and the context of the individual case. Also, it follows from this that, when acting for the Government, it is all the more important to make sure the Court is fully seized of all the relevant arguments and the context of a particular case. A. Civil Liberties and the Legal System 1. Judicial Protection of Minority Rights The Legislative Council (LegCo) recently vetoed a motion to reconsider who qualifies as a ‘man’ or ‘woman’ for marriage and other purposes. How should the common law courts protect minority rights in the absence of express statutory safeguards? In W v Registrar of Marriages (2013) 16 HKCFAR 112, the Court suspended the effect of its declaration of unconstitutionality to enable LegCo to enact legislation to deal not just with the reading of

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‘man’ and ‘woman’ in the Marriage Ordinance (Cap. 181) but more generally with the question of gender recognition. An overall review certainly might have been helpful to this area of the law but the courts can only do so much and make encouraging suggestions. And it has not happened, so that is where we stand. In terms of what the common law courts can do in the absence of express statutory safeguards, obviously there are limits. Insofar as reflected in the provisions of the Basic Law and the ICCPR, the provisions containing these constitutional guarantees should be generously interpreted by the courts in order to give Hong Kong residents the full measure of the rights so guaranteed (as the Court held in Ng Ka Ling v The Director of Immigration (1999) 2 HKCFAR 4). But as I have said, there are limits. So for example, it would not be possible for the courts to invent a status such as a civil partnership. That would have to be a matter for legislation.

2. The Internet and Freedom of Expression In HKSAR v Chan Yau Hei (2014) 17 HKCFAR 110, the Court had to deal with the question of the Internet as a ‘place’ for the purposes of outraging public decency. How should the law protect the freedom of expression in light of this technological advancement? Freedom of speech is a fundamental human right and is constitutionally protected in Hong Kong under the Basic Law and the ICCPR. But of course, freedom of speech is one of those rights which is expressly subject to restrictions. It is not an absolute right. One may contrast that with the right to hold an opinion (in ICCPR Art. 16(1)), which is unqualified, whereas the freedom of expression may be restricted (as provided in Art. 16(3)). Those restrictions identify certain legitimate purposes which laws may be enacted to protect and achieve, and therefore lawfully restrict the freedom of expression. The courts have applied the

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between the Internet and normal print media, and observed that the Internet is a more pervasive medium and has tremendous power: once a message enters cyberspace, millions of people worldwide can gain access to it. The Court also alluded to the extraordinary capacity of the Internet to replicate almost endlessly any defamatory message. That is the context one is obviously looking at, due to the power of the Internet to disseminate material quickly and to a greater audience. It is important to grasp this difference when looking at the question of freedom of expression. It does not mean, however, that statements made on the Internet are not entitled to protection. All speech is entitled to it. 3. Rule of Law in Hong Kong There is a lot of talk that the rule of law in Hong Kong may be under attack. What do you consider as an affront against the rule of law? proportionality test, as in the flagburning case, HKSAR v Ng Kung Siu (1999) 2 HKCFAR 442, and the public order case, Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229, to determine if a particular restriction is proportionate and is no more than necessary to achieve the legitimate aim. So, in this way, freedom of expression is jealously protected by the courts and rightly so. The Internet, however, is an important context in which to look at the freedom of expression but not because it changes the effect of the words used; the content of what you say in a letter is no different from what you say in an e-mail or a web posting. The important difference is that the magnifying effect of the Internet can be very dramatic.

Instead of a letter going to one person, a posting can go out to millions of people just at the press of a button. And so, the effect of speech via the Internet can be greatly magnified. That is not to say that the person who posts something on the Internet is not entitled to the same measure of protection of his freedom of speech. But in Oriental Press Group Ltd v Fevaworks Solutions Ltd (2013) 16 HKCFAR 366, the Court commented on the effect of the Internet and how that affected the striking of the balance between society’s interest in free speech and the individual’s interest in being entitled to protection from slurs on their reputation. The Court noted the difference

This is by way of general response and I am not referring to any specific case. It has been said many times that the price of freedom is eternal vigilance and we need to be eternally vigilant to protect the rule of law. That is the function of the courts and should be the function of lawyers too. We should not take it for granted; we are very lucky in Hong Kong to have a well-established rule of law. It has been described as a cornerstone of our success, and it has certainly contributed very materially to our stability, prosperity, and safety. So it is absolutely critical. I do think it is important to stress, as did Lord Bingham in his book The Rule of Law (at p.8), that the core of the existing principle is that HKSLG · FALL 2014 · ISSUE 5

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‘all persons and authorities within the State, whether public or private, should be bound by and entitled to the benefit of laws publicly made, taking effect generally in the future, and publicly administered by the courts’. The critical part is that all people are subject to the law. This is reflected in Art. 42 of the Basic Law, which provides that Hong Kong residents and other persons in Hong Kong shall have the obligation to abide by the laws in force in the HKSAR. So, it means that the rule of law is not just a one-way street. It is not just the Government and persons in authority who must obey the law. Everyone is entitled to the benefit of the law, and everyone is

equally subject to the law without exception. What this means, really, in a nutshell, is that one cannot pick and choose which laws one should obey and which to ignore. If you choose to ignore a legal obligation which applies to you, you are almost certainly going to be infringing a corresponding right of some other person who is entitled to expect that you will obey the law. So while you can claim the protection of the law against excessive force, for example, you cannot ignore court orders which are issued to protect the legitimate rights and interests of others. That is not to say that one is not entitled to actively pursue the means to change the law. But one must do that within the framework of the law.

B. Recent Developments of the Court’s Practices 1. Statutory Interpretation In T v Commissioner of Police [2014] HKCFA 71, the Court was divided on which method to use to determine ‘admitted’ (minority used ‘context and purpose’ throughout, while majority shifted to the ‘ordinary and natural meaning’ approach after considering context and purpose). What guidance could you offer students and practitioners on similar exercises? The approach in Hong Kong to statutory and constitutional interpretation is clear. There has been a series of cases in the CFA establishing that the modern approach to statutory interpretation is that the context and purpose are considered in the first instance – especially in the case of general words – and not at some later stage when ambiguity may be thought to arise. This approach is one that has been consistently applied for some time now. I think the clearest explanation I can give in answer to this question comes from in the recent case of HKSAR v Fugro Geotechnical Services Ltd [2014] HKCFA 95, where we said (at paragraph 22): ‘When it is said that context is the starting point, together with purpose, in statutory interpretation, that is not to say that one puts the words being construed to one side. On the contrary, since contextual and purposive construction is a tool or aid to assist a court in arriving at an interpretation that gives effect to the legislative intention, one must always have regard to the particular words used by the legislature in expressing its will. A court cannot attribute to a statutory provision a meaning which the language of the

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I do not necessarily think there are fewer big money cases in Hong Kong than before. It really depends on the area of law that you are looking at. There has, if anything, been an increase in the number of matrimonial big money cases in Hong Kong recently. There have certainly been more public law cases than before and I touched on this earlier when I said that this was one of the effects of the transfer of sovereignty.

statute, understood in the light of its context and the statutory purpose, is incapable of bearing. For that reason, one must necessarily look to the statutory language to see what meaning or meanings it is capable of bearing.’

should be interpreted, never forgetting that the exercise is to ascertain the legislative intention expressed in and by the actual words used.

The point about not being able to attribute to a statutory provision a meaning which the language of the statute, understood in light of its context and purpose, is incapable of bearing is very important. So it is not the case that one adopts context and purpose as a starting point and forgets about the words of the statute. Context and purpose are fundamental, so students and practitioners should look to these to inform them how a statute

1. Future Development of Common Law

C. Current and Future Legal Developments

UK Supreme Court judges have said extrajudicially that the courts are seeing fewer ‘big money cases’ and more public law cases. Do you feel this is the same in Hong Kong? Since the common law develops by case law, do you think certain areas of law would be less developed as a result of this trend?

But I think the answer to this question is this: the development of the law in a common law system is necessarily driven by the cases that come before the court. Now, what leads to the cases that come before the courts reflects the disputes which are in turn driven, to some extent, by the economy. If you look back over the twentieth century, many of the important contract cases arose out of the shipping industry: consider, for example, the development of the doctrine of fundamental breach and cases such as the Suisse Atlantique [1967] 1 AC 361. London was a commercial centre, and shipping and commercial disputes were regularly taken to that jurisdiction and resolved in those courts. But of course, the resulting principles apply to any contract case. In Hong Kong, many of the private law cases in contract have arisen out of the cyclical ‘boom and bust’ property market. The prevention principle in contract, which the CFA dealt with in Kensland Realty Ltd v Whale View Investment Ltd (2001) 4 HKCFAR 381, arose out of just such a property dispute. Many Hong Kong cases have been the product of that dynamic. So that, as I say, is a reflection of the type of dispute that arises and which then leads to a court case. The court case establishes the principles which then apply generally. HKSLG · FALL 2014 · ISSUE 5

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Concluding Questions 1. What advice do you have for those pursuing a career as a barrister or even a judge? First, make sure that it is a career that you really want to pursue because in order to succeed in a legal career – and to enjoy it – you need to be fully committed to it. If you want to be a barrister, make sure you enjoy public speaking and advocacy, because that is the primary role of a barrister. You obviously need to make sure you like the law and have an interest in it, and that you are prepared to work hard because it is a job that requires a lot of time and effort. But it is a very

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rewarding career, because it brings you into contact with lots of different people, different industries, and different factual situations in many cases. And again, at the level of a judge, you are given the opportunity – as I said at the outset – to produce the final product in the process. That is something that becomes more evident as you go up the judicial hierarchy. However, a judicial role does not suit everyone. So, if you have the opportunity to experience an adjudicative role, take that opportunity to see if you like it. This is not limited to sitting as a deputy judge; you might sit as a member of a tribunal or some other statutory or administrative body.

2. Increasingly, students want to join the Bar but are becoming solicitors first before making the change. Do you think this is a viable option? I think that is certainly now a much more viable prospect. And I think, in fact, that the movement across the professions that we have seen in the last 10 to 15 years reflects that. Quite a number of ex-solicitors have come to the Bar and have been very successful. There are now quite a number of ex-solicitors practising at the Bar, including some as Senior Counsel. At least one former member of the Bar who was previously a solicitor is now a CFI judge. So it is certainly something that young practitioners should think about. Obviously, it is not a good idea to flip-flop back and forth but if you have made a choice as to one branch of the profession at an early stage of your career that you might be having second thoughts about, it may be worth considering the other branch. Of course, one recent feature of practice is higher rights of audience for solicitors. That means those solicitors who want to appear in open court have the avenue of doing so. But I think many solicitors who switch over to the Bar do so not just because of the advocacy – as they could do that in their own firms – but more because they like the ethos of the Bar, the way that chambers are set up, and the fact that they are selfemployed.

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Corporate Manslaughter in Construction Law Siegfried Sin

n many jurisdictions, corporations may be held criminally liable for manslaughter arising from their culpable conducts. For instance, the UK Corporate Manslaughter and Corporate Homicide Act 2007 (the Act) states that the offense is found where ‘corporates grossly breach their duty of care’ to the deceased. In Hong Kong, corporate manslaughter is not a statutory crime, but it was recognised in common law by the case of R v Tam Ping Cheong CACC 355/1995, the only case which has held a company liable for the offence. For the interest of clarity and certainty, corporate manslaughter should be governed by express statutory provisions in Hong Kong. Reform in the UK The UK introduced the Act to address the accountability flaws under the equivalent common law standard for establishing corporate manslaughter. Previously, for a company to be guilty of gross negligence manslaughter, a ‘controlling mind’ had to be present and responsible at the material time. Due to this element of the crime, prosecuting companies was almost impossible as it was difficult to hold an individual culpable with systems of delegation and/or shared responsibility. The Act rectified this by changing the test from controlling mind to ‘senior management’, thereby extending the scope of liability. There are clear deterrent effects from the sanctions available upon

a guilty verdict as the courts have the discretion to impose unlimited fines, issue remedial orders and mandate publication of the details of the conviction and sentence. Such wide discretion reflects the seriousness of the crime. Inadequate remedies under the Hong Kong framework The construction industry employs a large labour force in Hong Kong, yet their employees enjoy limited protection under compensation schemes and the existing statutory framework. The city has witnessed many fatal accidents in the construction industry, including the loss of nine lives at the International Commerce Centre in 2009 due to an improperly constructed platform. Outside of the construction industry, Hong Kong saw a total of 196 occupational fatalities in 2012 and 188 in 2013. Occupational fatalities are often settled by small amounts of compensation to the deceased’s families, either under statutory mandates or out of compassion. For example, under the Employee’s Compensation Ordinance (Cap. 282), the family of a deceased victim is entitled to compensation worth of 84 months of the deceased’s salary, capped at HKD 21,500 per month. By contrast, the UK Act permits courts to order an unlimited amount of remedies or fines, allowing for better compensation and a stronger deterrent effect on companies.

Nanret Senok

Apart from civil actions or individual claims of compensation, public prosecution may deter corporations from grossly negligent conduct. Although the culpable corporate employer may be prosecuted under the Construction Sites (Saftety) Regulations (Cap. 59I), the maximum fine is only HKD 50,000. In comparison, the UK courts have imposed an average of HKD 2.68 million in fines per conviction since 2011. This highlights the weak deterrence achieved by the regulations in Hong Kong. A dedicated statute governing corporate manslaughter could benefit Hong Kong, since the available remedies under the existing legal framework are inadequate to protect employees, especially those in the construction industry. It could also serve to enhance general public awareness about occupational safety.

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Scottish Independence Referendum: a Catalyst for Britain’s Constitutional Reform

ince the ‘no’ vote passed by a majority of 55.3% in the Scottish Referendum on 19 September 2014, Westminster promised to delegate more powers to Holyrood. Consequently, the English, composing 84% of the UK’s population, expressed the need to address the West Lothian Question: should Members of Parliament (MPs) outside England vote on English matters.

British or English? English Democrats pledged to create an English Parliament in Westminster, giving all members an equal voice and vote on matters such as those in relation to currency and foreign policy. While devolving domestic policy to the regional chambers, the Prime Minister would perform the role of a President by controlling foreign affairs and defence. Meanwhile, the Liberal Democrats call for a decentralised government in response to the Labour Party’s concern over ‘The Westminster Bubble’. The working class-rooted party is concerned that while elites may have a good understanding of London, they fail to adequately represent the interests of other regions. Hence, Liberal Democrats’ party leader Nick Clegg stresses the need to delegate taxation and HKSLG · FALL 2014 · ISSUE 5

expenditure to local authorities. However, it may not be desirable to have different tax regimes across cities. Clegg’s stance on localism has failed in the past: 78% NorthEasterners rejected the need for regional assemblies in 2004, and major English cities in 2012 expressed their view against having extra tiers in the Government. With their government funding being continuously reduced, individual regions will not be financially prepared to fund public services on such short notice. As a result, large corporates would likely be encouraged to continue privatising public services, which increases the likelihood of the Government being accused of profiteering and corruption due to its diminished transparency. Additionally, single state-dominated unions are short lived. For instance, the West Indies Federation survived for four years before Jamaica rose and put it to an end in 1962. Given England is more dominant amongst other parts of the UK than Jamaica was in the West Indies, the English Parliament would have a more influential role over domestic matters than Westminster itself. The First Minister could likely undermine the Prime Minister’s decisions, and increased power struggles would be more common where the two are affiliated with different parties. One ‘United’ Kingdom Not surprisingly, David Cameron ruled out the possibility of creat-

Fontaine Wong

ing a separate governing body for England. Due to tensions between councils and the central Government, the Tories had in the 1980s abolished the idea of a devolved government (in the form of local Governments). However, he did suggest setting up ‘England-only’ legislative constituencies, including those affecting health and education, to be made accountable to and staffed by English MPs. This proposal would prevent Scottish MPs from voting on England-only issues. The English have spent years trying to convince the Scots that they are ‘better together’, but an English Parliament would significantly limit their rights to debate on issues concerning the ‘United’ Kingdom. Considering the consequences of breaching the vow with Holyrood, it is unlikely the House of Lords would agree in fear of breaching public trust, which the referendum made clear that major constitutions, in this case England, could easily be lost. Therefore, constitutional change may not be necessary at all. Since an English Standing Committee is already present in the House of Commons, a separate English Executive would be redundant because the English could, even within the current system, vote for England-only laws. Bearing in mind the costs of a national reform, it is perhaps a better option to draw up a representative government without major devolution of the United Kingdom.

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Protecting Data in the Clouds Quentin Wong

Introduction

n 1 September 2014, sensitive images of Hollywood celebrities stored on Apple’s iCloud service were leaked onto the Internet overnight. Although Apple denied there had been an intrusion into its systems, doubts remain over the security of files stored on cloud services. Incidents of this type are indeed not unprecedented, and they bring to our attention a pressing issue: do current statutes provide a satisfactory regulatory framework for the protection of cloud data? The Hong Kong Regime In Hong Kong, data privacy issues are governed by the Personal Data (Privacy) Ordinance (Cap .486) (PDPO). It contains six Data Protection Principles (DPP), among which Principle 4 places a duty on any entities that store client data to ‘take all practicable steps to ensure personal data… held by a data user [is] protected against unauthorized or accidental access.’ Any individual who suffers damage due to violation of the DPP is entitled to claim compensation from the offending party under s.66 PDPO. Such complaints are filed with the Office of the Privacy Commissioner for Personal Data (the Commissioner), which will then instigate inspections and serve enforcement notices to relevant parties. Despite having in place an ordinance dedicated to the issues of data privacy, the current statutory framework is insufficient to effec-

tively protect cloud data. First of all, the DPPs are expressed as statements of principles with no concrete legal definitions. It therefore becomes difficult to ascertain the exact circumstances under which liabilities would be levied in cases of a cloud services provider’s negligence. Secondly, the deterrent effects of the PDPO are limited. The Commissioner refers cases to law enforcement only after noncompliance with its enforcement letters. Even in case of a serious breach, data provider is given a one-off chance to correct their mistakes in accordance with the enforcement notices. S.66 PDPO further allows the offending data provider to raise a defence in civil proceedings by proving that it has exercised due diligence for data protection. As a result, the plaintiff may have considerable difficulty in disproving that the data provider had exercised the requisite standard of care, particularly because related evidence is controlled by the data provider. The availability of and the difficulty to disprove such defence further diminish the deterrence effects of the Ordinance against data providers.

cloud data leakages. Among other mandates, it requires all companies with more than 250 employees to hire a data protection officer, whose sole role is to set up and comply with proper data protection procedures. On the deterrent front, common law jurisdictions, namely the UK and Australia, have considered attaching civil or criminal liabilities to negligence in handling private data. Conclusion The Hong Kong Law Reform Commission last visited the issue of data protection and privacy in 2004. Given the increasing volume of data uploaded on to cloud data providers from individuals and corporations, there is a real need to update and strengthen Hong Kong’s regime of recourse against data breaches. In light of the iCloud nude photo scandal, it is timely for the Commission to conduct a review and propose a combination of preventive and deterrent measures to safeguard data privacy.

Developments outside of Hong Kong Recognising the need for reform, other jurisdictions have moved forward on both the preventive and deterrent fronts. Within the European Union, the General Data Protection Regulation, set to be adopted later this year, provides a set of regulations for the prevention of HKSLG · FALL 2014 · ISSUE 5

INTERNATIONAL

The Annexation of Crimea: How Russia Sowed the Seeds for Secession Crystal Yeung

rimea’s affiliation with Russia dates back to the eighteenth century when the peninsula was first absorbed into the Russian empire. In 1954, Soviet Union Premier Nikita Khruschev transferred Crimea to Ukraine. While the legality of the transfer was challenged, it hardly mattered at the time, as both States were inalienable parts of the Soviet regime. In 1991, however, the Soviet Union collapsed and Ukraine’s sovereignty of Crimea fell into serious dispute. It was not until six years later, when Russia and Ukraine became parties to the Treaty of Friendship, Cooperation, and Partnership, that the matter was thought to be tentatively laid to rest.

torial sovereignty, Russia claimed, inter alia, that its intervention was necessary to protect Russian nationals from attacks which Ukraine was unable or unwilling to prevent. A sequence of developments swiftly followed Russia’s intervention. First, Crimea saw a series of armed conflicts with evident involvement of the Russian military. This was closely followed by the Crimean secession referendum (the Referendum), whereby 96% of the Crimean people allegedly voted to join Russia as a federal subject. Immediately after the Referendum, Crimea unilaterally declared independence and began the process of accession to Russia.

Fast forward to 2014 In 2014, Ukraine was on the verge of signing an association agreement with the European Union. This would sever most of the State’s economic ties with Russia and effectively remove it from Russia’s sphere of influence. Late into these negotiations, then-Ukrainian President Viktor Yanukovych changed tactics to reach an agreement with Russia instead, involving an action plan which ensured Ukraine’s political and economic realignment with its eastern neighbour. Yanukovych’s decision led to the 2014 Ukrainian Revolution in which he was ousted and replaced by an interim government. Capitalising on the civil unrest, Russia sent troops into historically contentious Crimea. To justify such violation of Ukrainian terriHKSLG · FALL 2014 · ISSUE 5

Referendum was saved from being officially recognised as unlawful only because Russia vetoed against such a resolution by the United Nations Security Council (Security Council). However, Russia’s claim on the Referendum’s legality is not entirely baseless. Above all, Russia references the International Court of Justice (ICJ)’s advisory opinion regarding the Kosovo’s 2008 unilateral declaration of independence, which held that international law remains neutral on the lawfulness of unilateral secessions. In submitting this argument, Russia conveniently disregarded the subsequent part of the judgment, where the ICJ iterated that unilateral declarations of independence may be unlawful if it is connected with preceding violations of peremptory norms. Why Kosovo was different

Many in the international community are of the opinion that Crimea’s secession is illegitimate under international law. In fact, the

During the Kosovo War in 1999, the North Atlantic Treaty Organisation (NATO) engaged in large-scale bombings against the former Federal Republic of Yugoslavia, despite the absence of approval by the Security Council. Nine years later, Kosovo, sought to declare independence from Yugoslavia. Although NATO’s intervention in Kosovo was illegitimate, it did not affect the lawfulness of Kosovo’s unilateral declaration of independence. The secession was deemed lawful because it was not a direct result of NATO’s illegal use of force. Instead, it was a decision made by Kosovo’s government during the UN administration period.

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Unlike the situation in Kosovo, Crimea’s Referendum was not preceded by rapid Russian intervention instead of extended negotiations with Ukraine, the parent State. The Referendum also neglected to present a status quo option for voters. Therefore, in examining the lawfulness of Crimea’s secession, the key issue lies in whether the Referendum was achieved by unlawful intervention through Russia’s threat or use of force, a prohibition under Article 2(4) of the Charter of the United Nations (UN Charter). Russia’s unjustifiable defences Russia’s intervention in Crimea cannot be justified as an act of ‘self-defence’ under Article 51 of the UN Charter. At least one of the pre-requisites for self-defence, particularly the need for an armed attack to have occurred, has not been met. In Oil Platforms (Islamic Republic of Iran v United States of America) [1996] ICJ 4, the ICJ held that an armed attack only exists if a state uses force on a relative large scale or of a sufficient gravity. It is clear that Ukraine did not launch an armed attack against Russia to justify any act of self-defence. Moreover, according to the Caroline test and traditional just war theories, self-defence is only justified if it is a necessity and a proportional response to the armed attack. Russia ostensibly disregarded these two requirements as its intervention included the military backing of separatists and other armed manoeuvres. These activities were neither necessary to protect essential Russian interests nor reasonably limited in scope. They only served to place Crimea in Russia’s de facto control. It is also difficult to rationalise Russia’s alternative explanation, which is based on the customary practice of ‘protection of nationals abroad’. For states to use force to

protect their citizens abroad, three conditions must be met: there must be 1) an imminent threat of injury to nationals, 2) a failure or inability on part of the territorial sovereign to protect them, and 3) measures of protection that are strictly confined to the object of protecting them against injury. In the case of Crimea, no imminent threat to Russian nationals was reported, and accordingly there was no need for the Ukrainian government to afford them protection. Even if there was such a need, Russia’s military operations went beyond what was required for the protection of nationals. Finally, Russia maintained that its actions were lawful due to ‘government invitation’. It is difficult to assess the validity of this defence because state practice in this regard has been fairly inconsistent. While this defence is not entirely unjustified, it is premised on Yanukovych’s consent, which was an illegitimate ‘invitation’ because the Ukrainian parliament had passed a resolution

removing him from presidency. Thus, Yanukovych could not represent the Ukrainian government at the time he gave consent. In Nicaragua v United States of America [1986] ICJ 1, the ICJ emphasised that the principle of non-intervention would ‘lose its effectiveness as a principle of law if intervention were to be justified by a mere request for assistance made by an opposition in another State’. This illustrates the narrow confines of the defence of intervention by government consent. A liberty unlawfully earned cannot truly reflect the integrity of its meaning Not only does Russia fail in all attempts to defend its intervention in Ukraine, but the validity of the Crimean Referendum also falls short of following the Kosovo precedent. As such, it is uncontroversial that Crimea’s secession extended far beyond any globally recognised boundaries of international law. HKSLG · FALL 2014 · ISSUE 5

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A Glimpse into the Sharing Economy: an Uber Case Study Alan Lee

the same question.

he sharing economy has seen incredible growth in recent years. It is not hard to see why: the idea of renting out surplus goods and services for profit is certainly attractive in consumption-driven economies. Generally speaking, sharing economy companies serve as intermediaries, bridging owners of goods or services on one hand and end-consumers on the other. While many of these companies exist, Uber is arguably the epitome of the sharing economy’s success. Valued at USD 18.2 billion, Uber is a ride-sharing service which connects self-employed drivers with people in need of private transportation through the internet or its mobile application. Equally as apparent from the success, however, are the troubles that plague the sharing economy. HKSLG · FALL 2014 · ISSUE 5

The regulatory grey zone Sharing economy companies often operate in a grey area where regulated businesses overlap with the freedom to share or dispose of privately owned resources. As a result, these companies enjoy a competitive advantage over their traditional counterparts because they are not subject to stringent licensing requirements or consumer protection laws. In the case of Uber, even though its business model is reminiscent of a taxi service, it claims to be a technology company and thus does not require the licenses of a transportation provider. This apparent loophole in the law has caused a German court to temporarily ban Uber from transporting passengers. Besides Germany, the United States and other parts of Europe also struggle with

While it may be beneficial for sharing economy companies to use the regulatory grey zone as a competitive advantage, it comes at a risk to the end-consumers. Unlicensed operations lack the safeguard and transparency which come with regulatory compliance. For instance, end-consumers may not be able to ascertain or verify an Uber driver’s identity, skills and safety conditions of his or her vehicle. They may also be exploited by the lack of a clear and certain fare structure. Without a minimum set of regulatory safeguards, end-consumers are put in a precarious position. However, from the end-consumer’s perspective, the regulatory issue is not the biggest concern. Rather, it is the question of where legal liability falls when accidents occur. The question of vicarious liability The key rationale behind vicarious liability – the idea that an employer be held liable for the tortious conduct of his employee – is that an employer should assume the risks flowing from the same enterprise from which he makes a profit. The doctrine is essential because victims could be left without an adequate remedy in the event of an accident, since employees often do not have the financial resources to pay damages. While Uber requires its drivers to be available at all times, it does not recognise them as employees. This is evidenced by a US personal injury action filed in January 2014, where an Uber driver collided with and killed a six-year-old child.

INTERNATIONAL In asserting that the driver was a contractor and not providing transportation services at the time of the collision, Uber denied vicarious liability and argued that it had no responsibility to insure the driver. The problem with Uber’s position is apparent. According to common law principles of tort, in order for vicarious liability to apply, there must be (i) an employer-employee relationship and (ii) the tortious conduct must have a close connection with one’s employment. Uber contested that it bears no responsibility over idle drivers who are not currently carrying a passenger. This argument could be rejected with certainty - even if a driver is not carrying a passenger, the act of looking for ride requests would be an act of ‘close connection’ with employment. However, it is the employeremployee relationship requirement that gives rise to difficulty. Courts have often adopted the ‘control test’ and the ‘integration test’ in ascertaining the existence of an employer-employee relationship. Under the control test, liability is imposed where an employer has the power to mandate or give precise instructions to the worker on what work is to be done and how it is to be done. Conversely, if the worker enjoys discretion as to the quality and manner in producing the work, then he is merely an independent contractor with no vicarious liability attached. There is a strong indication of an employer-employee relationship between Uber and its drivers: not only does Uber require its contractors to be available at all times, it also denies its drivers the liberty to pick and choose their ride requests.

each completed transaction, which forms the company’s major source of income. The fact that the drivers form an essential component of the business is further evidenced by Uber’s aggressive strategy of poaching drivers from competitors in order to fuel its growth. The two tests, applied in Uber’s case, would strongly indicate the existence of an employer-employee relationship. However, other factors point to Uber being a contractor. Instead of paying its drivers a fixed salary, Uber remunerates its drivers based on their own utilisation rate. Uber also does not demand exclusivity from its drivers, meaning they have the freedom to engage in other employment. Nor does the company require its drivers to undergo training. These considerations suggest that the drivers might be independent contractors who bear the fortunes and risks of running their own businesses. Therefore, it may be difficult for the victims to claim against Uber for vicarious liability due to the uncertain existence of an employment relationship with its drivers. Towards the future With the problems plaguing Uber

and, by extension, the sharing economy, the German court may stand correct in temporarily banning Uber: unlicensed ride-sharing services have created considerable threat to the public. Besides, it may be contrary to public policy to allow Uber, due its similarity to a taxi service, to operate without the requisite licenses. In the long run, however, inhibiting the growth of sharing economy companies would not bode well for the digital economy. Disruptive innovation comes with risks and uncertainties which challenge the status quo and carry high social and economic values. For example, Uber empowers the market with more choices and has incentivised taxis in London to improve their service quality. By creating some 50,000 new jobs per month and allowing individuals to gain an additional income stream, Uber has demonstrated the positive impacts of sharing economy companies on the economy. What may be needed to balance the opposing interests, then, is legislation detailing with the position on vicarious liability, or in the absence of such a provision, the requirement that companies adequately insure their contractors.

The integration test, on the other hand, examines whether the worker’s activities are essential to the business. As an intermediary linking drivers and passengers, Uber profits by taking a 20% fee from HKSLG · FALL 2014 · ISSUE 5

INTERNATIONAL

Sovereignty as the Normative Basis of International Law Anson Chan

oday, the state monopoly of sovereignty is frequently criticised as an out-dated normative concept, especially when individuals and supranational actors are gaining political authority vis-à-vis the Westphalian state system. An examination of the concept of state sovereignty nonetheless reveals that its normative basis within the framework of international law has no signs of deterioration. Despite the enforcement of treaty obligations and the prohibition of the use of force among nation-states, such restraints – in addition to the recognition of state equality – are precisely the expressions of international law to which the consent of states is strictly required to be bound. Instead of the extrapolation of these components, the concept of sovereignty is the foundation of the existing international law, which therefore puts sovereign states as its most important, if not exclusive, subjects. Sovereignty is a descriptive term in international law to account for states’ possession of legal competence. This is a collection of monopolistic rights legitimately held on mainly two levels: maintaining effective domestic control over their territory, and acting as the representatives of their respective population and territory on the international stage. It is a principle of international customary law that these privileges and authority are independent of the consent of other state counterparts. More importantly, all sovereign states hold a coherent legal personality, and HKSLG · FALL 2014 · ISSUE 5

their sovereignty remains indisputable regardless of how powerful or fragile the state is. In practice, however, neither of the above principles is absolute. For instance, even if the allocation of state authority is equal in legal terms, each state has fundamentally different capacity to project such power. Some states like the hegemons might be ‘more equal than others’, capable of altering the international balance of power or even the framework of international law according to their national interest. Therefore, compliance with treaty provisions and international norms depends on the consent of sovereign states to be strictly bound. Due to its inherent lack of powerful enforcement mechanisms, international law could not regulate state activities in the absence of

relevant state support on supranational rules. In the context of treaty enforcement, artificial treaty provisions can never override national sovereignty: while states have full responsibilities to comply with their treaty obligations in good faith, treaty obligations are merely the ‘attribute of sovereignty’. In S.S. Wimbledon (United Kingdom, France, Italy & Japan v Germany) [1923] PCIJ (ser. A) No. 1 (Aug. 17), for instance, even though the Weimar Republic was held to have violated the Treaty of Versailles by wrongly refusing a vessel from accessing an international waterway, the Permanent Court of International Justice at the same time emphasised that treaty obligation itself should not be considered an act of infringement of any internal

INTERNATIONAL sovereign competence. Rather, it is an expression of willingness and conduct of the Weimar Republic, which was bound by the consent it made in 1919. Besides enforcing treaty obligations, the prohibition of use of force is another important expression of international law in restricting the sovereign competence to protect one’s population using any violent means. Art. 2 of the Charter of the United Nations (UN Charter), for instance, provides that the UN itself has no authority and should not intervene the essentially domestic jurisdiction of any member states. Art. 51 firmly attributes the use of force as sovereign competence when any of the member states are subject to armed attack against their counterparts. However, the term ‘armed attack’ is vaguely defined. It is at most implying the form of conventional attack when the UN Charter was drafted. This is best shown in Nicaragua v United States of America [1986] ICJ 1. In 1979, an uprising in Nicaragua brought

the state under the rule of communist regime, and the US, long opposed to such a notion, supported the anti-government front by funding and selling munitions to the Contras. The new communist government consequently sued the US in the International Court of Justice. The Court held that mere arm provisions to anti-government groups did not constitute an armed attack, which should at least include ‘the sending by or on behalf of a State of armed bands, groups, irregulars or mercenaries.’ Therefore, Nicaragua fell short of fulfilling the condition of Art. 51 to initiate self-defence against the Contras and the US. In this sense, the UN Charter does not have a solidified legal mechanism to prohibit sovereign states from use and threat of force against each other. In many circumstances, states activities are not strictly conditioned by international law but they indeed have plenty of room to manoeuvre their activities without violating the principles they agreed to when applying to become a UN

member state. More importantly, the UN does not have its own military force and thus depends heavily on the consent of its member states to be strictly bound. Treaty obligations and the prohibition of use of force mechanism, as a result, never project significant restraint on states, but they are merely rulebased mediation tools in the context of international law. Therefore, while international law consists of supranational rules that might infringe national sovereignty, it does not have an effective enforcement mechanism to ensure that its rules are binding to every related party. State competence is the last line of defence among nation-states that they would never be willing to concede in any extent. In other words, the extrapolation of international law can only be a normative product of the concept of sovereignty, not vice versa.

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INTERNATIONAL

The ‘Right to be Forgotten’: Mediating Between Fundamental Human Rights

n recent years, the proliferation of data collection and processing conducted by private companies and governments have raised public awareness on the importance of protecting personal data. Consequently, the ‘right to be forgotten’ has gained particular traction in the European Union (EU). Although without a clear definition, the ‘right to be forgotten’ can be understood as allowing individuals to live their lives ‘without being perpetually or periodically stigmatised by…specific actions performed in the past.’ It has been argued that this is a fundamental right guaranteed under Art. 8 of the European Convention on Human Rights (ECHR): the ‘right to respect for his private and family life’. However, the opposition criticizes that recognizing such right would threaten the freedom of expression and information, similarly guaranteed under Art.10 of the ECHR. Therefore, this article aims to explore how the ‘right to be forgotten’ has emerged as an important contemporary discourse in the regulation of personal data. It also explores how conflicting rights are balanced in a recent European Court of Justice (ECJ) case, thereby underscoring key issues faced by governments, private companies and individuals in the near future. A case from Spain In 2009, Mario Costeja González discovered that his personal information, published by Spanish newspaper La Vanguardia Ediciones SL (La Vanguardia) in the late HKSLG · FALL 2014 · ISSUE 5

1990s, was displayed as one of the top links after he had entered his name into Google’s search engine. The web-links contained specific information about Mr. González, who was experiencing financial difficulties at the time and auctioned his house in order to repay his social security debts. While Mr. González eventually repossessed his house, the same Google search results remained. Dissatisfied with the situation, he complained that Google was infringing upon his privacy rights and that its referral to such material was entirely irrelevant. By 2010, Mr. González had lodged a complaint to Agencia Española de Protección de Datos (AEPD), the Spanish Data Protection Agency. He requested that La Vanguardia be required to remove the relevant pages so that the information would cease to be linked to him.

Lincoln Jim

He further requested that Google Spain or Google Inc. be required to remove his personal data ‘so that it no longer appeared in the search results.’ However, the AEPD only upheld the complaint against Google Inc., which caused the company to initiate legal proceedings against the AEPD decision before the National High Court of Spain. The company’s arguments were: 1) Google was not territorially bound by the EU’s 1995 Data Protection Directive (DPD); 2) Google was not a controller of personal data; and 3) an individual does not have the right to request for the removal of his or her personal data from publicly accessible search engines. Given that these arguments raised unprecedented issues on fundamental human rights stipulated in the ECHR and the DPD, the Spanish court referred this case to the ECJ for interpretation and clarification.

INTERNATIONAL On 13 May 2014, the ECJ handed down its judgment in Google Spain SL, Google Inc. v Agencia Española de Protección de Datos, Mario Costeja González [2014] (C-131/12), ruling in favour of the AEPD and Mr. González. First, the ECJ declared that EU laws were applicable to search engines such as Google, even though its servers were located in the United States. This is because Google had subsidiaries which were offering Internet-related services in an EU member state. Second, the ECJ stated that Google must be classified as a ‘controller’ of personal data under Art. 2(d) of the DPD. This is because Google provides services to Internet users by making available information that was previously published and indexed through its search functions. Third, and arguably the most important aspect of the judgment, was the ECJ’s interpretation of Art. 12 of the DPD. The ECJ reasoned that individuals have the right to request search engines to remove links containing their personal information, provided that such information is ‘inadequate, irrelevant or excessive.’ However, the ECJ also emphasised that the ‘right to be forgotten’ is not an absolute right. Instead, it must be balanced on a case-by-case basis against other fundamental rights, such as those provided under Art. 10 of the ECHR. Understandably, one of the central criticisms of the ECJ’s judgment was its deliberately broad interpretation of the DPD provisions. Although such interpretation reflects the ECJ’s intention to expand the scope of data protection laws, the ruling was ambiguous and provided limited practical guidance on how to balance between the right to privacy and the freedom of expression. Using an example provided by Google council member Frank La Rue, if an individual was convicted of child abuse and had

served his or her sentence, should he or she be entitled to the ‘right to be forgotten’? Some may argue that the individual is entitled to such right so to reintegrate into society, while others argue that his conviction information should remain publicly available to protect minors from such individuals in the future. At present, courts have yet to provide a definitive legal position. Similarly problematic is the ECJ’s ruling that Google Inc. and other private companies bear the responsibility to determine whether requests for data removal are justified. According to a report by a House of Lords’ committee, imposing such a requirement on private companies is ‘unworkable, unreasonable and wrong’. First, it is a significant burden on smaller search engines which ‘are unlikely to have the resources to process the thousands of removal requests they are likely to receive’. Second, it raises serious concerns about corporate accountability and regulatory transparency because the task of controlling personal data has traditionally been the government’s responsibility. Instead, as Alejandro Perales, President of the Spanish

Communication Users Association, argues, ‘social organizations and regulatory authorities should pay a more active role’, especially in the decision-making process. The way forward Stakeholders may find some comfort knowing that the European Commission is planning to adopt the General Data Protection Regulation (GDPR) by late 2014. It aims to unify the EU’s fragmented data protection laws into a single document, to reform the outdated DPD (1995) and to strengthen protections under the ECHR. In particular, specific protections on the ‘right to be forgotten’ are set out under Art. 17 of the GDPR, which could perhaps clarify much of the ambiguity surrounding the concept. Nonetheless, given the importance of personal data in contemporary society, it will not be surprising to see more of these debates in the near future.

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INTERNATIONAL

Constitutionality of Obama’s Declaration of War Against the ISIL

Louisa Wong

which may lead to far-reaching consequences. Art. II, s. 2 of the Constitution names the President as Commander-in-chief of the national army and navy. Although ranked as the highest general and admiral, the President is not specifically empowered to declare war. Instead, such power is granted to Congress by Art. I, s. 8 of the Constitution. The Constitution therefore requires Congress to authorise declarations of war.

n 10 September 2014, US President Barack Obama announced his strategy to ‘degrade and ultimately destroy’ the terrorist group, the Islamic State of Iraq and the Levant (the ISIL). His counter-terrorism strategy comprises airstrikes across Iraq and Syria, ground support, enhanced counterterrorism capabilities, and humanitarian assistance.

clared war in the eyes of international law. While Obama welcomes congressional support, he does not deem it necessary for his military strategy to proceed. By declaring war without congressional consent, the President has acted beyond the scope of power conferred on him by the US Constitution.

Generally, wars are only declared against states. Although the ISIL is not a state, the nations in which the ISIL terrorists reside have failed to control the group’s activities. In these circumstances, US practice attributes the responsibility of terrorist activities to the nations that house such groups. Thus, by announcing his strategy to eradicate terrorism, Obama has de facto de

One legal justification for Obama’s declaration of war is the President’s role as the Commander-in-chief but this contradicts separation of powers. As the US Constitution (the Constitution) is designed to upkeep checks and balances between the executive and the legislature, it is unlikely that the Constitution confers sweeping powers to the executive on military action,

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The US Constitution

In addition to the power to declare war, Congress is given another war power to ‘make Rules for the Government and Regulation of the land and naval Forces’ under the same s. 8. Since final approval by Congress is ordinarily required for other important national matters, such as treaty signing and cabinent appointment, it is unlikely that war can be declared by the President alone without congressional consent. The Obama administration’s assertions also contradict the Constitution’s original intent. The Framers of the Constitution sought to avoid a one-man decision to commit the nation to war. Even Alexander Hamilton, a strong advocate of the President’s prerogatives, acknowledged that the power to initiate war is vested in Congress, and that the administration has a duty to ‘preserve peace till war is declared’. Therefore, neither the text or spirit of the Constitution provides any legal support for the President’s military action without congressional approval.

INTERNATIONAL War Powers Resolution of 1973

Statutory authorisation

The War Powers Resolution of 1973 (the Resolution) was enacted to provide checks and balances between the executive and the legislature on war power issues. Instead of giving Congress absolute power over the President in warfare, s. 2(a) of the Resolution acknowledges that Congress and the President shall come to a collective judgment before initiating military attack.

Instead of seeking congressional support, the Obama administration merely relies its unilateral declaration of war on two statutory authorisations previously passed by Congress pursuant to s. 2(b) of the Resolution.

The Resolution states that the President’s constitutional powers as the Commander-in-chief are exercised only pursuant to: 1) a declaration of war by Congress, 2) specific statutory authorisation, or 3) a national emergency created by attack upon the US, its territories or possessions, or its armed forces. While the first two situations clearly require congressional approval, the third confines the President’s constitutional powers to the defensive use of force. As affirmed by then-presidential candidate Obama to The Boston Globe in 2007, ‘the President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation’.

The 2001 Authorization for Use of Military Force (AUMF) empowers the President to act ‘against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001 or harboured such organizations or persons.’ However, the ISIL did not exist when the 2001 AUMF was passed. Al Qaeda, with which the 2001 AUMF concerns, has publicly disavowed the ISIL. It stretches credulity to justify military action against the ISIL when the group is not even associated with Al Qaeda. In fact, as part of the effort to combat Al Qaeda cells in Yemen, then-President George W. Bush sought congressional approval for an open-ended military authority in 2011 to ‘deter and preempt any future acts of terrorism or aggression against the United States’. Even at such times of crisis during the immediate aftermath of September 11, Congress denied the Bush’s request. It is therefore conceivable that Congress would not consent to Obama’s declaration of war against a terrorist group which is neither an affiliate of Al Qaeda nor causing the same scale of public panic as the September 11 bombings. Neither is Obama’s declaration of war justifiable under the 2002 AUMF targeting the Saddam Hussein regime, which authorises the President to go to war to ‘defend the national security of the United States against the continuing threat posed by Iraq.’ As the 2002 AUMF only allows the use of force by the

President against Iraq’s continuing threat, it is again far-fetched to justify military attacks against the ISIL when the group bears no clear connection with the Saddam Hussein regime. Report to Congress When the President does not obtain congressional approval before initiating war, he is required under s. 4 of the Resolution to report to Congress, and discontinue the use of force if he fails to secure Congress’ approval within 60 days after submitting the report. To date, the administration has neither made a report to Congress concerning the comprehensive and sustained military strategy against the ISIL nor has the President shown any intention to discontinue the use of force. Defensive use of force The President may only proceed with use of force without congressional approval if he is acting in response to a national emergency. While some may argue that the ISIL’s decapitation of American civilians constitutes an imminent threat which necessitates anticipatory self-defence, large-scale air strikes across Syria and Iraq can hardly be regarded as a proportionate response. Conclusion Although previous presidents had similarly declared war without obtaining congressional approval, it cannot be inferred that the President has implied constitutional authority to initiate war. After all, the President is obliged to defend the Constitution. Apparent convenience achieved by disregarding the Constitution will not only lead to heavy political costs in the future, but will also undermine the spirit of rule of law honoured by the Americans. HKSLG · FALL 2014 · ISSUE 5

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