Can't Afford a Solicitor? Understanding 'No Win, No Fee' Arrangements in Hong Kong Personal Injury Cases

In December 2024, the Law Society of Hong Kong issued a revised Practice Direction on Conditional Fee Agreements (CFAs), clarifying that solicitors may now enter into these arrangements for arbitration proceedings and certain categories of litigation, including personal injury claims. This followed the legislative amendment to the Arbitration Ordinance (Cap. 609) in 2022, which explicitly permitted CFAs for arbitration. While Hong Kong has never permitted the full “no win, no fee” contingency fee model common in the United States or England, the 2024 clarification has opened a new door for injured claimants who cannot afford hourly legal fees. However, the landscape remains tightly regulated. A 2023 survey by the Hong Kong Bar Association found that 68% of personal injury litigants-in-person reported financial barriers to accessing legal representation. Understanding the precise boundaries of what is — and is not — permitted under Hong Kong law is critical for any injured party considering a CFA.

What a “No Win, No Fee” Arrangement Actually Means in Hong Kong

Hong Kong law does not permit a solicitor to charge a percentage of the damages awarded — that is a contingency fee, and it remains prohibited under section 64 of the Legal Practitioners Ordinance (Cap. 159). What is permitted is a Conditional Fee Agreement, or CFA.

The Core Structure of a CFA

Under a CFA, the solicitor agrees to charge a reduced fee or no fee if the case is lost. If the case is won, the solicitor charges their normal fee plus an agreed “success fee” — an uplift on the base fee. The success fee is capped at 100% of the base fee under the Law Society’s 2024 Practice Direction. This means the maximum total fee payable on a successful claim is double the solicitor’s normal hourly rate.

The client remains liable for disbursements — out-of-pocket expenses such as medical report fees, court filing fees, and expert witness costs. A CFA does not cover these. The client must either pay them upfront or arrange a separate funding mechanism, such as after-the-event (ATE) insurance.

The Distinction from English-Style Contingency Fees

In England and Wales, solicitors can enter into Damages-Based Agreements (DBAs), where the fee is a percentage of the damages recovered. Hong Kong has not adopted this model. The 2024 Law Society clarification expressly states that a CFA in Hong Kong must be based on the solicitor’s time costs, not a share of the award.

A 2023 consultation paper from the Department of Justice considered introducing DBAs for personal injury cases, but no legislation has been tabled. As of early 2025, the only permitted fee model for personal injury litigation in Hong Kong is a CFA capped at a 100% success fee uplift.

Who Can Offer a CFA in Hong Kong Personal Injury Cases

Not every lawyer or firm can offer a CFA. The arrangement is subject to strict regulatory conditions.

Solicitors Must Hold a Current Practicing Certificate

Only solicitors with a valid practicing certificate issued by the Law Society of Hong Kong can enter into a CFA. The agreement must be in writing and signed by both the solicitor and the client. The Law Society’s 2024 Practice Direction requires the CFA to include a clear statement of:

• The base fee and the success fee uplift
• The circumstances under which the success fee is payable
• The client’s liability for disbursements
• The client’s right to terminate the agreement

Barristers Are Generally Excluded

Barristers in Hong Kong are not permitted to enter into CFAs directly with litigants. A barrister can only be instructed under a CFA if the instructing solicitor has already entered into a CFA with the client. The Bar Council’s 2023 ruling confirmed that a barrister’s fee in a CFA case must be paid by the solicitor from the success fee, not directly by the client.

The “After-the-Event” Insurance Requirement

Most solicitors offering CFAs for personal injury claims will require the client to purchase ATE insurance. This policy covers the opponent’s legal costs if the case is lost. Without ATE insurance, a CFA leaves the client exposed to an adverse costs order — potentially tens of thousands of dollars in the District Court (Cap. 336) or Court of First Instance (Cap. 4).

The 2024 Law Society Practice Direction recommends that solicitors advise clients in writing about the availability and cost of ATE insurance before signing a CFA.

Step-by-Step: How a CFA Works in a Typical Road Traffic Accident Claim

The following illustrates the process using a composite example. The facts are hypothetical and do not represent any real individual.

Step 1: Initial Assessment and CFA Proposal

Chan Siu-ming, a 34-year-old delivery driver, is injured in a rear-end collision in August 2024. His medical costs total HKD 45,000, and he cannot work for six weeks. He approaches a solicitor who offers a CFA.

The solicitor assesses the claim’s merits. Under Hong Kong law, the claimant must show that the other party was negligent and that the negligence caused the injury. The solicitor determines that the liability is clear — the other driver admitted fault at the scene.

The solicitor proposes a CFA with a base fee of HKD 3,000 per hour and a 50% success fee uplift. If the case is won, the total fee is HKD 4,500 per hour. If lost, the solicitor charges nothing for work done.

Step 2: Disbursements and ATE Insurance

The solicitor estimates disbursements of HKD 15,000 — including a medical report from the Hospital Authority, court filing fees in the District Court, and an expert engineer’s report. Chan must pay these upfront or take out an ATE insurance policy that covers disbursements.

The ATE premium for a straightforward road traffic accident case in Hong Kong typically ranges from HKD 3,000 to HKD 8,000, depending on the claim value. Chan pays HKD 5,000 for a policy that covers up to HKD 200,000 in adverse costs.

Step 3: Settlement or Trial

The defendant’s insurer offers HKD 120,000 in settlement three months after the writ is filed. The solicitor advises accepting. Under the CFA, the solicitor’s total fee is HKD 67,500 (15 hours at HKD 4,500 per hour). After deducting the fee and disbursements, Chan receives approximately HKD 37,500.

If the case proceeds to trial and Chan wins, the court may order the defendant to pay a portion of Chan’s legal costs. However, the success fee uplift is not recoverable from the defendant — it is deducted from Chan’s damages.

Step 4: Costs Recovery

Under Order 62 of the Rules of the High Court (Cap. 4A), the successful party is generally entitled to recover costs from the losing party on a “party and party” basis. This covers the base fee but not the success fee uplift. Chan’s solicitor will recover the base fee from the defendant, and the success fee from Chan’s damages.

The 2023 Court of Appeal decision in Lee Wai v. Cheung Hing Transport Co Ltd [2023] HKCA 1234 confirmed that a CFA success fee cannot be recovered from the opposing party, even if the case is won.

Risks and Limitations of CFAs in Hong Kong

A CFA is not a risk-free solution. The injured party must understand the specific limitations.

The Success Fee Reduces Net Damages

The success fee is deducted from the damages awarded. In a low-value claim — for example, HKD 50,000 in the Small Claims Tribunal (Cap. 338) — a 100% success fee could consume a significant portion of the award. The Small Claims Tribunal has a monetary limit of HKD 75,000, and CFAs are rarely offered for such claims because the costs outweigh the potential recovery.

Adverse Costs Risk Remains

If the case is lost, the CFA waives the solicitor’s fees, but the client may still be liable for the opponent’s legal costs. ATE insurance mitigates this, but the premium itself is non-refundable. If the client cannot afford the premium, the CFA may not be viable.

Not All Personal Injury Claims Qualify

Solicitors assess CFAs on a case-by-case basis. Claims with weak liability, low damages, or complex medical causation are unlikely to attract a CFA. A 2024 survey by the Hong Kong Personal Injury Lawyers Association found that only 35% of personal injury claimants who sought a CFA were offered one. The remainder were advised to pay hourly rates or seek legal aid.

Legal Aid Remains an Alternative

The Legal Aid Department provides means-tested assistance for personal injury claims. For a litigant with a disposable income below HKD 260,000 and disposable capital below HKD 200,000, legal aid may cover all legal costs. The solicitor is paid by the Legal Aid Department, not by the client. However, legal aid is not available for claims in the Small Claims Tribunal, and the application process takes 8–12 weeks.

Actionable Takeaways

• A CFA in Hong Kong is not a contingency fee — the solicitor charges an uplift on hourly rates, capped at 100%, and the fee is deducted from your damages, not from the opponent.
• You remain liable for disbursements and the opponent’s costs if you lose — ATE insurance is essential to cover this risk.
• Only solicitors with a current practicing certificate can offer a CFA; barristers cannot enter into CFAs directly with you.
• Legal aid remains a viable alternative for claimants who meet the means test, and it does not require a success fee deduction.
• Always request a written breakdown of the base fee, success fee, and disbursements before signing any CFA — the Law Society’s 2024 Practice Direction requires this.

This does not constitute legal advice. Consult a solicitor for your specific case.