Civil Justice Reform brings with it two new Orders containing innovative new procedures designed to encourage and facilitate pre-trial settlement. First, there is the entirely new Order 13A which enables a defendant to admit liability in whole or in part and request payment terms. Second, the replacement Order 22 provides for the new sanctioned payment and sanctioned offer procedures, which have enhanced costs and interest consequences. The new Orders are included in both the Rules of the High Court and the District Court Rules.

There is only space here for an overview of the new procedures. Those interested in more detail may refer to the text of the new Orders (available on the judiciary's website), or consult reference works such as the updated Hong Kong Civil Court Practice, which contains the text of the new rules along with commentary.

Order 13A - Admission of Liability to Pay

Order 13A is aimed at early settlement in three types of cases involving claims for money.

First, there is the case where the defendant has no defence but faces difficulty making immediate payment of the full amount claimed. Before CJR came into force, such a defendant could 'buy time' by serving a general denial defence, and perhaps trying to manufacture a triable issue to resist summary judgment. At the end of the day, judgment is invariably entered against such a defendant but only after as much delay as possible has been eked out of the system, and both costs and court time have been wasted. It has long been possible for the parties to settle in such a case, on terms as to payment, perhaps formalised in a Tomlin order, or a stay of execution. However, realistically that has only been achievable with agreement of the parties.

Under the new Order 13A, a defendant can admit liability and request payment terms, which may be fixed by the court if the plaintiff does not agree. Coupled with this, Order 18 rule 13 has been amended to rule out defences consisting of bare denials, and under Order 41A, a pleading setting up a positive defence must now, like all pleadings, be verified by statement of truth.

The second type of case at which Order 13A aims is the case where the defendant is willing to pay an amount less that that claimed. For example, although the defendant may not have any defence to the debt claimed by the plaintiff, it may have a set-off or counterclaim which would substantially reduce the amount of money changing hands at the end of the day. Previously there might need to be full sets of pleadings, perhaps extending to counterclaim and defence to counterclaim, before the parties' positions were crystallised and it was possible to reach settlement at a net figure. Under the new Order 13A, the defendant can admit liability at the outset and offer to pay a reduced sum, perhaps with a side letter stating that the potential set-off or counterclaim will be waived if the proposal to pay a lesser sum is accepted. If the plaintiff does not accept the offer, the action will proceed. The Order does not specify that the action would proceed on the question of quantum only, but that seems to be the intention, as the admission of liability stands unless leave is given to withdraw it under rule 2(3).

Third, the new Order 13A caters for unliquidated money claims, enabling the defendant to admit liability straight away and offer an amount it is willing to pay. If the defendant does not propose a quantum, or if his proposal is not accepted, there will be an assessment of damages without trial on liability.

Encouraging Settlement at the Outset of Proceedings

In order to encourage the use of the new Order 13A admission procedure, the defendant's attention is directed to its availability right at the outset of proceedings. Order 6 rule 2(1)(c) provides that a writ of summons must be indorsed with a statement informing the defendant that such an admission may be made, and the form of writ (Form No 1 in Appendix A to the rules) has been amended so as to include such an indorsement. Furthermore, the appropriate form for making an Order 13A admission must be served on the defendant together with the writ: Order 13A rule 13.

The clear intention is to encourage use of the new Order 13A procedure right at the outset of proceedings, to avoid waste of costs and court time. However, rule 3(2) permits the procedure to be used at later stages of an action, so long as default judgment has not been entered (or in the case of proceedings commenced by originating summons, at any time before the hearing date). Late use of the procedure may have costs consequences, and by that stage it will invariably be more appropriate to use the sanctioned payment and sanctioned offer procedures under the new Order 22 (as to which, see below). 

Request for Payment Terms

The mechanism whereby a defendant can request time to pay, which will be fixed by the court in the absence of agreement with the plaintiff, is probably the key innovation in Order 13A. The mechanism works like this:

• When admitting liability to pay the defendant may, under Order 13A rule 9, request time to pay simply by completing the relevant part of the form of admission (Form 16 for liquidated claims, 16C for unliquidated or mixed claims).
• The form enables the defendant to propose making payment at a specified date in the future, or by instalments.
• Where terms of payment are requested, the defendant is required to complete the statement of means set out in the admission form, and must declare the same to be true on oath or affirmation.
• When requesting entry of judgment on the defendant's admission of liability (using Form 16A, 16D or 16E as appropriate) the plaintiff may indicate that the defendant's request for time to pay is accepted or rejected.
• If the plaintiff accepts the defendant's request for time to pay, the court will enter judgment in accordance with the agreed payment terms: rule 9(6).
• If the plaintiff rejects the defendant's request for time to pay, it may elaborate with reasons or put forward a counterproposal as to when the judgment should be satisfied. 
• Where the defendant's request for payment terms has been rejected by the plaintiff, the court will enter judgment, to be paid at the times and rate to be determined by the court: rule 10(3).
• The court's determination of the times and rate of payment, where that has not been agreed, may, by Order 13A rule 10(4)(a), be made without a hearing. The court will do so on the basis of the information in the defendant's statement of means set out in the form of admission, the plaintiff's response thereto in the request for judgment, and 'all other relevant matters' rule 10(4)(b). 
• A party unhappy with the rates and time of payment fixed by the court without a hearing may apply for a re-determination under Order 13A rule 11.

Stay of Execution on Judgment for Payment by Instalment

Where judgment is entered for payment on agreed terms an automatic stay of execution pending payment takes effect by virtue of rule 9(7).

Failure to pay any instalment in full on the due date causes the stay of execution to cease immediately, leaving the plaintiff free to enforce payment of the outstanding balance by the usual means of execution: rule 9(8). There is no provision in the Order for a grace period, or for overlooking even the most minor failure to comply with the payment terms. However, the court's power under Order 3 rule 5(1) to extend time for compliance with any judgment might be invoked. By contrast, in England CPR PD 14 para 6 expressly provides for variation of payment terms where there is a change of circumstances.

The procedure works differently where payment terms are fixed by the court, but there will be a right to execute on a judgment which has not been complied with.

The judgment creditor who proceeds to execution on non-compliance with payment terms will have the advantage of the means statement sworn or affirmed by the judgment debtor when the request for payment on terms was made.

The New Order 22 - Sanctioned Payments and Sanctioned Offers

Order 22 previously provided for the payment into court procedure whereby a defendant could make an offer to settle by paying an amount into court, which, if not accepted, and not bettered at trial, resulted in costs consequences for the plaintiff. It also dealt with Calderbank offers ('without prejudice save as to costs', carrying similar costs consequences.

The Order has been completed replaced, now providing for sanctioned payments and sanctioned offers. The key innovation is enhanced costs and interest sanctions, giving the recipient of the offer an added incentive to accept. Parties remain free to offer settlement in whatever way they wish. In particular it appears that Calderbank offers may still be taken into account under the amended Order 62 rule 5(1)(d). However, the costs and interest sanctions Order 22 will only apply where the sanctioned settlement procedures are followed: rule 2(4).

The new Order 22 is lengthy and complex. It is based on the English CPR Part 36, as it was before amendment in April 2007. It is useful to read the English provision, which is drafted in simpler terms, using plain language.

Making a Sanctioned Proposal

The new Form 23 will be used when making a sanctioned payment. The money must be paid into court, and the form filed and served. There is no prescribed form for making a sanctioned offer. Such an offer may be made by letter, by a plaintiff as to how much he is willing to accept in settlement of a money claim, or by either party in a non-monetary claim. The letter should make it clear that the offer is made pursuant to Order 22, so as to avoid argument as to whether the enhanced costs and interest sanctions are applicable.

Note that where the offeree is legally aided a sanctioned payment notice or sanctioned offer must be served not only on that person's solicitors but on the Director of Legal Aid.

Acceptance of a Sanctioned Proposal

The attached charts show how a sanctioned proposal under Order 22 may generally be accepted without the need for formal application to the court, and when leave is required. 

There are additional requirements in Order 22 rule 18 for acceptance of a sanctioned proposal made by one or more, but not all, of a group of defendants. And of course any settlement involving a party under disability requires approval of the court under Order 80: this is confirmed for Order 22 settlements by rule 19.

Just as under the previous Order 22, sanctioned payments and sanctioned offers which are not accepted must not be disclosed to the court if not accepted, and the matter proceeds. Only when the issue of costs comes to be determined by the court may they be disclosed: see rule 25.

Enhanced Costs Sanction

Previously, a party who decided not to accept a payment into court or a Calderbank offer, ultimately achieving no better result, could expect to be deprived of costs and ordered to pay the offeror's costs after the offer could have been accepted. The position is the same under the new sanctioned procedures, with the key difference that under Order 22 rules 23 and 24 costs may now be ordered on the indemnity basis. Furthermore, the court is expressly mandated to impose the indemnity costs sanction except where it would be unjust to do so.

Enhanced Interest Sanction

The court probably has always had a discretion to deprive a successful plaintiff of pre-judgment interest if it could have achieved the same or better result by accepting a settlement. However, this was rarely done.

Under the new Order 22, the court is mandated (save where it would be unjust to do so) to deprive such a plaintiff of pre-judgment interest. Furthermore, where it is the defendant who refuses to accept an offer to accept a certain amount, but is eventually found liable for at least that amount, the court may now order that defendant to pay pre-judgment interest at an enhanced rate.

There is also provision for enhanced interest on costs.

The enhanced rate of interest which may be ordered is up to 10% above judgment rate, and will be ordered as from the last date on which the plaintiff's offer could have been accepted, unless unjust to impose such a sanction. The intention appears to be that the enhancement would be up to 10 percentage points above the judgment rate, meaning that with the current judgment rate of roughly 8%, the court could order interest at up to 18%. However, the wording of the relevant rules within the new Order 22 is not crystal clear on this. There is no reference to percentage points. Thus it might be argued that the power to enhance interest is up to 10% of the 8% judgment rate, resulting in a cap of 8.8%. However, as mentioned, that does not appear to be the intention.

Conclusion

The new Orders 13A and 22 are key parts of Civil Justice Reform. It has long been the policy of the law to encourage settlement. That is not only because the court system is an expensive dispute resolution service, but because settlement by amicable agreement is always preferable to resolution by judgment of the court, which can result in the need for exercise of coercive power. In a society like Hong Kong where social harmony is particularly highly valued, settlement by agreement is all the more important.

The new procedures should be welcomed.

WS Clarke
Solicitor
Honorary Lecturer
Department of Professional Legal Education
The University of Hong Kong
wsclarke@netvigator.com

The author wishes to thank Allan Leung of Lovells for the flow charts reproduced in this article.

創新的程序以鼓勵進行審前和解

民事司法制度改革伴隨產生了兩個新的命令，其中包含旨在鼓勵、便利審前和解的創新程序。第一、全新的Order 13A使得被告人能夠全部或部分承認法律責任，並請求還款條件。第二、更替的Order 22 規定了新的附帶條款的付款安排及附帶條款的和解提議程序，其結果是提高了訟費與利息。新的命令包含在《高等法院規則》和《區域法院規則》中。

限於篇幅，本文僅對新程序作一概述。有意瞭解更多詳情的人士可以參閱新命令的文本（刊登於司法機構的網站），或查詢參考資料，例如新版的Hong Kong Civil Court Practice，後者包含新規則的文本並附帶評論。

Order 13A—承認付款的法律責任

Order 13A旨在涉及金錢申索的三類案件中實現早期和解。

第一類案件中，被告人無可抗辯，但難以立即全額支付所申索的款項。 民事司法制度改革生效前，該等被告人可以送達概括否認抗辯書，或者盡力製造可審訊爭論點以抗拒簡易判決，從而「爭取時間」。最終，肯定會對該等被告人作出判決，但可以在制度允許的範圍內儘量拖延，從而虛耗訟費和法院時間。長期以來，各方可以在此類案件中就還款條件達成和解，他們可能採取 Tomlin Order這樣的正規化形式或者擱置執行。然而在實際中，只有各方同意，才能做到這點。

依照新的Order 13A，被告人可以承認法律責任並請求還款條件，後者可以由法院確定（如果原告人不同意的話）。另外，Order 18 rule 13已經過修訂，排除了單是否認所構成的抗辯；依照Order 41A，確立積極抗辯的狀書如今也必須像所有狀書那樣，得到事實確認書的證實。

在Order 13A旨在應對的第二類案件中，被告人願意支付少於所申索金額的款項。例如，雖然被告人可能對原告人申索的債務無可抗辯，但可能提出抵消或反申索，從而大大減少最終支付的金額。先前可能需要全套狀書，或須擴大至反申索及反申索抗辯，然後才能澄清各方的立場，才有可能達成某個和解的淨數值。依照新的Order 13A，被告人可以在一開始便承認法律責任，並提議支付較少的金額，或許亦可附帶補充函件，說明如果接受支付較少金額的提議，將會放棄潛在的抵消或反申索。如果原告人不接受提議，訴訟行動將繼續。該項命令未具體規定僅就數額問題展開訴訟，但似乎意圖如此，因為承認法律責任會維持有效，除非准許依照rule 2(3)將其撤銷。

三、新的Order 13A適合於未經算定款項的申索，使得被告人能夠直接承認法律責任，並提議自己願意支付的金額。如果被告人未提出損害賠償額，或者其提議未獲接受，將會對損害賠償作出評估，而無須對法律責任進行審理。

在法律程序一開始便鼓勵和解

為了鼓勵運用新的Order 13A承認程序，命令提請被告人注意在法律程序一開始便可利用該程序。Order 6 rule 2(1)(c) 規定，傳訊令狀必須注明相關的陳述，告知被告人可以作出該等承認，而令狀的形式（規則附錄A中的表格1）已經過修訂，以便包含該等批註。另外，作出Order 13A 承認的適當表格必須與令狀一道送達被告人：Order 13A rule 13。

這樣做的意圖，顯然是為了鼓勵在法律程序一開始時便採用新的Order 13A 程序，以避免虛耗訟費與法院時間。然而，rule 3(2) 允許在訴訟的較晚階段採用該程序，只要尚未作出失責判決（在以原訴傳票開展法律程序的情形中，為聆訊日期前的任何時候）。延遲採用該程序可能招致訟費，到那個階段，依照新的Order 22採用附帶條款的付款安排或附帶條款的和解提議程序（至於採用哪一項，請參閱下文），無疑更為恰當。

請求還款條件

被告人可以請求還款時間（假如未與原告人達成一致，則由法院確定）的機制，可能是 Order 13A中的關鍵創新。該機制的運作如下：

• 承認付款的法律責任後，被告人可以依照Order 13A rule 9，僅須填寫承認表格（算定申索為表格16；未算定或混合申索為表格16C）的相關部分，請求還款時間。
• 該表格使得被告人能夠提議在未來的特定日期付款或分期付款。
• 假如請求還款條件，被告人必須完成承認表格中規定的經濟能力聲明，並且必須通過宣誓或誓章宣佈聲明為真確。
• 就被告人承認法律責任（適當使用表格16A、16D或16E）要求作出判決時，原告人可以表明被告人的還款時間請求是得到接受還是被拒絕。
• 如果原告人接受被告人的付款時間請求，法院將遵照商定的還款條件作出判決：rule 9(6)。
• 如果原告人拒絕被告人的付款時間請求，可以詳細說明理由，或提出何時應當履行判決的反建議。
• 假如被告人的還款條件請求遭到原告人的拒絕，法院將作出判決，還款時間及金額由法院確定：rule 10(3)。
• 依照Order 13A rule 10(4)(a)，假如還款的時間與金額未予商定，法院可以對此作出決定而無需聆訊。法院將根據承認表格中規定的被告人經濟能力聲明的資料、判決請求中原告人對聲明的答覆，以及「所有其他相關事宜」作出決定：rule 10(4)(b)。
• 對法院未經聆訊而確定的付款金額和時間不滿的一方，可以依照Order 13A rule 11申請重新裁定。

分期付款判決的擱置執行

假如就商定條件付款作出判決，將依照rule 9(7)自動擱置執行，等候還款。

未能在到期日全額分期付款會導致擱置執行立即停止，使得原告人可以自由透過通常的執行途徑要求支付未結餘額：rule 9(8)。命令中並未規定寬限期，亦未規定可以寬容哪怕是最輕微的不守支付條件的行為。然而，可以援引Order 3 rule 5(1)規定的法院權力，延長合規時間而不作出任何判決。與之相反，在英國，假如情形發生變化，CPR PD 14 第6段明文規定更改還款條件。

假如由法院確定還款條件，則程序的運作方式有所不同，但仍享有權利執行未被遵守的判決。
在提出還款條件要求時，以不遵守還款條件為理由而著手執行判決的判定債權人，可以獲得判定債務人對經濟能力聲明所作出的宣誓或確認，這是他們的優勢。

新的Order 22—附帶條款的付款安排和附帶條款的和解提議

Order 22先前規定付款進入法院程序，被告人從而可以提議向法院支付一定金額而達成和解，如果提議未被接受並在審訊中未能取得更佳結果，這將會給原告人帶來訟費後果。該命令還涉及Calderbank提議（「無損訟費以外的權利」），附帶類似的訟費後果。

現今，該項命令被完全取代，而規定了附帶條款的付款安排和附帶條款的和解提議。關鍵創新在於改進了訟費與利息懲處措施，讓接獲提議者的接受動機加強。各方依然可以自由地以自己願意的方式提議和解。 特別是，依照修訂後的Order 62 rule 5(1)(d)，Calderbank提議似乎仍會得到考慮。然而，只有在允許附帶條款的和解程序的情況下，方才適用有關訟費與利息懲處的Order 22: rule 2(4)。

新的Order 22冗長而複雜，它是以英國的CPR Part 36為基礎，而在2007年4月的修訂前便已是如此。參閱英國條文將有所幫助，該條文的文字較為簡易明白。
作出附帶條款的提議

在作出附帶條款的付款安排時，可使用表格 23。有關的款項必須支付給法院，並提交、送達表格。作出附帶條款的和解提議，並無規定的形式，可以通過函件作出該等提議，可以由原告人提出願意接受多少金額以就申索作出和解，或是由任何一方在非金錢申索中作出提議。函件應當明確是根據Order 22作出提議，以避免對是否適用提高後的訟費與利息懲處進行爭議。

請注意，假如受要約人接受法律援助，則附帶條款的付款安排通知或附帶條款的和解提議不僅必須送達該人士的代表律師，還須送達法律援助署署長。

接受附帶條款的提議

隨附的圖表說明通常如何接受Order 22規定的附帶條款的提議，而無須向法院提出正式申請，及何時需要獲得許可。

Order 22 rule 18對接受被告人團體的一人或多人（但非全體）提出的附帶條款的提議還設定了其他要求。當然，依照Order 80，涉及無行為能力者的任何和解方案均需要法院批准：對於Order 22 的和解，rule 19確認了這一點。

正如先前的Order 22所規定，附帶條款的付款安排和附帶條款的和解提議假如未被接受，則不得將其向法院披露，而案件將會繼續。只有當訟費問題將由法院裁定時，方可披露相關資料：參見rule 25。


提高後的訟費懲處

先前，一方假如決定不接受向法院付款或Calderbank 提議，而最終未取得更佳的結果，則預期會被剝奪訟費，並被命令在提議本可以被接受之後，向要約人支付訟費。附帶條款的新程序規定的狀況相同，主要區別在於：根據Order 22 rules 23和24，現在可以按彌償基準責令支付訟費。此外，法院得到明文授權，可以給予彌償訟費懲處，除非此舉是有失公正。

提高後的利息懲處

法院可能始終擁有酌情決定權，可以剝奪勝訴原告人的判決前利息，如果後者接受和解方案後本可以取得相同或更佳的結果。然而，法院很少這樣做。

依照新的Order 22，法院獲得授權（除非這樣做有失公正）可以剝奪該等原告人的判決前利息。而且，假如是被告人拒絕接受某個金額的提議，但最終被裁定對至少該金額負有法律責任，法院現今可以命令被告人以提高後的利率支付判決前利息。

關於訟費的更高利息亦作出了規定。

可以責令支付的提高後利率最高不得超過判定利率的10%，從原告人的提議本可以被接受的最後日期開始起計算，除非施行該等懲處有失公正。這樣做的意圖似乎在於，提高後的利率最高不得超過判定利率 10個百分點。這意味著，在目前判定利率約為8%的情況下，法院可以責令支付最高18%的利率。然而，新的Order 22中相關規則對此缺乏十分明確的措辭。規則並未提到百分點，因而也可以說提高利率的權力僅限於8%判定利率的10%，這樣上限便是8.8%。然而，正如上文提到，這似乎並非本意。

結論

新的Orders 13A和22是民事司法制度改革的關鍵組成部分。長期以來，該法律的政策是鼓勵和解。這不僅是因為藉法院體系解決爭議的成本高昂，並且通過友好協商達成和解總是優於通過法院判決來解決，而後者可能導致必須行使強制權力。在香港這樣一個特別注重社會和諧的地方，通過協商達成和解顯然更為重要。

新的程序應當會受到歡迎。

WS Clarke
Solicitor
Honorary Lecturer
Department of Professional Legal Education
The University of Hong Kong
wsclarke@netvigator.com

作者謹此就路偉律師事務所的Allan Leung提供本文中複製的流程圖表示謝意。