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Say you’re sorry – The Hong Kong Apology Bill

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The Apology Bill

On 27 January 2017, the Hong Kong Government gazetted the Apology Bill (the “Bill”). The Bill was introduced to the Legislative Council on 8 February 2017 for first reading. If passed, the Bill will make Hong Kong the first jurisdiction in Asia to have apology legislation enacted, which will further Hong Kong’s status as a centre for dispute resolution.

With the object being to prevent the escalation of disputes and facilitate amicable resolution, the Bill was formulated by the Steering Committee on Mediation (the “Steering Committee”) and drawn from overseas experience, including the United States, Australia, Canada, and the United Kingdom.

Apology inadmissible in civil proceedings

At present, apologies may be admitted in evidence in civil proceedings to establish legal liability where they contain an express or implied admission of the person’s fault or liability. This will be changed if the Bill is passed: evidence of a person’s apology will generally be inadmissible to determine fault, liability or other issue to the prejudice of the apology maker.

Importantly, an “apology” under the Bill will cover both an expression that is an admission of fault or liability as well as a statement of fact in connection of the matter. This is a distinguishing feature of the Bill: apology legislations in other jurisdictions do not usually protect statements of fact linked to an apology. The Steering Committee expressed the view that the protection of statement of facts in an apology would encourage a fuller and more meaningful apology, so as to enable parties to understand the root cause or underlying circumstances of the incident.

The Court has discretion to admit a statement of fact in an apology

The Bill, however, confers discretion on the court, tribunal or other decision maker seized with the dispute to admit a statement of fact contained in an apology as evidence where it is just and equitable to do so.

Though it remains to be seen how this discretion will be exercised, the Steering Committee takes the view that it should only be invoked in limited circumstances where, for instance, the Plaintiff’s right to a fair hearing might be infringed or there is no other evidence available for determining an issue.

Administrative and criminal proceedings not covered

The Bill will apply to civil proceedings including arbitral, regulatory and disciplinary proceedings, including proceedings commenced by the Securities and Futures Commission and the Hong Kong Monetary Authority.

Carve-outs to the Bill’s application are made for proceedings conducted under the Commissions of Inquiry Ordinance (Cap. 86), Control of Obscene and Indecent Articles Ordinance (Cap. 390) and Coroners Ordinance (Cap. 504). These proceedings often involve administrative function akin to fact-finding exercise rather than determining liability.

Importantly, the Bill will also not apply to criminal proceedings. In criminal proceedings, preventing escalation of disputes (as the object of the Bill) is peripheral to the public interest in upholding justice by punishing wrongdoers and deterring the commission of crime. This exception is consistent with apology legislations enacted in other countries such as Australia and United States.

Impact on limitation period and insurance contracts

Section 23 of the Limitation Ordinance (Cap. 347) provides that the limitation period for debt claim and claim for the recovery of land may be extended by an “acknowledgement” of the title or claim. The Bill will preclude an apology from constituting an acknowledgement for the purpose of section 23. Thus, making an apology will not extend the normal limitation period, which under Hong Kong law is normally six years for claims in contract or tort.

Traditionally, the making of an apology could render insurance coverage void because of clauses in the policy that prohibit the admission of fault or liability. The Bill will remove this disincentive by providing that an apology does not affect any insurance cover, compensation or other form of benefit arising under a contract of insurance or indemnity.

All the sorries in the world

If passed, the Bill will align Hong Kong with other common law jurisdictions, including Australia and the US, which have introduced apology laws. The Hong Kong Bill, in providing that an apology does not extend limitation periods or void insurance coverage, goes further than most other apology laws, with the exception of Canada, where several provinces and territories have adopted a similar approach.

Notably, the Bill will take Hong Kong one step ahead of English law. Article 2 of the Compensation Act 2006 (United Kingdom) provides that an apology does not amount to an admission of negligence or breach of statutory duty, but does not address limitation, insurance coverage or apologies that are given in relation to other causes of action apart from negligence and breach of statutory duty.

If the Bill is enacted, it is likely that the Hong Kong Courts will look to the jurisprudence of other common law jurisdictions to resolve issues of interpretation, particularly as to what constitutes an apology, and the scope of inadmissibility as evidence.

I’m sorry you feel that way

Scholars have argued that apologies take very different functions and meanings in different cultures, which in turn could impact on their effectiveness in settling disputes. Japan is often cited as an example of a collective agency culture, where apologies are more readily given even where someone is not to blame. Cross-cultural psychologists have suggested that in China, a pragmatic, consequence-oriented view of responsibility dominates, whereas in the US more focus is placed on culpability. Hong Kong’s ‘One Country Two Systems’ being the ultimate ‘East meets West’ jurisdiction, the introduction of the Bill will no doubt provide fertile and fascinating ground for scholars.

Do apologies actually matter? While some research suggests that apologies can facilitate legal settlement and make the aggrieved party less likely to initiate legal proceedings, apology laws could decrease the intrinsic value of apologies, and the sense of closure and accountability which they would otherwise provide. At least one study in the United States showed that in the medical negligence context, apology laws were linked to an increased probability of facing a lawsuit, and increased average payment made to resolve the claim. In other words, the introduction of the Bill could, perversely, lead to an increase in disputes and higher settlements. We’re sorry for bearing the bad news.