Hong Kong Fraud Disclosure Order Application: Court Does Not Support Excessive Solicitors’ Fees Charged by Bank Solicitors
Disclosure Orders in Hong Kong Fraud Recovery Litigation
An important aspect of Hong Kong fraud recovery actions is the application to the court for a disclosure order ordering the bank to provide information such as the identity, address and bank details of the holder of the bank account from which the money was received, so as to facilitate the initiation of legal proceedings against the payee and the tracing of the fraudulently obtained money back to the bank through the bank details. This kind of disclosure order is initiated under the Evidence Ordinance or according to the principles under the common law, and banks are generally neutral and do not object to it. The problem is that in recent years, banks have tended to seek legal representation and some of them charge exorbitant legal fees, which are ultimately borne by the applicant for a disclosure order, i.e. the victim, thus adding to the burden of the victim of the fraud and making it unaffordable.
Court does not uphold excessive legal fees charged by bank solicitors
In a case we represented [2025] HKCFI 2461, the court ruled after a hearing that the court did not uphold a bank’s decision to allow its solicitors to charge excessive legal fees in a fraud disclosure order application, and that if the bank’s solicitors charged excessive legal fees, the bank should bear the unreasonably high portion of the fees itself.
Background to applications for disclosure orders in Hong Kong fraud cases
In [2025] HKCFI 2461, we represented a victim of fraud to recover fraudulent assets and applied to the court in the normal way for a disclosure order requiring the bank to provide the personal information of the holder of the receiving account and the bank’s current flow for the purpose of litigation. The bank appointed a law firm to respond to the lawsuit and provided the requested information, however, our client was required to pay the bank’s solicitor’s fees amounting to over $65,000 in total. As a matter of legal principle, the disclosure application was made for the purpose of our client’s litigation, and the bank was not at fault; therefore, as a matter of legal principle, we did need to bear the bank’s costs. However, we felt that the amount of $65,000 was too much, and in fact, the bank’s lawyers only had a simple job to do, and we thought that a reasonable amount would be around $13,000 to $4,000. As a result, our firm represented our client in a court battle with the bank’s attorney. After the court hearing, the court ruled that we were only required to pay the other party HK$15,000, which was basically close to the amount we had originally claimed.
The significance of the judgment
I believe that this judgment may be widely used in other similar cases in the future. In fraud recovery cases, banks only assist in providing information about the recipients of the fraudulent payments. However, in recent years, banks have tended to seek legal representation, and some of the banks’ legal representatives charge exorbitant solicitor’s fees, which makes it even more difficult for the victims of fraud to cope with the situation. In this case, the learned Mr. Justice Ouyang extended the legal principles of past jurisprudence to show that banks should bear the burden of excessive fees charged by their own solicitors if they allow them to go unchecked.
We represented the plaintiff, the victim of fraud, in this case, and Mr. Poon of our firm appeared in this case.
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