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Cyber Resilience Assessment Framework Introduced for Insurers in Hong Kong

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Following consultation with the insurance industry, on 11 December 2024 the Insurance Authority published a revised Guideline on Cybersecurity (Revised GL20). It takes effect on 1 January, 2025, introducing a Cyber Resilience Assessment Framework (CRAF or Framework) for insurers.

What Insurers Need to Know

The Framework applies (with limited exceptions) to the authorised insurers in relation to the business they carry on in or from Hong Kong. The provisions do not apply to captive, marine mutual, and special purpose insurers, Lloyd’s and insurers that have ceased underwriting or accepting business and are in run-off. All other provisions of the revised GL20 apply to all authorised insurers except for captive and marine mutual insurers.

The Framework requires insurers to evaluate inherent risk and the maturity of their controls against the prescribed control principles. The Framework’s three step approach is:

– Step One: the insurer conducts an inherent risk assessment.

– Step Two: the insurer conducts a cybersecurity maturity assessment.

– Step Three: the insurer makes a submission to the Insurance Authority on assessment results and proposed remedial measures.

What Insurers Need to Do, Generally

Important aspects of GL 20 require insurers to demonstrate a robust cybersecurity strategy and framework.  The requirements include:

1. Insurer’s board of directors to endorse the cybersecurity strategy and framework (CSF). In doing so it should ensure:

a. There are clearly defined roles and responsibilities including reporting lines and escalation procedures.

b. It should cultivate a strong level of awareness of and commitment to cybersecurity.

c. Risk appetite and tolerances are well defined.

d. This requires a complete risk assessment to identify risks and assess mitigating measures.It has oversight of CSF design and its implementation and effectiveness.

e. Where a designated management team of appropriately qualified individuals are tasked to assist the board, both board and team need to ensure the CSF is updated continuously.

2. Insurers are to include objectives and staff and system user competencies in the CSF, implement continuous monitoring and review the CSF periodically – annually, or more frequently if a material event occurs such as an incident or new system deployment.

3. Insurers are to have a well-developed cybersecurity incident response plan.

What insurers need to do regarding the Framework

Important actions to be implemented by insurers under CRAF include:

1. Conduct assessments:

a. An inherent risk assessment is to be conducted in accordance with the Inherent Risk Assessment Matrix. This is designed to identify the insurer’s rating on a three-tiered system:

i. High – extensive adoption of technologies over numerous delivery channels

ii. Medium – adoption of some complex new technologies

iii. Low or not applicable if appropriate – few emerging technologies are adopted

        b. A cybersecurity maturity assessment is to be conducted in accordance with the Cybersecurity Maturity Assessment Matrix – having regard to Governance, Identification, Protection, Detection, Response and Recovery, Situational Awareness and Third-Party Risk Management. If an insurer wishes to adopt an alternative cybersecurity assessment framework, for example, the framework adopted by the organisation elsewhere or a framework previously used, it must be comparable to the Framework and meet all required conditions.

        2. Make appointments:

        a. an Assessor is to be appointed, with appropriate skills and qualifications (having regard to the inherent risk rating). When assessing cybersecurity controls, the Assessor should determine the sampling size and approach, taking a risk-based approach. Samples may be limited to the preceding 6 months if the assessment is being conducted for the first time. Otherwise, a 12 months period should be used.

        b. If necessary, a Validator with the prescribed qualifications, is to be appointed.

        3. Make submissions to the Insurance Authority:

        a. For insurers with a high inherent risk rating the results of their assessments are to be submitted within 12 months from the effective date of CRAF.

        b. For insurers with a low or medium inherent risk rating the results of their assessments are to be submitted within 18 months from the effective date of CRAF.

        Thereafter, submissions are to be made at least every three years or more frequently (annually) or upon a major change to business or technologies.

        4. Ensure the insurer’s Chief Executive or a senior officer (i.e. a key persons in control function) and the Assessor and/or Validator responsible for conducting Assessment review and approve the assessment.

        Conclusion:

        The insurance industry faces significant cyber risk as a first party issue, in its supply chain and in its insurance portfolios. GL20 is a valuable tool for insurers to measure, implement and enhance their cyber governance, systems, controls and resilience on a continuous basis.

        Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

        From Claims to Chains: The High Price of Overstating Your Losses in a Statement of Damages

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        Introduction

        In personal injury claims, the plaintiff is required to sign a statement of truth to verify the truth of the facts stated in a Statement of Damages. The potential consequences of overstating one’s losses are highlighted in the case of Zurich Insurance Company Limited v Chan Man Fu [2024] HKDC 1615.

        Background

        This case revolves around a committal application by an insurance company against a plaintiff in the underlying personal injury proceedings.

        The respondent, Chan Man Fu, was involved in a traffic accident on 12 November 2018. Following the accident, Chan filed a personal injury claim against another driver whose motor insurer was the applicant in this case. At the time of the accident, Chan was represented by T.S. Tong & Co., with Tam as the handling solicitor, appointed by the Legal Aid Department.

        Under the Statement of Damages dated 13 October 2022, Chan claimed a monthly income of HK$45,000 which includes his alleged earnings from two jobs: a freelance job at a cemetery and a part-time taxi driver job. The total amount of pre-judgment and post-judgment loss of earnings claimed by Chan come up to more than HK$5 million. The Statement of Damages included a statement of truth translated by Tam and signed by the respondent before Tam, confirming the accuracy and truthfulness of the information provided.

        Key Evidence Suggested Chan Had No Income

        Contrary to Chan’s declared income in the Statement of Damages, various documents disclosed by Chan during the personal injury proceedings revealed that Chan had no income at all during the relevant period:-

        1. An Annual Statement of Earnings and Property Acquired dated 3 November 2018 (which was only nine days prior to the traffic accident) as signed by Chan, showed Chan had declared no income, listing only Comprehensive Social Security Assistance (CSSA) of HK$8,678;
        2. In the Annual Statement of Earnings and Property Acquired filed for the period of 3 October 2018 to 3 October 2019, Chan also declared no income other than CSSA of HK$8,928;
        3. In an application for the Traffic Accident Victims Assistance Scheme submitted by Chan himself in April 2019, Chan described himself as a self-employed taxi driver who was only familiarizing himself with the roads and had not taken any order or earned any income.

        In face of the overwhelming evidence that Chan was lying about his income, Chan attempted to shift the blame on his solicitors by alleging that there was misunderstanding between him and his solicitors in that the income stated in the Statement of Damages was only referring to his potential income and not his actual income at the time of the accident. Chan also alleged that he was asked to sign the statement of truth (which Chan alleged Tam for claiming it was in draft form) first before the solicitors had explained the importance of the statement of truth and consequences of giving false statement (which Chan admitted was at least done after the signed the document). Chan also said that when he told Tam some statements in the Statement of Damages were incorrect, Tam allegedly said, “it does not matter, we can revise it [the Statement of Damages] later.”

        The court finds Chan’s explanation implausible, as Chan did not insist on correcting the Statement of Damages even after being told about the serious consequences that can following the making of false statement. This remained the case long after the Statement of Damages is filed. Chan also failed to summon Tam to give evidence at the hearing nor adduce any evidence from Tam in support of his account of events.

        Judgment

        After considering the evidence above, the District Court Judge found Chan guilty of making false statements in his Statement of Damages. The court stressed that the evidence overwhelmingly demonstrated that Chan had knowingly or recklessly made false declarations about his income. The judge highlighted that Chan’s actions were a blatant attempt to mislead the court and secure financial benefits fraudulently.

        Chan was eventually sentenced to 21 days of imprisonment for contempt of court. Additionally, he was ordered to pay the costs of the applicant on an indemnity basis, with counsel certificate.

        Key Takeaways

        This case highlights two key reminders in respect of signing of statements of truth in legal documents:

        1. Honesty is Paramount: Claimants must provide truthful information in legal declarations. False statements can lead to severe legal consequences, including imprisonment, penalties, and adverse legal costs orders.
        2. Verification of Claims: Before signing statements of truth, claimants should ensure that all claims and damages sought are accurate and supported by concrete evidence. Even if they are legally represented, claimants are ultimately responsible for the information they provide. They should fully understand the contents and implications of any legal documents before signing.

        The case of Zurich Insurance Company Limited v Chan Man Fu underscores the critical importance of honesty and evidence in personal injury claims. Claimants must be diligent in ensuring the accuracy of their statements and be prepared to substantiate their claims with verifiable evidence. This case serves as a stark warning that the legal consequences of making false statements can be dire and far-reaching, affecting not the claimant’s chance of success in a personal injury action but also his potential exposure to imprisonment and monetary.

        Should you have any questions, please feel free to contact us.

        Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

        調和互相矛盾的仲裁條款：嘗試令情況變得更好

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        (這篇文章發表在 2024年十一月香港律師會會刊)

        隨著互相關聯合約的形成，國 際 商 業 及 金 融 交 易 日 趨 複 雜。遺憾地，合約方往往甚少重視及甚少考慮各種互相關聯合約中爭議解決條款的設計，導致不一致的條款。盡可能調和這些不一致的爭議解決條款，除了避免各別及衍生訴訟與仲裁而引起的額外成本、不便和延誤，更重要的是避免引致互相衝突的裁決而出現不公。

        在 AAA、 BBB 及 CCC 對 DDD [2024] HKCFI 513 案中，香港原訟法庭嘗試運 用 AmTrust Europe Ltd 對 Trust Risk Group SpA [2015] EWCA 437 案主張的「重心測試」來調和這些不一致的仲裁條款。不幸地， AAA 案中不一致的仲裁條款無法調和，留下了出現矛盾判決的風險。

        本文旨在審視「重心測試」。本文主張「重心測試」不適用於調和互相衝突的仲裁條款。當一系列合約中出現互相關聯的議題，本文將借鑒 Fiona Trust & Holding Corporation 對 Privalov [2007] UKHL 40 案提出的一站式處理推定，主張一種明確以合約方為基礎的方法來決定這些議題的單一訴訟地。本文亦將進一步討論當一系列合約中存在互相衝突但又具有同等效力和作用的仲裁條款時，就著重疊的議題而言，它們應因無法給予具約束力的裁決而被視為無效的仲裁條款。

        AAA、 BBB、 CCC 對 DDD [2024]HKCFI 513

        在 AAA 案中，貸款人、借款人和擔保人簽訂了一份貸款協議，受香港國際仲裁中心管理的仲裁管轄，仲裁庭需由三名仲裁員組成。作為貸款的保證，借款人向貸款人簽發了一份由借款人及擔保人簽署的承付票。該承付票亦受香港國際仲裁中心管理的仲裁管轄，但該仲裁協議沒有指明仲裁員人數。該貸款協議其後經一份修訂協議修訂，該修訂協議包含該貸款協議的仲裁條款。

        正如經常發生的情況一樣，借款人未能償還貸款，因此貸款人根據該貸款協議對借款人和擔保人展開仲裁。貸款人在仲裁中要求包含針對該承付票的濟助，這引發了按照該貸款協議成立的仲裁庭是否對該承付票有管轄權的爭論。

        法庭首先注意到，該貸款協議的仲裁條款與該承付票的仲裁條款存在重大差異（例如（沒有）明確指明仲裁員的數目），而仲裁庭是根據該貸款協議（而非該承付票）的仲裁條款組成的。儘管法庭承認 Fiona Trust 案的主張理想，一站式解決合約方相關爭議，但法庭認為此理想無法在「一般範例」中實踐，因多份相關合約內互相矛盾的爭議解決條款反映合約方無意一站式解決爭議。

        法庭採納並應用了 AmTrust 案的「重心測試」，考慮了哪項仲裁條款與該承付票的爭議有「更密切的關聯」。相對自然地，法庭最後認為，仲裁庭對於根據該承付票提出的索賠沒有管轄權。法庭提供了進一步指引，盡量降低因不一致的仲裁條款而出現矛盾結果的風險，包括當存在互相矛盾的仲裁條款時，總是應先嘗試委任相同的仲裁庭或合併所有相關的仲裁案。


        「重心測試」不適用於互相衝突的仲裁條款

        法庭試圖挽救一場災難的做法當然令人欽佩。合約方應為其明知且自願陷入的亂局負起最終責任，畢竟任何的挽救都不是對災難的完美救濟。同樣地，「重心測試」並非十全十美。

        首先而顯而易見地，法庭公允地接受「重心測試」可能是一個模糊的概念，而決定爭議議題的「重心」或與爭議解決條款的「密切程度」可能很晦澀，尤其因為多份合約互相關連及爭議議題互相交織。事實上，不同的法官和仲裁員可能給予不同因素不同比重，使整個決定程序很可能出現不確定性、不可預測性，並引起合約方之間不必要的爭議。

        其次，「重心測試」的諷刺之處在於雖然法庭承認有多項適用的仲裁條款，且有必要詮釋合約方的意圖以決定哪一項仲裁條款適用，但「密切關聯」測試與合約方的意圖沒有明顯關係。

        更重要的是，使用「重心測試」似乎不符合既定原則，即《聯合國國際貿易法委員會國際商事仲裁示範法》第 8 條不容許以不便訴訟地為由而不予提交仲裁 (Kaverit Steel and Crane Ltd 對 Kone Corp. (1992) 87 DLR (4th) 129)。「重心測試」中的「密切關聯」測試基本上類似「 不便訴訟地」測試。要使「重心測試」有意義，必須涉及「取代」或「廢除」一項原本有效且具約束力的仲裁條款（即使此舉的實際效果被淡化為單純優先於有關仲裁條款的考量），但根據《示範法》，這基本上是不容許的。

        多條司法管轄權條款或可有「先後順序」，故法庭程序可被擱置，但這原則不一定適用於仲裁條款。事實上，在 AmTrust 案中，當英國上訴法院設計「重心測試」時，曾考慮一份其後簽訂的框架協議中的仲裁條款是否涵蓋一份較早前簽訂的商業條款協議產生的爭議，而後者包含英國司法管轄權條款。同樣地，在X對 Y [2021] 2 HKC 68案中， AmTrust案提出的「重心測試」獲法庭應用於決定委託書中的仲裁條款是否涵蓋了包含新加坡司法管轄權條款的質押書下的爭議。在 H 對 G [2022] HKCFI 1327 案 中， AmTrust 案提出的「重心測試」適用於決定一份建築合約中的仲裁條款是否涵蓋了包含非專屬香港司法管轄權條款的擔保書下的爭議。「重心測試」的本意似乎並非用於處理互相矛盾的仲裁條款的情況，將「重心測試」如此延伸可能是不適合的。


        一項明確以合約方為基礎的方法

        在 AmTrust 案中，英國上訴法院認為， Fiona Trust 案中的一站式處理推定應用在互相矛盾的爭議解決條款時會有限制。正如 Rix J 在 Credit Suisse First Boston (Europe) Ltd 對 MLC (Bermuda) Ltd [1999] CLC 579, 第 590 頁所指出：「如果合約方使用不同協議處理總體關係的不同範疇，而這些不同的協議包含不同的司法管轄權條款，那麼應用 Fiona Trust 案的推定未免過於廣泛及一刀切，忽略了合約方的謹慎選擇。」然而，我等謹認為，撇除相關合約的重疊部分被假定由其中一合約方所選擇的仲裁條款來處理之外，如果合約方對仲裁條款的選擇一般都受到尊重，這兩個主張不一定是相互排斥的。問題是如何決定哪個仲裁條款管轄重疊的部分。

        本文謹提議以下述的明確測試，在多項仲裁條款互相矛盾的情況下，決定哪項仲裁條款適用：

        1. 由於合約方在多份相關合約中訂明各自的仲裁條款，起點應為尊重合約方對訴訟地的明示選擇，除非該些在互相關聯的合約之間存在重疊議題。

        2. 如果在互相關聯的合約之間存在重疊的議題，該些重疊議題應獲推定，由所有相關合約方最後訂立的仲裁條款（即最後一份共同意願）約束。

        為說明這點，請考慮以下例子。假設有以下三份互相關聯的合約：

        (a) 合約（仲裁條款） 1：合約方 A 和 B

        (b) 合約（仲裁條款） 2：合約方 A、B 和 C

        (c) 合約（仲裁條款） 3：合約方 B 和 C

        關於涉及三份合約之間的重疊議題，根據 Fiona Trust 案的一站式處理推定，仲裁條款 2 應被推定為令其他相異的仲裁條款無效。針對重疊的議題，仲裁條款 2（作為所有相關合約方最後訂立的仲裁條款）應包含一項被視為「理所當然」的隱含條款：仲裁條款1應被推定為已被取代（ Monde Petroleum SA 對 WesternZagros Ltd [2015] EWHC 67, [38]）；合約方 B 和 C 應被推定為不得簽訂仲裁條款 3，以產生與仲裁條款 2 互相矛盾的結果。

        使仲裁條款相互失效？

        儘管以合約方為基礎的方法客觀、確定且與 Fiona Trust 案的推定一致，這方法至少無法涵蓋以下三種情況：

        (i) 在多份相關合約中，沒有一項仲裁條款能涵蓋所有相關合約方。

        (ii) 有多於一項仲裁條款涵蓋所有相關合約方，但這些條款都是同時簽訂的。

        (iii) 合約方故意訂立互相矛盾的仲裁條款以得出矛盾的結果。

        不論原因為何，在這些情況下，有多項仲裁條款適用於多份相關合約中重疊的議題。道理上，這些眾多仲裁條款沒法提供任何有約束力的決定。畢竟，任何人都不可能被在同一事實基礎上得出的兩個完全相反的判決所「約束」。在此情況下，與其強加幻想的意圖於合約方身上，似乎較為公允的方法是將此等仲裁條款視為無效，基於它們無法產生可藉由法律程序強制執行的有約束力判決（ IS Prime Ltd 對 TF Global Markets (UK) Ltd & Ors. [2020] EWHC 3375 (Comm), [43] – [50]）。

        使仲裁條款相互失效可能看似是種激進的方法，不過，當事人總是可自由地協議出一個可行的爭議解決機制，以避免此方法。如果合約方堅持要有互相矛盾又不可行的仲裁條款，那不是很清楚為甚麼公共政策需要協助這些多重衍生訴訟，引致困難、額外成本和延誤。這些多重衍生訴訟最後會產生互相矛盾的結果，造成不公平，正正違背整個仲裁制度的目的，就是公平和快速地透過仲裁解決爭議，避免不必要的費用。


        總結

        多份相關合約中的互相矛盾爭議解決條款是帶有問題的。撇開分散的爭議解決程序會增加訟費和時間這問題，不能接受的是出現互相矛盾的裁決並造成不公的風險。當涉及互相矛盾的仲裁條款時，這問題變得更加嚴重，不僅因為使仲裁條款無效的情況有限，而且因為一旦執行互相矛盾的仲裁裁決，情況亦會變得極其混亂。當災難來臨時，沒有挽救措施是完美的。

        預防永遠勝於治療。本文謹希望參與複雜的多重合約交易的合約方深思熟慮，考慮如何一致且有效率地解決相關合約下的爭議。

        What You Need to Know before commencing Personal Injuries Action – Importance of Compliance with Pre-Action Protocol in Practice Direction 18.1

        by

        Introduction

        Before parties commence a personal injury proceedings in the Court, parties are required to adhere to, amongst others, the Pre-Action Protocol in Practice Direction 18.1 (“PD 18.1”). The importance of abiding to the Pre-Action Protocol is highlighted in the decision of Mak Shiu Cheung v Luk Man Tai [2023] HKDC 1801.

        Facts of the case

        This case concerns a traffic accident case, the facts of which are straightforward: the vehicle that the Plaintiff drove on was hit by the Defendant’s vehicle and the Plaintiff sustained personal injuries as a result.  

        On 2 May 2023, the Plaintiff’s solicitors issued a Letter of Claim as per PD 18.1 to the Defendant (“Letter of Claim”). However, the Letter of Claim (1) did not disclose the fact that there has been an Employees’ Compensation Action already commenced on behalf of the Plaintiff in respect of the accident; and (2) did not disclose documents relating to the issue of quantum such as medical reports and records as well as the Plaintiff’s earning records such as payrolls and tax returns.

        The Defendant replied to the Letter of Claim on 11 May 2023, which was within one month after the Letter of Claim was sent to the Defendant. In the reply letter, the Defendant requested for documents and information such as the Plaintiff’s payroll records and all documents related to the Employees’ Compensation Action (“Reply Letter”).

        The Plaintiff’s Solicitors did not respond to the Reply Letter and instead commenced the proceedings by issuing the Writ, filing and serving the Statement of Claim and Statement of Damages around 3.5 months later on 22 August 2023.

        The Defendant took out a Summons on 7 September 2023 (the “Summons”), asking for:-

        • Stay of proceedings of 3 months from the date of order (“Issue 1”);
        • Plaintiff to make discovery of documents to the Defendant as required under paragraph 66 of PD 18.1 and the Reply Letter and comply with PD 18.1 as to constructive communication and engagement of a single joint expert (“Issue 2”);
        • Plaintiff to be disallowed of the costs of preparation of the Statement of Claim and Statement of Damages (“Issue 3”); and
        • Costs of the present application be to the Defendant (“Issue 4”).

        Ruling of the Court

        There is no dispute as to Issue 1 and Issue 3 as the Plaintiff conceded and agreed to waive the costs for the preparation of the Statement of Claim and Statement of Damages and to stay the proceedings for a period of 3 months.

        The real dispute is on Issue 2 and Issue 4.

        Regarding Issue 2, the Plaintiff argued that it was not necessary to take out the Summons and that the Plaintiff had to commence a legal proceedings because, amongst others, the Defendant failed to give a constructive reply in their Reply Letter as to whether the insurer of the Defendant will admit liability and whether there will be third party which may be at fault and that the Plaintiff would be time-barred if the legal proceedings was not commenced.

        The Court found for the Defendant, stating that:-

        • The Plaintiff failed to contain all the basic information and documents specified in PD 18.1 in his Letter of Claim, particularly there is a lack of particulars regarding the Employees’ Compensation Action and failure to disclose the relevant quantum documents;
        • The Plaintiff’s solicitors is the solicitors on record for both the Personal Injuries Action and Employees’ Compensation Action and therefore this is not a case where the Plaintiff does not have knowledge on the Employees’ Compensation Action;
        • This is not a case where the Plaintiff was unaware of the existence of quantum documents such as medical reports and records and income proof as these documents were filed in the list of documents in the Employees’ Compensation Action prior to the issuance of the Letter of Claim of the Personal Injuries Action;
        • This is also not a case where such quantum documents can be obtained by the Defendant by other means;
        • Admission of liability is not a prerequisite for an initial reply to be amounted to a “constructive reply”;
        • The current proceedings most likely could have been avoided if the Plaintiff had complied with the Pre-Action Protocol; and
        • Even so, the Plaintiff failed to comply with PD 18.1 as it had not served the Writ and Statement of Claim along with other documents such as statement of facts and finding of guilt, documents on post-accident earnings, pre-accident earnings, statement by the Plaintiff and other eye-witnesses when they were available and were not served under the Pre-Action Protocol.

        The Court repeatedly emphasized that the importance of strict compliance to the Pre-Action Protocol in PD 18.1. The rationale behind the Pre-Action Protocol in PD 18.1 is to encourage early settlement of the matter in order to save time and costs for parties and the Court. The burden lies with the Plaintiff to include and disclose the basic information and documents specified in Appendix A and Schedule A of PD 18.1. The Court highlighted that any half-hearted and half-baked attempt to purportedly comply with the Pre-Action Protocol would not be tolerated by the Court and a simple “oversight” will not generally be accepted. Any unnecessary costs incurred or wasted would result in adverse cost consequences and even a wasted costs order (i.e. an adverse costs order made to penalize a party’s improper conduct).

        As to costs (Issue 4), the Court suggested that the Defendant had good grounds to ask for a wasted costs order against the Plaintiff or Plaintiff’s solicitors and costs on an indemnity basis. However, in view of Defendant’s concession, the Court only ordered for a disallowance of costs on the Plaintiff for preparation of the Statement of Claim and Statement of Damages and the costs of and occasioned by the application be to the Defendant on a party-and-party basis.

        Key Takeaways

        In a personal injury claim, the plaintiff is required to adhere and ensure compliance to the Pre-Action Protocol in PD 18.1 to provide the requested documents and information to the defendant to facilitate the defendant’s investigation to the matter and for achieving early settlement between the parties. Failure to comply with the Pre-Action Protocol would lead to costs consequence and even a wasted costs order.

        Should you have any questions, please feel free to contact us.

        Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

        Assisted Reproductive Technology Laws in Hong Kong

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        Due to advances in reproductive medicine, women in their 40s and beyond are now able to give birth to healthy babies. Although controversial, it was reported in 2005 that a 66 year old Romanian woman had given birth to a healthy baby girl through in-vitro fertilisation (IVF).

        Assisted reproductive technologies have significantly improved the ability for older women to become pregnant and successfully deliver live babies. The US Centers for Disease Control and Prevention defines assisted reproductive technology as “all fertility treatments in which either eggs or embryos are handled”. This year, the world’s first “test tube” baby born via IVF, Louise Brown, celebrates her 46th birthday. In Hong Kong, the first reported successful birth via IVF was reported in 1986.

        Egg freezing

        It has been estimated that females are born with a finite, lifetime supply of approximately one million oocytes (immature eggs) which decrease in quality and quantity beyond the mid 20s, when peak fertility has been observed. Freezing high quality eggs during the prime childbearing years for later use is now considered practical when one is not ready to become pregnant.

        Egg freezing has become more popular in recent years, particularly in the pandemic and post pandemic era. TIME Magazine surveyed a fertility practice with over 50 clinics in the US and it reported a 50% increase in the number of women freezing their eggs between 2019 and 2021.

        In Hong Kong, there are no age or marital status restrictions on women who wish to freeze their eggs. Frozen oocytes (i.e., eggs) can be stored for up to 10 years, and since women are advised to freeze their eggs before the age of 35 due to declining egg quality, this storage limit tries to cap potential pregnancies at age 45.

        The public healthcare system offers women suffering from cancer under the age of 35 years with egg freezing services if they have not had chemo or radiotherapy, demonstrate adequate follicle count upon pelvic scanning and have a greater than 50% predicted survival rate post cancer treatment. The costs of egg storage still need to be borne by the patient.

        In most other instances, the total costs of egg freezing must be funded by patients, either out-of-pocket, through private insurance, or a combination of both.

        IVF

        When a patient is ready for pregnancy, her oocytes may be harvested or thawed and then used in IVF, described by the Mayo Clinic as a process whereby “…eggs are collected… and fertilised by sperm in a lab. Then a procedure is done to place one or more of the fertilised eggs, called embryos, in a uterus, which is where babies develop.”

        Unfortunately, a woman must be legally married in a monogamous relationship to have her eggs fertilised using IVF pursuant to the Hong Kong Code of Practice on Reproductive Technology & Embryo Research (the Code). Since same sex marriage is not yet legally recognised in Hong Kong, couples in same sex marriages and single women are not yet able to access post egg freezing services leading to live pregnancies. Appendix IV of the Code does allow for the transfer of eggs outside of Hong Kong to an IVF centre licensed or established according to the laws where the centre is situated. Section 4 of the Human Reproductive Technology Ordinance established the Council on Human Reproductive Technology, which oversees the 2002 Code.

        Three public hospitals are able to provide public IVF services to a couple where the wife is a Hong Kong permanent resident under the age of 40 years with no biological children. The waiting period for the initial IVF appointment could be up to three years and patients still need to pay out-of-pocket for medication, certain procedures and embryo storage (if applicable).

        Surrogacy

        Through IVF, a woman can serve as a surrogate in Hong Kong, carrying an embryo through to childbirth, but only for a couple in a legally recognised marriage, again ruling out same sex couples. Commercial surrogacy (i.e., receiving monetary payment) is prohibited pursuant to section 17 of the Human Reproductive Technology Ordinance and therefore only altruistic surrogacy is allowed. Furthermore, section 18 of the Human Reproductive Technology Ordinance goes on to state that surrogacy agreements are not enforceable so altruistic arrangements may ultimately be rescinded by either party to a surrogacy agreement.

        Pursuant to Chapter XII of the Code, a multi disciplinary team must provide a commissioning couple and the surrogate mother (and her husband if applicable) with counseling so the parties are able to understand the ethical, legal, medical, moral and social implications of the surrogacy arrangement. The counseling team must consist of two registered medical practitioners, a legal professional, a social worker and/or a clinical psychologist. Recommendations on the surrogacy arrangement including the reasons and details for the surrogacy must be recorded by the multi disciplinary team.

        Hong Kong legal framework for assisted reproductive technology

        Hong Kong’s legal framework illustrates the complex intersection between restrictive marriage laws and reproductive rights in Hong Kong.

        By 2023, Hong Kong’s fertility rate had plummeted to 0.75, one of the lowest in the world. The reasons have been attributed to, amongst other factors, health conditions, a society inhospitable to child rearing, desire to have freedom, fear of financial burdens and responsibilities, career ambitions, lack of childcare options, short parental leaves, an overly competitive schooling system and/or lack of a suitable co-parent.

        It may be time to review and update the laws in relation to assisted reproductive technology in order to help support higher fertility rates in the HKSAR, enabling more women to successfully give birth.

        Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

        Oldham, Li & Nie Named Hong Kong Law Firm of the Year at Asialaw Awards 2024 

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        Oldham, Li & Nie has been honoured with the prestigious title of Hong Kong SAR Law Firm of the Year 2024, the top jurisdictional accolade, at the Asialaw Awards 2024. The awards ceremony took place on 26 September 2024, at JW Marriott Hotel in Kuala Lumpur.  

        In addition, our Partner and the head of Private Client and Tax departments, Anna Chan, has been awarded the Client Choice Award and named Hong Kong SAR Lawyer of the Year, further underscoring the excellence of our Private Client and Tax teams. 

        Asialaw Awards Winner 2024

        About Asialaw awards 

        Asialaw, one of the leading legal directories, not only provides comprehensive legal rankings, but also celebrates outstanding achievements through its annual awards, recognising the best law firms, individuals and deals across Asia. 

        For 2024, Asialaw honoured legal excellence across 20 jurisdictions in Asia, celebrating work in 28 practice areas and industry sectors during the 2023-2024 eligibility period. The selection process is based on rigorous in-house research and feedback from clients and legal industry experts. 

        For more information on the Asialaw Awards 2024, including the full shortlist and list of winners, please visit the Asialaw website.