Civil Justice Reform - Pleadings and Statements of Truth (November 2008)

This legal update outlines the reforms in relation to pleadings and the introduction of Statements of Truth.

Pleadings
The aim of the reforms in respect of pleadings is to remedy three main defects, namely:

i. inaccurate pleadings;
ii. pleadings giving too little detail; and
iii. pleadings giving too much detail.

A properly drafted pleading reflects a party's true case and is more likely to lead to settlement at an early stage. For those cases which proceed, properly drafted pleadings will enable the real issues to be identified and appropriate case management directions made.

What are the changes in relation to pleadings?

Judicial Scrutiny of Pleadings
A party's pleading must contain the necessary particulars of the claim, defence or other matters pleaded. If it does not, the other party can apply for an order for further and better particulars of the pleading. A new court rule will give the court power to order a party to serve such particulars even without any application having been made by the other party.

Under existing court rules, a party may, in certain circumstances, apply for an order to strike out the other party's pleading, for example, where it discloses no reasonable cause of action or defence (as the case may be).A new court rule will empower the court to strike out a party's pleading even where the other party has not applied for such.

The new court rules will also give the court power to amend a pleading of its own motion, where it considers such clarification necessary for either disposing fairly of the cause or matter or saving costs.

Orders for Further and Better Particulars only where necessary
As current day procedures provide for pre-trial exchange of witness statements and expert reports detailing a party's case, there is thought to be less justification for applications for further and better particulars. Therefore, under the new rules, the court will only order further and better particulars of a pleading when it is necessary either for disposing fairly of the cause or matter or for saving costs i.e. when there is a genuine need for clarification.

Amendments to pleadings only where necessary
To discourage carelessly drafted pleadings, a new court rule will make it more difficult to amend pleadings. The court will not allow amendment, unless it is necessary either for disposing fairly of the cause or matter or for saving costs.

Defences
Defences commonly consist of bare denials and non-admissions, giving the plaintiff very limited information about the true nature of the defendant's case.

Under the new court rules, bare denials in a defence will not be permitted. A party who denies any allegation in the statement of claim or counterclaim will have to state (a) the reasons for the denial; and (b) any version of events that he wishes to put forward. As substantive defences will have to be pleaded, the time for filing and serving a defence, defence to counterclaim and reply will be increased from the current 14 days to 28 days.

Pleadings inconsistent alternatives
At present, a party is permitted to plead alternative and inconsistent facts in his pleadings where he has incomplete information which points to alternative sets of facts. To exclude dishonest or speculative claims, the new court rules will only permit a party to plead inconsistent alternative facts where he has reasonable grounds for doing so.

Statements of Truth
Under the new court rules, all pleadings, witness statements and expert reports will have to be verified by a statement of truth. This is a statement verifying that the contents of the document are believed to be true.

In respect of pleadings, the party putting forward the pleading (or his next friend or guardian ad litem, where applicable) will have to sign the statement of truth. In the case of witness statements and expert reports, the maker of the statement (i.e. the witness or expert) will have to sign the statement of truth. The form of a statement of truth verifying a pleading is:

"I believe that the facts stated in this [name pleading being verified] are true."

The form of a statement of truth verifying a witness statement or expert report is:

"I believe that the facts stated in this [name of document being verified] are true and (if applicable) the opinion expressed in it is honestly held."

Although in respect of pleadings, the court rules will allow a party's legal representative to sign a statement of truth on his behalf, it is unlikely in practice that legal representatives will be willing to do so. If a party is other than an individual, it will therefore be necessary for that party to identify the appropriate person within its organisation to sign the statement of truth on its behalf.

The new court rules specify who may sign a statement of truth, as follows:

An insurer or the Motors Insurers' Bureau of Hong Kong may sign a statement of truth on a party's behalf when it has a financial interest in the outcome of the proceedings. If there is more than one insurer conducting proceedings on behalf of the plaintiff or defendant, the lead insurer may sign, unless the court states otherwise.

The court may strike out a pleading which is not verified by a statement of truth. If a witness statement or expert report is not verified by a statement of truth, it will be inadmissible in evidence, unless the court orders otherwise.

The potential consequences of signing a statement of truth without an honest belief that the contents of the document in question are true are serious, namely contempt proceedings which may result in a fine and/or imprisonment.

Likely effect of the changes

1. Statements of Truth are likely to deter false or speculative cases. They will also make it much more difficult to amend pleadings because any application to amend will call into question the signing of the statement of truth in respect of the original pleading.

2. The new rules empowering the court to order service of particulars and strike out pleadings of its own motion and allowing amendment of pleadings only when really necessary are likely to lead to more carefully and precisely drafted pleadings.

3. The abolition of bare denials in defences and stricter provisions in respect of pleading inconsistent alternatives will prevent cagey pleadings and promote more openness, which should lead to earlier settlements.

4. Practical problems may arise in relation to insurers signing statements of truth because they have no personal knowledge of the facts underlying the claim. This can perhaps be remedied by inserting an appropriate clause in insurance policies. The Chief Justice's Working Party on Civil Justice Reform has suggested that agreement might be secured by the insurer from the insured that the incident report form is submitted on the basis that the facts stated in it may be used to draft the pleadings, that he believes the facts to be true and authorizes the insurer to sign a statement of truth relating to such facts.

Karen Dicks, Professional Support Lawyer
Litigation Department, Deacons