STANDARD TERMS OF ENGAGEMENT
1.1. This sets out the terms of your engagement of Katherine Chan Law Office (our “Standard Terms of Engagement”) as legal adviser on the laws of the Hong Kong, Special Administrative Region of the People’s Republic of China (“Hong Kong”). Please read the following terms carefully and let us know if you would like to discuss any aspect before agreeing to them by engaging us.
1.2. When we accept your instructions to provide legal services (the “Engagement”), a letter referring to these Standard Terms of Engagement may be sent to you (the “Engagement Letter”). The Engagement Letter (if any) and these Standard Terms of Engagement constitute the agreement between you and us for the purposes of the Engagement. If no Engagement Letter is issued by us, these Standard Terms of Engagement constitute the agreement between you and us for the purposes of the Engagement.
1.3. Part of our services may be rendered by companies owned and controlled by us. For such purpose, the reference to “we” or “us” includes our service companies which currently comprise Katherine Chan Law Office, Katherine Chan Consultancy Limited and Law and Business Consulting Limited.
1.4. Change to personnel responsible for the Engagement will be avoided, but we reserve the right to replace them with others of similar competence should it become unavoidable.
2. Scope of Services
2.1. We shall not be obliged to perform any work (“Services”) outside the scope as set out in the Engagement Letter, or as otherwise agreed. If and to the extent that there is a conflict between the Standard Terms of Engagement and the Engagement Letter (if any), the Engagement Letter shall prevail.
2.2. We understand a part, or all, of the Services may be rendered to or for the benefit of any of the companies in which you have an interest or affiliation, whether directly or indirectly, and which forms part of a group (you and all such companies being collectively the “Group”). While instructions may be received directly from or invoices may be addressed and sent to any Group member, you will remain primarily liable for payment of all our fees and expenses.
2.3. Unless specifically agreed, our engagement would not include the provision of any tax advice nor do we assume any responsibility for tax issues regarding your matter or transaction.
2.4. We value all of our clients and are dedicated to providing the highest quality of services in a timely, effective and efficient manner. If you have any concerns or complaints about any matter relating to our services, we would like to discuss them with you and try to resolve them as soon as possible.
3. Our Fees and Expenses
3.1. Save for any arrangements to the contrary, we will charge our fees for our time spent on the Engagement based on our hourly charge-out rates. The applicable hourly charge-out rates are to be set out in the Engagement Letter or separately notified to you in writing. Our fees are based on the following factors:
a) complexity of the factual and legal issues;
b) quantity of documents to be prepared or reviewed;
c) time involved in conferences, obtaining instructions and verifying factual matters;
d) value or size of the matter or transaction;
e) urgency; and
f) seniority of the personnel engaged.
3.2. At your request, we may provide an estimate of our fees as an indication of our likely charges for handling the Engagement based on the information known to us at the time the estimate is given. An estimate may be revised and is not binding upon us.
3.3. In some cases, we may offer a fixed fee for the Engagement. A fixed fee is our proposal to deal with a specified matter of the Engagement for a stated fee. If the work involved in the specified matter falls outside the agreed scope, we will charge for the extra work based on paragraph 3.1 above.
3.4. We may from time to time request from you payment on account of our fees and expenses which may be credited against payment of our invoice. Invoices will be submitted periodically. Each invoice represents the final bill for charges for work done for the relevant stage of the Engagement and includes disbursements and other charges or expenses incurred on the Engagement.
3.5. Our out-of-pocket expenses (whether incurred or to be incurred) such as postage, bank charges, filing fees, registration fees, stamp duty, traveling expenses, search fees, overtime charges for support staff, photocopying and telephone charges (where appropriate) will usually be billed as disbursements or other charges or expenses at the same time when we render our invoices for stage payments.
3.6. By instructing us, you confirm our authority to appoint third-party service providers as may be required and to pay for all their fees and all other expenses incidental to the carrying out of the Services. However, before engaging any barrister, foreign lawyer or expert, we shall consult you.
3.7. Money held by us for you, whether on account of fees, expenses or otherwise, will be placed in our client account. In view of the low-interest rate and the associated administrative costs, the Law Society of Hong Kong has waived the requirement for law firms to pay interest to clients on such clients' money. You, therefore, agree that unless otherwise agreed in writing, we will not pay interest on such money held by us to you and will be entitled to retain for our own benefit any interest or other benefits accrued thereon.
4. Settlement of Invoices
4.1. Our invoices are due for payment within 14 days of the invoice date. Any invoice which has been overdue for 14 days may, upon our request and from time to time, be subject to an interest charge at the rate for the time being applied to judgment debts.
4.2. If an invoice has been overdue for more than 14 days, or if you fail within 14 days to meet a request for payment on account of our fees and expenses (or both), we may decline to act any further. In that case, we shall charge you for the full amount of work done to that date.
4.3. Payment of our invoice will not be subject to any deduction or withholding on account of taxes or charges of any nature. Where a deduction or withholding is levied by law, you agree to pay such an additional amount to ensure our receipt of the full amount of the invoice.
5. Client Identification, Verification and Due Diligence
5.1. In accordance with the rules and directions of the Hong Kong Law Society, we are under a strict obligation to conduct client identification, verification and due diligence on you (collectively the “Review”) or contact and obtain relevant information from third parties for such purposes.
5.2. You agree to provide the documents and information as set out in the Engagement Letter (if any) or otherwise requested by us upon the signing of the Engagement Letter or (where impracticable) as soon as possible. Until all such documents and information have been provided and/or the Review has been completed to our satisfaction or if it is of our opinion that a conflict of interest arises, we are entitled to terminate the Engagement immediately, or suspend or not commence our Services without any prior notice but we will endeavour to notify you as soon as practicable. You also confirm and warrant that you (or, where you are not an individual or consisted only of individuals, those who, directly or indirectly, own or control you) are not and will not during the term of the Engagement be or acting for any person or entity subject to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of Hong Kong, the United Nations, the European Union, the United Kingdom or the United States of America.
5.3. By requesting us to proceed with the Engagement, you confirm the accuracy of the documents and information supplied, confirmed or warranted under paragraph 5.2 and your personal particulars provided to us and, if applicable, the authority of the signatory designated by you to give instructions to us. You undertake to notify us in writing immediately should any information supplied, confirmed or warranted under paragraph 5.2 becomes untrue, incorrect or misleading in any respect.
5.4. If we know or have reasonable grounds for suspecting that a matter involves money laundering, we may be obliged to report our knowledge or suspicion to the relevant authorities during the course of the Engagement. In making the reports, we may not notify you and/or may be precluded from obtaining your consent. In certain circumstances, we may also be obliged to terminate or suspend the Engagement without providing you with an explanation for the termination or suspension.
6.1. We understand you and we may communicate by electronic means (including telephone, fax, email or electronic messages). Because of all the uncertainties, risks or lack of adequate means for verification associated with such means of communication, we accept no liability for any misinterpretation, inadvertent misdirection, non-receipt or late receipt of, or corruption in, the information communicated or its disclosure to other parties.
6.2. While both you and we will regularly carry out virus checks, it is the recipient's responsibility to implement its anti-virus measures or carry out its own virus checks on all its systems, data and communications whether in the form of computer disc, email, internet or otherwise). We accept no liability for:
a) any viruses that may enter your system or data by these or any other means; or
b) the removal or withdrawal of any of your messages from our normal system of communication as a result of the operation of our anti-virus measures.
7. Ownership and Storage of Materials
7.1. All original documents (such as deeds, guarantees or certificates) and all files, papers and other materials delivered by you to us, and samples or other materials obtained by us for the Engagement will be returned to you, disposed of as directed by you or otherwise upon completion of the Engagement and payment of all outstanding invoices; provided that we may retain a copy thereof prior to return or disposal.
7.2. Our working files and papers, all correspondence with you and with other parties generated by us on your behalf, and other materials generated by us in connection with the Engagement will remain our property (and, unless otherwise agreed, we shall own the copyright in any materials prepared by us on your behalf).
7.3. Unless otherwise agreed, we shall retain the materials referred to in paragraph 7.2 (except for any of your materials that you have requested to be returned to you or disposed of as directed by you) for such periods as from time to time prescribed by the Law Society of Hong Kong or such longer periods as we may consider appropriate and may thereafter destroy the same without prior notice to you.
7.4. You acknowledge and agree that we may store materials in one or more open clouds.
8. Data Protection
All personal data collected from you is to be held and processed by us in or outside Hong Kong in accordance with applicable data protection legislation and rules and our duty of confidentiality. The use of the personal data is primarily for the provision of legal services to you in the Engagement and other related purposes including maintaining client records, and legal and regulatory compliance purposes. We may disclose your personal data to agents or professional consultants acting for you. If we intend to use the personal data for unrelated purposes or to disclose to third parties, we shall obtain your prior consent specific to that disclosure. If you wish to update your personal information or have access to it or have other inquiries about the processing of your personal data, please contact the solicitor in charge of the Engagement or our principal.
9. Audit Enquiries
From time to time, we may (if you are a corporation) receive inquiries and/or requests for information from your auditors in connection with the preparation and audit of your accounts. Unless you instruct us to the contrary, we will assume that we are authorized to respond to such inquiries and requests for information. As a matter of practice, we propose only to respond to inquiries that refer to specific matters for which we act on your behalf, and not general inquiries. We are entitled to charge a fee for responding to such inquiries.
10. Disclosure for Promotional Purposes
Except as you may otherwise inform us, and subject to any confidentiality undertakings of which we are made aware between you and any other party with respect to a particular matter, you agree that we may include, in a list of matters which we use for promotional purposes, a summary description of all completed matters and (in the case where the pending matters have been publicly disclosed) any pending matters on which we represent you. Save for such description or as may be required by law, confidential information relating to the matter will not be disclosed by us.
11.1. We are subject to a duty to hold in strict confidence all your information acquired by us in connection with the Engagement; unless disclosure is authorized by you or required by law. You agree that we may disclose your confidential information to:
a) our professional indemnity insurers or our professional advisors; or
b) a third party where we are required by legal or professional regulations or a court order to do so.
11.2. As we owe the same duty to our other clients, we cannot disclose to you, or use for your benefit, any confidential information that we currently have, or may obtain, in relation to our other clients.
11.3. You agree that we are authorized to disclose that you are our client and that we have acted for you on any particular matter under the Engagement.
12. Conflict of Interest
12.1. If either you or we become aware of a possible conflict of interest, it should be raised immediately. In such a situation, you agree it will be up to us, having due regard to legal constraints, applicable professional rules and your and our other client's interests to decide whether we should continue to act for one only, or for neither. If we decide that we should not continue to act for you, we shall be entitled to terminate the Engagement by giving notice to you.
12.2. We act for diverse clients, some of whom operate in the same industry or sector. Some clients we represent may have, or develop, commercial or legal interests adverse to other clients. You agree that we may act for current or future clients who do, or may in the future, operate in the same industry or sector as you, or who may have or develop commercial or legal interests adverse to yours; provided that we do not use any of your confidential information for the benefit of another client.
12.3. You agree that we may act for different clients to institute legal proceedings against the same defendant(s); provided that there is no conflict of interest in our doing so. In such a situation, we will not pass on any information given by or obtained from one client to another client even though such information may be of benefit to the other client. Enforcement actions against the same properties of the common defendant(s) will be taken according to the order of the time when instructions for such enforcement actions are received from the relevant clients.
13. Services for Your Own Benefit
13.1. The services provided under the Engagement are solely for your benefit and for the intended purposes. We accept no responsibility to any other party. If we are instructed by a third party as an agent acting for you, you and your agent jointly and severally warrant that the agent has the authority to retain us on these Standard Terms of Engagement and to give us instructions on your behalf. You should not pass our advice to a third party, and we will not accept liability to any third party. Nothing in these Standard Terms of Engagement or the Engagement Letter (if any), whether expressed or implied, is intended to, or will, confer on any person any benefit or any right to enforce any term which such person would not have but for the Contracts (Rights of Third Parties) Ordinance (Cap. 623 of the Laws of Hong Kong).
13.2. You will be directly liable for payment of the fees and expenses of any other professional party introduced by us at your request. Any advice so given will be that party's responsibility direct to you and not ours, and we shall not be responsible for such party’s acts or omissions.
13.3. Unless we expressly agree otherwise, the copyright and other intellectual property rights in all original materials which we generate for you belong to us. You may use any material prepared by us under the Engagement within your organization solely for the purpose for which it is provided and subject to the confidentiality of such materials.
14. Termination of the Engagement
14.1. You are entitled to terminate the Engagement at any time by giving written notice to us.
14.2. We are entitled to terminate the Engagement at any time for good reason and upon 7 days prior written notice (or such shorter period as determined by us and permitted under applicable professional rules). The following events exemplify when this may be necessary:
a) if any payment due to us is not made;
b) if we are unable to obtain clear instructions from you;
c) if there is a serious breakdown in the trust and confidence between you and us;
d) if there is any breach of the terms or warranties of the Engagement on your part; or
e) if it would be inappropriate for us to continue to act having regard to applicable professional rules.
14.3. Any termination of the Engagement will not affect either party's accrued rights or liabilities, nor the coming into force or the continuance in force of any provision of the Engagement which is expressly or by implication intended to come into or continue in force on or after such termination.
14.4. The terms contained herein as well as the Engagement Letter (if any) will continue to be binding on each of us notwithstanding the termination of the Engagement.
15. Exclusion of Liability
15.1. We are solicitors qualified to practice in Hong Kong. We advise only on matters governed by Hong Kong law. With your permission, we may engage counsel in other jurisdictions from time to time for your benefit. However, none of the information and services we provide constitute, and shall not be construed by you as, legal advice as to the laws of any other jurisdiction. We specifically disclaim liability in respect of any matters not relating to Hong Kong law.
15.2. If you suffer loss as a result of any act or omission by us, we may incur liability to you. It is, however, customary for businesses to limit our liability in respect of our acts or omissions. In the circumstances, you agree that our liability shall be subject to the following limits:
a) we shall not be liable for any loss or damage arising from any dishonest, deliberate, reckless or innocent misstatement, concealment or other conduct on the part of any other person;
b) we shall not be liable for any loss or damage (direct or indirect) caused by or arising from (i) errors, inaccuracies, defects or omissions in documents or information provided by you or on your behalf or obtained from third parties, (ii) delays in the provision of such documents or information by you or on your behalf or by third parties, or (iii) in any other case, our mistaken reliance on any document or information, provided by you or on your behalf or obtained from third parties;
c) we shall not be liable for any loss of profits or any indirect or consequential loss or damage suffered or incurred by you as a result of any advice we give to you or work we do for you;
d) we shall not be liable for any loss, theft or damage of or to any asset or other property, including (but not limited to) money and documents deposited or placed with any third party, including any bank or other financial institution or any other firm of solicitors, and we shall not be obliged to repay client monies lost through the failure of any bank or other financial institution or any other firm of solicitors; and
e) if you have agreed to any limitations with any other adviser, we shall not be liable for anything you could have claimed from that other adviser but are prevented from doing so by reason of such limitation.
15.3. None of the exclusions or limitations in paragraphs 15.1 and 15.2 will operate to exclude or limit any liability to the extent that we are precluded or restricted from excluding or limiting such liability by law or by any applicable rules of professional conduct.
16. Limitation of Liability
16.1. Your attention is drawn to the important restrictions set out below on our potential liability, including the circumstance of our being held to be in breach of our obligations under the Engagement.
16.2. To the extent permitted by law, we exclude all warranties, conditions or terms, other than those expressly set out in these Standard Terms of Engagement including, but not limited to, all warranties, conditions or terms implied in fact or by law.
16.3. It is reasonable that the parties agree at the outset on the maximum amount of our potential liability provided that such limitation is not unfair. You and we agree that this represents your and our joint judgment of the extent to which it is reasonable for us to bear liability in connection with the Engagement. You and we agree that the following maximum amount is fair in view of the scope and size of the Services and the risks we assume in carrying out the Services compared to the fees we will receive.
16.4. To the extent permitted by law, in all instances for non-contentious business, the total of our aggregate liability to you for loss or damage (including indirect and consequential loss or damage) caused by, or resulting from, or in relation to, the Engagement, including whether arising from breach of contract, negligence, or any other tort, in equity or otherwise, and whether we were advised of the possibility of such loss or damage, is limited to (a) three times of the fees (excluding for the avoidance of doubt, disbursements) paid to us by you for the portion of the Engagement giving rise to the liability or (b) the minimum level of cover from time to time required and applicable by the Solicitors (Professional Indemnity) Rules, whichever is the higher.
16.5. The remedies available and the liability we accept under the Engagement are, to the extent permissible by law, the only remedies and the absolute limit of our liability arising under or in connection with the Engagement. To the maximum extent permissible by law and subject to any valid liability under paragraph 16.4, all other liability is expressly excluded in particular, but without limitation, liability for failure to realize anticipated savings or benefits.
16.6. You acknowledge and agree that in relation to the Engagement, our relationship is solely with you. To give effect to the liability cap in paragraph 16.4 (the “Cap”) you will procure that no company in the group to which you belong brings or enforces any claim against us in respect of any liability subject to the Cap to the extent that the relevant claim or enforcement of claim (when taken with other sum claims and enforcements and other amounts subject to the Cap which are or have been paid or payable) would cause the Cap to be exceeded. You will indemnify us to the extent that our liability to members of the group, both while they are members of the group and thereafter (in respect of liabilities expressed to be subject to the Cap), in total exceeds the Cap. This indemnity shall extend to legal and other costs and expenses, internal and external, incurred by us in respect of claims or enforcements that would cause the Cap to be exceeded.
16.7. You agree that if you make any claim against us for loss or damage in connection with the Engagement, and that loss or damage is contributed to by your own actions, then liability for your loss or damage will be apportioned as is appropriate having regard to the respective responsibility for the loss or damage, and the amount you may recover from us will be reduced by the extent of your contribution to that loss or damage.
16.8. No claim or action, regardless of form, arising hereunder or relating to the Engagement, may be brought by either you or us more than 3 years after the cause of action has accrued or the completion of the Engagement (whichever is the earlier); except that an action for non-payment of fees and expenses may be brought by us not later than 6 years following the date of the relevant invoice or the last payment due to us (whichever is the later).
17.1. You will ensure that all materials and information provided to us by you or any member of your group or by your staff, agents or advisors will be accurate, complete and not misleading and that we can rely on such materials and information without independent verification.
17.2. You will promptly defend and indemnify us and our employees and consultants against any actual or alleged losses, claims, liabilities and damages incurred or asserted as a result of us carrying out our obligations under the Engagement.
You may not assign the benefit or burden of these Standard Terms of Engagement or the Engagement Letter (if any) without our prior written consent.
19. Governing Law
These terms, and the Services we provide to you, are governed by Hong Kong law. You agree to submit irrevocably to the non-exclusive jurisdiction of the Hong Kong Courts in the event of any dispute arising between you and us. You accept that we have agreed to act for you strictly on the basis that you undertake not to pursue legal proceedings in any jurisdiction other than Hong Kong in relation to any matters arising out of the Engagement. You acknowledge that we may bring proceedings against you in other jurisdictions at our option in relation to any such dispute.