The legal aid scheme will be extended to cover money claims in derivative investment products such as Lehman Brothers minibonds - but few investors are likely to benefit because the only people with assets of HK$260,000 or less can apply.
The supplementary legal aid scheme, designed for those with assets over HK$1.3 million, will not be extended for the purpose, legislators were told yesterday.
The Legal Aid Ordinance stipulates that aid shall not be provided for claims over derivatives as the government did not think public funds should be used to help people who made losses as a result of speculation.
Deputy Secretary for Home Affairs Grace Lui Kit-yuk told a meeting of the Legislative Council legal affairs panel that the government would study a legal amendment to include such claims. We propose to review the legislation to make legal aid available to cover claims in derivatives of securities, currency features, or other futures contracts when fraud, misrepresentation or deception is involved at the time of purchase, Lui said.
A detailed proposal, which will seek to remove the exclusion clause, will be tabled to the panel in the next legislative session.
But Lui said the sandwich class legal aid scheme would not be extended because the scheme had to be self-sustainable.
Even if applicants contributed 20 per cent of their claims back to the scheme after winning the case, the contribution would not be enough to cover the legal fees, she said.
Albert Ho Chun-yan, chairman of Democratic Party, said the sandwich class should also benefit.
Don't think the investors losing HK$2 million are very rich. Some of them put all their money into buying those minibonds, Ho said.
He believed only very few victims would be eligible for the ordinary legal aid scheme.
The non-extension of the sandwich class scheme is only a wish to protect the banks. The government doesn't want to help investors sue banks, he said.
Lui said a review of the legal aid scheme for the sandwich class would come later. Copyright (c) 2011. South China Morning Post Publishers Ltd. All rights reserved.
