TERMS OF ENGAGEMENT

 

1.         Definitions

 

1.1.      The following definitions will apply to these Terms of Engagement (“Terms” or “Terms and Conditions”) and the covering letter to which these Terms of Engagement are an appendix.

 

1.1.1.   “Engagement” means the legal advice and service to be provided to the client by Crumps including the work necessary to provide such advice.

 

1.1.2.   “Letter of Engagement” means the letter from Crumps to you relating to the Engagement and to which these Terms of Engagement are an appendix.

 

1.1.3.   “Client” means the person, firm, company or other entity instructing Crumps.

 

1.1.4.   “Contract” means these Terms of Engagement together with the Letter of Engagement to which these Terms of Engagement are an appendix.

 

1.1.5.   “Crumps” means Crump & Co.

 

1.1.6.   “Associates” means all companies which you control, or, if you are a company forming part of a group, the company by which you are controlled directly or indirectly and all other companies controlled directly or indirectly by such company.

 

1.1.7.   “Tribunal” means Court, Arbitration, Adjudication or other Alternative Dispute Resolution tribunal.

 

2.         Nature of Terms

 

2.1.      These Terms can also be found on our website at www.crump-co.com.hk.  In the event of any change to the Terms, you will be given seven days prior written notice and, if you do not raise any written objection to such revisions, then the revised Terms shall be binding upon you.

 

2.2.      The contract sets out the basis on which our services are provided and comprises the entire agreement for the completion of the Engagement to the exclusion of any other express or implied terms, whether orally or in writing, including without limitation, any conditions, warranties and representations.  Whether or not you sign the Letter of Engagement your continued instructions in the matter will confirm your acceptance of these standard Terms.

 

2.3.      In the event that any clause or part of any clause in the Contract is found by any court of competent jurisdiction to be void or otherwise invalid or unenforceable for whatever reason then the Contract shall be read as if the offending clause or part thereof had been deleted leaving the remainder thereof in full force and effect.

 

3.         Client Contact Partner - Communications

 

3.1.      In addition to any specific method of communication and reporting agreed with you, we operate a “Client Contact Partner” system to ensure that you have a single, senior lawyer who will maintain an overview of your affairs and have ultimate responsibility for ensuring that your requirements are met.  His/her name is set out in the Letter of Engagement.

 

3.2.      We will report to you (and others, where applicable) as set out in the Letter of Engagement.

 

3.3.      Unless you specifically request otherwise, you agree that we may communicate with you by email (including sending invoices to you for services undertaken or disbursements incurred).  We do not accept any liability for any loss, delay, corruption or contamination arising from any email communication sent to you.  In this regard you acknowledge that:

 

3.3.1.   Email is not a highly secure environment and your confidential information may be able to be accessed and misused by third parties who are not entitled to it.

 

3.3.2.   Email does not have guaranteed delivery times nor does it guarantee receipt by the intended addressee.

 

3.3.3.   The transmission of viruses is a significant risk, with no fully satisfactory means of detection.  You are advised to check all incoming email for viruses and take appropriate sets to remove them.

 

3.3.4.   Where documents are sent by email, they may not be received in the format in which they were sent.

 

3.3.5.   A receipt of an email cannot be sure that an email was actually sent by the specified sender i.e. there is no guarantee of authenticity.

 

3.4.      We shall be entitled to send communications to you to the last postal address, facsimile number and/or email address provided by you to us.  Should you fail to provide us with updated contact information, we shall not be responsible for any loss that you may suffer thereby.

 

4.         Instructions

 

4.1.      The extent of the Engagement is set out in the Letter of Engagement.  It may be modified by written agreement between us.

 

4.2.      In appointing Crumps to act on any matter on your behalf you are also authorizing us to take any necessary steps to protect your interest in that matter (unless you instruct us to the contrary).

 

4.3.      We shall not be responsible for any failure to advise or comment on any matter which falls outside the scope of your instructions.

 

4.4.      You agree to ensure that all instructions which we require in connection with the Engagement are provided fully and promptly.

 

4.5.      You agree to ensure that any information which we may require or is reasonably necessary in connection with the Engagement is provided fully, accurately and promptly.

 

4.6.      We will act in accordance with the instructions and information provided by you and we shall not be required to verify the same.  As a consequence, we will not be liable for and will be entitled to an indemnity from you in relation to any misstatements or misrepresentations resulting from information provided by you which gives rise to losses and claims from third parties.

 

4.7.      In the event that our clients are more than one individual, we are able to act on the instructions of any one of those individuals.  In the event that our client is a company then we are entitled to rely on the instructions of any director or person authorized by any director or person having usual or ostensible authority.  The foregoing shall apply unless we are otherwise instructed in writing.

 

5.         Charges

 

5.1.      Unless we agree any variation in the Letter of Engagement, our charges will be based upon the time spent in dealing with the relevant matter. This may include time spent in travelling, supervision, administration, regulatory compliance and preparing invoices.

 

5.2.      We try to be flexible in our charging approach and are prepared to consider alternatives to an hourly rate including, for example, fixed fees, fixed daily rates (particularly on casualties), fee limits, percentage fees based on specific criteria, or retainers.  If we have agreed such a modification, details are set out in the Letter of Engagement.

 

5.3.      Each individual is charged at an hourly rate. Our current charging rates are set out in the Letter of Engagement. Hourly rates vary according to the level of seniority of each lawyer.  Your instructions will be carried out at the level of seniority believed by us appropriate to providing an efficient and economic service. We reserve the right to vary these rates from time to time in a reasonable manner.

 

5.4.      Invoices are calculated based upon units of 6 minutes. The number of minutes in any element of time which is not a whole multiple of 6 is rounded up to the next whole multiple of 6. For example, based on an hourly rate of HK$3000, a time element of up to 6 minutes’ duration will result in a charge of HK$300.

 

5.5.      In addition, we may consider other factors such as the amount of any money or the value of any property involved, the complexity, difficulty or novelty of the matter, the specialist expertise involved, the degree of urgency or importance and the need to work antisocial hours. All or any of these factors may affect the fees charged by an additional percentage being added to the hourly rate.

 

5.6.      Any estimate given in the Letter of Engagement for carrying out the Engagement (or part of it) is only a guide to assist you in budgeting and should not be regarded as a firm or binding quotation unless otherwise agreed in writing.

 

5.7.      For a variety of reasons some Engagements are not completed.  A transaction may abort.  In these circumstances we will charge for the work done.

 

5.8.      Where you instruct us as an agent on behalf of another party (such as your client), unless we agree in writing otherwise, you agree to be jointly and severally liable with your principal for payment of our fees and disbursements in relation to the matter.

 

6.         Expenses

 

6.1.      In appointing us to act on your behalf, you are also authorizing us, unless you instruct us to the contrary, to incur such expenses and disbursements as we consider necessary which you will be required to reimburse to us.

 

6.2.      Examples of disbursements which we may have to pay on your behalf include Court and commissioner’s fees, fees of counsel, foreign lawyers and other experts, search and registration fees, stamp duty and special bank transaction costs.  We will recharge such disbursements at the actual cost to us.  We will charge traveling and subsistence costs and expenses incurred on your behalf.

 

6.3.      We reserve the right to charge postal, fax, telephone and photocopying expenses incurred on your behalf.

 

6.4.      If we engage third parties to participate in the Engagement, Crumps shall not be liable in respect of any advice given or work undertaken by them, regardless of whether such persons were introduced by us.

 

7.         Invoices

 

7.1.      You will be invoiced at regular intervals (usually monthly) or at an appropriate stage in the conduct of the matter.  We reserve the right to request payments in advance on account of fees and disbursements and to require funds held on account to be increased so as to cover anticipated fees and disbursements.

 

7.2.      In any period to which an invoice relates, we may charge you less than the accumulated time charges of the lawyers performing services for you.  However, unless otherwise agreed with you in writing, we reserve the right to invoice you at a later time for any time charges incurred which have not been so invoiced.

 

7.3.      For the purpose of the Legal Practitioners Ordinance Chapter 159, Laws of Hong Kong (“LPO”), you agree that each particular invoice rendered to you is to be regarded as a separate and distinct invoice, notwithstanding that it may relate to any particular matter that is the subject of on-going instructions from you.

 

7.4.      If you wish to take issue in respect of any invoice, you are entitled pursuant to Section 67 of LPO to apply to the Court for taxation of that invoice.  This entitlement must be exercised by you lodging the application with the Court within one month from the date of delivery to you of the relevant invoice.  In the event that you delay in making such application beyond one month, the Court may impose terms on your being entitled to pursue the application, for example, by requiring you to pay the amount of the particular invoice into Court.  Where you delay for more than twelve months from the date of delivery of the relevant invoice or if you have already settled the same, the Court will only permit you to pursue your application to tax the particular invoice, in special circumstances.

 

8.         Payment

 

8.1.      Payment is due within 30 days from the invoice date unless we have agreed in writing that a different payment date will apply.  If an account is not paid within 30 days, we shall be entitled to charge interest on the amount outstanding (including any expenses) from the date of invoice at a rate equivalent to 3% above the base rate from time to time of HSBC.

 

8.2.      If an account is overdue for payment, we reserve the right to suspend work and to retain documents and papers belonging to you and your Associates, irrespective of the matter to which they relate, until all sums outstanding to us are paid.

 

8.3.      When we receive instructions from, or on behalf of, more than one client to deal with any particular matter, each such client will be separately responsible for payment of our fees and disbursements.

 

8.4.      Where you may be entitled to be reimbursed your costs by a third party such as an insurer, you will continue to be responsible for our fees in the event the third party does not pay them for any reason within our payment terms.

 

9.         Termination of Instructions

 

9.1.      You may withdraw your instructions at any time by written notice to us.

 

9.2.      We will cease acting for you upon reasonable notice to you where there is, in our opinion, a good reason.  Such reasons would include where it would be unlawful or unethical for us to continue to act (for example, pursuant to ORSO) or if our invoices have not been settled or any required payment on account has not been made.  We are not obliged to disclose to you the “good reasons” relied upon by ourselves.

 

9.3.      Upon termination we will have the right to charge you for work done by us up to the time of termination and all disbursements.

 

9.4.      You agree that we have a lien over and are able to keep all papers, documents and property held by us and which belong to you whilst we are owed money by you.

 

9.5.      Following termination, any otherwise non-public information that you have supplied to us which is retained by us will be kept confidential in accordance with the applicable rules of professional conduct but subject to any disclosure required by law.

 

9.6.      At your request and subject to our lien, your papers, documents and property will be returned to you, but our files, including lawyer work products, on the relevant matter will be retained by us.  We reserve the right to destroy or otherwise dispose of any items retained by us within a reasonable period of time after the termination of the engagement unless you have agreed with us otherwise in writing.

 

10.       Money Held by Us

 

10.1.    Money held by us for you, whether on account of fees or disbursements or otherwise, will be placed in our Client Account and you will be entitled to interest which would have been earned had it been held in a separate designated deposit account at HSBC unless the amount of such interest is less than HK$500.

 

10.2.    Money held by us (and accrued interest) may be taken by us in payment or part payment of our invoices whether overdue or not and whether in connection with the same or different matters in respect of which we act for you.  This extends to money held for your Associates.

 

11.       Litigation

 

11.1.    There are a number of specific points that you should be aware of when involved in litigation (including arbitration, and other forms of alternative dispute resolution) whether as claimant or defendant:

 

11.1.1. You are responsible for paying our account even if the Tribunal eventually orders another party to contribute towards your legal costs.  You should be aware that there are sometimes difficulties and/or delays in assessing and recovering these costs.

 

11.1.2. The Tribunal has wide-ranging discretion to determine which party(ies) should bear the costs of the proceedings and in what proportion.  This is usually exercised to order an unsuccessful party to pay a proportion of the other’s costs (normally 60-70%).

 

11.1.3. Only in exceptional cases will the Tribunal make an award which gives the successful party a right to the full reimbursement of the costs of the proceedings.  You should therefore assume that even if your action is successful there will be additional costs payable to us over and above anything recovered from the other side.  In cases where another party is legally aided you may not be able to recover any costs, even if you are successful.

 

11.1.4. If you lose an action, you will be liable to pay our fees and disbursements.  In addition, the Tribunal is also likely to exercise its discretion to order you to pay a proportion of your opponent’s costs (again, normally 60-70% of the total expended by the other side).  Further, if at a hearing during the course of the action the Tribunal orders you as the unsuccessful party to pay the costs of the successful party, these costs may be assessed and ordered to be paid forthwith.

 

11.1.5. If you have legal fees insurance or other applicable insurance you should also be aware that insurers may not pay bills before completion of the case, and you will remain liable to pay our bills when rendered during and at the end of the case even if you have not yet been indemnified by your insurers.

 

11.1.6. If you withdraw an action, the other party is entitled to have an order made by the Tribunal for you to pay costs.

 

11.1.7. In any action you will be required to disclose to the other parties all documents, correspondence, notes, memoranda or other items which are or have been in your possession, custody or power and which relate in any way to the issues in the dispute.  This duty covers documents which may be prejudicial to your case but which, subject to certain exceptions such as communication with ourselves, you are nevertheless obliged to reveal.  The obligation of disclosure is ongoing until the action is over and therefore all such documents must be kept in safe-keeping.  This obligation is onerous and you may be liable for severe penalties including fines and/or imprisonment in cases of deliberate non-disclosure.  If in any doubt as to whether to preserve documents, you should always err on the side of preservation.

 

12.       Confidentiality and Conflicts

 

12.1.    As lawyers, we are bound by a general duty of confidentiality towards you as our client. Any information which we obtain from you while providing legal services which is not in the public domain will be treated as confidential. On rare occasions, we may be required to disclose information to regulatory or fiscal authorities, or under rules of professional conduct. In such cases, we will inform you of the request or requirement to disclose where it is permissible and practicable.

 

12.2.    You agree that we are authorized to disclose that you are our client, and that we have acted for you on any matter where information on that matter is within the public domain and on any other matter where you consent to such disclosure.

 

12.3.    Unless you notify us to the contrary in writing, we may use your personal information for marketing our services, providing you with legal updates and profiling your legal and professional requirements.

 

12.4.    An actual or potential conflict between your interests or the interest of another client of the firm may arise during the course of a matter.  If this situation arises during our dealings with you, we will discuss the position with you and determine the appropriate course of action.  In order to protect your interests we may not be permitted to continue acting.

 

13.       File Storage

 

13.1.    Files and other papers relating to your matters will be stored for no more than 7 years.  Such files or papers may be stored on microfilm or by other means of image processing.  After the expiry of this 7 year period we will be entitled to destroy such files and papers and your express authority for us to do so is a term of the Contract.  This applies to all files and papers retained by us other than title deeds and other documents of title which you have asked us to hold in safe custody.

 

14.       Complaints

 

14.1.    If you have any comments or concerns about the services that we provide or you wish to discuss any aspect of the way in which your instructions are being handled and you do not wish to raise these with the individual lawyer involved, please speak to your Client Contact Partner or if you prefer, the Managing Partner.

 

15.       Regulation

 

15.1.    Our firm is regulated by the Law Society of Hong Kong and these Terms of Engagement are subject to the Rules and Regulations of the Law Society of Hong Kong.

 

15.2.    The Law Society of Hong Kong has implemented its “Practice Direction P” with effect from 1^st July 2008 in an attempt to counter money laundering and terrorist related activities and practices through Law Firms in Hong Kong.  Practice Direction P is a set of guidelines and mandatory requirements that all Law Firms in Hong Kong are required to follow when taking instructions from new and existing clients.

 

In relation to individual clients, there is an obligation on us to obtain the following information and records from our clients as a matter of due diligence prior to commencing work:-

 

1)                  Personal Identification – e.g. a copy of your Hong Kong Identity Card or Passport

2)                  Address – e.g. a copy of a recent utility bill or bank statement

3)                  Occupation – e.g. a copy of your business card

 

In relation to corporate clients the following information is required:-

 

1)                  Identification of the person giving instructions – e.g. a copy of their Hong Kong Identify Card or passport

2)                  A board resolution authorizing us to act on behalf of the company and authorizing that person to give instruction on behalf of the company

3)                  Legal Status of the Corporation – e.g. a Business Registration document/ Certificate of Incorporation

4)                  Identity of the Company Directors – e.g. a company search

5)                  Identity of the beneficial ownership and control structure of the company – e.g. a company search and copies of declarations of trust.

 

Where you are acting on behalf of a third party, a trust or an estate, we are required to obtain similar documentation as above in order to verify the identities of the entities which are instructing us.

 

15.3.    In accepting your instructions your attention is drawn to anti-money laundering legislation in Hong Kong, such as the Organized And Serious Crimes Ordinance Chapter 455, Laws of Hong Kong (“ORSO”), and in particular Section 25A thereof which states that:-

 

“(1)  Where a person knows or suspects that any property:-

(a)   in whole or in part directly or indirectly represents any person’s proceeds of;

(b)   was used in connection with; or

(c)    is intended to be used in connection with,

an indictable offence, he shall as soon as it is reasonable for him to do so disclose that knowledge or suspicion, together with any matter on which that knowledge or suspicion is based, to an authorized officer……”

 

This legislation applies to us as your legal representatives so that we WILL have an obligation to report any knowledge or suspicion that any property, whether directly or indirectly, represents the proceeds of an indictable offence – i.e. an offence punishable by a period of not less than 5 years imprisonment (whether committed in or outside of Hong Kong).

 

The report would also have to particularize the basis of the knowledge or suspicion upon which the report is based.

 

There would also be an obligation upon us under the legislation NOT to disclose to you the fact that a report has been or is to be made by us as it is a criminal offence to “tip-off”.

 

The above obligation overrides any legal professional privilege or confidentiality that we may have to you.  In such circumstances since we would obviously have a conflict of interest with you and it may well be necessary to withdraw from acting for you without being able to give any reason for doing so unless you provide a waiver to us to permit us to continue to act for you.

 

16.       Copyright

 

Advice given in documents prepared by us for you are for your use only and are intended for use only in the matter on which we are performing services for you.  We retain a copyright in all written material given by us to you.

 

17.       Third Party Reliance

 

All work and advice given and rendered by us to you are intended solely for your own use.  All documents and materials prepared by us and given to you are not intended to be given to, read or acted upon by any other person.  We accept no liability for any loss whatsoever suffered by you or any third party which results from our advice or any document created by us being passed on to or acted upon by a third party.

 

18.       Force Majeure

 

We shall not be liable to you if we are unable to perform our services as a result of anything beyond our reasonable control.  In the event of any such occurrence, we shall notify you as soon as reasonably practicable thereafter.

 

19.       Limitation of Liability

 

Unless the law says otherwise:

 

1)         We will only be liable to you, up to a maximum of HK$10,000,000 for any loss arising from the work we carried out for you; and

 

2)         Our partners consultants and employees will be acting on our behalf and will not be personally liable for any loss arising out of, or in connection with, our work for you.

 

We will not be liable for any loss that arises from us relying (where it is reasonable to do so) on information or documents that are misleading, incomplete or incorrect.

 

Unless the next paragraph applies, we will not be liable for any loss caused by anything any person other than us and our partners, members, consultants and employees does or fails to do.

 

If you have instructed other advisers, we will not be liable for any loss you suffer for which the other advisers alone are responsible.  If you have suffered a loss for which we and the other advisers are jointly and individually responsible, we will pay our share of the loss up to the limit shown above.  When deciding our share of the loss, we will not take account of any agreement limiting the amount of damages other advisers pay and any actual or possible shortfall in this amount (whether this is due to settling or limiting claims, or any other reason).

 

We advise you to take independent advice with regard to the significance of the limitation of liability before you confirm that we are to be instructed on these terms.

 

Deposit for fees held by us: unless we have agreed alternative banking arrangements with you, your client funds will be held in the firm’s general bank account.

 

Unless the law says otherwise, we will not be liable for the loss of any deposits.

 

20.       Severability

 

If any provision of this contract is prohibited, invalid or unenforceable in any jurisdiction, that provision will, as to that jurisdiction, be ineffective to the extent of the prohibition, invalidity or unenforceability without invalidating the remaining provisions of this agreement or affecting the validity or enforceability of that provision in any other jurisdiction, unless it materially alters the nature or material terms of this contract.

 

21.       Governing Law

 

These Terms are governed by the laws of Hong Kong and any dispute, claim or proceedings in relation to the same will be submitted to the Courts of Hong Kong.  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 this retainer.