LEGISLATIVE COUNCIL ─ 2 May 2001 4923 OFFICIAL RECORD OF PROCEEDINGS Wednesday, 2 May 2001 The Council met at half-past Two o'clock MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE MRS RITA FAN HSU LAI-TAI, G.B.S., J.P. THE HONOURABLE KENNETH TING WOO-SHOU, J.P. THE HONOURABLE JAMES TIEN PEI-CHUN, J.P. THE HONOURABLE DAVID CHU YU-LIN THE HONOURABLE ALBERT HO CHUN-YAN IR DR THE HONOURABLE RAYMOND HO CHUNG-TAI, J.P. THE HONOURABLE LEE CHEUK-YAN THE HONOURABLE MARTIN LEE CHU-MING, S.C., J.P. THE HONOURABLE ERIC LI KA-CHEUNG, J.P. DR THE HONOURABLE DAVID LI KWOK-PO, J.P. THE HONOURABLE FRED LI WAH-MING, J.P. DR THE HONOURABLE LUI MING-WAH, J.P. THE HONOURABLE NG LEUNG-SING 4924 LEGISLATIVE COUNCIL ─ 2 May 2001 PROF THE HONOURABLE NG CHING-FAI THE HONOURABLE MARGARET NG THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, J.P. THE HONOURABLE JAMES TO KUN-SUN THE HONOURABLE CHEUNG MAN-KWONG THE HONOURABLE HUI CHEUNG-CHING THE HONOURABLE CHAN KWOK-KEUNG THE HONOURABLE CHAN YUEN-HAN THE HONOURABLE BERNARD CHAN THE HONOURABLE CHAN KAM-LAM THE HONOURABLE MRS SOPHIE LEUNG LAU YAU-FUN, S.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG THE HONOURABLE SIN CHUNG-KAI THE HONOURABLE ANDREW WONG WANG-FAT, J.P. DR THE HONOURABLE PHILIP WONG YU-HONG THE HONOURABLE WONG YUNG-KAN THE HONOURABLE JASPER TSANG YOK-SING, J.P. THE HONOURABLE HOWARD YOUNG, J.P. DR THE HONOURABLE YEUNG SUM THE HONOURABLE YEUNG YIU-CHUNG LEGISLATIVE COUNCIL ─ 2 May 2001 4925 THE HONOURABLE LAU CHIN-SHEK, J.P. THE HONOURABLE LAU KONG-WAH THE HONOURABLE LAU WONG-FAT, G.B.S., J.P. THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P. THE HONOURABLE AMBROSE LAU HON-CHUEN, J.P. THE HONOURABLE EMILY LAU WAI-HING, J.P. THE HONOURABLE CHOY SO-YUK THE HONOURABLE ANDREW CHENG KAR-FOO THE HONOURABLE SZETO WAH THE HONOURABLE TIMOTHY FOK TSUN-TING, S.B.S., J.P. THE HONOURABLE LAW CHI-KWONG, J.P. THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P. DR THE HONOURABLE TANG SIU-TONG, J.P. THE HONOURABLE ABRAHAM SHEK LAI-HIM, J.P. THE HONOURABLE LI FUNG-YING, J.P. THE HONOURABLE HENRY WU KING-CHEONG, B.B.S. THE HONOURABLE TOMMY CHEUNG YU-YAN, J.P. THE HONOURABLE MICHAEL MAK KWOK-FUNG THE HONOURABLE ALBERT CHAN WAI-YIP THE HONOURABLE LEUNG FU-WAH, M.H., J.P. 4926 LEGISLATIVE COUNCIL ─ 2 May 2001 DR THE HONOURABLE LO WING-LOK THE HONOURABLE WONG SING-CHI THE HONOURABLE FREDERICK FUNG KIN-KEE THE HONOURABLE IP KWOK-HIM, J.P. THE HONOURABLE LAU PING-CHEUNG THE HONOURABLE AUDREY EU YUET-MEE, S.C., J.P. MEMBER ABSENT: THE HONOURABLE CYD HO SAU-LAN PUBLIC OFFICERS ATTENDING: THE HONOURABLE DONALD TSANG YAM-KUEN, J.P. THE CHIEF SECRETARY FOR ADMINISTRATION THE HONOURABLE ANTONY LEUNG KAM-CHUNG, G.B.S., J.P. THE FINANCIAL SECRETARY THE HONOURABLE ELSIE LEUNG OI-SIE, J.P. THE SECRETARY FOR JUSTICE MR GORDON SIU KWING-CHUE, J.P. SECRETARY FOR PLANNING AND LANDS MRS LILY YAM KWAN PUI-YING, J.P. SECRETARY FOR THE ENVIRONMENT AND FOOD DR YEOH ENG-KIONG, J.P. SECRETARY FOR HEALTH AND WELFARE LEGISLATIVE COUNCIL ─ 2 May 2001 4927 MRS REGINA IP LAU SUK-YEE, J.P. SECRETARY FOR SECURITY MRS FANNY LAW FAN CHIU-FUN, J.P. SECRETARY FOR EDUCATION AND MANPOWER MR LEO KWAN WING-WAH, J.P. SECRETARY FOR HOME AFFAIRS MISS YVONNE CHOI YING-PIK, J.P. SECRETARY FOR COMMERCE AND INDUSTRY CLERKS IN ATTENDANCE: MR RICKY FUNG CHOI-CHEUNG, J.P., SECRETARY GENERAL MR LAW KAM-SANG, J.P., DEPUTY SECRETARY GENERAL MRS JUSTINA LAM CHENG BO-LING, ASSISTANT SECRETARY GENERAL 4928 LEGISLATIVE COUNCIL ─ 2 May 2001 TABLING OF PAPERS The following papers were laid on the table pursuant to Rule 21(2) of the Rules of Procedure: Subsidiary Legislation/Instruments L.N. No. Employees Compensation Assistance (Notice of Insolvency of Insurer) Regulation.................................... 85/2001 Road Traffic (Traffic Control) (Amendment) Regulation 2001......................................................... 86/2001 Clubs (Safety of Premises) (Exclusion) (Amendment) Order 2001................................................. 87/2001 Shipping and Port Control (Closure of Waters) Notice 2001................................................ 88/2001 Tax Reserve Certificates (Rate of Interest) (No. 5) Notice 2001................................................ 89/2001 Education (Amendment) Ordinance 2001 (8 of 2001) (Commencement) Notice 2001 ......................... 90/2001 Hong Kong Science and Technology Parks Corporation Ordinance (5 of 2001) (Commencement) Notice 2001................................................ 91/2001 Urban Renewal Authority Ordinance (Cap. 563) (Commencement) Notice 2001 ......................... 92/2001 Other Paper Report of the Bills Committee on Rehabilitation Centres Bill LEGISLATIVE COUNCIL ─ 2 May 2001 4929 ORAL ANSWERS TO QUESTIONS PRESIDENT (in Cantonese): Questions. First question. Impact of a CFA Ruling on Employee Compensation Mechanism 1. MR BERNARD CHAN (in Cantonese): Madam President, on 20 February this year, in a case involving a fatal industrial accident, the Court of Final Appeal (CFA) ruled that even if the deceased did not have any established habit of saving money during his lifetime, it was open to the Court to make an estimate of the wealth which the deceased would have probably accumulated in his future days but for the accident causing his death, and use this as the basis for determining the amount of compensation payable to his dependants in this respect. In this connection, will the Government inform this Council: (a) of the impact of the precedent on the compensation mechanism for deaths and injuries of employees; and (b) whether the precedent will pose greater financial pressure on the Employees Compensation Assistance Fund (ECAF) in future; if so, of the solution that the relevant authorities have? SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, section 20(2)(b)(iii) of the Law Amendment and Reform (Consolidation) Ordinance provides that, in common law cases, damages payable to an employee who died in the course of duty cover the loss of wealth which the deceased would have accumulated. In assessing such loss, the Court will take into account the income and expenditure of the deceased person, the age when he died, and the wealth he would have accumulated if not for the accident which took his life, and so on. Since the Ordinance came into force in 1986, the High Court already has a number of precedents awarding damages, including to those who did not have any established habit of saving money, in respect of loss of wealth that would have been accumulated. Regarding a case of award of damages in a fatal industrial accident, the CFA ruled in February this year that although the deceased was not able to accumulate any wealth due to his heavy family burden, the fact that he was a 4930 LEGISLATIVE COUNCIL ─ 2 May 2001 thrifty and hardworking person who was not hooked on any bad habits, his parents were already very old and his children were about to complete their schooling formed the basis for it to arrive at an inference that if not for the accident, the deceased would have accumulated wealth by the time he would otherwise have died. The rulings on damages in respect of the loss of such wealth by the Court of Appeal and Court of First Instance were therefore affirmed. It is clearly stated in the ruling of the CFA that in deciding whether damages should be awarded for loss of accumulated wealth, whether the deceased has a record of saving before his death was not a condition antecedent. The Court has to make analysis based on the established facts and estimate the wealth the deceased would probably have accumulated if he had been alive before making a ruling on damages. In the case concerned, the CFA has only elaborated on the related provisions of the Law Amendment and Reform (Consolidation) Ordinance but did not alter the mechanism for calculating damages. Basing on this, we are of the opinion that the ruling should be supported since it can provide the grief and poverty stricken dependents of the deceased with a more reasonable compensation which can help relieve their hardships. It would not have any impact on the compensation mechanism for deaths and injuries of employees. As the ruling of the CFA did not constitute a change of the calculation basis for damages and that there have only been a small number of such cases, it is estimated that they would not pose a great financial pressure on the ECAF. Indeed, if all employers took out insurance for their employees and bear their legal obligation, there is no need to draw on the ECAF at all. The current financial problem faced by the ECAF could be attributed to a number of causes, the most important one being that there have recently been three major common law cases with damages exceeding $10 million. Besides, as a result of a drop in employees' compensation insurance premium, levy income has decreased in recent years. The Administration is presently reviewing the Employees Compensation Assistance Scheme and enforcement has been stepped up. We will do what we can to try to maintain a breakeven balance sheet. MR BERNARD CHAN (in Cantonese): Madam President, the Secretary mentioned in the fifth paragraph of her main reply that there had only been a LEGISLATIVE COUNCIL ─ 2 May 2001 4931 small number of such cases. However, according to some legal opinions, since the CFA has made this ruling in respect of the case mentioned, it is estimated that the amount of damages claimed for similar cases would increase by approximately 50%, thereby causing the amount of damages payable in each case to rise by $500,000.