The recent resignations of two British judges from Hong Kong’s highest court have raised significant concerns about the rule of law in the region, according to lawyers and experts. This development is expected to further undermine confidence in Hong Kong’s broader commercial legal sector.
Hong Kong’s legal industry, which has been a cornerstone of the territory’s status as an international financial hub, is already grappling with challenges such as a downturn in capital markets, competition from other judicial centers, and escalating tensions between China and the U.S.
The resignations, coupled with questions about judicial independence and the strength of the rule of law, are likely to heighten foreign companies’ concerns about the legal protections available in Hong Kong.
“Some people think that you can divide or separate commercial cases from political or human rights cases, but that’s a perilous path. The politics of repression can creep into the commercial area as well,” said Michael Davis, an international law professor and global fellow at the U.S.-backed Wilson Center think tank.
The heightened concerns were sparked by the resignations a month ago of British judges Jonathan Sumption and Lawrence Collins. Both authorities in commercial law, they quit Hong Kong’s Court of Final Appeal (CFA) following the convictions of 14 democrats under a China-imposed national security law.
Collins cited the “political situation,” while Sumption, in a column for the Financial Times, described Hong Kong as “slowly becoming a totalitarian state” and stated that the rule of law was being profoundly compromised. He referred to an “oppressive atmosphere” and calls for judicial “patriotism” that are difficult for judges to oppose.
Despite these resignations, some supporters, including Hong Kong government adviser and barrister Ronny Tong, maintain that the rule of law remains robust. Tong acknowledged the damage caused by the resignations and comments but emphasized the importance of foreign jurists in enhancing local jurisprudence.
“Hong Kong’s ability to remain an international financial center is largely attributed to its stable environment with a strong rule of law, consisting of a robust legal system and a pool of diversified legal talents,” a spokesman for Hong Kong’s Department of Justice said in response to a Reuters request for comment.
Six senior commercial lawyers with over a century of combined experience expressed concerns about Hong Kong’s future as a legal center. They noted that firms drafting commercial contracts or deciding where to arbitrate complex cases increasingly prefer jurisdictions like Singapore, Dubai, or Delaware in the U.S. over Hong Kong due to perceived neutrality.
“Sumption and Collins leaving is devastating for Hong Kong, in terms of the CFA’s powers as a commercial appellate court,” a commercial lawyer with three decades of experience told Reuters, declining to be identified given the sensitivity of the matter.
Davis added that any perceived reduction in legal protections affects commercial entities’ confidence in contract enforcement. While national security cases dominate headlines, most lawyers in Hong Kong are engaged in commercial and corporate work.
Hong Kong ranks third in Asia for the rule of law by the World Bank Group, with 11,000 solicitors and 1,600 barristers. However, the number of foreign law firms registered in Hong Kong dropped from 91 in 2019 to 74 in 2024, according to the Hong Kong Law Society. This consolidation has led to U.S. law firm Winston & Strawn closing its Hong Kong office in February, and Dechert is considering closing its Hong Kong and Beijing offices.
Winston cited “changing client needs and the legal market in Hong Kong” as reasons for its move, while Dechert did not respond to Reuters.
Some international law firms have reduced their presence in Hong Kong after involvement in politically sensitive cases. In 2021, U.S.-headquartered Mayer Brown decided to no longer represent the University of Hong Kong over its decision to remove a statue commemorating China’s 1989 Tiananmen Square crackdown. This led to criticism from former Hong Kong Chief Executive Leung Chun-ying and the loss of business from Chinese state-owned companies and private clients.
Mayer Brown, which announced plans in May to separate its Hong Kong operations, did not respond to requests for comment.
The debate over the robustness of Hong Kong’s rule of law could also exacerbate difficulties in recruiting new judges. Of the city’s 211 designated judicial posts, only 163 are currently filled, leading to increased wait times for civil cases in the High Court and District Court.
The judiciary has started recruiting private lawyers as deputy judges for short stints to address the staffing crunch. “The recent criticism is likely to have a reputational impact and make it even more difficult to replenish judges from the private sector,” said a commercial lawyer with over 40 years of experience, referring to Sumption’s remarks.
Seven foreign non-permanent judges will remain on Hong Kong’s highest court after Canadian judge Beverley McLachlin steps down this month. Australia’s James Allsop, a commercial expert who also serves on Singapore’s International Commercial Court, will continue to serve on the CFA when requested.
Another leading British judge on the CFA, David Neuberger, expressed his commitment to supporting the rule of law in Hong Kong. “Hong Kong has an impressive and independent judiciary and a thriving and able legal profession, both of which benefit the people of Hong Kong and contribute to the rule of law,” he said. “They deserve support, not undermining.”