The Consumer Council has received so far (up to April 24) 11,229 Lehman-Brothers-related complaints.
In the majority (90%) of these cases, the Council has referred them to the Hong Kong Monetary Authority and the relevant banks for follow-up action in an effort to help bring resolution of complaints.
The Council has since received confirmation on the status with regard to 943 complaint cases, in which settlement was reached between the banks concerned and the complainants in 624 cases involving a total investment amount of $217,816,200.
The remainders 319 of the cases remained unresolved in that the banks had declined settlement with the complainants concerned.
In another development, the Consumer Legal Action Fund (CLAF) is set to help bring its first lawsuit against a financial institution in a Lehman-Brothers-related case.
If everything proceeds smoothly and barring unforeseen circumstances, litigation action could begin as early as one or two months from now.
This followed approval by the CLAF Board of Administrators to grant legal assistance after careful deliberation of the factual and legal issues involved in the case concerned.
It involved the sale of Lehman related financial product which the applicant bought in the amount of $500,000 in January 2008.
The case is one of 82 applications which the Consumer Council, the trustee of CLAF, has received so far for consideration of legal assistance.
Further progress of the case now rests with the decision of the applicant to enter agreement with CLAF before litigation proceedings could commence.
So far, 11 of the applications were withdrawn after having reached an advanced stage. The Council was informed that in at least 6 of the cases, settlement had been reached with the banks concerned.
Depending on the progress made in the preparation work for the litigation, it is hoped that the writ could be served on the relevant party in one or two months' time.
In determining applications for granting legal assistance, the CLAF would take into account the various factual and legal issues involved in Lehman related cases.
The applications would be categorized to systematically cover different legal issues of significance arising in typical scenarios of retail sale of financial products.
For instance, one of the legal issues is whether there existed a fiduciary relationship between the bank and its customer in a particular case, and if so, whether the bank had acted in the best interest of the customer and made full disclosure of all material facts.
Equally significant were legal issues such as the legal effect of misrepresentation or negligent misstatement or omission of material facts in different circumstances, and the legal effect of signature on contractual documents under such circumstances.
The objective is to bring to court "test cases" that will serve to clarify important legal principles and establish precedents for better consumer protection in future.