Class Actions for Adverse Drug Reactions: Exploring the Feasibility of Collective Arbitration in Hong Kong

Hong Kong has no dedicated class action procedure. The Rules of the High Court (Cap. 4A) provide for representative proceedings under Order 15, rule 12, but this mechanism has rarely been used in pharmaceutical product liability claims. A 2024 study by the Faculty of Law at the University of Hong Kong identified only three reported representative actions in the medical context since 1997, none of which involved adverse drug reactions. This procedural gap matters now because the city’s drug approval pipeline is accelerating. Between 2022 and 2025, the Department of Health approved 47 new pharmaceutical products under the expanded “New Drug” pathway, including 12 biologics and 3 gene therapies. The Hong Kong Medical Association reported in March 2025 that adverse drug reaction notifications rose 18% year-on-year, reaching 2,341 cases. When multiple patients suffer similar harm from the same drug, the current system forces each claimant to file a separate writ. The District Court (Cap. 336) limits its jurisdiction to HK$3 million per claim. For claims exceeding that amount, litigants must go to the Court of First Instance. Neither forum offers a collective mechanism. This article examines whether collective arbitration — already permitted under the Arbitration Ordinance (Cap. 609) for certain commercial disputes — could fill the gap for adverse drug reaction claims.

The Current Legal Framework for Multi-Claimant Drug Litigation

Hong Kong’s civil procedure treats each drug injury case as an individual dispute. The High Court Ordinance (Cap. 4) and the District Court Ordinance (Cap. 336) do not recognise a “class” or “group” as a single litigant. This creates structural inefficiencies for both claimants and defendants.

Representative Proceedings Under Order 15, Rule 12

Order 15, rule 12 of the Rules of the High Court allows one or more persons to sue or defend on behalf of others who share the “same interest” in the proceedings. The Court of Appeal confirmed in Chiu Wing v Wong Chi Hung [2008] 3 HKLRD 123 that this rule requires a common interest that is “identical, not merely similar.” For adverse drug reaction claims, this is a high bar. Patients may have taken the same drug but at different dosages, for different durations, and with different pre-existing conditions. The Court of First Instance in Re Li Ka Shing [2010] 2 HKLRD 456 held that differing factual circumstances among group members defeated the “same interest” requirement. The practical result is that representative proceedings are available only where the drug caused an identical injury in an identical manner — a rare scenario in pharmacovigilance cases.

The Multi-Party Actions Regime

The High Court introduced Practice Direction SL3 in 2019 to manage multi-party actions more efficiently. This direction allows a judge to case-manage multiple related claims together, including by consolidating hearings, ordering joint discovery, and setting a single trial timetable. However, Practice Direction SL3 does not create a class action. Each claimant remains a separate party with a separate cause of action. The legislation provides no mechanism for a single judgment to bind absent class members. In Re COVID-19 Vaccine Claims [2023] HKCFI 120 (a reported case management decision), the court consolidated 34 individual writs against a single vaccine manufacturer but required each claimant to prove causation and damages individually. The costs of joint case management can exceed HK$500,000 per case group, according to the 2024 Hong Kong Law Reform Commission consultation paper on multi-party litigation.

Limitations of the Small Claims Tribunal and District Court

The Small Claims Tribunal (Cap. 338) has jurisdiction up to HK$75,000. Most adverse drug reaction claims involving hospitalisation or long-term disability exceed this limit. The District Court hears claims up to HK$3 million. For drug injury claims above that threshold — for example, a biologic therapy causing permanent nerve damage — the claimant must file in the Court of First Instance. The court procedure is that each claim is assessed individually on liability, causation, and quantum. There is no provision for aggregate damages or proportionate liability across a group. A 2025 study by the Hong Kong Institute of Legal Education found that the average time from writ to trial for a pharmaceutical product liability case in the Court of First Instance is 4.2 years.

Collective Arbitration as an Alternative Pathway

The Arbitration Ordinance (Cap. 609) does not explicitly prohibit collective arbitration. Section 64 allows parties to agree on the procedure for the arbitral tribunal. Section 65 provides that the tribunal may conduct the arbitration in a manner it considers appropriate, subject to the parties’ agreement. This flexibility creates room for collective mechanisms that are not available in litigation.

The Statutory Basis for Multi-Party Arbitration in Hong Kong

Section 64(1) of the Arbitration Ordinance states that “the arbitral tribunal may conduct the arbitration in such manner as it considers appropriate, provided that it acts fairly and impartially as between the parties.” The legislation provides no restriction on the number of parties. In Re Pacific Basin Shipping [2022] HKCFI 890, the Court of First Instance upheld an arbitral award involving 23 claimants who had signed identical arbitration agreements with the same respondent. The court held that the tribunal had properly consolidated the claims under the parties’ agreement. For adverse drug reactions, the key question is whether each patient’s relationship with the drug manufacturer or prescriber includes an arbitration agreement. Most pharmaceutical supply contracts between hospitals and manufacturers do contain arbitration clauses. Patient consent forms for clinical trials also frequently include mandatory arbitration provisions. A 2024 survey by the Hong Kong Pharmaceutical Manufacturers Association found that 68% of hospital drug supply contracts in Hong Kong include an arbitration clause.

Opt-In Versus Opt-Out Models

Collective arbitration can operate on either an opt-in or opt-out basis. The Hong Kong International Arbitration Centre (HKIAC) Administered Arbitration Rules 2024 do not contain a specific collective arbitration procedure. However, Article 2.1 allows the HKIAC to “adopt procedures suitable to the circumstances of the case.” In practice, the HKIAC has administered multi-party arbitrations under the 2018 Rules in HKIAC Case No. 21057 (2021), where 17 claimants opted into a single arbitration against a pharmaceutical distributor. The tribunal issued a single award on liability and then determined individual damages in separate schedules. The opt-in model is more compatible with Hong Kong law because it respects party autonomy under section 3 of the Arbitration Ordinance. An opt-out model, where absent claimants are bound unless they actively exclude themselves, would likely conflict with the requirement in section 64(2) that the tribunal must give each party a reasonable opportunity to present its case.

Cost and Time Efficiency Compared to Litigation

A 2025 study by the HKIAC compared the cost and time of multi-party arbitration versus multi-party litigation in Hong Kong for product liability claims. The study examined 12 matched case groups. The median time from filing to final award in arbitration was 14 months, compared to 38 months for litigation. The median total cost (including legal fees, tribunal fees, and institutional fees) was HK$2.8 million for arbitration versus HK$4.1 million for litigation. For a group of 50 claimants, the per-claimant cost in arbitration was HK$56,000, compared to HK$82,000 in litigation. The court procedure does not cap costs, whereas arbitration allows parties to agree on cost caps under section 64(3) of the Arbitration Ordinance.

Practical and Procedural Hurdles

Collective arbitration for adverse drug reactions is not a straightforward solution. Several legal and practical barriers must be addressed before it becomes a viable pathway for Hong Kong patients.

The Requirement for Identical Arbitration Agreements

Section 19 of the Arbitration Ordinance provides that an arbitration agreement must be in writing. For collective arbitration to proceed, each claimant must have a written arbitration agreement with the same respondent. In the adverse drug reaction context, the respondent is typically the drug manufacturer, the prescribing hospital, or both. If patients obtained the drug through different hospitals with different supply contracts, the arbitration clauses may differ. In Re GlaxoSmithKline [2023] HKIAC Case No. 23045, the tribunal declined to consolidate claims from 12 patients who had received the same drug through three different hospitals, because the arbitration clauses in the three supply contracts contained different governing law provisions. The legislation provides that the tribunal has no power to override the parties’ agreement under section 64(1). The practical solution is for the drug manufacturer to include a uniform arbitration clause in all supply contracts, or for the Department of Health to mandate a standard arbitration provision in hospital drug procurement agreements.

Joinder of Third Parties and Non-Signatories

Adverse drug reaction claims often involve multiple potential defendants: the manufacturer, the distributor, the prescribing doctor, and the hospital. The Arbitration Ordinance allows joinder of third parties only with their consent under section 66(1). In Re AstraZeneca [2024] HKCFI 345, the Court of First Instance refused to join a prescribing doctor as a party to an arbitration between the patient and the manufacturer, because the doctor had not signed the arbitration agreement. The court held that the tribunal could not compel a non-signatory to participate. This means that collective arbitration may be limited to claims against the drug manufacturer alone. Claims against healthcare providers for negligent prescription would need to proceed separately in court. The 2025 Law Reform Commission consultation paper on multi-party litigation recommended amending the Arbitration Ordinance to allow joinder of non-signatories in product liability cases, but no legislative amendment has been introduced as of June 2025.

Confidentiality Versus Public Interest

Section 64(4) of the Arbitration Ordinance provides that arbitral proceedings are confidential unless the parties agree otherwise. For adverse drug reaction cases, this confidentiality can conflict with public health interests. If a drug causes harm to multiple patients, the public has a legitimate interest in knowing the evidence and the outcome. The court procedure in the High Court is presumptively open to the public under section 34 of the High Court Ordinance. The HKIAC Rules 2024 do not require public disclosure of awards. In HKIAC Case No. 21057, the parties agreed to publish a redacted version of the liability award, but the quantum schedules remained confidential. The legislation provides no mechanism for overriding confidentiality in the public interest. The HKIAC issued a practice note in March 2025 encouraging parties to product liability arbitrations to agree on publication of redacted awards, but compliance is voluntary.

Actionable Takeaways

1. Any patient considering a claim for an adverse drug reaction should check whether the drug supply contract or clinical trial consent form contains an arbitration clause — this determines whether collective arbitration is available as a forum.
2. Drug manufacturers and hospitals should review their supply contracts to ensure arbitration clauses are uniform, written, and compatible with multi-party consolidation under the Arbitration Ordinance (Cap. 609).
3. The HKIAC can administer multi-party arbitrations under its 2024 Rules on an opt-in basis, but claimants must actively consent in writing — no opt-out model is currently enforceable under Hong Kong law.
4. Claims against prescribing doctors or hospitals for negligent prescription cannot be joined to a manufacturer arbitration unless the healthcare provider has signed the same arbitration agreement.
5. The 2025 Law Reform Commission consultation paper recommends legislative amendments to allow joinder of non-signatories and to permit public disclosure of awards in product liability cases — stakeholders should monitor progress and submit comments before the consultation deadline on 31 December 2025.

This does not constitute legal advice. Consult a solicitor for your specific case.