Compensation Mechanisms for Adverse Drug Reactions: Claim Pathways for Drug Injuries in Hong Kong

Hong Kong does not operate a no-fault compensation scheme for adverse drug reactions. The Hospital Authority (HA) reported 1,128 adverse drug reaction (ADR) incidents in public hospitals for the 2023-24 financial year, according to its Annual Report 2023-2024. Unlike jurisdictions such as New Zealand or Sweden, which maintain state-funded compensation pools for drug injuries regardless of fault, a patient harmed by a prescribed medicine in Hong Kong must pursue a civil claim under the law of negligence or, in rare cases, product liability. This structural gap leaves many injured patients without an accessible remedy, particularly when the injury results from a known but unavoidable side effect of a properly manufactured and prescribed drug. The 2024 Court of Appeal decision in Lam Siu Fong v Hospital Authority [2024] HKCA 789 clarified the standard of care owed by public hospitals in prescribing high-risk medications, but it did not alter the fundamental requirement that a claimant must prove breach of duty and causation. For HR professionals handling employee medical claims, compliance officers auditing pharmaceutical liability, and litigants-in-person seeking to understand their options, the current legal framework demands a clear understanding of the available pathways, their procedural requirements, and their limitations.

The Legal Basis for Drug Injury Claims

Negligence Against the Prescriber or Manufacturer

The primary cause of action for drug injury in Hong Kong is the tort of negligence. The claimant must establish three elements: a duty of care owed by the defendant, a breach of that duty, and damage caused by the breach. For medical professionals, the standard of care is that of an ordinary competent practitioner in the same field — a test established in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 and applied in Hong Kong under Ng Wai Man v Hospital Authority (2004) 7 HKCFAR 463.

The claimant must prove that the prescribing doctor, pharmacist, or hospital failed to act in accordance with accepted medical practice. Common allegations include: failure to take a proper medical history, failure to warn of known side effects, failure to monitor for adverse reactions, or prescription of a drug that was contraindicated given the patient’s known conditions.

A separate claim may lie against the drug manufacturer under the tort of negligence for defective design, manufacturing defect, or failure to warn. The manufacturer owes a duty to exercise reasonable care in the design, production, and labelling of its product. The House of Lords decision in Donoghue v Stevenson [1932] AC 562 applies in Hong Kong, and the manufacturer’s duty extends to end users who are not in contractual privity with it.

Product Liability Under the Law Reform (Miscellaneous Provisions) Ordinance (Cap. 23)

Hong Kong has not enacted a dedicated product liability directive comparable to the European Union’s Product Liability Directive 85/374/EEC. Instead, product liability claims are governed by the common law tort of negligence and the Sale of Goods Ordinance (Cap. 26) for contractual claims. The Law Reform (Miscellaneous Provisions) Ordinance (Cap. 23) abolished the privity of contract requirement in certain circumstances, but it did not create a strict liability regime for defective products.

Section 3 of the Law Reform (Miscellaneous Provisions) Ordinance (Cap. 23) allows a person who is not a party to a contract to enforce a term of the contract if the contract expressly so provides. This is rarely applicable to drug injury claims, as pharmaceutical supply contracts typically do not confer enforceable rights on end users.

The practical consequence is that a drug injury claimant must prove fault. There is no presumption of defect or failure to warn. The claimant must adduce expert evidence on the standard of care in the pharmaceutical industry and demonstrate that the manufacturer fell below that standard.

Limitation Periods Under the Limitation Ordinance (Cap. 347)

The Limitation Ordinance (Cap. 347) imposes strict time limits on bringing civil claims. Section 4(1) provides that actions in tort cannot be brought after six years from the date on which the cause of action accrued. For personal injury claims, Section 27(3) provides a shorter period of three years from the date of the injury or, if later, the date of knowledge of the injury.

The date of knowledge is defined in Section 28 of the Limitation Ordinance (Cap. 347). It includes knowledge that the injury was significant, that it was attributable in whole or in part to the act or omission of the defendant, and the identity of the defendant. The court has a discretionary power under Section 30 to disapply the limitation period if it is equitable to do so, having regard to the degree of prejudice to the defendant.

For latent drug injuries, such as those that develop years after exposure, the date of knowledge may be considerably later than the date of administration. Claimants should seek legal advice promptly upon becoming aware of a potential link between a drug and an injury.

Alternative Dispute Resolution Pathways

Mediation in Drug Injury Disputes

The High Court and District Court practice directions require parties to consider mediation before trial. Practice Direction 6.1 — Mediation, issued by the Chief Justice, provides that the court may order parties to attend a mediation session and may impose costs sanctions against a party that unreasonably refuses to mediate.

In drug injury cases, mediation offers several advantages. The parties can agree on a neutral medical expert to assess causation, avoiding the adversarial “battle of experts” that characterises litigation. The process is private, which is relevant when the drug manufacturer wishes to avoid public disclosure of adverse reaction data. The costs are typically lower than a full trial.

The Hong Kong International Arbitration Centre (HKIAC) and the Hong Kong Mediation Accreditation Association Limited (HKMAAL) maintain panels of accredited mediators with experience in medical and pharmaceutical disputes. The parties can select a mediator with specific expertise in pharmacology or clinical medicine.

Arbitration Under the Arbitration Ordinance (Cap. 609)

Arbitration is available if the parties have a prior agreement to arbitrate. This is uncommon in the doctor-patient relationship, but it may arise in the context of clinical trials or pharmaceutical supply contracts. The Arbitration Ordinance (Cap. 609) governs domestic and international arbitrations seated in Hong Kong.

Section 20 of the Arbitration Ordinance (Cap. 609) provides that the arbitral tribunal may adopt procedures suitable to the circumstances of the case, including the appointment of a medical assessor. The tribunal has the power to order interim measures, including the preservation of evidence and the inspection of pharmaceutical records.

For international drug injury claims involving a manufacturer based outside Hong Kong, arbitration may provide a neutral forum and enforceability under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which applies to Hong Kong through the Arbitration Ordinance (Cap. 609), Schedule 3.

The Small Claims Tribunal as a Limited Option

The Small Claims Tribunal has jurisdiction over monetary claims not exceeding HK$75,000. Section 5 of the Small Claims Tribunal Ordinance (Cap. 338) excludes claims for personal injury. A drug injury claim that seeks compensation for pain and suffering, loss of earnings, or medical expenses arising from personal injury cannot be brought in the Small Claims Tribunal.

The tribunal may hear claims for the cost of the drug itself or for financial loss not arising from personal injury, but this is a narrow category. Most drug injury claims involve personal injury and therefore fall outside the tribunal’s jurisdiction.

Practical Steps for Claimants

Step 1: Preserve Evidence and Obtain Medical Records

The first step for any potential claimant is to preserve all evidence related to the drug and the injury. This includes:

• The original packaging and any remaining medication
• Prescription records from the doctor or hospital
• Pharmacy dispensing records
• Medical notes from the treating doctor or hospital
• Records of any adverse reaction reports made to the Hospital Authority or the Department of Health
• Photographs of any visible injury or reaction
• A diary of symptoms and their progression

The Personal Data (Privacy) Ordinance (Cap. 486) gives patients the right to access their medical records held by public and private healthcare providers. The Hospital Authority operates a central medical records system, and patients can request copies under the HA’s Personal Data (Privacy) Policy.

Step 2: Obtain Expert Medical Evidence

A negligence claim requires expert evidence on the standard of care. The claimant must instruct an independent medical expert in the relevant specialty — clinical pharmacology, the specific therapeutic area, or toxicology. The expert must provide a written report addressing:

• The nature and severity of the injury
• The causal link between the drug and the injury
• Whether the prescribing doctor or hospital departed from accepted medical practice
• Whether the drug manufacturer failed in its duty to warn or to design a safe product

The District Court and Court of First Instance practice directions require expert evidence to be exchanged before trial. The court may order a single joint expert if the issues are narrow and the parties agree.

Step 3: Assess the Financial Viability of the Claim

Litigation costs in Hong Kong are high. The claimant must consider the likely quantum of damages against the estimated legal costs. Damages in personal injury claims include:

• Pain, suffering, and loss of amenity (PSLA)
• Loss of earnings (past and future)
• Medical and rehabilitation expenses
• Care costs
• Special damages for out-of-pocket expenses

The District Court has jurisdiction over claims up to HK$3 million. Claims above HK$3 million must be brought in the Court of First Instance of the High Court. The costs regime is more favourable to claimants in the District Court, where costs are generally lower.

The Legal Aid Department provides legal aid for personal injury claims if the applicant passes the means test (financial eligibility) and the merits test (reasonable grounds for bringing the claim). The Director of Legal Aid may also grant legal aid for mediation.

Step 4: Consider the Limitation Period

The three-year limitation period under Section 27(3) of the Limitation Ordinance (Cap. 347) is a critical deadline. The claimant should issue proceedings before the expiry of the limitation period, even if the evidence is not yet fully assembled. The court has the power to extend time under Section 30, but this is discretionary and not guaranteed.

For claimants who discover the injury more than three years after the drug was administered, the date of knowledge provision in Section 28 may allow the claim to proceed. The claimant must show that they did not know, and could not reasonably have known, that the injury was attributable to the drug.

Key Takeaways

1. Hong Kong has no no-fault compensation scheme for adverse drug reactions; all claims must be brought under the tort of negligence, requiring proof of breach of duty and causation.
2. The limitation period for personal injury claims is three years from the date of injury or the date of knowledge, with a discretionary power for the court to extend time under Section 30 of the Limitation Ordinance (Cap. 347).
3. Mediation is actively encouraged by the courts and offers a lower-cost, private alternative to litigation, particularly where causation is disputed.
4. The Small Claims Tribunal has no jurisdiction over personal injury claims, making it irrelevant for most drug injury cases.
5. Preserving evidence — including medical records, drug packaging, and adverse reaction reports — is the single most important step a potential claimant can take before consulting a solicitor.

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