A recent judgment in Hong Kong regarding a law firm may be of interest to employers managing senior employees with wide operational discretion. Although the case arose in a law firm setting, the court’s reasoning on authority, loyalty, record-keeping and proof of loss has wider relevance for employment disputes across industries.
The plaintiff law firm sued a former salaried consultant, alleging that she had breached duties owed to her employer by undercharging a major client, failing to keep proper time and attendance records, removing case files on departure, and causing the firm to lose the chance to recover substantial additional fees.
The consultant had managed the client relationship, issued interim and final bills, written off significant time costs, and later resigned to join another firm that took over the client’s matter. The employer claimed damages of more than HK$15 million (plus related costs), arguing that she had no authority to discount fees to that extent and had failed to preserve proper records.
The court dismissed the employer’s claim in full and ordered it to pay the employee’s costs. The court accepted that, as an employee, the defendant owed duties of loyalty, good faith and fidelity, including a duty to have regard to the employer’s interests.
However, the court was not satisfied that the employee had breached those duties by writing off time or agreeing the level of fees charged to the client. On the evidence, she...
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