A key element in the success and continuing attraction of the HKSAR is that its judicial system operates on the principle, fundamental to the common law system, of the independence of the judiciary from the executive and legislative branches of government. The courts make their own judgments, whether disputes before them involve private citizens, corporate bodies or the Government itself. And the Government is advised on matters relating to pay and conditions of service of judicial officers by the Independent Standing Committee on Judicial Salaries and Conditions of Service.

The Court of Final Appeal is the highest appellate court in the HKSAR. The court is headed by the Chief Justice. There are three permanent judges and a panel of eight non-permanent Hong Kong judges and nine non-permanent judges from other common law jurisdictions. In hearing and determining appeals, the court will consist of five judges, and the court may, as required, invite a non-permanent Hong Kong judge or a non-permanent judge from other common law jurisdictions to sit on the court. The Chief Justice is the head of the Judiciary. He is assisted in the overall administration by the Judiciary Administrator.

The High Court, comprising the Court of Appeal and the Court of First Instance, is headed by the Chief Judge of the High Court. Sitting in the High Court in addition to the Chief Judge are nine Justices of Appeal and 25 Judges of the Court of First Instance. The Registrar, Senior Deputy Registrars and Deputy Registrars of the High Court deal mainly with interlocutory and taxation matters.

The Court of Appeal hears civil and criminal appeals from the Court of First Instance, the District Court and the Lands Tribunal. The Court of First Instance has unlimited jurisdiction in all civil and criminal matters. Civil matters are usually tried by Court of First Instance judges sitting without juries, although there is a rarely used provision for jury trials in certain cases, including defamation. Criminal offences in the Court of First Instance are tried by a judge with a jury of seven, or when a judge so orders, a jury of nine. The Court of First Instance also hears appeals from the Magistrates' Courts and the Labour and Small Claims Tribunals.

The District Court is one level below the Court of First Instance. It has a Chief District Judge and 33 judges, who sit without a jury in both criminal and civil cases. There are also a Registrar and two Deputy Registrars to deal with interlocutory and taxation matters. The District Court tries criminal cases except murder, manslaughter and rape. The maximum term of imprisonment is seven years. The District Court's civil jurisdiction is limited to disputes with a monetary value of up to $1 million, or recovery of possession of land of rateable value up to $240,000. It has jurisdiction over employees' compensation cases. Its family jurisdiction involves divorce, custody and adoption matters. It also has an appellate jurisdiction over stamp duty appeals.

The Magistrates' Courts process about 90 per cent of the cases in Hong Kong annually. Led by the Chief Magistrate, the team consists of eight Principal Magistrates, 65 Permanent Magistrates and six Special Magistrates sitting in seven locations. Magistrates exercise criminal jurisdiction over a wide range of offences. In general, their sentencing power is limited to two years' imprisonment and a fine of $100,000. Specific statutory provisions empower magistrates to impose sentences of up to three years' imprisonment and a fine of $5 million. Magistrates also handle cases in the Juvenile Courts which deal with offences, except homicide, committed by children and young persons below 16 years of age. Special Magistrates handle minor offences such as traffic contraventions. Their sentencing power is limited to a maximum fine of $50,000 or as specified in their warrants of appointment.

In addition, there are five tribunals. The Lands Tribunal handles tenancy claims, rating and valuation appeals, applications for the compulsory sale of buildings for redevelopment, and compensation assessments when land is resumed by the Government or reduced in value by development. The Labour Tribunal handles claims arising from contracts of employment. The Small Claims Tribunal handles civil claims up to $50,000. The Obscene Articles Tribunal determines whether articles are obscene or indecent. It also classifies articles submitted by authors and publishers. The Coroner's Court conducts inquests and inquires into the causes of and circumstances connected with a death.

In accordance with the Basic Law and the Official Languages Ordinance, the courts can use both official languages in any proceedings.