January 28, 2021
I. Legal Framework for Mediation in Hong Kong
1. The Mediation Ordinance (Cap. 620), law of Hong Kong, is the most important legislation relating to mediation in Hong Kong. It applies to any mediation conducted under an agreement to mediate if either of the following circumstances applies, subject to few exceptions:
(a) the mediation is wholly or partly conducted in Hong Kong; or
(b) the agreement provides that Mediation Ordinance, or the law of Hong Kong is to apply to the mediation.
2. Mediation Ordinance provides that mediation as a structured process comprising one or more sessions in which one or more impartial individuals (mediators), without adjudicating a dispute or any aspect of it, assist the parties to the dispute to do any or all of the following:
(a) identify the issues in dispute.
(b) explore and generate options.
(c) communicate with one another; and
(d) reach an agreement regarding the resolution of the whole, or part, of the dispute.
3. For information, some mediation proceedings or proceedings with a similar nature (i.e., conciliation) are regulated by other legislations in Hong Kong, such as the Arbitration Ordinance (Cap. 609) and the equal opportunities laws, etc.
II. Private Mediation
4. Generally speaking, the majority of mediation proceedings conducted in Hong Kong are private mediation. Mediation in Hong Kong is voluntary in nature. Parties are allowed to (i) refer their dispute to mediation for dispute resolution prior or during litigation proceeding; and (ii) to suspend and/or withdraw from the mediation proceeding at any time, subject to the applicable mediation rules as agreed by the parties.
5. Due to the confidential nature of mediation, there is no statistics of settlement agreements in private mediation in Hong Kong.
III. Court-Related Mediation
6. The Judiciary of Hong Kong (“Judiciary”) is very supportive to mediation; and have implemented various pilot schemes and issued various Practice Directions (“PD”) to promote mediation as an effective alternative to litigation. PD 31, which applies to all civil proceedings in the Court of First Instance and the District Court of Hong Kong, is one of the most important PD relating to mediation in Hong Kong. Under PD 31, (i) the parties and their legal representatives have a duty to assist the courts to facilitate the settlement of disputes; and (ii) the courts are allowed to make adverse costs orders against any party on the ground of unreasonable failure to engage in mediation. Notwithstanding the above, mediation is not considered as a compulsory part of the litigation proceeding in Hong Kong because parties are allowed to refuse to engage in mediation, if the parties have good reasons.
7. For information, a summary of the PDs relating to mediation is set out below:
(a) PD 31 Mediation (civil cases)
(b) PD 3.3 Voluntary Mediation in Petitions presented under Sections 168A and 177(1)(f) of the Companies Ordinance, Cap 32 (company related disputes)
(c) PD 6.1 Construction and Arbitration List (construction disputes)
(d) PD 15.10 Family Mediation (family cases)
(e) PD 18.1 The Personal Injuries List (personal injuries cases)
(f) PD 18.2 The Employees’ Compensation List (employment disputes)
(g) PD 20.2 Probate and Administration of Estate Proceedings (other than Applications under the Non-contentious Probate Rules (Cap.10A)) (probate matters)
(h) LTPD CS No.1/2011 Mediation for Compulsory Sale Cases under the Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545) (compulsory sale cases)
(i) LTPD BM No.1/2009 Case Management and Mediation for Building Management Cases (building management cases)
8. In January 2021, the Judiciary launched the Case Settlement Conference Pilot Scheme in the District Court. In gist, this pilot scheme is aimed to introduce and enhance the idea of assisted settlement into the case management process of litigation to further promote the use of alternative dispute resolution in civil litigation and to instill among litigants as well as their legal representatives a culture of exploring settlement in Hong Kong.
9. In sum, Hong Kong has a strong environment for Court-Related Mediation because the Judiciary is very active in promoting and facilitating litigants to resolve their disputes by mediation or other dispute resolution models. However, parties are allowed to refuse to refer their disputes to mediation for dispute resolution in some circumstances.
10. For information, the statistics of the settlement agreement in Court-Related Mediation cases are set out below:
2017 2018 2019
CFI DC CFI DC CFI DC
Partial 1% 1% 1% 3% 2% 1%
Full 47% 42% 50% 45% 49% 41%
Total 48% 43% 51% 48% 51% 42%
CFI: Court of Frist Instance DC: District Court
IV. Solicitor-Mediation-Advocate (Lawyers as Representatives in Mediation)
11. In Hong Kong, a party may be accompanied by one or more persons, including legally qualified persons, to assist and advise them in mediation (subject to applicable rules).
12. Solicitor-mediation-advocates are practising solicitors who have received training in mediation advocacy. Their major duties are to facilitate the mediation proceeding to advance their clients’ interest in mediation. Solicitor-mediation-advocates are required to have sufficient knowledge and skills in assisting their clients in among others, planning and preparing for the mediation, and in particular, arguing for their clients’ positions, needs and interests in a non-adversarial way in the mediation process. The Law Society considered that mediation-advocacy will become one of the most fast-growing areas of practice to solicitors in Hong Kong in future.
V. Solicitor-Mediators (Lawyers as Mediators)
13. The mediation profession in Hong Kong is significantly market driven and self-regulated. Although there are no statutory requirements to lawyers (solicitors and barristers) to act as mediators in Hong Kong, lawyer-mediators, in addition to their professional legal knowledge and experience, are expected to have completed relevant training and assessments in mediation; and thus, have sufficient knowledge, skills and experience on mediation.
14. Solicitor-mediators are practising solicitors who have completed mediation training and mediation assessment recognised by the Law Society of Hong Kong. They are expected to be have sufficient skills in mediation, legal knowledge on court procedures and be experienced in helping the parties to identify and resolve their issues. Moreover, some solicitor-mediators have in addition extensive expertise in particular practice areas, e.g., personal injuries or family disputes. Their technical skills and legal knowledge would be particularly helpful to the parties to resolve their disputes in an efficient, effective and economical manner. Nevertheless, solicitor-mediators are no allowed to give legal advice to any party in relation to the dispute and mediation proceeding (i.e., not to act as a legal advisor).
15. For information, Hong Kong Mediation Accreditation Association Limited (“HKMAAL”) is the leading accreditation body of mediators in Hong Kong. Any person who wants to become an accredited general mediator (for civil and commercial cases) of the HKMAAL shall satisfy the following requirements:
(i). to complete a recognised training in general mediation which must be at least 40 hours long.
(ii). to pass two simulation mediation cases (role plays) conducted by the HKMAAL; and
(iii). to have at least 3 years full-time working experience prior to submitting their application for consideration by the HKMAAL.
16. There is no statutory or uniform code of practice for mediators in Hong Kong. Notwithstanding the above, the majority of mediators in Hong Kong have undertaken to observe the Hong Kong Mediation Code which is published by the Department of Justice of the Government of Hong Kong. Moreover, mediators who are solicitors and barristers are also subject to their respective codes of practice, for example, solicitor-mediators are required to observe the Hong Kong Solicitors’ Guide to Professional Practice.
VI. United Nations Convention on International Settlement Agreements Resulting from Mediation (“Convention”)
17. On 7 August 2019, 46 countries (including China, USA, India, South Korea, etc.) signed the Convention which was aimed (i) to facilitate international trade; and (ii) to promote the use of mediation for the resolution of cross-border commercial disputes. For information, the Convention has 53 signatories as of 7 January 2021.
18. Although Hong Kong is not a signatory to the Convention, China may extend the Convention to Hong Kong in future.
19. On the other hand, it is noted that some major economies in Europe (including UK, France, Germany, Spain, Italy, Netherlands, etc.) are not signatories of the Convention which may have aversive impact on the influence of the Convention.
20. The Convention applies to international commercial settlement agreements resulting from mediation. However, it does not apply to the following:
(i). settlement agreements that are enforceable as a judgment or as an arbitral award; and
(ii). settlement agreements concluded for personal, family or household purposes by one of the parties (a consumer), as well as settlement agreements relating to family, inheritance or employment law.
21. Under the Convention, the courts of a Party to the Convention are expected to handle applications:
(i). to enforce a settlement agreement in accordance with its rules of procedure and under the conditions laid down in the Convention; and
(ii). to allow a mediation party to invoke the settlement agreement in accordance with its rules of procedure and under the conditions laid down in the Convention, in order to prove that the matter was already resolved by the settlement agreement.
VII. Opportunities and Challenges Led by the Convention
22. Generally speaking, the Convention aims to provide greater certainty of; and lower the cost on enforcement of convention settlement agreements among the Parties to the Convention. It will provide more incentives to disputants to refer their cross-border commercial disputes to mediation for dispute resolution; and thus, provide facilitate international trade and provide more business opportunities to mediation and related practitioners.
23. On the other hand, a competent authority (i.e., a court) of a Party to the Convention may refuse to grant relief on the following grounds laid down in the Convention, including:
(i). if a party to the settlement agreement was under incapacity.
(ii). if the settlement agreement is not binding, null and void, inoperative or incapable of being performed under the law to which it is subjected.
(iii). if there was a serious breach by the mediator of standards applicable to the mediator, without which breach that party would not have entered into the settlement agreement; and
(iv). if granting relief would be contrary to the public policy of the contracting state.
24. In light of the above, it is anticipated that mediators may need to face new challenges, which are similar to the challenges to arbitrators under the New York Convention, including the following challenges:
(i). matters relating to the mediation process (i.e., fairness, procedural matters).
(ii). matters relating to the mediators (i.e., impartiality, independence).
(iii). matters relating to the settlement agreement; and
(iv). matters relating to public policy ground.
These challenges may lead to significant impacts to the practice of mediators.
25. On some occasions, a mediator may be required by a mediation party to supply evidence to a competent authority of a Party to the Convention that a settlement agreement is resulted from mediation for the purpose of reliance and enforcement of that settlement agreement in the relevant Party to the Convention. Arguably, it may lead to additional risks (i.e., breach of confidentiality) to the mediator even the respective mediation case has been concluded.