Hong Kong court imposes costs sanctions for unreasonable refusal to mediate

A recent Hong Kong judgment has added to the growing body of case law illustrating courts’ intolerance of litigants who refuse to engage with ADR.   The decision will be of interest to litigants not just in Hong Kong but in other jurisdictions (including England) where similar procedural rules allow a court to penalise a party whose refusal to mediate is held to have been unreasonable: Wu Yim Kwong Kingwind v Manhood Development (24/07/2015, DCCJ 3839/2012).

Of particular interest are the court’s findings that the successful defendant’s refusal to mediate could not be justified by:

  • the fact that the claim was for possession of real property, rather than a monetary claim.  The court refused to accept that this meant the claim was not susceptible to negotiation at all; or
  • the other party’s uncooperative attitude in the proceedings more generally and the fact that it had not instigated settlement negotiations itself.  Aside from the fact that bilateral settlement negotiations are not to be equated with more structured ADR procedures like mediation, the court noted that ‘one must not assume that the process of mediation would not bring about changes in attitudes’. This echoes the English High Court’s recent warning that litigants should not consider themselves justified in dismissing mediation as futile purely on the basis of the stance adopted by their opponent up to that point – ‘tactical positioning should not be too easily labelled as intransigence’.

Read our Hong Kong office’s briefing on the decision here.

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Filed under Asia, Mediation (General), Refusal to mediate

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