Hong Kong: Third party funding for mediation delayed

Hong Kong has published its long-awaited Code of Practice for third party funders and announced that amendments to the Arbitration Ordinance, which permit funding of Hong Kong arbitrations, will come fully into force on 1 February 2019.   However, proposed amendments to the Mediation Ordinance (Cap. 620) regarding non-Hong Kong mediations, costs and disclosure of mediation communications have been deferred for further consultation.

The Department of Justice has announced that commencement of these New Mediation Ordinance provisions will be deferred to a future date following further deliberation at the Steering Committee on Mediation. The DoJ will continue to engage the mediation community and relevant shareholders, so that the New Mediation Ordinance provisions may be brought into operation as soon as practicable with the necessary code of practice to complement it. Continue reading

UK: Civil Justice Council report on ADR calls for review of Halsey guidelines but stops short of recommending mandatory mediation

The Civil Justice Council’s ADR working group has released its final report on ADR and Civil Justice, following consultation on its interim report released last year. The broad mandate of the review was “to maintain the search for the right relationship between civil justice and ADR” and to promote debate over possible reforms.

The report includes various recommendations aimed at improving the awareness of ADR (both in the general public and in the professions/judiciary) and the availability of ADR (both in terms of funding/logistics and regulation of the professionals involved).

However the recommendations likely to be of most interest to users of the civil justice system in the short term are those that relate to Court/Government encouragement of ADR.  In this regard:

  • The report does not support blanket compulsion of ADR in the sense of requiring proof of ADR activity as an administrative precondition to any particular step in the litigation.
  • It also rejects the introduction of mandatory Mediation Information and Advice Meetings (as used in the family courts) as a precondition to pursuing civil claims.

Continue reading

A new international Convention for the enforcement of mediated settlements

We are soon to have a new international regime for the enforcement of mediated settlement agreements.

The UN Convention on International Settlement Agreements Resulting from Mediation, which will be known as the Singapore Convention, was approved in June 2018 by UNCITRAL (the United Nations Commission on International Trade Law).  It is expected to be open for signature from 1 August 2019 and will come into force upon ratification by at least three contracting States.

The Convention will oblige contracting States (except in specified limited circumstances) to recognise international settlement agreements resulting from mediation in commercial disputes, either to enforce the agreement or allow it to be invoked as a defence to a claim (that is, either as a sword or a shield).

It is hoped that the Singapore Convention will achieve for mediation what the New York Convention has for international arbitration, encouraging a greater global acceptance of mediation as a credible and reliable dispute resolution mechanism in international commerce.

For more detail on the Convention, and commentary on how likely it is to achieve that aim, see the article by Jan O’Neill (Professional Support Lawyer, London) recently published on the Practical Law Dispute Resolution Blog, here.

 

Singapore Convention on enforcement of mediated settlement agreements published

Further to our earlier post, the Singapore Convention has now been published. It will be signed in Singapore on 1 August 2019 and will come into effect six months after at least three states have ratified it.

The drafters’ goal is for the Singapore Convention to be for mediation what the New York Convention is for arbitration.  That the Convention is potentially significant in terms of enforcement is clear. But it is also important in terms of elevating the status of international commercial mediation and lending greater credibility to the process. Much will depend on uptake, but with the New York Convention as a blueprint, the goal is to secure numerous signatory states at the outset.

The Convention will aid enforcement of mediated settlement agreements relating to international commercial disputes, being those where:

  • at least two parties to the settlement agreement operate in different contracting states; or
  • the state where the substantial part of the settlement agreement is to be performed is different to where the parties to the settlement conduct business; or
  • the state where the settlement agreement is most closely connected is different to where the parties to the settlement conduct business.

The Convention carves out consumer, personal, household, family, inheritance and employment disputes from its jurisdiction.

There are various procedural requirements for the underlying settlement agreement to qualify for enforcement under the Convention. There are also grounds for refusing to grant relief listed in the Convention. These include the incapacity of the parties, invalidity of the settlement agreement, serious breach of mediator standards, mediator bias and public policy.

UK commercial mediation market grows 20% – CEDR mediation audit results published

The Centre for Effective Dispute Resolution (CEDR) has released the results of its Mediation Audit 2018, based on a survey of practising mediators in the UK. (The results of parallel surveys of lawyer attitudes to mediation, and of US practitioners’ views, are to be published separately).

The audit is the eighth biennial survey CEDR has conducted in the last 16 years (in conjunction with the Civil Mediation Council).  The 2018 audit received 336 responses from UK mediators.

While it is important to bear in mind the empirical limitations of such reviews based on survey responses from a sample of market participants, the audit does indicate a number of interesting trends in civil and commercial mediation in the UK.    CEDR’s key findings from the responses include: Continue reading

Dispute resolution in Asia-Pacific: Parties seek efficient processes and enforceable outcomes

Following our report on the Global Pound Conference series, which brought together over 4000 stakeholders at 28 conferences worldwide, our analysis of the Asia Pacific results reveals different demands in Asia and Oceania.

Six Asia Pacific cities hosted conferences to assess how dispute resolution can be improved: Singapore; Hong Kong; Chandigarh, India; Bangkok, Thailand; Sydney, Australia and Auckland, New Zealand. Each conference addressed the demand side (commercial party perspectives on dispute resolution); the supply side (what advisers and providers are delivering to commercial parties); the key obstacles and challenges; and what needs to be addressed to effect change.

Region-wide, the data highlights that commercial parties want to use mediation and other ADR processes more, either alone or as an adjunct to adversarial proceedings. However, the data shows that the market is not responding adequately. As a result, mediation remains under-utilised, and actual use lags behind positive attitudes to it. Unless parties and their advisors actively take a different course (for example through inserting escalation clauses in contracts, actively proposing mediation at the point of dispute, or by following mandatory mediation protocols), there is likely to remain a perpetuation of the “same old processes” – litigation and arbitration.

Read more analysis of the Asia Pacific results on our Asia Disputes Notes blog here.

Global Pound Conference report published

The Global Pound Conference series – a unique and ambitious initiative to inform how civil and commercial disputes are resolved in the 21st century – brought together over 4000 dispute resolution stakeholders, at 28 conferences spanning 24 countries worldwide.

Herbert Smith Freehills, global founding sponsor of the series, has teamed up with PwC and IMI (International Mediation Institute) to identify key insights that emerge from the extensive voting data collected during the series. With a focus on the needs of corporate users of dispute resolution, this ground-breaking report challenges the traditional and fundamental notions of what clients want and how lawyers should represent them in a dispute. We identify four key global themes along with four notable regional differences.

Global themes emerging from the voting data reveal:

  • Efficiency is the key priority of parties when choosing dispute resolution processes.  Most dispute resolution continues to have as its frame of reference an adversarial process (litigation or arbitration) based on asserted legal rights. Yet two thirds of in-house counsel canvassed at GPC events said they require more efficiency in dispute resolution. This questions whether traditional dispute resolution processes still meet the needs of end users.

  • Parties expect greater collaboration from advisors in dispute resolution. Around two thirds of in-house counsel said they need to see more collaboration from their lawyers. This applies when lawyers are interacting with both  clients and opponents. This questions traditional notions of how lawyers should represent clients. Is the zealous advocate, fighting their client’s corner tenaciously at all costs, still appropriate?

  • Global interest in the use of pre-dispute protocols and mixed-mode dispute resolution. With the data pointing towards a more collaborative and efficient approach, unsurprisingly delegates felt that disputing parties should be encouraged to consider processes like mediation before they commence formal proceedings. The data also showed a growing desire by parties to use mediation in parallel with litigation and arbitration.

  • Some uncomfortable home truths for lawyers. In-house counsel were judged to be change enablers. As such, they shoulder a significant responsibility to encourage their organisations (and, if necessary, their external lawyers) to consider dispute resolution options more carefully, including using processes like mediation. In contrast, 70% of global delegates said external lawyers were the primary obstacles to change in commercial dispute resolution.

These insights show the potential of the GPC series to inform further studies and discussions across the world. Download your copy of our report here to learn more.

To discuss the content of this report and its impact on your organisation’s approach to dispute resolution, please contact the authors.

 

Podcast: How arbitration and ADR can be used together

In this short podcast Professional Support Consultants Hannah Ambrose and Vanessa Naish look at how Arbitration and Alternative Dispute Resolution (ADR) can work together. The podcast considers how parties can agree to an ADR process in addition to or alongside arbitration (looking at approaches in different jurisdictions and under different arbitral institutional rules), before turning to the complexities of drafting escalation clauses in contracts. Finally it looks at how a successful settlement should be formalised to be most effective and enforceable.

For more on this topic, see our guide ‘Use of mediation in arbitration‘, from our popular series of ADR Practical Guides.  (The full set of ADR Practical Guides can be accessed here – including a business-friendly introduction to mediation and guides to preparing for a mediation).

For further information, please contact Hannah Ambrose, Vanessa Naish or your usual Herbert Smith Freehills contact.

Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112

Article published – ADR reform: one size does not fit all

On 6 March, the Civil Justice Council held a workshop to discuss the recommendations made in its interim report on ADR, which was subject to consultation late last year. The interim report addresses concerns regarding a perceived underuse of ADR within some sections of the civil justice system and suggests a variety of possible corrective measures. The proposals include a power for the court to determine whether costs sanctions should be imposed for unreasonable conduct relating to ADR (such as an unreasonable refusal to mediate) not only at the end of a case, as currently, but during the matter when the decisions regarding ADR are taken.

Jan O’Neill has published a post on Practical Law’s Dispute Resolution blog in which she questions how realistic the suggestion of “midstream” assessment of parties’ conduct relating to ADR would be in practice. She suggests that many of the concerns expressed in the report as to the underuse of ADR are not relevant to many larger, complex claims, and urges the working group to tailor any final recommendations to the specific courts or dispute types for which the evidence suggests they are needed and practicable.

Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).

 

 

An international convention on the enforcement of mediated settlements – UNCITRAL moves one step closer

The UNCITRAL working group that has for several years now been considering the potential for an international enforcement regime for international mediation has now completed its work and produced draft instruments.

At its most recent meeting in New York, the UNCITRAL Working Group II (Dispute Settlement – formerly Arbitration and Conciliation) approved a draft convention and a draft amended Model Law on international settlement agreements resulting from mediation. Continue reading