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.

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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

The role of mediation in the resolution of Belt and Road Initiative disputes

China’s Belt and Road Initiative (BRI) has gained huge momentum of late, with governments, companies and lawyers keen to maximise the many opportunities it presents. The resolution of disputes arising from the BRI is no exception. The sheer complexity and scale of BRI projects is prompting a welcome review of dispute resolution processes, with a view to resolving BRI disputes more quickly and amicably, ideally in a confidential and enforcement-friendly environment.
Recent developments suggest that the BRI presents an opportunity for less formal procedures, like mediation, to flourish and enter the mainstream. Indeed, three key BRI jurisdictions – China, Singapore and Hong Kong – have recently promoted mediation in the context of BRI disputes.

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EU Parliament Resolution on the implementation of the Mediation Directive

The EU Parliament has adopted a Resolution on the implementation of the EU Mediation Directive (2008/52/EC), containing recommendations aimed at increasing the use of mediation in civil and commercial disputes throughout the EU.

The Resolution follows a 2016 report by the EU Commission which concluded that, overall, the Mediation Directive had added value, particularly by prompting significant legislative changes in several Member States. No revision of the Directive itself was recommended. However, the report noted continuing difficulties with the functioning of many of the national mediation systems in practice. These were attributed principally to the lack of a “mediation culture” in many Member States, insufficient knowledge of how to deal with cross-border cases, the low level of awareness of mediation, the functioning of quality control mechanisms for mediators and a reluctance by courts to propose mediation.

In response, Parliament has made the following recommendations:

  • EU Member States should step up their efforts to encourage the use of mediation in civil and commercial disputes, such as through information campaigns, improved cooperation between legal professionals and an exchange of best practices.
  • The Commission should assess the need to develop EU-wide quality standards for the provision of mediation services.
  • The Commission should assess the need for member states to establish national registers of mediated proceedings. (subject to data protection rules).
  • The Commission should undertake a detailed study on the obstacles to the free circulation of foreign mediation agreements across the EU, and on options to promote the use of mediation.
  • The Commission should find solutions to extend the scope of mediation to other civil or administrative matters.

We will report on any steps to implement these recommendations in due course.

Apology legislation passed in Hong Kong – what does it mean for you

On 13 July, Hong Kong’s Legislative Council passed a law (the Apology Law) intended to facilitate the resolution of civil disputes in the territory. The Apology Law, which is expected to be gazetted and come into force shortly, reforms the legal consequences of making any sort of apology (written, oral or by conduct). An apology will not constitute an admission of fault or liability (even if it includes such an admission), nor may it be admissible in evidence to the detriment of the apology maker. This is the case unless the maker of the apology wishes it to be admitted or it falls to be admitted in the usual way through discovery, oral evidence or any equivalent tribunal processes.

Hong Kong is the first jurisdiction in Asia to enact apology legislation and its Apology Law is the broadest enacted to date worldwide. The driver behind it is that apologies may in some circumstances 'unlock' disputes and lead to settlement without recourse to formal legal action. Since parties (and their lawyers and insurers) may be reluctant to do anything that may be construed as an admission of liability, apologies have to date been sparse. The Apology Law seeks to incentivise disputing parties to make apologies, whether in the direct aftermath of an accident or dispute, or further down the line, should the dispute escalate.

The law has far-reaching consequences for anyone involved in contentious civil disputes, whether before the courts or tribunals in Hong Kong. The Apology Law has the scope substantially to change the way insurance, evidence and settlement are approached in civil proceedings and regulatory and disciplinary matters. The scope for ‘tactical’ apologies by counterparties should be borne in mind as set out below.

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Global Pound Conference Hong Kong – a mandate for change

Hong Kong's status as a leading international dispute resolution hub is well-known. It enjoys a strong, independent judiciary as well as world class international arbitration services. Mediation and other forms of ADR are heavily supported by a myriad of institutions. Although not a compulsory requirement, mediation in the context of civil litigation tends to be interpreted by commercial parties as a mandatory step. Against this backdrop, delegates voted at the recent Global Pound Conference Hong Kong, which saw over 200 delegates from across Hong Kong's disputes market congregate to discuss their approach to commercial dispute resolution. Hong Kong's Secretary for Justice, Chief Justice and Solicitor General headlined the conference.

Click here for our ebulletin on the Hong Kong results, and here for an article on technology in dispute resolution, featuring partner May Tai.

Click here to download our synopsis and infographics on the Hong Kong data as featured on our ADR hub.

Click here to download the aggregated results from the first 18 Global Pound Conference events, which have taken place in 12 countries in Africa, the Americas, Asia, Europe and the Middle East. This includes the very first analysis of the overall trends set to shape the future of dispute resolution globally.

The above provide insights for all stakeholders  – commercial parties, lawyers, experts, judges, arbitrators, mediators and government – on the areas of focus for Hong Kong as it seeks to maintain  – and expand – its position as a leading dispute resolution centre.

Mediation in Hong Kong and the Global Pound Conference: article published

Julian Copeman, May Tai and Anita Phillips discuss their client research and the outputs of the recent Global Pound Conference to assess what is required to bring mediation into the mainstream for commercial parties in Hong Kong. Click here to access their article in Asian Dispute Review, which was published on 3 April 2017.