The Hong Kong GPC – Mediating Commercial Disputes

The Hong Kong Global Pound Conference took place on 23 February 2017 and saw over 200 delegates – judges, commercial parties, corporate counsel, arbitrators, mediators, dispute resolution institutions, government officials and academics – come together to identify trends and cultural preferences in a way that had not been possible through previous studies.

The view from the top

Hong Kong’s Secretary for Justice, Solicitor General and Chief Justice headlined the conference. Their support for mediation to resolve commercial disputes was clear. In his keynote speech, the Secretary for Justice, the Hon Rimsky Yuen SC, called for renewed commitment to promote dispute resolution services to promote the rule of law and access to justice. He set this against the backdrop of economic development and competitiveness in Hong Kong. Its role as an international dispute resolution and commercial centre was clearly highlighted.

In recognising that parties want efficiency when selecting dispute resolution processes, the Secretary for Justice pointed to three measures to promote mediation in the territory:

(1) third party funding (TPF) for arbitration and mediation: in this regard, the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016 was introduced in the Legislative Council (LegCo) on 30 December 2016;

(2) apology legislation: this is aimed at promoting the settlement of disputes before parties become polarised, by recognising that an apology will not constitute an admission of fault or affect insurance cover. An Apology Bill received its second reading in LegCo in February 2017; and

(3) evaluative mediation: the Department of Justice would consider the use of evaluative mediation for IP and other disputes in Hong Kong. A common complaint of mediation in Hong Kong is that mediators are perceived to be too passive, whereas parties often want and need some sort of evaluation to reality check their cases and assist with settlement.

Growth, harmonisation and a necessary culture shift

The Secretary for Justice also highlighted the huge commercial and infrastructure investment expected through the PRC Government’s Belt and Road Initiative. This will undoubtedly lead to an upsurge in international disputes arising from the significant investment over the coming decade.

The harmonisation of dispute resolution has been provided for in the ‘Blue Book on Dispute Resolution Mechanisms for the Belt and Road’, which proposes mediation first, followed by arbitration. This is a complex area, involving 60 countries with different legal systems (some common law, some civil law), but it offers a great opportunity for mediation as a preferred dispute resolution process.

Recognising the GPC as a driver for change in his Closing Address, the Hon Chief Justice Geoffrey Ma highlighted (1) that a culture shift was required to promote collaboration over traditional adversarial approaches to dispute resolution, and (2) the Judiciary’s support for mediation.

He concluded by describing mediation as the most significant development in the administration of justice in Hong Kong in the last 10 – 20 years. He identified it as an integral part of Hong Kong litigation that has the potential to provide access to justice in large measure. In his view, however, mediation could do much more, and more people needed to be convinced of its benefits.

… [A] shift from treating ADR as ‘alternative dispute resolution’ to ‘appropriate dispute resolution’ was overdue.

Hong Kong votes

So, how did the Hong Kong results compare to those of other GPC events?

PricewaterhouseCoopers (PwC) has undertaken in-depth analyses of top priority responses from data gathered at the first seven 2016 GPC events held in Geneva, Lagos, Madrid, Mexico City, New York, Singapore and Toronto.

At each event, participants were asked 20 core questions and told to rank their preferences by order of priority. All figures were based on a total of 650 participants who self-selected at the 2016 events. The results highlighted in the diagram below, show not only some clear similarities with the Hong Kong data outputs, but also some interesting differences, discussed in more detail in the original article.

GPC HK Info Graphic
Click on the image to enlarge.

This is an amended extract to fit the GPC Blog format, please click here to access the full article. This piece was written by Foreign Legal Consultant Anita Phillips and Partners Julian Copeman and May Tai, all at Herbert Smith Freehills in Hong Kong, and was published in Asian Dispute Review on 3 April 2017.

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