Counsel and witnesses

Are the parties typically represented by lawyers in commercial mediation? Are fact- and expert witnesses commonly used?

There are no restrictions regarding party representatives and third parties (including experts) attending as long as all the parties consent and the attendees sign a confidentiality undertaking. Lawyers are usually present for more complex mediations and absent otherwise to save legal costs.

Fact witnesses are seldom present during a mediation meeting. Expert witnesses might be present in very complex cases.

Procedural rules

Are there rules governing the mediation procedure? If not, what is the typical procedure before and during the hearing?

There are no rules governing the mediation procedure.

The facilitative style of mediation is promoted in Hong Kong. The Mediation Code and the assessment criteria of HKMAAL use the facilitative mediation model.

For commercial mediations, the mediator will usually meet privately with the parties after his or her appointment has been finalised and a retainer received. Bundles of documents will already have been prepared for the mediator to review. The parties may agree on the document list prepared for the mediator and each party sometimes prepares a confidential brief for the mediator. Alternatively, each of the parties might prepare their own bundle and mark certain documents as ‘confidential’.

At the private meeting, the mediator would explain his or her role and what the parties might expect at the mediation. The parties will be reminded to prepare the relevant authorisations for those attending the mediation and undertakings of confidentiality. This meeting might touch on some of the merits of the case and is primarily used by the mediator to explain the process, assess the personalities of the negotiating team and understand a bit more of their positions.

The common mediation process model used in Hong Kong is as follows:

  • introduction stage (opening statement of mediator and the parties);
  • exploration stage (initial discussion, common ground or issues, identification of issues, prioritised agenda, discussion of each agenda item (seek objective criteria, options));
  • negotiation stage (initial negotiations, private sessions (underlying issues, reality checking), final negotiations); and
  • settlement stage (analyse if solutions are workable, record in writing).

A simple mediation could be completed within half to one day. A more complex mediation where the parties are keen to settle might take two or more days. Mediations can also be adjourned to allow parties to provide more information.

Tolling effect on limitation periods

Does commencement of mediation interrupt the limitation period for a court or arbitration claim?

No. A court or arbitration claim must be initiated before the expiry of the limitation period.

Enforceability of mediation clauses

Is a dispute resolution clause providing for mediation enforceable? What is the legal basis for enforceability?

ADR clauses are commonplace in Hong Kong for arbitrations. Mediation clauses (mediate first then arbitrate) are starting to gain recognition, but are not often used. Even if a mediation clause is present, without a mandatory system of mediation in Hong Kong, such a clause merely reminds the parties that mediation is an option. Even if the courts were to enforce such a clause, an unwilling party can simply attend the mediation meeting and not participate.

Confidentiality of proceedings

Are mediation proceedings strictly private and confidential?

One of the objects of the Mediation Ordinance is: ‘to protect the confidential nature of mediation communications’ (section 3(b)). The Ordinance clearly states that all ‘mediation communications’ (other than the agreement to mediate or the settlement agreement - section 5) cannot be disclosed except where allowed (section 8(1)). This includes the parties’ consent, when imposed by law, to prevent danger of injury to a child or for seeking legal advice (section 8(2)).

With the leave of the court or tribunal (by application under section 10), section 8(3) further allows disclosure ‘for the purpose of enforcing or challenging a mediated settlement agreement’, where there is a complaint against a mediator or other justifiable purpose.

These are the usual exceptions in most common law jurisdictions.

One notable exception is disclosure for ‘research, evaluation or educational purposes without revealing, or being likely to reveal, directly or indirectly, the identity of a person to whom the mediation communication relates’ (section 8(3)(f)). The Hong Kong government seems anxious to be able to compile statistics on mediation.

No sanctions are imposed by the Ordinance if a mediator breaches confidentiality. Parties who might feel aggrieved would have to defer to common law to seek regress.

Mediation institutions such as the HKMAAL, HKIAC, Law Society and HKMCentre have published ethical and disciplinary rules for mediators on their panels. No reported cases have been published.

Success rate

What is the likelihood of a commercial mediation being successful?

Mediation is more pervasive in the District Courts (approximately 2,900 cases) and Court of First Instance (approximately 5,000 cases) between 2011 to 2018. Approximately 45 per cent of all mediations result in full or partial settlement. No separate statistics are available for commercial cases.

Personal injury cases form a significant percentage of mediation cases and their settlement rates are generally higher. Consequently, settlement rates for commercial cases are likely to be less than 40 per cent.