By its very nature, the relationship between employer and employee is unique. Employment provides not only financial rewards, but can be a source of social status and a measure of self-worth. It is hardly surprising then, that when a dispute arises between an employer and employee, emotions can run high. In this context, the value of an apology should not be underestimated.

The fear that making an apology may prejudice a party’s legal position means that apologies are rarely forthcoming in such disputes. In addition, insurance policies containing terms which prohibit the policy holder from making an admission of fault without the insurer’s consent, create a significant barrier and in practice, insurers rarely agree (unless, for example, there has been a clear breach).

How has the situation changed?

This general reluctance to offer an apology may change once a new law recently passed by the Hong Kong Government comes into effect. The intention behind the Apology Ordinance was to remove some of the most common obstacles to parties making an apology and to facilitate the resolution of disputes by enabling early settlement without recourse to formal legal action.

Once in force, the Apology Ordinance will give statutory protection to any apology (written, oral or by conduct) made in a civil dispute, including disputes between employers and employees. Under this new law, an apology will not constitute an admission of fault or liability (even if it includes such an admission), nor will it be admissible in evidence in legal proceedings, where it might otherwise be used to the detriment of the apology maker. The law also provides that an apology will not void or affect insurance cover.

The definition of an apology under the Apology Ordinance is broad and includes so called ‘partial’ apologies (those saying sorry or expressing regret) and ‘full’ apologies (those admitting fault as part of the apology). This is a significant point of difference between the Apology Ordinance in Hong Kong and similar laws adopted in other jurisdictions. For example, in the UK and the majority of US states, apology legislation covers ‘partial’ apologies only.

However, the Hong Kong legislature felt that approach was too narrow, and that it was vital that the protection conferred on apology makers by the Apology Ordinance be extended to admissions of fault in order to maximise its potential to facilitate early resolution of disputes by encouraging full and burden-free apologies.

Whether this extension of the protection of the law to cover admissions of fault will make it more difficult for a potential claimant, is open to debate. While a claimant will prima facie not be able to rely on evidence of the apology and any associated admission of fact in court as proof of wrongdoing, they may still separately obtain evidence related to a statement of liability or fact by other independent means, for example, during discovery or during cross-examination.

It may also be possible that information disclosed in such apology may lead a claimant to identify other evidence of fault on which they may rely, in the event of litigation. In any event, the government evidently felt that encouraging the settlement of disputes by enabling protection to apology makers was the more pressing priority.

Key take-away for employers

This development is significant as Hong Kong is the first jurisdiction in Asia to enact apology legislation and its law is the broadest enacted to date worldwide.

When contemplating whether or not to make an apology it will be important to understand that protection under this legislation is not absolute. A late amendment to the Bill was introduced to counter the concern that potential claimants to whom an apology has been given will be disadvantaged by the protections conferred under the legislation. That amendment provides that in “exceptional circumstances” the tribunal can admit a statement of fact made by an apology maker.

Only time will tell if this law, which has been subject to thorough scrutiny and careful drafting, strikes the right balance and will lead to genuine apologies and the early settlement of disputes. However, the protections it offers certainly have the potential to significantly impact the manner in which both employers and employees deal with disputes, and the scope to substantially change the way evidence, settlement and even insurance is approached.