The Mediation Committee of the Law Society, from time to time, will issue circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Judgment related to Mediation: Chan Gordon v Lee Wai Hng and Li Po Kwong [2011] 2 HKLRD 1029; Date of Judgment: 20 April 2011

This involved a dispute between the administrator of a deceased father and the surviving daughter over a residential property and monies in a bank account. By a judgment dated 1 March 2011, it was held that the property belonged to the daughter as a result of a proprietary estoppel and constructive trust. This judgment concerns the issue of costs under Order 62, rule 6(2) of the Rules of the High Court (Cap. 4A).

The Court ordered "No order as to costs of the administrator" on the ground that the administrator had acted unreasonably. Notwithstanding Deputy Judge Au-Yeung placed little weight on the party's attitude towards mediation when considering the costs issue, she made the following comments:-

"The administrator's view towards mediation was problematic. Initially, in March 2010, all parties to this case were agreeable to mediation. However, the administrator suddenly withdrew his agreement, stating,

'… our client the administrator is of the view that mediation may not be applicable for the instant kind of action praying for pure directions for estate administration because mediator may not make a ruling or declaration of entitlement which ruling/declaration is the legal foundation for the Administrator to properly administer and distribute the estate. Having said that, the Administrator fully understands the costs consequence on indemnity basis associated with unsuccessful mediation.'

With respect, this sort of attitude was out-dated and unhelpful in view of the encouragement towards alternative dispute resolution under the Civil Justice Reform. The mediator was not required to make any ruling or declaration. The important thing was to get all the interested parties to discuss terms that were acceptable to all. A deed of family arrangement could be entered into, if all beneficiaries were willing. Had there been mediation earlier, it may be that the costs of contesting the Uncle's counterclaim could be spared (which was the result of the eventual mediation)…As it were, the administrator did not enter into mediation until I commented at the pre-trial review that the case cried out for mediation…As the administrator eventually attended the mediation, I place little weight on matters in this and the preceding paragraph in determining costs."

Please click here for full judgment.

2. Book Review: Mediation Representation

Written by Professor Harold Abramson of the New York Touro Law Centre, the book is the "global edition" of his previous work published in 2004 which was awarded the 2004 Book Award by the CPR International Institute for Conflict Prevention and Resolution, one of the pioneer mediation organisations in the USA.

The following chapters cover a culturally neutral framework known as the "Mediation Representation Triangle": Chapter 1: Negotiating in Mediations; Chapter 5: Preparing your case for mediation and Chapter 6: Preparing your Client for Mediation. The framework provides guidance on representation of clients in mediation, with emphasis on how to negotiate with a Mediator's Assistance and a Mediation Representation Plan in order to address clients' interests, overcome impediments and share information judiciously. The book also covers issues such as selecting an appropriate mediator and attendance of legal representatives at various stages of mediation.

The book will be published in November 2011 by the Oxford University Press and enquires can be made to the publisher at: 2516 3126.

3. Mediation Practice under Civil Justice Reform: Reminder

The Civil Justice Reform (CJR) was implemented over 21 months ago and members are reminded of the following obligations under the Solicitor's Guide to Professional Conduct (paragraph 10.17) and the Judiciary's Practice Direction 31 on Mediation::-

1. The Court has case management powers to advise or suggest parties to consider mediation to resolve disputes pursuant to Order 1A Rule 1(e) and Order 1B Rule (2)(l) of The Rules of the High Court.

2. In appropriate cases, solicitors should advise clients to make a genuine attempt to settle their disputes by way of Alternative Dispute Resolution methods such as mediation.

3. The commencement of the mediation does not automatically stay proceedings. The parties may, however, discuss whether it is necessary to adjust any timetables and seek a stay or the Court's directions (PD 31 paragraph 16)

Solicitors should support their client's decision not to proceed to mediation with a reasoned explanation. The Registrar notes Masters have set cases down for trial even though parties have not attempted to mediate.

4. JMHO Shanghai Mediation 1-Day Conference 2012

The Joint Mediation Helpline Office will co-organize the Shanghai Mediation ONE Day Conference 2012 on "Mediation in Hong Kong and Shanghai – Options and Possibilities" with the Shanghai Commercial Mediation Centre (SCMC) on 5th March 2012 (Monday) in Shanghai, PRC, with details to be announced.

The Conference is the first of its kind to promote Hong Kong mediation services to the PRC and overseas business entities. It enables professionals in Hong Kong to meet and exchange views with Shanghai's practitioners on the promotion of mediation services, enhancing mediators' standards and practices and issues in relation to mediators' accreditation.

Interested parties may contact Mr. Tam of JMHO at 29011217 or ao@jointmediationhelpline.org.hk for more information.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk

The Mediation Committee of the Law Society, from time to time, will issue circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Decision on Mediation Confidentiality: Champion Concord Limited and Craigside Investments Limited v Lau Koon Foo and the District Lands Officer, Sai Kung (unrep., FACV Nos. 16 and 17 of 2010, 27 May 2011)

This was an application by the Appellant for leave to amend their pleadings and to adduce affidavit evidence with a view to introducing a claim which was not pursued at trial – rectification of a mediated settlement agreement. The Appellant argued that:

• the agreement did not accurately record the settlement actually reached in the mediation
• the mediator's drafting was defective; and
• the Appellants' former solicitors failed to notice the discrepancy between the document and the agreement reached.

The Appellant also sought to adduce an affirmation which provided a detailed account of the mediation process and criticised the mediator and the Appellant's former solicitors.

The Respondent responded by denying any variance between the agreement reached or the terms of the settlement document.

The Appeal Committee dismissed the application.

Ribeiro PJ took the view the application was not a genuine appeal but "merely an attempt to get the Court of Final Appeal to allow the appellants to start the litigation all over again, running a point which was deliberately not pursued at the trial. Even if it is a proper matter for appeal the application falls foul of the well-known principle set out in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356, at 369B-C."

Ribeiro PJ made the following remarks on the confidentiality of mediation:

"Before leaving this matter, we wish to make it clear that we must not be taken to be accepting the appropriateness of the disclosures made by Mr Yeadon and Mr Kee regarding the mediation process. The fundamental importance of confidentiality in mediation is universally acknowledged and it can only be in highly exceptional circumstances that evidence which invades such confidentiality will be permitted to be adduced. There was no argument as to whether the circumstances put forward by the appellants bring them within such an exception, and we wish expressly to keep that question open."

Click here for the full decision.

2. Decision on Case Management: Faith Bright Development Ltd v Ng Kwok Kuen & Other [2010] 5 HKLRD 425; HCA 9058/1999

This decision is similar to the case of Sherryknoll Enterprises Ltd v Grand Power Ltd (unrep., HCA 1599/2009, [2010] HKEC 1391) which concerns the failure of the parties to file and serve timetabling questionnaire, listing questionnaire and mediation certificates for the case management hearing (CMH).

Held, the Registrar adjourned the CMH and disallowed all costs between the parties and their clients.

In his decision, Registrar Lung made the following observations:

There has been a pattern of non-compliance with O.25, PD 5.2 and PD 31 which also applies to cases in the District Court.

The parties should not underestimate the function of the timetabling questionnaire and the listing questionnaire as the court relies on this information to make appropriate directions and the court does not intend to make orders ‘shooting a target in the dark' which could result in wastage of time and costs.

The most economical means to resolve the parties' disputes maybe by mediation. If parties agree to mediate the court will consider whether a short stay of the proceedings should be ordered as there will be cost-saving if settlement can be reached – no need for discovery, preparation of the witness statements, expert evidence etc. However, any request for a stay will always be at the court's discretion. Whether the proceedings are stayed for mediation or not, the court will also make directions for the future conduct of the matter if mediation fails to reach settlement for the parties.

Please click here for full decision.

3. Book Review: Mediation: Process and Practice in Hong Kong

LexisNexis Butterworths has published a book entitled Mediation: Process and Practice in Hong Kong by Professor Nadja Alexander who is currently teaching in the City University of Hong Kong.

The book is divided into 2 parts as indicated by its title: ‘Mediation Process' and ‘Mediation Practice in Hong Kong'. The first part reviews the social, historical, and cultural context in which various approaches to conflict resolution and mediation models emerge (Chapters 1-4). After reading its analysis of various models of mediation, readers should be able to appreciate the importance of keeping an open and curious mind on the diverse practice of mediation and not to confine themselves simply to one model. The author highlights the fact that mediators can build expertise by way of reflective practice and shifting among different models. Chapters 5-6 explain the mediation process and skills which can be practised in any communication situation. The second part (Chapters 7-9) comments on the development of mediation in Hong Kong, the accreditation mechanism and the relevant law which helps policymakers, especially on the way forward in respect of accreditation of mediators. Chapter 10 deals with Online Dispute Resolution.

Each chapter also contains a "mediator learning" section which summarizes the author's advice to mediators. This book is provides different insights on mediation and the appendix provides a careful selection of relevant material by the author. The ‘Risk Analysis Tool' is particularly useful for practitioners and intake officers at various mediation institutions.

The book is now available at the Law Society's Library.

4. Tips to Practitioners: Mediated Settlement Agreement

The Law Society has received enquiries on whether sample settlement agreement will be provided. The Mediation Committee will not provide a sample agreement but would like to draw members' attention to the following issues for consideration when acting as a mediator/solicitor:

4.1 There are judgments involving disputed mediated settlement agreement (see for example, FACV 16 and 17 of 2010 in paragraph 1 above) where some parties made allegations of being misled or coerced into the agreement and/or the agreement did not reflect the parties' intentions.

4.2 Some schools of thought suggest that mediators should not draft the settlement agreement even when they are solicitors. Rather, it should be the legal representatives of the parties who should do the drafting, particularly when the agreement involves technical and complex transactions such as the transfer of properties, technology, construction and joint ventures, etc.

4.3 Even if solicitor-mediators are invited to draft the agreement, this should be done by consulting the parties and their lawyers to ensure the terms reflect their intention/agreement.

4.4 Parties should be encouraged and given sufficient time to seek independent legal advice before signing any settlement agreement.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk

The Mediation Committee of the Law Society, from time to time, will issue circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Court of Appeal (UK) Case on Reasonableness of Refusing Mediation: Rolf v De Guerin [2011] EWCA Civ 78

Brief outline: The claimant, a homeowner, contracted with the defendant, a builder, to build a garage and a loft at her home. The contract subsequently broke down due to the ‘aggressive and interfering role' played by Mr. Mislati, the claimant's husband. The claimant then instructed other builders to finish the garage and commenced proceedings against the defendant claiming a sum of over ￡70,000. The claimant subsequently made the defendant an offer to settle the claim for ￡14,000 plus her reasonable costs, pursuant to the Civil Procedural Rules Part 36 (the "Pt 36 offer"), and an offer to mediate with a view to resolving the dispute. The Defendant did not reply until 5 days prior to the trial, indicating it was willing to settle the claim for ￡14,000 plus reasonable costs, payable by monthly instalments over 36 months due to financial difficulties. The trial nonetheless took place and the court gave judgment for the claimant in the sum of ￡2,500 but otherwise dismissed her claim. The issue of costs followed. The judge was told about the ‘sanctioned offer' and the related correspondence. However, the judge decided that there was to be ‘no order as to costs' until the Pt 36 offer was made, after which, the claimant was to pay the defendant's costs. The claimant appealed.

Appeal allowed and the Court of Appeal substituted the costs order with ‘no order as to costs'.

After expressing its view as to why the lower court had erred in making its order, the appellate court went on to examine the conduct of the parties. When asked by the court why he had been unwilling to mediate, the defendant said if he had mediated, he would have had to accept ‘his guilt'; he would have been unable to persuade a mediator what Mr Mislati (the claimant's husband) was like. He said the judge had to see that for himself at trial when Mr Mislati gave evidence; and in any event, "I wanted my day in court, and I was proved correct".

The Court did not accept the defendant's explanation as reasonable: ‘wanting a day in court does not seem to be an adequate response to a proper judicial concern that parties should respond reasonably to offers to mediate or settle and that their conduct in this respect can be taken into account in awarding costs.' Rix LJ in his judgment reaffirmed the dicta in Dunnett v. Railtrack Plc (Practice Note) [2002] EWCA Civ 303, [2002] 1 WLR 2434 where unreasonable refusal of mediation will lead to adverse costs order. The Court further applied the test laid down in Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002, and concluded that the case before them, namely a small building dispute between a householder and a small builder, was one suitable for mediation and that a trial should be regarded as a solution of last resort.

When coming to his conclusion, Rix LJ noted:-

"It is possible of course that settlement discussions, or even mediation, would not have produced a solution; or would have produced one satisfactory enough to the parties to have enabled them to reach agreement but which Mr Guerin might now, with his hindsight of the judge's judgment, have been able to say did him less than justice. Nevertheless, in my judgment, the facts of this case disclose that negotiation and/or mediation would have had reasonable prospects of success. The spurned offers to enter into settlement negotiations or mediation were unreasonable and ought to bear materially on the outcome of the court's discretion, particularly in this class of case." (Burchell v. Bullard [2005] EWCA Civ 358, [2005] BLR 330, [2005] 3 Costs LR 507 distinguished.)

Please click here for full judgment.

2. Speech by Lord Neuberger of Abbotsbury MR – Swindlers (Including the Master of the Rolls) Not Wanted – Bentham and Justice Reform, Bentham Lecture, 2 March2011

Lord Neuberger, the Guest Speaker at the Bentham Lecture 2011, indicated the development of mediation as a means to resolve disputes amicably will continue to be important and valuable, but his Lordship also said such mechanism should remain an alternative, not the norm, or approach the norm. His Lordship said litigation must be carried out efficiently, and vexation, expense and delay must be kept to a minimum. However, the irreducible cost of an accessible and effective legal system has to be paid in order to protect genuine legal and civic rights which are essentials of a civil society, not luxuries.

Lord Neuberger quoted Bentham's utilitarian theory which advocates that in some cases substantive law should properly go unenforced because the cost of enforcement was too great a price to pay. In that sense, an amicable, mediation settlement in such cases had a positive utility value, and facilitating a mediated settlement will be the right thing to do. Having said that, his Lordship pointed out that a civil society is not based on a commitment to utility but on the ‘Rule of Law'. Together with ‘Access to Justice', these two are important limbs of a modern civil society that cannot be dispensed with. He said:

"In a society based on the rule of law, it is essential that all its citizens have fair and equal access to justice. Despite his scepticism about the law, I am sure Bentham would not have disagreed. Access to the courts is not a privilege but a fundamental right. But it is not merely fundamental principle which requires citizens to have access to the courts. Practicality demands it as well. You cannot force people to mediate, and what if the party in the wrong refuses to mediate, or refuses to do so in good faith, or declines to be reasonable, or is simply badly advised, or takes an over-optimistic view of his case? The only way the party in the right can get what he deserves, can vindicate his rights, is to go to court, and any civilized system should ensure that he is able to do so. If he cannot, then justice is either not done or he must resort to violence to achieve a sort of justice. Either way, the rule of law dies."

Lord Neuberger warned reformers not to lose sight of the objective of the civil justice reform, which is to increase Access to Justice. He said if there is no effective access to the courts, the fundamental underpinning to all forms of dispute resolution systems, such as mediation, and even arbitration, falls away. The only reason the strong and the rich will negotiate, arbitrate or mediate with their weaker and poorer opponents is the knowledge that ultimately there is the authority and power of the justice system standing behind the arbitration and mediation systems.

Please click here for full speech.

3. Venues for Mediation

Finding venue for mediation at reasonable costs has always been an issue of concern for mediation users. In order to facilitate members to find venues for mediation, the Committee has compiled the following list of venues with basic information for members' reference. For an updated and final quote, please contact the providers direct.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk

The Mediation Committee of the Law Society, from time to time, will issue circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. (1) Decision on Selection of Mediator: Upplan Co Ltd v Li Ho Ming & Others (HCA 1915/2009) before Registrar Lung (5th August 2010)

This was a joint application pursuant to paragraph 13(1) of Practice Direction 31 asking the court to decide on the appointment of the mediator for the parties. The dispute involved two companies and two real properties with a value of approximately HK$21 million. Both parties agreed it was desirable to resolve the dispute by mediation as they had a family relationship.

Registrar Lung, in reaching his decision, noted the mediator's fees is not the only factor to be considered when selecting a mediator and adopted a 3-step approach:-

"First, the court will consider all the relevant objective data, in the following priority:

1. the nature of the matter and the issues for mediation;
2. the amount involved and the importance of the matter to the parties;
3. the mediators' knowledge and experience in respect of the issues in order to determine whether the mediators are the appropriate persons to deal with the issues concerned;
4. the experience of the mediators in mediation;
5. the other relevant experiences such as that of legal practice, arbitration or social experience;
6. the fees and expenses for the mediation;
7. the availability of the mediators, bearing in mind that mediation will be taking place near the trial;
8. other relevant factors.

Second, the court will, on the materials and information before it, make an assessment of the nominated mediators to determine, on the balance of probabilities, who will most likely be able to conduct the mediation smoothly, successfully and economically.-

Third, the court will make its rational and dispassionate decision accordingly."

In his decision, Registrar Lung also made the following observations:

1. fees of all 4 mediators nominated by the parties were more or less the same, the biggest difference being $5,000 per day.
2. costs for the application, including the hearing before the court being $12,000;
3. the parties to held different views based on the "passion on the part of the parties rather than anything else".

Having regard to these observations, he stated unequivocally that:

1. the court likes to let the parties and their solicitors understand the approach the court is going to adopt in deciding the choice of the mediator, so that in future they may be able to resolve their disputes by adopting a similar approach and avoid an application to court, thereby saving time and costs.
2. the court would also like to record this decision for the reference of other parties, who may have the similar issues for the court's determination.
3. in future, the court will expect the parties making similar applications to show that they have adopted the 3-step approach before taking out any application, and will be expected to provide reasons why the disputes remains unresolved. The court will, on application, consider making adverse costs order against any party who is unable to give such explanation or has behaved unreasonably.
4. solicitors acting for the parties should co-operate with one another and be flexible in their approach, bearing in mind the spirit of Order 1A of the RHC, saving time and costs for their respective clients and also saving the court's time as well.
Please click here for full judgment.

2. Book Review:Mediation and the Legal Practitioner

Published by LexisNexis and written by an experienced mediator, Dr. Sarah Hilmer, who is also the Director of the Mediation Institute at the Faculty of Law of the Chinese University of Hong Kong, the book is definitely useful to lawyers, newly qualified mediators and mediation assessment candidates.

As suggested by the author in the preface, the objective of the book is to provide sufficient theory which can be used in context of local Hong Kong Mediation Practice. In respect of mediation theory, the book explains the different stages of a mediation process and the importance and functions of each stage. This serves as a supplement to ordinary mediation training courses as, more often than not, training courses tend to spend time assisting trainees to perform rather than focusing on the underlying objectives of those stages due to time constraints. Hence, the book will help mediator's appreciate the philosophy of mediation which is crucial to its application in real life.

It is also worth drawing members' attention to two aspects of the book. First, there is a section on Conflict Theory (Chapter 1.2). The legal profession receives training to handle dispute within a particular context such as litigation. However, legal training seldom touches on the subject of “conflict" itself, the diagnosis of its nature and causes, human behaviour under conflict situations and various avenues of addressing conflicts. Whilst member can find an in-depth account on conflict theory in other publications such as The Mediation Process (Christopher Moore, 2nd ed. 1996), Dr. Hilmer provides a concise and useful ‘snapshot' of the same in this section which links negotiation theory with the mediation theory discussed in subsequent chapters.

Second, there is a chapter on the role of lawyers in mediation. The chapter discusses and examines recent local case law in conjunction with relevant civil procedures and practice directions. It also contains a list of ‘Do's and Don'ts' for legal practitioners. Tips to lawyers are also provided throughout the book in the form of summary tables.

The Law Society has recently acquired this book which is now available at the Law Society's Library.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk or fax: 28450397.

The Mediation Committee of the Law Society, from time to time, will issue circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Judgment on Unreasonable Refusal of Mediation: Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273 (HCA 2032/2007)

This is a judgment on costs and interest. The parties had already agreed on the judgment sum to be entered in favour of the Plaintiff. The Plaintiff sought an award of costs on an indemnity basis relying on a number of grounds, one of them being the unreasonable refusal by the Defendant to mediate. The Defendant tried to justify its refusal to mediate by reference to Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 and argued:

• as the dispute concerned the construction of an agreement which turned on the background knowledge of the parties and the factual matrix of the case, it could not be easily mediated.
• they reasonably believed that they had a strong case;
• a settlement offer had been previously made to the Plaintiff
• the cost of mediation would be disproportionately high.

Held, the Defendant should be liable to pay costs to the Plaintiff on a common fund basis: the case was a simple, one-off contract dispute that did not raise any point of law, the determination of which will provide guidance for the future, whether for the parties or others in the trade. Nor was it one where injunctive or other protective relief was sought. It was plain that the Defendant’s case did not fall within the category of reasonable belief of a strong case identified by Dyson LJ in Halsey. At its highest, the Defendant’s defence in this action could only be regarded as a borderline one. The settlement offer of the Defendant was ‘way off the mark’ but the wide difference between the parties did not indicate that mediation would only be a waste of time and efforts. There was no factual basis for the submission that the cost of mediation would be disproportionately high. Practice Direction 31 supports the approach that the burden is on the part of the refusing party to provide a reasonable explanation. There was no reasonable explanation on the part of the Defendant for refusing to mediate.
Please click here for the full judgment.

2. Book Review:Mediation and the Legal Practitioner

weet & Maxwell has published an article"Mediation and the Legal Practitioner" as the first CJR special release to the Hong Kong Civil Procedure 2011 Service. The article is written by Dr. Raymond Leung, the General Editor of the Hong Kong Mediation Handbook and Ms. Cecilia Wong, a member of the Law Society Council.

The article is divided into 4 major sections. The first section (Paragraphs 1-37) reviews the historical, social and legal context in which mediation has been introduced to the Civil Justice system. The writers have critically analyzed the Civil Justice Reform of Hong Kong and discussed the mediation procedure in Practice Direction 31 on Mediation. The second section (Paragraphs 38-48) discusses the current law in connection with mediation, including the enforcement of agreement to mediate, the enforcement of settlement agreement, legal professional privilege and confidentiality. The third and the fourth sections (Paragraphs 49-63) provide information regarding Legal Aid and the Mediation Information / Coordination Services of the Judiciary.

The article is now available at the Law Society's Library.

3. Tips to Practitioners: Appointment of Mediator

Where parties to a dispute are willing to attempt mediation to resolve their disputes but are unable to come to agreement on the choice of mediator, Solicitors for the parties can jointly write to the Law Society for nomination of a mediator.

The joint letter, signed by both parties, should contain the following information:

1. Court Action Number, if any.
2. The firm’s reference number
3. Both English and Chinese names of the parties
4. Nature of Dispute
5. Mediator(s) previously proposed, if any, and reasons for rejecting
6. Timeframe
7. Language of Mediation

Alternatively, members can contact the Mediation Co-ordinator for assistance to locate mediator(s) on the Law Society’s Panels who meets the criteria set by the parties. Both services are free of charge.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk or fax: 28450397.

The Mediation Committee of the Law Society, from time to time, will issue updates circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Decision on Confidentiality in Mediation: S (the Petitioner) v T (the Respondent) CACV 209/2009 on appeal from FCMC NO. 11230 OF 2008

This is an application to admit as evidence, without prejudice information disclosed in the course of mediation. Hon Rogers VP rejected to make an order admitting the evidence and regarded the matter ‘fundamentally important.' Held: Fundamental to mediation is confidentiality. Every mediation starts with an agreement between the parties and the mediator that what is said in mediation must be kept confidential and even the process of mediation and the fact that it is embarked upon should be kept, in my view, confidential. It is wholly wrong for any party, of their own motion, to refer to what was said or not said or arose out of mediation, unless and until, a concluded agreement has been reached in the mediation which encompasses what may be disclosed and not disclosed. It is not a simple question of one party waiving privilege because it is a matter for both parties. The issue is extremely important because it goes to the root of the mediation process. Unless this is adhered to the whole mediation system will come to naught. This applies just as much to matrimonial and custody proceedings as it does to any other proceedings.

Please click here for full judgment.

2. Book Review: The Hamlyn Lectures 2008 – Judging Civil Justice

Sponsored by the Hamlyn Trust, a charity supporting public legal education in the United Kingdom, the Hamlyn Lectures is a collection of public lectures by judges, legal academics, practitioners and other eminent speakers. . The latest in that distinguished series published recently, was the lectures delivered by Professor Dame Hazel Genn on "Judging Civil Justice"

The book has five chapters corresponding to the three lectures given by Professor Dame Hazel Genn. It considers how the civil justice system relates to people's everyday legal problems, compare the civil justice reforms in Canada, Australia, New Zealand, Japan, and Hong Kong and critically assess the significance of the formal civil justice system to the resolution of justiciable disputes. The writer also questions whether diverting cases out of the public courts and into private dispute resolution promotes access to justice. The fourth chapter deeply reflects on whether people expect or need civil judges to be case managers guided by principles of economy and proportionality, rather than their more traditional role to adjudicate cases. The speaker looks critically at the changed expectations and points to the need for judges to 'do justice'.

Chapter 3 is devoted to ADR, in particular mediation practice in civil justice over the last decade. Michael Zander QC rightly opined that, "(the lectures) should be required reading especially for policy makers in government and for the senior judiciary." Here is an extract from the book that provokes much reflection on the way the judiciary and government have been vigorously promoting mediation in the UK and could be insightful for policymakers in Hong Kong:

"In my view, mediation has rightly become a feature in the landscape of dispute resolution…I believe that the public and the legal profession should be properly educated about the potential of mediation from the earliest possible moment…I have three concerns… ADR cannot supplant the machinery of civil justice precisely because, in civil cases, the background threat of litigation is necessary to bring people to the negotiating people. Finally and most importantly, I am concerned that the case for mediation has routinely been made not so much on the strength of its special benefits but by setting it up in opposition to adjudication and promoting it through anti-adjudication and anti-law discourse…a cruder message that has been picked up by the government and used to justify a helpfully economical policy of diverting cases away from courts."

The Law Society has recently acquired the book which is now available at the Law Society's Library.

3. Tips for Family Mediation Candidates

Candidates who wish to seek accreditation as a Family Mediator may find the opportunity for live supervised cases for satisfying Stage-2 Requisite too limited. This is because there are very few Supervisors on the Law Society Panel and Candidates usually see Family Mediation Supervisors as the only source of cases.

The Law Society notes the difficulty and would like to suggest Candidates to consider getting cases through networking with legal practitioners who can take mediation positively to clients. This increases the sources of cases and in each case Candidates need only to mediate one of the many issues involved. Candidates can then invite Supervisors to assess their case.

In order to facilitate the accreditation of Family Mediators, the Mediator Accreditation Committee of the Law Society is prepared to consider cases supervised by non-Law Society Family Supervisors on a case-by-case basis. Circular will be issued in due course.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk

The Mediation Committee of the Law Society, from time to time, will issue updates circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Decision on Reasonableness of Refusing Mediation: The Incorporated Owners of Shatin New Towm (the Applicant) v Yeung Kui (the Respondent) CACV 45/2009 on appeal from LDBM NO. 339 OF 2007

The Court of Appeal allowed an appeal and awarded costs. The Respondent applied to vary the costs order on the basis that the Applicant had unreasonably refused to mediate. The reason provided by the Applicant for refusing mediation was that previous settlement efforts had failed and mediation would inevitably delay the resolution of the dispute, given the hearing was fixed in less than one month time. The application concerned the interpretation of Deed of Mutual Covenants, and it was in the interest of owners to resolve the dispute sooner. Cheung JA in his decision observed that parties should make all possible attempts to resolve their disputes, but the case involved the correct interpretation of the terms of the DMC which the applicant has a duty to apply correctly. He also observed that the respondent had rejected various settlement proposals and that he could not justifiably complain when the outcome of the appeal was not in his favour. He therefore did not consider the refusal to take part in the mediation should be visited with an order that the applicant could not recoup costs. The cost order was therefore upheld.

Please click here for full judgment.

2. Book Review: The Hong Kong Mediation Handbook

The Law Society has recently acquired the Hong Kong Mediation Handbook which is now available at the Law Society's Library. Written by ten mediators - the book covers both academic and practical issues and includes such topics as: Definitions of Conflict, Dispute and ADR (Chapter 2 & 3), the History of Mediation (Chapter 4), Approaches, Process and Stages of Mediation (Chapters 5 & 7), Mediation Skills (Chapter 8), Psychology and Behaviour in Mediation (Chapter 9) and Legal Implications and CJR (Chapter 10 & 11). Chapters 12 – 14 covers the application of mediation in various specialized areas, including Family, Criminal Offence, Commercial, Consumer, Labour, Community, Land Use, Workplace, School, Healthcare and Public disputes.

Chapters 7-9 are particularly useful for newly-accredited mediators who intend to start practice in the near future as they provide refreshers on the ‘mediation triangles', the code of conduct of mediators, the functions of the pre-mediation meetings and how parties are prepared within different stages of mediation; emotions and psychology in mediation are discussed at length and it is useful for mediators to build rapport and establish communication more easily during mediation.

Family Mediation is not only limited to divorce and custody cases, but also family property and estate disputes; a number of case studies in the Handbook have depicted the appropriateness of mediation in resolving such disputes.

The second part of the book (pp.305-566) contains useful references provided by mediation service providers, including the Law Society, the Hong Kong International Arbitration Centre, as well as Mainland and International institutions.

3. Report of Secretary for Justice's Working Group on Mediation

The Working Group on Mediation under the chairmanship of the Secretary for Justice, Mr. Wong Yan Lung and its three Sub-groups considered issues in relation to public education and promotion, accreditation and training as well as the regulatory framework for mediation. A three-month consultation has been launched starting from 8 February 2010 on the way forward to facilitate the effective and extensive application of mediation. The Working Group made 48 recommendations and members are invited to send comments on the Report on or before 8 May 2010 to : Department of Justice, 1/F, High Block, Queensway Government Offices, 66 Queensway, Hong Kong (Attention: Ms Sou Chiam, Deputy Principal Government Counsel).

The Financial Services and the Treasury Bureau published a consultation document on the "Proposed Establishment of an Investor Education Council and a Financial Dispute Resolution Centre" on 9 February 2010. The consultation period will last for 3 months until 8 May 2010. Members can submit views to 18/F, Tower I, Admiralty Centre, 18, Harcourt Road, Hong Kong; or by email to fdrc_consultation@fstb.gov.hk.

Please click here to download the SJ's Working Group Report and here to download the FSTB Consultation Document.

Members who wish to comments or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk

The Mediation Committee of the Law Society has decided that from time to time it will issue circulars on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Decision on Suitability of Mediation: Catherine v Tary Ltd (unrep., HCPI 805/2007, [2009] HKEC 1669)

In this case, the defendants rejected the plaintiff's invitation to mediate on the ground that "the proceedings had reached an advanced stage and the issue of liability is in dispute". The argument was rejected by the Hon. Fung J, who commented the argument was paradoxical as it was precisely the purpose of mediation to resolve dispute with the assistance of a neutral mediator and it is "better late than never" to avoid risks and expenses associated with litigation. It was reiterated that it is the duty of the parties and their legal representatives to assist the Court in furthering the underlying objectives of the Rules of High Court to facilitate settlement of disputes. Unreasonable refusal to attempt mediation is relevant conduct in litigation in the exercise of the discretion on costs. Members are encouraged to read this in conjunction with a similar case of UK: Carleton v Strutt & Parker (A Partnership) [2008] EWHC 424 (QB).

Please click here for full judgment of Catherine and here for Carleton.

2. Book Review: Mediation Advocacy

The Law Society would like to thank the Standing Conference of Mediation Advocates for donating a book on mediation, viz. Mediation Advocacy, which is now available at the Law Society's Library. Written by two experienced barristers and mediators - Mr. Andrew Goodman and Mr. Alastair Hammerton – the easy-to-read, 123-page book presents practical information covering such topics as: advising clients on the decision to mediate (Part1), choosing the right mediator for a case (Part 2), preparation work prior to mediation (Part 3), the role of advocate at mediation (Part 4) and costs issues (Part 5).

Members who will be assisting their clients in the role of solicitor advocates during mediations will find the book particularly practical as the book provides case law and authorities, and useful sections?on the following: "Arguing against Mediation", "Dealing with Overly Aggressive Opponents" and finally, there is a section on "Recoverability of Costs" which discusses in depth issues of concern for UK solicitors after the Woolf Reform and they are of equal importance to solicitors in Hong Kong after the implementation of CJR.

Members who have been qualified as a mediator would also find the book insightful especially on how a solicitor-mediator can interact with his peers in the course of mediation (Sections 3.5 and 4.7).

Mediation Advocacy is a subject distinct from Mediation. Some solicitors may feel "both hands tied up" when assuming the non-advisory role of a mediator. This is not the case when they act as a Mediation Advocate for its role is more comparable to the conventional practice of a solicitor. Mediation should be regarded as a problem-solving forum WHICH REQUIRE a set of problem-solving techniques in order to advance client's interests

This book offers these skills which solicitors are most likely to need in their practice after CJR.

3. Mediate First Pledge

The Secretary for Justice established the Working Group on Mediation to?consider and make recommendations on ways to promote and facilitate the development of wider use of?mediation in Hong Kong. The "Mediate First" Pledge is an initiative of the Public Education and Publicity Sub-Group of the Secretary for Justice's Working Group on Mediation.

The Civil Justice Reform has changed the terrain of litigation. The signing of the Pledge is a token of acknowledging and responding positively to this change. It signifies the signatory's attempt to consider mediation and avoid the expense, risk, and loss of control of the dispute that usually comes with litigation. It does not, however, impose on the signatory any legal obligations to use mediation, nor does it waive any of?their legal rights or obligations.

The Pledge is to be used to indicate support of the use of mediation in personal disputes, including workplace, partnership, solicitor-client, and between firm-supplier etc. Adoption of the pledge will not result in any fetter on a solicitor's discretion in handling a particular case, indeed solicitors are required to consider mediation and other settlement options when advising clients in the Hong Kong Solicitors' Guide to Professional Conduct.

The Pledge has received positive support from the commercial sector, with 64 companies and 38 trade associations signing up. The Law Society has signed the Pledge and encourages members to support the initiative in their practice to demonstrate. The names of signatories will be sent to the Secretary for Justice's Working Group for publication as a sign of support for this initiative.

Please click here to download the Pledge.

Members who wish to comments or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk

The Mediation Committee of the Law Society has decided that from time to time it will issue circulars which will contain information on the development of mediation, together with any other matters relating to mediation which may be of interest to members.

1. Case Law on Confidentiality: Farm Assist Limited (In Liquidation) v The Secretary of State for the Environment Food and Rural Affairs (No. 2) [2009] EWHC 1102 (TCC)

In the proceedings, the Claimant sought to set aside a mediated settlement agreement entered into with the Department of Environment Food & Rural Affairs, the Defendant, on the grounds that the settlement was entered into under economic duress. Parties jointly sought assistance from the mediator who responded she had little recollection of the mediation and that she only had a certain amount of administrative correspondence and no personal notes on the case. The Defendant nevertheless wished to meet the Mediator and take a witness statement. The Mediator responded she would not devote further time to the case and referred to the terms of the Mediation Agreement that both parties had agreed not to call her as a witness. The Defendant served a witness summons and the mediator applied to the court to set aside the summons.

The judgment contains an in-depth review of the law relating to confidentiality and privilege of mediation. Please click here for a copy of the full judgment.

2. Book Review: Dispute Resolution Guides – International Commercial Mediation

The Law Society's Library has recently acquired a book on mediation, viz. Dispute Resolution Guides – International Commercial Mediation. Written by an experienced barrister and mediator Dr. Cyril Chern, the book presents a broad perspective on mediation covering such topics as: the historic origin of mediation (Ch.1), preparation work prior to mediation (Ch.2-6, 14), mediation strategies and techniques (Ch.6-9), procedures of mediation (Ch.10-11), ethical and legal issues (Ch.12, 14).

Members who need to act as solicitor advocates in mediation will find Chapters 2-6 particularly useful. These chapters not only outline the steps in commencing mediation with specimen forms and agreements provided, the advice given in the section "Approaching a Competitive Opponent" in Ch. 6 is insightful for advocates who need to deal with their hostile counterparts who are merely "going through the motion" and are not interested in settling the case.

Members who want to qualify as a mediator or are currently undertaking mediation assessments are encouraged to read Chapter 9 of the book, in which the use of BATNA (Best Alternative to a Negotiated Agreement) is discussed at length. Other skills not covered in depth during mediation training courses are also highlighted in this chapter.

Although the book does not advocate a particular model of mediation, the contents could enrich your mediation ‘tool-kit' for complex commercial cases where something more than a facilitative model but short of an evaluative style of mediation might be needed.

3. Mediation Video: S.C.M.A. Meeting and Panel Discussion – Negotiation Strategies and Psychology – recorded on 25 March 2009.

The Law Society would like to thank the Standing Conference of Mediation Advocates and Herbert Smith for granting permission to the Law Society to post this video on the Law Society's website for the benefit of members. Please click here to view the video.

Members who wish to comment or provide information on mediation should contact the Mediation Co-Ordinator by sending an email to: mediation@hklawsoc.org.hk