We took a leading role organising the one day conference in Hong Kong which saw over 200 delegates assemble to identify trends and cultural preferences in commercial dispute resolution. Hong Kong's Secretary for Justice, Chief Justice and Solicitor General headlined the conference, underlining the government and judiciary's high engagement with the initiative.
Hong Kong is a global financial centre and leading regional dispute resolution hub. 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.1
Against this backdrop, delegates voted at the Global Pound Conference Hong Kong as follows:
- When it comes to the choice of dispute resolution process, users and their advisors put far more store in their familiarity with the process and the outcome sought, rather than relationships, industry practice or saving costs.
- Financial remedies are overwhelmingly the most important outcome for all involved in commercial dispute resolution. Preserving relationships or achieving action-based outcomes are far less significant.
- The rule of law is seen as the most important factor in achieving dispute resolution outcomes, ahead of consensus.
Julian Copeman, Greater China managing partner and moderator at the Hong Kong event, commented: "When weighing up the benefits of financial outcomes and preserving relationships, financial outcomes were viewed by all stakeholders as far more important. This contrasts with other Global Pound Conference events, notably Singapore."
Does this translate to a vote for 'business as usual' processes like litigation and arbitration in the territory? Is Hong Kong an unsophisticated jurisdiction lacking confidence in less adversarial process options? It's not as simple as that:
- While delegates voted for familiarity and financial outcomes governed by the rule of law, users said efficient processes driven by collaboration were also key.
- Add to this a preference for combining adjudicative and non-adjudicative processes, and we are looking at a more sophisticated user profile.
- Perhaps most interestingly, users voted mediation primarily a way of gaining better information about the case, rather than a cost-saving device. This suggests a degree of high sophistication - seeing ADR as a means of gaining intelligence and honing the issues for future settlement.
Anita Phillips, professional support consultant and panellist at the Hong Kong event, commented: "Clients want their advisors to collaborate with them. They don’t necessarily want lawyers to be advocates in the traditional sense. In this vein, lawyers need to think more about combining processes instead of a binary decision between adversarial processes like litigation and arbitration. Redefining mediation 'success' to include fact-finding is also advisable in light of users' comments."
The technology debate
On the role of technology in resolving disputes, stakeholders were both wedded to the status quo, but open to change:
- Delegates said they do not currently regard technology as a tool to enhance commercial dispute resolution.
- However, they agree that the need for efficiency (including through technology) will have by far the most significant impact on future policy-making for commercial dispute resolution.
How technological innovation can be embedded in traditionally conservative professions like law is an important question. As our previous research on ADR has highlighted2, the legal advisor sits at the centre of dispute resolution processes and therefore is often best positioned to influence change. At the Global Pound Conference Hong Kong, like many other events, external lawyers were judged to be the most resistant to change. This paradox is an impediment to change, particularly when looking to improve processes (like technology), that can drive efficiency in dispute resolution.
May Tai, a partner in the Greater China international arbitration practice and panellist at the Hong Kong event, commented: "In terms of technology, the option of staying with the status quo does not exist. Clearly on a very simple or low value case, it is not appropriate to bring in internal or external technology specialists. But in complex and/or high value cases, there is no other way to provide clients with the best service and best chance of succeeding in their case.”
Justin D'Agostino, global head of disputes and panellist at the Global Pound Conference Hong Kong added: "With technology advances, the landscape for dispute resolution will be unrecognisable over the next 5-10 years. Hong Kong is well placed to benefit from the innovation technology affords but we must act now."
Users, advisors and academics thought that the enforcement of settlements (including those reached through mediation was more important than making processes like mediation compulsory in Hong Kong. This is consistent with other Global Pound Conference events. Of course, a process is only worthwhile if the outcome can be enforced. But in practice, problems of enforcement of mediated settlement agreements are highly rare. In fact, at the Hong Kong event, panellists could not point to any practical experience of this. That enforcement of mediated settlement agreements could help optically to evidence the status and value of mediation, is perhaps the key point (see our commentary here).
As with many Global Pound Conferences, in Hong Kong there were elements of high sophistication and a willingness to innovate amongst delegates, but also conservatism and a reluctance to embrace change. It is clear that in Hong Kong, the tools and institutional support is in place to provide users of commercial dispute resolution with multiple high quality process options. However, the Global Pound Conference has highlighted that stakeholders are not always embracing those tools. In particular, despite its broad support, parties and lawyers alike remain concerned sometimes to attempt ADR. The Hong Kong event has prompted well-needed reflection.
Commenting on the Hong Kong event, Alexander Oddy, global head of ADR and conference MC, concluded: "Hong Kong really captured my imagination. We had amazing audience engagement showing how receptive people were to new ideas. They have a set of dispute resolution tools that are known and work, but there is a clear willingness to look for new and constructive ways to resolve conflict."
See: 'ADR in Asia Pacific issue 1' (page 15): www.hsf.com/adr. Those surveyed represented international companies from a broad range of sectors including banking, insurance, manufacturing, investment funds, accountancy, leisure, and energy on their use of mediation in Hong Kong between 2010 and 2015.
See: 'The inside track – how blue-chips are using ADR'; and 'ADR in Asia Pacific, issue 1' (page 16): www.hsf.com/adr.
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2019