The judiciary in Hong Kong recently published a Guidance Note for Case Settlement Conference in Civil Cases in the District Court.(1) The guidance note extends a pilot scheme for facilitating settlement in general civil cases in the District Court. While facilitating the settlement of certain civil disputes is a laudable aim and part of the underlying objectives in the court rules, the guidance note appears to raise more questions than it answers. It also appears to give the judicial officer (a 'master'), before whom a case settlement conference is listed, a wide discretion to preside over settlement negotiations and purported authority to curtail a party's right to legal representation and limit their legal representatives' rights of advocacy. It is understood that the guidance note will come into effect in January 2021.
Like many places, Hong Kong is suffering from a deep recession and a pandemic, which are taking place in an environment in which issues are being raised about certain principles concerning access to justice. Despite significant civil procedural reform in April 2009, there appears to have been limited progress with court waiting times. This is not a phenomenon that is unique to Hong Kong.
The District Court is a busy court (with civil, criminal and family jurisdictions), which is located in the heart of Hong Kong (for further details please see "Significant increases to District Court's monetary jurisdiction").
One of the motivations for the guidance note may be to free up court lists, in which case it appears to be a rather blunt instrument. Hong Kong already has a comprehensive Practice Direction on Mediation (Practice Direction 31), which came into effect in 2010. Most litigants and their legal representatives are aware of the need to consider and explore settlement options. Generally, the mediation practice direction is working well, while different stakeholders acknowledge that there is room for improvement. Where the mediation practice direction does not apply to a category of civil cases, there are certain specialist lists or practice directions in place.
The guidance note is stated to apply to all civil cases before the District Court, with certain exceptions (eg, personal injuries and employees' compensation claims, which have their own practice directions).
Some of the more questionable provisions in the guidance note read as follows:
- Paragraph 13 – "If legal representatives attend the CSC, they should only participate to the extent requested or invited by the Court and to provide assistance and advice to their client as and when it is necessary".
- Paragraph 15(a) – "The master may address the parties directly instead of addressing them through the parties' legal representatives".
- Paragraph 15(c) – "The master may assist the parties to achieve a settlement by reviewing and evaluating the process of any without prejudice negotiation (including any sanctioned offers and payments) between the parties and mediation (if conducted but unsuccessful)".
For many stakeholders accustomed to the common law, some of the provisions of the guidance note appear rather incongruous. Some provisions are also ambiguous.
Issues arise as to what is the legal basis for a guidance note to detract from certain fundamental rights, such as access to legal representation (particularly in connection with a court process).
Some of the provisions may be potentially ultra vires. For example, it is not clear what legal basis there is for requiring parties to have to disclose without prejudice correspondence at a case settlement conference or prohibiting them from excluding settlement proposals "by virtue of a claim of privilege".(2) Even in mediations, there is no requirement to disclose settlement correspondence and certainly no obligation to give up privilege in any such communications. The starting position is that the confidentiality of 'mediation communications' is protected by statute.(3)
The introduction to the guidance note promotes the need to facilitate the settlement of civil disputes, by reference to the objectives of the court rules.(4) However, those objectives are underpinned by an obligation on the courts to recognise that the primary aim in exercising their powers is "to secure the just resolution of disputes in accordance with the substantive rights of the parties"(5) – for example, the parties' private, contractual and fundamental rights and protections.
While the promotion of alternative dispute resolution is part of the government's worthy aim to promote the Hong Kong Special Administrative Region as a leading disputes hub, the guidance note could (in some cases) lead to a form of mandatory negotiation and it appears to overreach.
Endnotes
(1) Guidance Note for Case Settlement Conference in Civil Cases in the District Court, dated 14 October 2020.
(2) Supra note 1, at (for example) paras 10(d) and 14(a).
(3) Sections 8, 9 and 10 of the Mediation Ordinance (Cap 620).
(5) Rules of the High Court and District Court, Order 1A, Rule 2(2).
