In Hong Kong, much like the UK, parties are encouraged to use alternative dispute resolution (ADR) methods such as mediation and collaborative practice to facilitate speedy resolutions in family proceedings.
Whilst mediation continues to be the most common means of ADR in Hong Kong for family proceedings, the Hong Kong Judiciary introduced a new scheme in 2019, integrating mediation with financial dispute resolution (FDR) and/or children’s dispute resolution (CDR) proceedings, namely mediator-assisted FDR (MFDR) and CDR hearings (MCDR). This enables a mediator to attend FDR/CDR hearings and work alongside the Judge to help parties reach settlement.
FDR and CDR Hearings
Before delving into MFDR/MCDR, it is important to first provide an overview on FDR/CDR proceedings in Hong Kong. The FDR scheme was implemented in 2003 and is governed by Practice Direction 15.11. It is triggered when an application for ancillary relief is made and the court allocates a date for the First Appointment Hearing. Prior to the First Appointment, parties must provide financial disclosure by means of Financial Statements (Form E) among other documents. The Master will have preliminary conduct of the directions hearing and only when all outstanding directions are complied with will the case be transferred to a Judge for a case management hearing. On that occasion, the Judge will direct that the case be referred to FDR during the First Appointment hearing, unless he decides such a referral is inappropriate.
During the FDR hearing, the Judge acts as a facilitator. This means that the Judge may consider any without prejudice settlement offers and indicate his/her view of the likely outcome of the case including division of the matrimonial assets if the case proceeds to trial. The Judge may also have direct dialogue with the parties who would generally then negotiate between themselves outside court, and provide updates to the Judge if settlement is reached.
However, if parties are unable to reach settlement at FDR, the case moves forward to trial. Given the privileged nature of the FDR hearing, the case would be passed to a trial Judge and the FDR Judge will have no further involvement except in additional FDR hearings (if any).
If children matters are included in the petition, the CDR procedure will be triggered alongside FDR. The court may either direct a Children’s Appointment hearing be heard at the same time as the First Appointment for FDR, or at an earlier date if there is an urgent application. The aim of CDR is to support parents in effectively parenting their children post-separation whilst keeping the children’s best interests in mind. Under Practice Direction 15.13, parties will need to file and exchange the Children’s Form (Form J) and a concise statement of issues relating to the children.
At the Children’s Appointment Hearing, the Judge will then give directions on the filing of Social Investigation Reports, expert reports, and/or affidavits. Although the same judge will preside over both the CDR and FDR hearings, CDR is not privileged, and the CDR Judge can hear the child-related matters at trial if settlement is not reached.
MFDR and MCDR Hearings
In 2019, MFDR and MCDR was introduced in the Hong Kong Family Court when the Court saw the potential for synergy between mediation and FDR/CDR processes.
The role of the mediator and the Judge is complementary. The mediator acts as the neutral facilitator and seeks to understand the parties’ respective needs. The mediator therefore has a more personal relationship with the parties as they build rapport and can also help to build trust between parties outside the court room which is conducive to settlement. The mediator can also suggest settlement options but should refrain from expressing his subjective view on the merits of the case. On the other hand, the FDR/CDR Judge encourages settlement, but does not establish rapport with the parties. The Judge’s role is more authoritative and can give views on the merits. The Judge therefore is in a stronger position to steer the parties to focus on substantive issues, but less able to give specific suggestions. Both roles working in tandem can focus the parties’ mindset on the key issues, helping to resolve any roadblocks and guide the parties towards settlement.
Blending the two processes together does not prove to be difficult either. The presiding Judge has the ultimate control of the process and decides whether a case is suitable for MFDR/MCDR. At the hearing, the Judge directs the case and will still hear legal submissions from legal representatives. Before the hearing, the Judge will also receive a Note summarising the parties’ respective position prepared by the mediator based on the parties’ acceptance. The mediator assists the parties with negotiations when the case is stood down without assistance of the Judge. The communication between the Judge and the mediator are confidential and not privy to the parties.
At any stage of the FDR process, the hearing may be adjourned but the mediator can continue to work with the parties. Depending on the progress of the mediation, the mediator may invite the parties to return to court to report on progress. If settlement is not achieved, given that MFDR/MCDR is privileged, the parties would not be prejudiced at trial. The mediator is still required to observe confidentiality with the parties in respect of discussions in their individual private sessions.
MFDR/MCDR has been largely successful. Based on statistics provided by the Judiciary in May 2024, there have been 54 mediator-assisted cases heard since 2019 to April 2024 (comprising 49 MFDR and 5 MCDR cases), of which 47 cases have completed including 33 cases which reached full or partial settlement. As the remaining 7 cases are ongoing, it produces a success rate of 70% which is most encouraging.
The Way Forward
Overall, MFDR/MCDR is an additional ADR option providing enhanced support to parties throughout the FDR/CDR process. Unlike private financial adjudication, this approach uses mediation in a court process and the parties benefit from the Judge’s input as well as the mediator’s continuous guidance to keep negotiations focused on the relevant issues.
As the process is still relatively new, it is important for family lawyers and mediators in Hong Kong to understand the MFDR/MCDR process so they are well-positioned to suggest it to clients when appropriate. Not all cases are suitable for MFDR/MCDR, especially those which involve small financial claims or litigants in person.
The key advantage of the MFDR/MCDR process is the mediator’s role in facilitating the parties’ continued negotiations (through individual and/or joint sessions) outside court when the case is stood down. Rather than the parties continuing to be at loggerheads outside court and dispute over frivolous issues, the mediator can continue to focus the parties on the Judge’s indications as well as disputed issues and guide them in negotiations towards (potential) settlement.
This article was published in HNW Divorce Magazine, Issue xx.