CSC, an Alternative Dispute Resolution Opportunity in Court?
By Mrs. Cecilia Wong
This article first appeared in the July 2022 issue of Hong Kong Lawyer - The official journal of The Law Society of Hong Kong.
* The views and opinions expressed in this article are those of the author and/or interviewees and do not reflect the policy or position of any association, firm, institution or body. Special thanks are given to Ms. Elaine Liu, Ms. Clara Yip and Mr. K.Y. Lo for agreeing to be interviewed. Ms. Liu, Ms. Yip, and Mr. Lo are referred to and the three interviews are excerpted below in chronological order according to the date of the interview.
Introduction
In December 2020, the Judiciary issued the Guidance Note for Case Settlement Conference in Civil Cases in the District Court (the "Guidance Note"), which took effect on 2 January 2021.[1] A Supplemental Note for the Guidance Note (the "Supplemental Note") was further issued by the Chief District Judge on 16 December 2020.[2]
As explained by the Guidance Note, the Case Settlement Conference ("CSC") scheme is an extension and upgrade of a pilot scheme of External Mediation Master Scheme ("EMM Scheme") undertook by the District Court in 2018 to introduce the idea of assisted settlement into the case management process in civil cases, to further promote the use of alternative dispute resolution, and to instill among litigants as well as their legal representatives a culture of exploring settlement. According to the Judiciary, the settlement rate of CSC cases at the District Court is 45% as at December 2021.
In December 2020, Hong Kong Lawyer published an article on "District Court Guidance Note On Case Settlement Conferences". To further explore the various dimensions of the CSC scheme, interviews were conducted in November 2021 with two CSC Masters, Ms. Elaine Liu and Ms. Clara Yip, and in March 2022 with a solicitor in private practice Mr. K.Y. Lo, who had attended a CSC hearing as a party's legal representative under the CSC Scheme.
The interviewer, Mrs. Cecilia Wong is the Chairlady of Mediation Committee of the Law Society of Hong Kong. She is a member of Chief Justice’s Working Party on Mediation, a former council member of the Law Society of Hong Kong, and former member of the Department of Justice's Steering Committee on Mediation. Mrs. Wong is also an experienced dispute resolution practitioner. She is an accredited General Mediator, Family Mediator, Family Mediation Supervisor, an arbitrator on the Panel of Arbitrators of the Law Society of Hong Kong and a fellow arbitrator of the Hong Kong Institute of Arbitrators (HKIarb). Mrs Wong has served as a mediator at Qianhai Court of the People's Republic of China. The interviews with Ms. Elaine Liu, Ms. Clara Yip and Mr. K.Y. Lo were conducted on an independent basis by Mrs. Cecilia Wong in her personal capacity.
Readers should note that, any sharing of cases within the excerpt interviews in this article are only examples. Depending on the nature and circumstances of the case, different cases may be dealt with in different ways as may be deemed appropriate by the CSC Master.
Interview with Ms. Elaine Liu
Ms Elaine Liu is a Hong Kong practicing barrister-at-law, arbitrator and accredited mediator. Ms Liu is the Past Chairman of Hong Kong Bar Association’s Committee on Mediation, a Member of Chief Justice’s Working Party on Mediation, the Department of Justice’s Steering Committee on Mediation, and Working Party on Membership of the Hong Kong Mediation Accreditation Association Limited (“HKMAAL”). Ms Liu is a Fellow of the Chartered Institute of Arbitrators, an accredited mediator and assessor of HKMAAL and Hong Kong International Arbitration Centre, as well as an accredited mediator of Centre of Effective Dispute Resolution and Shanghai Commercial Mediation Centre. Ms. Liu has been an EMM Master and CSC Master at the District Court since 2018.
An interview with Ms. Elaine Liu was conducted on 15 November 2021. The following is an edited excerpt from the interview.
Please share with us what types of cases are usually covered by the CSC scheme.
A wide range of civil cases are covered, from disputes among family members, such as disputes relating to family property, to purely commercial or tort cases, like contract, defamation, building management, landlord and tenant disputes, water seepage and other cases. In some cases, both parties appeared as litigants in persons, whereas in others, one or both parties are legally represented. At this stage, personal injuries cases are not included.
How would you describe the role of the CSC Master, and how is CSC different from mediation?
The role of the CSC Master is rather unique. It is different from the role of a facilitative or an evaluative mediator. Different CSC Masters may have different styles but all are to see that the parties engaged in constructive and realistic dialogues to explore the possibility of resolving their disputes, to assist the parties to bridge their gaps and reach a settlement. The CSC Master has the authority that a mediator is not vested with. A mediator will conduct caucus session with the parties. The CSC Master will not meet with one of the parties alone. All parties are present at the CSC hearing.
How would you describe the interplay between the CSC, mediation and/or other alternative dispute resolution processes? Would it be better for parties to have attempted mediation first, before attending any CSC hearing?
The parties are encouraged to conduct mediation before the CSC but this is not mandatory. The CSC hearing of a case with prior attempted mediation would not be conducted with great difference from a case without one, except that in the former case, I may explore the matters left unresolved at the mediation, and try to work with the parties to remove the obstacles that stand in the way of settlement. In either cases, the parties are to focus on attempting to settle or narrow the scope of their disputes at the CSC.
What kinds of directions are usually given after a CSC hearing?
As mentioned in the Guidance Note, the CSC Master will not give case management directions. The CSC Master may adjourn the CSC hearing to another session; or, where the parties come to a settlement, give the consent order by way of Tomlin Order or other order for a full or partial disposal of the case; or, direct that the case be proceeded to the next stage, such as the case management conference. Generally, depending on the outcome of the CSC, there will be no order as to costs, or an order that the parties' costs of the CSC be in the cause. Having said that, as stated in the Guidance Note, default in compliance with the directions for preparation of the CSC and unreasonable conduct at the CSC may result in costs sanction.
While mediation is a voluntary process, CSC may not be initiated by the parties themselves. Would parties feel compelled to settle in the CSC process?
In assisting parties to reach settlement, the CSC Master will ensure that any settlement at the conclusion of the CSC is ultimately the party’s own voluntary decision. If the parties are not able to reach a consensus, the CSC Master may still assist them to have better understandings of their obligations, the situation they are likely to face in further conduct of the litigation, and assist them to make informed decisions on the way forward for resolution of their disputes.
In some cases, the parties may have signed confidentiality agreements with non-parties and/or the mediator. During CSC, will parties be compelled to disclose contents of the mediation, and thus be in breach of the confidentiality agreements?
In my experience, parties seldom had queries or difficulties with this issue. The entire CSC hearing is without prejudice. I understand that the records will not be seen by the trial judge. The CSC Master will not handle the case any more after the end of the CSC.
Sometimes the parties themselves would like to revisit the issues discussed at the prior mediation with a view to further narrowing down their differences. Parties are encouraged to voice their concerns or obstacles to settlement. Given the without prejudice setting of the CSC, anything said during CSC will be confidential and will not affect the trial.
Would the CSC Master ask questions about what the party had been advised, to understand how the problem evolved? If yes, would the views offered or questions raised by the CSC Masters impinge on the views or advice already given by parties' lawyers?
The purpose of the CSC process is to assist the parties to reach a settlement. Usually what the party had been advised by the lawyers are not in issue. The focus remains on how to resolve the disputes.
Sometimes, questions raised by the CSC Master at a CSC hearing may be matters that have already been advised by the parties' lawyer. There are many possible valid reasons to revisit those questions at the CSC, for example, the advice was given at a time without the benefit of the other side’s case or evidence; or new issues may arise at the CSC that were not anticipated at the time of the lawyer’s advice; or the parties may be in a different personal situation, and therefore a review of the circumstances is required.
How will the CSC Master deal with previous Without Prejudice communications between parties and/or parties' lawyers disclosed at CSC?
Without Prejudice communications between the parties will assist in the consideration and evaluation of options for settlement. These communications would show what the parties’ views or proposals at that time. Nonetheless, the parties shall remain open-minded at the CSC and not be bolted down by the previous WP offers. Irrespective of whether a WP offer has been made previously, I as the CSC Master will still go through the issues and options at the CSC. The CSC Master would not seek to discourage the parties by asking why certain offers were made or were not made.
Have you faced uncooperative parties during CSC, did the uncooperative party face adverse costs consequences?
The parties and lawyers who had come before me at the CSC hearings are mostly co-operative. The CSC hearing is an occasion for a realistic, pragmatic, constructive and amicable exploration of the issues and options. It is the duty of the CSC Master to maintain control of the hearing. The CSC Master has the power to sanction the parties on costs in accordance with the Guidance Notes. Thus far, I did not have to exercise this power.
What is the normal duration of a CSC hearing?
Usually, CSC hearings would be fixed for 2 hours in the morning. In many cases, the parties could reach a settlement before lunchtime. Some cases may take longer than a morning to iron out the terms of settlement, some may require a second CSC to tie up the unresolved ends. For the parties who genuinely need more time to consider the options, or to discuss with others, such as other family members, a short adjournment has proved to be effective in achieving a settlement that the parties fully embraced.
How can lawyers or parties' legal representatives better prepare for a CSC hearing?
Before attending a CSC hearing, lawyers should have considered with their clients preliminarily the possible options for settlement. Clients should be advised on issues that have transpired, the costs implications and broadly the time and procedures involved in the litigation. These are quite similar to what should be advised in preparing the parties for mediation.
For the parties to gain the benefit of the CSC hearing, litigants and their legal representatives should attend the hearing with an open mind, and appreciate the unique features of the CSC. Clients will need to understand the reason why their legal representative did not argue the case for them at the CSC as this is not what the CSC is for. The purpose of the CSC hearing is to assist parties to come to a settlement. Generally, the atmosphere of the CSC hearing is also very different from trial or other stages of the proceedings in court.
Please share with us some feedback or concluding remarks on the CSC process.
The feedbacks I received are positive. Many cases settled at the end of CSC hearing and the parties expressed appreciation of the result. Some of those who could not settle at the CSC hearing found the process pleasant, comfortable and constructive. A legal representative who had attended the CSC hearing with lay clients told me that the CSC hearing was very effective, lay clients were more receptive to the realities of their case after the CSC hearing.
I understand that similar trends of developments are also found in other countries, such as Canada, New Zealand and many others. The CSC provides a useful platform for the parties to be practical and work out proposals in their best interests to resolve their differences.
Interview with Ms. Clara Yip
Ms. Clara Yip is a Hong Kong practicing solicitor, accredited mediator and registered Counsellor. Ms. Yip is currently a Consultant at So, Lung & Associates, an Accredited Family Mediation Supervisor, General and Family Mediator, Trainer of Accredited Mediation Courses (Family) approved by HKMAAL and The Law Society of Hong Kong. Practising as a Solicitor, Family and General Mediator and Counsellor, Ms. Yip has always been invited to share how to apply her cross-professional skills in promoting peace and harmony. Ms. Yip has been a CSC Master at the District Court in 2021 and 2022.
An interview with Ms. Clara Yip was conducted on 23 November 2021. The following is an edited excerpt from the interview.
What is special about the CSC process, and how is the CSC process different from mediation or other ADR process?
There are definitely unique features to the CSC Scheme which distinguishes the CSC process from other ADR procedures.
To begin with, the appointment of the CSC Master is neutral, and not in the hands of the parties. Sometimes, I have heard that parties may think mediators are not neutral because the mediator is proposed by the other party. The CSC scheme also cultivates an atmosphere of face-to-face dialogue, direct and open communication. In mediation, if parties are legally represented, it is possible that the client may just ask his or her lawyer to speak to the mediator or the other party. However, in CSC hearings, the party may be asked to communicate with the CSC Master directly, instead of through his or her lawyer.
With that being said, I believe it is unfair to compare CSC and mediation, or to argue that either process is better or can be replaced by the other. Every ADR process has its own unique features. For example, in mediation, the mediator may have caucus with one party, caucus with one party’s solicitor, or caucus with the accompanying person … there are many combinations. With parties' agreement, non-parties may also be allowed to participate in the mediation process. CSC is more focused on settlement options. During CSC, parties are directed to consider about the manner of payment, time of payment, etc. On the other hand, a mediation session can be much more detailed and comprehensive, taking a whole day or more to complete, for parties to explore various issues from interest to settlement options, with necessary private sessions in between, etc. Parties may have more time to digest their case in between mediation sessions, which could be up to a week, a month or more.
The CSC process cannot replace the well-designed and structured mediation process. Thus, where necessary, the CSC Master may have to remind the parties that the CSC process is not a replacement of mediation. In appropriate cases, the Court may at the end of CSC hearing encourage parties to attempt mediation because of the complexity of their case.
What types of cases are likely to be assigned to undergo the CSC process?
The CSC process will be beneficial for certain civil cases in the District Court, especially where both parties anticipate that the costs payable may be greater than the quantum of damages claimed or counter-claimed.
In some cases, parties may be unwilling to admit liability in the proceedings but willing to make payment to settle at CSC because the quantum of damages claimed is not that high. The CSC Master may assist the parties to explore how they may come to settlement on quantum on a without admission of liability basis.
In your experience, is the current duration of CSC hearing appropriate for the scheme?
Yes, I believe so. In my experience, parties usually use up the 2 hours fixed for the CSC hearing, and some cases that can be settled may take even up to 3 or 3.5 hours. Parties may need some time to warm up, trust and understand the dynamics of the CSC hearing first, before they are willing to speak freely and participate in the settlement process.
In some cases, the parties have attempted mediation and have signed the Agreement to Mediate. During CSC, would parties be compelled to disclose contents of the mediation, and thus be in breach of the confidentiality obligations for the mediation process?
So far, I have not encountered unwilling parties in this respect. As the parties usually consider that their own proposal is the most reasonable, they would not mind to disclose what they had offered during mediation. In some cases, lawyers of each party may have exchanged without prejudice correspondence after parties attempted mediation, based on the negotiations made during mediation. Information about parties' previous exchange of proposals may also assist the CSC Master to understand the background of the case.
What is the interplay between CSC and mediation or other ADR process?
In preparing for this CSC conference, the lawyers probably would have a conference with their clients first. This will propel parties to have a pause and think about the case again.
During the hearing, the CSC Master may ask whether parties had previously exchanged settlement proposals, to gain a better understanding of the background of the dispute. The CSC Master would not ask a lot of details about what had transpired between parties at mediation, unless with the consent of both parties.
For cases unsettled after CSC hearing, parties may have more understanding about the scope of their differences, and prepare for new strategies for further negotiations. If parties indicate that they are interested in further mediation at the CSC, the CSC Master may refer them to the Integrated Mediation Office of the Judiciary.
Have you faced uncooperative parties during CSC? In your experience, are parties willing to make genuine attempts to settle at CSC?
Most parties I encountered were co-operative and willing to engage in genuine discussions to attempt settlement at CSC. In fact, most of the parties may have had some sort of relations prior to the dispute – be it landlord and tenant, family members, or business partners. Before CSC, parties might have been litigating for one to two years, and the CSC is an opportunity to give them a pause. While the Court respects parties' right to have their disputes resolved through litigation, parties would be asked to consider what would be the best way to resolve the dispute at CSC. Some of the parties are very willing to share about their concerns, struggles and options of settlement, which may not necessarily involve the law.
Credits may also be given to lawyers of the parties, especially in cases where solicitors (and sometimes barristers) have been engaged, I have seen the whole legal team of a party gave prompt advice and response to client if the settlement terms are in the client's best interests. I am happy to see that there are more lawyers with this open mindset of facilitating settlement in client's best interests.
It seems that parties are co-operative in the CSC conference.
Yes. We cannot say that just because parties are emotional, or unwilling to settle, that means they are not willing to co-operate. In the CSC context, being co-operative would mean that the party is willing to share his views, concerns, difficulties, and consider proposals and options. An indicator of parties’ co-operation is the parties' exchange of sincere proposals/offers and counter-offers.
It is the duty of the CSC Master to explain to the parties that CSC is without prejudice, and what they may speak and offer at CSC would not affect the trial. By asking the appropriate questions, the CSC Master may assist parties to ascertain the biggest barriers to settlement in their case and evaluate their risks.
How can lawyers or parties' legal representatives be better prepared for a CSC hearing?
In most cases, parties and legal representatives are well-prepared for the CSC. The Guidance Note requires the parties to prepare the CSC Bundle, including summary of each party's case, list of issues, estimate of costs, statement of the parties' latest offer and counter-offer etc. These documents would be helpful for the CSC Master to assist parties to engage in cost-benefit analysis.
Most lawyers at the CSC hearing understand that they are not purely advocates on law and are prepared to generate and consider various options with reference to the parties' background and resources, and give realistic advice on settlement with an open mindset.
Please share with us some feedback or concluding remarks on the CSC process.
As a solicitor in private practice, I observe that there is already a culture in the profession that, before the issuance of any writ or originating procedures, parties may first attempt to make some without prejudice negotiations, and/or attempt pre-litigation mediation etc. This way, lawyers are offering more professional services to clients, ensuring protection of their clients' best interests and keeping abreast of the times.
It is true that in some cases, a trial to resolve parties' disputes may be necessary and some parties may even be willing to risk to lose the case just to obtain judgment and make publicly known the issues in dispute. While the Court always respects the parties' right to have their disputes resolved through litigation, the CSC process allows the parties to pause, re-consider and ensure that parties should be able to make an informed decision before going further on the litigation path.
It is hoped that after the CSC has been implemented for some time, feedback by parties to the Judiciary and more data collected will assist in the further improvement and betterment of the scheme in the long run.
Interview with Mr K.Y. Lo
Mr. K.Y. Lo is a solicitor in private practice and consultant at Ho & Ip, Solicitors. Mr. Lo has been admitted in Hong Kong for over 26 years and has also been admitted in other jurisdictions, including England and Wales and the British Virgin Islands. An interview with Mr. K.Y. Lo was conducted on 17 March 2022. The following is an edited excerpt from the interview.
Please share with us some feedback on the CSC hearing. Do you find the CSC process to be helpful and why?
In a case where I acted as legal representative and attended the CSC hearing with client, the parties were family members with a property ownership dispute. The parties were able to agree on a settlement proposal at CSC and did not have to go to trial.
In that case, the CSC process was particularly helpful as it offered a chance for parties to resolve their family disputes without having to go to trial. The CSC Master was a very experienced mediator, and was very patient in facilitating the settlement.
At which stage of the proceedings was the CSC hearing fixed? Did you consider it a good timing for parties to undergo CSC?
The CSC hearing was fixed after parties exchanged witness statements and other evidence, before the pre-trial review. I believe that was a good timing for parties to undergo CSC because it offered parties a last chance to settle before going to trial.
In that case, parties had also gone through mediation but the mediation was unsuccessful. Personally, I considered this to be appropriate timing as parties should not waste the Court’s resources, without having attempted mediation first.
At the CSC hearing, what was the interaction between the CSC master, legal representatives and the parties? Did the CSC Master speak directly to the parties?
The CSC Master played a key role and often spoke directly to the parties at the CSC hearing. I felt that this direct dialogue was necessary Before the CSC hearing, parties and their legal representatives may not have expected the CSC Master to also act like a mediator. It was therefore very helpful for the CSC Master to brief the parties at the outset of the CSC hearing that the CSC Master would facilitate parties’ discussion to explore settlement options, and that necessary protections are in place – in particular that the CSC process would not affect the trial, because the CSC Master would not be involved in the same case after the CSC.
With that being said, the interaction between the CSC Master, legal representatives and the parties is also different from that in mediation. Usually, a mediator is simply regarded by parties as someone in the middle. In a Court room setting, however, lay clients may have very different perception. The CSC Master commands respect from both lay clients and their legal representatives. If the Master is not biased, and is very fair, lay clients may be more inclined to listen to the CSC Master because he or she has authority. The CSC Master may skillfully explore the parties’ common points, as well as pinpoint each party’s weaknesses.
Do you think the current duration of CSC is appropriate or sufficient for the parties?
In the case I referred to just now, parties used 8 to 9 hours to settle at CSC despite that only 2 hours were initially reserved for the CSC hearing. Parties were very grateful for the CSC Master’s patience and it was extremely fortunate that the CSC Master was able to fix another half-day session of CSC despite the Court’s busy schedule.
The appropriate duration of CSC for each case must be fact sensitive. In a typical family dispute, for example, it may well be the case that each party would need to consult with his or her other family members, be it a spouse, a parent, or other siblings, before agreeing to any settlement proposal. In such cases, more time will be needed for a party to discuss with the other family members before settlement can be reached.
In such situations, the legal representative may make prior arrangement with the other family members so that immediate contact with them could be made. This should speed up the process and ensure that the Court’s time and resources are not wasted.
On reflection, parties might also need some time to tune in and adjust their mindset to settlement during CSC, which may not be properly done in 2 hours’ time unless parties come well-prepared.
In general, how would you suggest lawyers who have not attended a CSC hearing to better prepare themselves for a CSC hearing?
Practitioners should be aware that the CSC process is almost akin to mediation in Court room. Parties and their legal representatives may prepare for the CSC hearing in contemplation of very real possibilities of settlement and come up with detailed settlement proposals before attending the CSC hearing.
Each case has its own strong points and weak points. Each case may have its apparent or hidden weaknesses. Sometimes, as part of litigation strategy, parties would not want to disclose the weaknesses of their case, even at mediation. The same applies for CSC. Prior to a CSC hearing, the legal representative should have some idea or plan of what can be disclosed at CSC.
Did the CSC Master ask parties why mediation was not successful? Were there any concerns of sharing confidential information or without prejudice correspondence at the CSC?
Yes, the CSC Master did generally ask why mediation was unsuccessful, but without asking what was discussed at mediation.
As regards the disclosure of without prejudice correspondence at CSC, no concerns were raised. First, client’s agreement would first be obtained before any disclosure. Second, client needs to be clearly aware that the CSC process would not affect the trial of the case. The CSC Master may mention this to both parties at the outset, and the legal representative may remind client again during the CSC hearing.
Some practitioners have raised concerns about the CSC scheme because parties may rely on the Court for mediation, while mediation is considered by some to be separate from the Court process.
I would say that that CSC scheme offers a very practical solution, as a mediator cannot have the same authority as a CSC Master. I have gone through the CSC process in a case, and the CSC offered an opportunity for parties to work out a practical solution which worked for both parties. It helped save the Court’s time and resources, and parties did not need to waste time and money to go to trial. The CSC also seems to be a very independent step from the other Court processes.
I think relying on Court for alternative dispute resolution should be a last resort – parties should go through mediation or other dispute resolution methods first, and should not be allowed to have CSC at a stage too early in the proceedings. The Court’s time and resources are limited.
This also goes to the selection of cases for CSC. Many cases in the District Court may be suitable for CSC because the trial costs and the disputed amount may not be proportionate.
Do you have any suggestions or comments on how the CSC process may be improved further?
Fixing a case for CSC will use up at least half a day of the Court’s time. As litigation lawyers, we may sometimes come across clients who are adamant and very sure that no settlement is possible. In such cases, parties should not waste the Court’s time at CSC.
In this regard, perhaps a brief “pre-CSC hearing” of a shorter duration may be useful to filter away cases not suitable for CSC, though I am not sure whether that would be even more cumbersome. At such a pre-CSC hearing, if either party indicates to the Master that settlement is impossible, the parties may then forego the opportunity to settle at CSC. It is a question of distribution and use of our judicial resources.
* The views and opinions expressed in this article are those of the author and/or interviewees and do not reflect the policy or position of any association, firm, institution or body. Special thanks are given to Ms. Elaine Liu, Ms. Clara Yip and Mr. K.Y. Lo for agreeing to be interviewed. Ms. Liu, Ms. Yip, and Mr. Lo are referred to and the three interviews are excerpted below in chronological order according to the date of the interview.
Introduction
In December 2020, the Judiciary issued the Guidance Note for Case Settlement Conference in Civil Cases in the District Court (the "Guidance Note"), which took effect on 2 January 2021.[1] A Supplemental Note for the Guidance Note (the "Supplemental Note") was further issued by the Chief District Judge on 16 December 2020.[2]
As explained by the Guidance Note, the Case Settlement Conference ("CSC") scheme is an extension and upgrade of a pilot scheme of External Mediation Master Scheme ("EMM Scheme") undertook by the District Court in 2018 to introduce the idea of assisted settlement into the case management process in civil cases, to further promote the use of alternative dispute resolution, and to instill among litigants as well as their legal representatives a culture of exploring settlement. According to the Judiciary, the settlement rate of CSC cases at the District Court is 45% as at December 2021.
In December 2020, Hong Kong Lawyer published an article on "District Court Guidance Note On Case Settlement Conferences". To further explore the various dimensions of the CSC scheme, interviews were conducted in November 2021 with two CSC Masters, Ms. Elaine Liu and Ms. Clara Yip, and in March 2022 with a solicitor in private practice Mr. K.Y. Lo, who had attended a CSC hearing as a party's legal representative under the CSC Scheme.
The interviewer, Mrs. Cecilia Wong is the Chairlady of Mediation Committee of the Law Society of Hong Kong. She is a member of Chief Justice’s Working Party on Mediation, a former council member of the Law Society of Hong Kong, and former member of the Department of Justice's Steering Committee on Mediation. Mrs. Wong is also an experienced dispute resolution practitioner. She is an accredited General Mediator, Family Mediator, Family Mediation Supervisor, an arbitrator on the Panel of Arbitrators of the Law Society of Hong Kong and a fellow arbitrator of the Hong Kong Institute of Arbitrators (HKIarb). Mrs Wong has served as a mediator at Qianhai Court of the People's Republic of China. The interviews with Ms. Elaine Liu, Ms. Clara Yip and Mr. K.Y. Lo were conducted on an independent basis by Mrs. Cecilia Wong in her personal capacity.
Readers should note that, any sharing of cases within the excerpt interviews in this article are only examples. Depending on the nature and circumstances of the case, different cases may be dealt with in different ways as may be deemed appropriate by the CSC Master.
Interview with Ms. Elaine Liu
Ms Elaine Liu is a Hong Kong practicing barrister-at-law, arbitrator and accredited mediator. Ms Liu is the Past Chairman of Hong Kong Bar Association’s Committee on Mediation, a Member of Chief Justice’s Working Party on Mediation, the Department of Justice’s Steering Committee on Mediation, and Working Party on Membership of the Hong Kong Mediation Accreditation Association Limited (“HKMAAL”). Ms Liu is a Fellow of the Chartered Institute of Arbitrators, an accredited mediator and assessor of HKMAAL and Hong Kong International Arbitration Centre, as well as an accredited mediator of Centre of Effective Dispute Resolution and Shanghai Commercial Mediation Centre. Ms. Liu has been an EMM Master and CSC Master at the District Court since 2018.
An interview with Ms. Elaine Liu was conducted on 15 November 2021. The following is an edited excerpt from the interview.
Please share with us what types of cases are usually covered by the CSC scheme.
A wide range of civil cases are covered, from disputes among family members, such as disputes relating to family property, to purely commercial or tort cases, like contract, defamation, building management, landlord and tenant disputes, water seepage and other cases. In some cases, both parties appeared as litigants in persons, whereas in others, one or both parties are legally represented. At this stage, personal injuries cases are not included.
How would you describe the role of the CSC Master, and how is CSC different from mediation?
The role of the CSC Master is rather unique. It is different from the role of a facilitative or an evaluative mediator. Different CSC Masters may have different styles but all are to see that the parties engaged in constructive and realistic dialogues to explore the possibility of resolving their disputes, to assist the parties to bridge their gaps and reach a settlement. The CSC Master has the authority that a mediator is not vested with. A mediator will conduct caucus session with the parties. The CSC Master will not meet with one of the parties alone. All parties are present at the CSC hearing.
How would you describe the interplay between the CSC, mediation and/or other alternative dispute resolution processes? Would it be better for parties to have attempted mediation first, before attending any CSC hearing?
The parties are encouraged to conduct mediation before the CSC but this is not mandatory. The CSC hearing of a case with prior attempted mediation would not be conducted with great difference from a case without one, except that in the former case, I may explore the matters left unresolved at the mediation, and try to work with the parties to remove the obstacles that stand in the way of settlement. In either cases, the parties are to focus on attempting to settle or narrow the scope of their disputes at the CSC.
What kinds of directions are usually given after a CSC hearing?
As mentioned in the Guidance Note, the CSC Master will not give case management directions. The CSC Master may adjourn the CSC hearing to another session; or, where the parties come to a settlement, give the consent order by way of Tomlin Order or other order for a full or partial disposal of the case; or, direct that the case be proceeded to the next stage, such as the case management conference. Generally, depending on the outcome of the CSC, there will be no order as to costs, or an order that the parties' costs of the CSC be in the cause. Having said that, as stated in the Guidance Note, default in compliance with the directions for preparation of the CSC and unreasonable conduct at the CSC may result in costs sanction.
While mediation is a voluntary process, CSC may not be initiated by the parties themselves. Would parties feel compelled to settle in the CSC process?
In assisting parties to reach settlement, the CSC Master will ensure that any settlement at the conclusion of the CSC is ultimately the party’s own voluntary decision. If the parties are not able to reach a consensus, the CSC Master may still assist them to have better understandings of their obligations, the situation they are likely to face in further conduct of the litigation, and assist them to make informed decisions on the way forward for resolution of their disputes.
In some cases, the parties may have signed confidentiality agreements with non-parties and/or the mediator. During CSC, will parties be compelled to disclose contents of the mediation, and thus be in breach of the confidentiality agreements?
In my experience, parties seldom had queries or difficulties with this issue. The entire CSC hearing is without prejudice. I understand that the records will not be seen by the trial judge. The CSC Master will not handle the case any more after the end of the CSC.
Sometimes the parties themselves would like to revisit the issues discussed at the prior mediation with a view to further narrowing down their differences. Parties are encouraged to voice their concerns or obstacles to settlement. Given the without prejudice setting of the CSC, anything said during CSC will be confidential and will not affect the trial.
Would the CSC Master ask questions about what the party had been advised, to understand how the problem evolved? If yes, would the views offered or questions raised by the CSC Masters impinge on the views or advice already given by parties' lawyers?
The purpose of the CSC process is to assist the parties to reach a settlement. Usually what the party had been advised by the lawyers are not in issue. The focus remains on how to resolve the disputes.
Sometimes, questions raised by the CSC Master at a CSC hearing may be matters that have already been advised by the parties' lawyer. There are many possible valid reasons to revisit those questions at the CSC, for example, the advice was given at a time without the benefit of the other side’s case or evidence; or new issues may arise at the CSC that were not anticipated at the time of the lawyer’s advice; or the parties may be in a different personal situation, and therefore a review of the circumstances is required.
How will the CSC Master deal with previous Without Prejudice communications between parties and/or parties' lawyers disclosed at CSC?
Without Prejudice communications between the parties will assist in the consideration and evaluation of options for settlement. These communications would show what the parties’ views or proposals at that time. Nonetheless, the parties shall remain open-minded at the CSC and not be bolted down by the previous WP offers. Irrespective of whether a WP offer has been made previously, I as the CSC Master will still go through the issues and options at the CSC. The CSC Master would not seek to discourage the parties by asking why certain offers were made or were not made.
Have you faced uncooperative parties during CSC, did the uncooperative party face adverse costs consequences?
The parties and lawyers who had come before me at the CSC hearings are mostly co-operative. The CSC hearing is an occasion for a realistic, pragmatic, constructive and amicable exploration of the issues and options. It is the duty of the CSC Master to maintain control of the hearing. The CSC Master has the power to sanction the parties on costs in accordance with the Guidance Notes. Thus far, I did not have to exercise this power.
What is the normal duration of a CSC hearing?
Usually, CSC hearings would be fixed for 2 hours in the morning. In many cases, the parties could reach a settlement before lunchtime. Some cases may take longer than a morning to iron out the terms of settlement, some may require a second CSC to tie up the unresolved ends. For the parties who genuinely need more time to consider the options, or to discuss with others, such as other family members, a short adjournment has proved to be effective in achieving a settlement that the parties fully embraced.
How can lawyers or parties' legal representatives better prepare for a CSC hearing?
Before attending a CSC hearing, lawyers should have considered with their clients preliminarily the possible options for settlement. Clients should be advised on issues that have transpired, the costs implications and broadly the time and procedures involved in the litigation. These are quite similar to what should be advised in preparing the parties for mediation.
For the parties to gain the benefit of the CSC hearing, litigants and their legal representatives should attend the hearing with an open mind, and appreciate the unique features of the CSC. Clients will need to understand the reason why their legal representative did not argue the case for them at the CSC as this is not what the CSC is for. The purpose of the CSC hearing is to assist parties to come to a settlement. Generally, the atmosphere of the CSC hearing is also very different from trial or other stages of the proceedings in court.
Please share with us some feedback or concluding remarks on the CSC process.
The feedbacks I received are positive. Many cases settled at the end of CSC hearing and the parties expressed appreciation of the result. Some of those who could not settle at the CSC hearing found the process pleasant, comfortable and constructive. A legal representative who had attended the CSC hearing with lay clients told me that the CSC hearing was very effective, lay clients were more receptive to the realities of their case after the CSC hearing.
I understand that similar trends of developments are also found in other countries, such as Canada, New Zealand and many others. The CSC provides a useful platform for the parties to be practical and work out proposals in their best interests to resolve their differences.
Interview with Ms. Clara Yip
Ms. Clara Yip is a Hong Kong practicing solicitor, accredited mediator and registered Counsellor. Ms. Yip is currently a Consultant at So, Lung & Associates, an Accredited Family Mediation Supervisor, General and Family Mediator, Trainer of Accredited Mediation Courses (Family) approved by HKMAAL and The Law Society of Hong Kong. Practising as a Solicitor, Family and General Mediator and Counsellor, Ms. Yip has always been invited to share how to apply her cross-professional skills in promoting peace and harmony. Ms. Yip has been a CSC Master at the District Court in 2021 and 2022.
An interview with Ms. Clara Yip was conducted on 23 November 2021. The following is an edited excerpt from the interview.
What is special about the CSC process, and how is the CSC process different from mediation or other ADR process?
There are definitely unique features to the CSC Scheme which distinguishes the CSC process from other ADR procedures.
To begin with, the appointment of the CSC Master is neutral, and not in the hands of the parties. Sometimes, I have heard that parties may think mediators are not neutral because the mediator is proposed by the other party. The CSC scheme also cultivates an atmosphere of face-to-face dialogue, direct and open communication. In mediation, if parties are legally represented, it is possible that the client may just ask his or her lawyer to speak to the mediator or the other party. However, in CSC hearings, the party may be asked to communicate with the CSC Master directly, instead of through his or her lawyer.
With that being said, I believe it is unfair to compare CSC and mediation, or to argue that either process is better or can be replaced by the other. Every ADR process has its own unique features. For example, in mediation, the mediator may have caucus with one party, caucus with one party’s solicitor, or caucus with the accompanying person … there are many combinations. With parties' agreement, non-parties may also be allowed to participate in the mediation process. CSC is more focused on settlement options. During CSC, parties are directed to consider about the manner of payment, time of payment, etc. On the other hand, a mediation session can be much more detailed and comprehensive, taking a whole day or more to complete, for parties to explore various issues from interest to settlement options, with necessary private sessions in between, etc. Parties may have more time to digest their case in between mediation sessions, which could be up to a week, a month or more.
The CSC process cannot replace the well-designed and structured mediation process. Thus, where necessary, the CSC Master may have to remind the parties that the CSC process is not a replacement of mediation. In appropriate cases, the Court may at the end of CSC hearing encourage parties to attempt mediation because of the complexity of their case.
What types of cases are likely to be assigned to undergo the CSC process?
The CSC process will be beneficial for certain civil cases in the District Court, especially where both parties anticipate that the costs payable may be greater than the quantum of damages claimed or counter-claimed.
In some cases, parties may be unwilling to admit liability in the proceedings but willing to make payment to settle at CSC because the quantum of damages claimed is not that high. The CSC Master may assist the parties to explore how they may come to settlement on quantum on a without admission of liability basis.
In your experience, is the current duration of CSC hearing appropriate for the scheme?
Yes, I believe so. In my experience, parties usually use up the 2 hours fixed for the CSC hearing, and some cases that can be settled may take even up to 3 or 3.5 hours. Parties may need some time to warm up, trust and understand the dynamics of the CSC hearing first, before they are willing to speak freely and participate in the settlement process.
In some cases, the parties have attempted mediation and have signed the Agreement to Mediate. During CSC, would parties be compelled to disclose contents of the mediation, and thus be in breach of the confidentiality obligations for the mediation process?
So far, I have not encountered unwilling parties in this respect. As the parties usually consider that their own proposal is the most reasonable, they would not mind to disclose what they had offered during mediation. In some cases, lawyers of each party may have exchanged without prejudice correspondence after parties attempted mediation, based on the negotiations made during mediation. Information about parties' previous exchange of proposals may also assist the CSC Master to understand the background of the case.
What is the interplay between CSC and mediation or other ADR process?
In preparing for this CSC conference, the lawyers probably would have a conference with their clients first. This will propel parties to have a pause and think about the case again.
During the hearing, the CSC Master may ask whether parties had previously exchanged settlement proposals, to gain a better understanding of the background of the dispute. The CSC Master would not ask a lot of details about what had transpired between parties at mediation, unless with the consent of both parties.
For cases unsettled after CSC hearing, parties may have more understanding about the scope of their differences, and prepare for new strategies for further negotiations. If parties indicate that they are interested in further mediation at the CSC, the CSC Master may refer them to the Integrated Mediation Office of the Judiciary.
Have you faced uncooperative parties during CSC? In your experience, are parties willing to make genuine attempts to settle at CSC?
Most parties I encountered were co-operative and willing to engage in genuine discussions to attempt settlement at CSC. In fact, most of the parties may have had some sort of relations prior to the dispute – be it landlord and tenant, family members, or business partners. Before CSC, parties might have been litigating for one to two years, and the CSC is an opportunity to give them a pause. While the Court respects parties' right to have their disputes resolved through litigation, parties would be asked to consider what would be the best way to resolve the dispute at CSC. Some of the parties are very willing to share about their concerns, struggles and options of settlement, which may not necessarily involve the law.
Credits may also be given to lawyers of the parties, especially in cases where solicitors (and sometimes barristers) have been engaged, I have seen the whole legal team of a party gave prompt advice and response to client if the settlement terms are in the client's best interests. I am happy to see that there are more lawyers with this open mindset of facilitating settlement in client's best interests.
It seems that parties are co-operative in the CSC conference.
Yes. We cannot say that just because parties are emotional, or unwilling to settle, that means they are not willing to co-operate. In the CSC context, being co-operative would mean that the party is willing to share his views, concerns, difficulties, and consider proposals and options. An indicator of parties’ co-operation is the parties' exchange of sincere proposals/offers and counter-offers.
It is the duty of the CSC Master to explain to the parties that CSC is without prejudice, and what they may speak and offer at CSC would not affect the trial. By asking the appropriate questions, the CSC Master may assist parties to ascertain the biggest barriers to settlement in their case and evaluate their risks.
How can lawyers or parties' legal representatives be better prepared for a CSC hearing?
In most cases, parties and legal representatives are well-prepared for the CSC. The Guidance Note requires the parties to prepare the CSC Bundle, including summary of each party's case, list of issues, estimate of costs, statement of the parties' latest offer and counter-offer etc. These documents would be helpful for the CSC Master to assist parties to engage in cost-benefit analysis.
Most lawyers at the CSC hearing understand that they are not purely advocates on law and are prepared to generate and consider various options with reference to the parties' background and resources, and give realistic advice on settlement with an open mindset.
Please share with us some feedback or concluding remarks on the CSC process.
As a solicitor in private practice, I observe that there is already a culture in the profession that, before the issuance of any writ or originating procedures, parties may first attempt to make some without prejudice negotiations, and/or attempt pre-litigation mediation etc. This way, lawyers are offering more professional services to clients, ensuring protection of their clients' best interests and keeping abreast of the times.
It is true that in some cases, a trial to resolve parties' disputes may be necessary and some parties may even be willing to risk to lose the case just to obtain judgment and make publicly known the issues in dispute. While the Court always respects the parties' right to have their disputes resolved through litigation, the CSC process allows the parties to pause, re-consider and ensure that parties should be able to make an informed decision before going further on the litigation path.
It is hoped that after the CSC has been implemented for some time, feedback by parties to the Judiciary and more data collected will assist in the further improvement and betterment of the scheme in the long run.
Interview with Mr K.Y. Lo
Mr. K.Y. Lo is a solicitor in private practice and consultant at Ho & Ip, Solicitors. Mr. Lo has been admitted in Hong Kong for over 26 years and has also been admitted in other jurisdictions, including England and Wales and the British Virgin Islands. An interview with Mr. K.Y. Lo was conducted on 17 March 2022. The following is an edited excerpt from the interview.
Please share with us some feedback on the CSC hearing. Do you find the CSC process to be helpful and why?
In a case where I acted as legal representative and attended the CSC hearing with client, the parties were family members with a property ownership dispute. The parties were able to agree on a settlement proposal at CSC and did not have to go to trial.
In that case, the CSC process was particularly helpful as it offered a chance for parties to resolve their family disputes without having to go to trial. The CSC Master was a very experienced mediator, and was very patient in facilitating the settlement.
At which stage of the proceedings was the CSC hearing fixed? Did you consider it a good timing for parties to undergo CSC?
The CSC hearing was fixed after parties exchanged witness statements and other evidence, before the pre-trial review. I believe that was a good timing for parties to undergo CSC because it offered parties a last chance to settle before going to trial.
In that case, parties had also gone through mediation but the mediation was unsuccessful. Personally, I considered this to be appropriate timing as parties should not waste the Court’s resources, without having attempted mediation first.
At the CSC hearing, what was the interaction between the CSC master, legal representatives and the parties? Did the CSC Master speak directly to the parties?
The CSC Master played a key role and often spoke directly to the parties at the CSC hearing. I felt that this direct dialogue was necessary Before the CSC hearing, parties and their legal representatives may not have expected the CSC Master to also act like a mediator. It was therefore very helpful for the CSC Master to brief the parties at the outset of the CSC hearing that the CSC Master would facilitate parties’ discussion to explore settlement options, and that necessary protections are in place – in particular that the CSC process would not affect the trial, because the CSC Master would not be involved in the same case after the CSC.
With that being said, the interaction between the CSC Master, legal representatives and the parties is also different from that in mediation. Usually, a mediator is simply regarded by parties as someone in the middle. In a Court room setting, however, lay clients may have very different perception. The CSC Master commands respect from both lay clients and their legal representatives. If the Master is not biased, and is very fair, lay clients may be more inclined to listen to the CSC Master because he or she has authority. The CSC Master may skillfully explore the parties’ common points, as well as pinpoint each party’s weaknesses.
Do you think the current duration of CSC is appropriate or sufficient for the parties?
In the case I referred to just now, parties used 8 to 9 hours to settle at CSC despite that only 2 hours were initially reserved for the CSC hearing. Parties were very grateful for the CSC Master’s patience and it was extremely fortunate that the CSC Master was able to fix another half-day session of CSC despite the Court’s busy schedule.
The appropriate duration of CSC for each case must be fact sensitive. In a typical family dispute, for example, it may well be the case that each party would need to consult with his or her other family members, be it a spouse, a parent, or other siblings, before agreeing to any settlement proposal. In such cases, more time will be needed for a party to discuss with the other family members before settlement can be reached.
In such situations, the legal representative may make prior arrangement with the other family members so that immediate contact with them could be made. This should speed up the process and ensure that the Court’s time and resources are not wasted.
On reflection, parties might also need some time to tune in and adjust their mindset to settlement during CSC, which may not be properly done in 2 hours’ time unless parties come well-prepared.
In general, how would you suggest lawyers who have not attended a CSC hearing to better prepare themselves for a CSC hearing?
Practitioners should be aware that the CSC process is almost akin to mediation in Court room. Parties and their legal representatives may prepare for the CSC hearing in contemplation of very real possibilities of settlement and come up with detailed settlement proposals before attending the CSC hearing.
Each case has its own strong points and weak points. Each case may have its apparent or hidden weaknesses. Sometimes, as part of litigation strategy, parties would not want to disclose the weaknesses of their case, even at mediation. The same applies for CSC. Prior to a CSC hearing, the legal representative should have some idea or plan of what can be disclosed at CSC.
Did the CSC Master ask parties why mediation was not successful? Were there any concerns of sharing confidential information or without prejudice correspondence at the CSC?
Yes, the CSC Master did generally ask why mediation was unsuccessful, but without asking what was discussed at mediation.
As regards the disclosure of without prejudice correspondence at CSC, no concerns were raised. First, client’s agreement would first be obtained before any disclosure. Second, client needs to be clearly aware that the CSC process would not affect the trial of the case. The CSC Master may mention this to both parties at the outset, and the legal representative may remind client again during the CSC hearing.
Some practitioners have raised concerns about the CSC scheme because parties may rely on the Court for mediation, while mediation is considered by some to be separate from the Court process.
I would say that that CSC scheme offers a very practical solution, as a mediator cannot have the same authority as a CSC Master. I have gone through the CSC process in a case, and the CSC offered an opportunity for parties to work out a practical solution which worked for both parties. It helped save the Court’s time and resources, and parties did not need to waste time and money to go to trial. The CSC also seems to be a very independent step from the other Court processes.
I think relying on Court for alternative dispute resolution should be a last resort – parties should go through mediation or other dispute resolution methods first, and should not be allowed to have CSC at a stage too early in the proceedings. The Court’s time and resources are limited.
This also goes to the selection of cases for CSC. Many cases in the District Court may be suitable for CSC because the trial costs and the disputed amount may not be proportionate.
Do you have any suggestions or comments on how the CSC process may be improved further?
Fixing a case for CSC will use up at least half a day of the Court’s time. As litigation lawyers, we may sometimes come across clients who are adamant and very sure that no settlement is possible. In such cases, parties should not waste the Court’s time at CSC.
In this regard, perhaps a brief “pre-CSC hearing” of a shorter duration may be useful to filter away cases not suitable for CSC, though I am not sure whether that would be even more cumbersome. At such a pre-CSC hearing, if either party indicates to the Master that settlement is impossible, the parties may then forego the opportunity to settle at CSC. It is a question of distribution and use of our judicial resources.
