Previously, legal practitioners were only obliged to advise their clients involved in family litigation as to the availability of family mediation and to provide them with the relevant information, but the parties were then free to opt out of family mediation as they saw fit or appropriate.
However, since the new Practice Direction 15.10 issued by the Hong Kong Judiciary came into effect on 2nd May 2012, parties to family litigation instituted on or after 2nd May 2012, are required to consider engaging in mediation to resolve their dispute. Each party, or the party’s legal representative, must file a Certificate of Mediation with the Court indicating whether or not the party wishes to attempt mediation, and if one chooses not to do so, the party must set out the reason.
Any party who does not wish to attempt mediation must be made aware of the possibility of the Court making an adverse costs order when a party “unreasonably fails to engage in mediation”, as the new Practice Direction 15.10 expressly provided that:-
1.4 In exercising its discretion on costs, the Court takes into account all relevant circumstances. These would include any unreasonable failure of a party to engage in mediation where this can be established by admissible materials. Legal representatives should advise their clients of the possibility of the Court making an adverse costs order, where a party unreasonably fails to engage in mediation.
1.5 The Court will not make any adverse costs order against a party on the ground of unreasonable failure to engage in mediation where:
(i) The party has engaged in mediation to the minimum level of participation1 agreed to by the parties or as directed by the Court.
(ii) A party has a reasonable explanation for not engaging in mediation.
Footnote 1 - An example of a specified minimum level of participation may be as follows: “Agreement between the parties as to the identity of the mediator and the terms of his or her appointment, agreement as to the rules applicable to the mediation (if any) and participation by the parties in the mediation up to and including at least one substantive mediation session (of a duration determined by the mediator) with the mediator”.
With the new Practice Direction 15.10 now in force, it brings the Court’s approach to mediation in Matrimonial and Family proceedings more in line with other civil proceedings (since Practice Direction 31 came into effect on 1st January 2010 – a party may face an adverse costs order if one fails to engage in mediation to the minimum level of participation or has no reasonable explanation for not engaging in mediation).
Clients should be aware and be warned that if the Court considers that a party has unreasonably refused to attempt mediation, and insisted on pursuing the dispute by litigating to trial at Court, the party may not be awarded an order for its legal costs even if the party succeeded at trial!
It is therefore advisable for any party in Matrimonial and Family proceedings to engage in mediation to the minimum level of participation to avoid any potential adverse costs order made by the Court on the ground of unreasonable failure to engage in mediation.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.
Articles by Practice Area
- Hong Kong has commenced exchanging financial account information with other jurisdictions for tax purpose
- China is Reforming Its Individual Income Tax Rules – Are You Ready?
- OLN Nominated for Four Awards in the ALB Hong Kong Law Awards 2018
- How to be Eligible for the Treaty Benefits for China-sourced Passive Income under the New Rules?
- China Waives Work Permits for Hong Kong, Taiwan and Macau Residents