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K21.2. Types of ADR
| 625. | ADR processes fall into two main categories: the adjudicatory ("where the third party neutral makes a binding determination of the issues") and the consensual ("where the parties retain the power to control the outcome and any terms of resolution"). (Note 553) |
| 626. | The two main forms of adjudicatory ADR are arbitration and expert determination. |
| 626.1 | Arbitration involves the parties privately choosing the adjudicator or an adjudicating panel who then proceed to make a legally binding determination, subject to rules laid down by an arbitral organization or by statute. The award can be enforced through the courts. Some court supervision also exists against excess of jurisdiction or serious irregularity. |
| 626.2 | Little more needs to be said about arbitration, which is well-established in Hong Kong. Since its foundation in 1985, the Hong Kong International Arbitration Centre ("HKIAC") has played an increasingly important role in providing support and facilities for arbitration here. Training courses and Chartered Institute certification are available and the HKIAC presently has over 300 arbitrators on its panel. In the year 2000, 298 arbitration cases, local and international, were referred to the HKIAC concerning disputes involving sums ranging from $353,400 to $300 million. This is a substantial case-load which may be compared with the current figure of 600 to 650 civil cases annually going to a full trial in the High Court. In addition, very substantial arbitrations are known to take place outside the HKIAC. Thus, the Working Party has been told that the Government was recently engaged in two arbitrations, each involving claims in excess of HK$1 billion. In neither case was the HKIAC involved in appointing the arbitrator, although in one case, the hearing took place partly at the Centre. |
| 626.3 | Expert determination is a process whereby the parties appoint an expert, often pursuant to a contractual term, to make a binding decision or appraisal in accordance with agreed instructions, without necessarily conducting any enquiry or following adjudicatory rules. The determination is contractually binding and is enforced by an action on the contract. (Note 554) |
| 627. | Consensual ADR processes include the following (Note 555) :- |
| 627.1 | The commissioning of a non-binding neutral fact-finding expert's report as the possible basis of the parties' reaching a settlement. |
| 627.2 | Submitting the dispute to a neutral evaluation of the merits. Where this is court-annexed, it is often referred to as early neutral evaluation or "ENE", the "earliness" being a reference to the stage in the litigation when the evaluation takes place. Again, the evaluation may be used as the basis of a settlement. |
| 627.3 | Mediation by a neutral aimed at assisting the parties to arrive at a contractually binding settlement. Conciliation is generally considered to be the same as mediation. |
| 628. | ADR may involve a combination of these processes and variations in the arrangements. Thus, what has become known as "Med-Arb" involves a neutral acting as mediator and, if the parties fail to agree, becoming an arbitrator with power to make a binding award. A mediator may or may not also provide an evaluation of the merits, and so forth. (Note 556) |
Notes
| 553 | The quotations are from B&M at §2-025. See also LCD-DP §2.4. <back> |
| 554 | B&M §23-023. See also LCD-DP §2.2 and Annex A. <back> |
| 555 | See B&M pp 17-20, from which these items are drawn. <back> |
| 556 | LCD-DP §2.4. <back> |
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