Maximizing ADR Effectiveness in Civil Disputes: New Guidelines for CSCs and MCSCs

The upcoming implementation of Practice Direction 31.1 (PD 31.1), which provides procedural guidelines on Case Settlement Conferences (CSCs) and Mediator-Assisted Case Settlement Conferences (MCSCs), will take effect on 2 January 2025. By familiarising themselves with these new guidelines, legal professionals can help clients achieve more timely and cost-effective settlement outcomes. 

What Cases Does PD 31.1 Apply To? 

PD 31.1 applies to all civil cases before the District Court, with the exception of personal injury, employees’ compensation, false detention claims against the Government, and equal opportunities cases. This marks the Court’s proactive approach in encouraging parties and their legal representatives to explore Alternative Dispute Resolution (ADR) when there is a reasonable prospect of resolving the dispute. 

What Does the Court Do? 

At the heart of PD 31.1 is the Court’s facilitation of settlement discussions rather than adjudication. The Case Settlement Master (for CSCs) or Judge (for MCSCs) will not adjudicate on the merits of the case, nor deal with contested case management issues or interlocutory applications (unless taken out for settlement purposes). Instead, the Court will address the parties directly, foster negotiations, and help them explore settlement options. 

For MCSCs, a combined approach between the Court and an appointed mediator further enhances the settlement process. After an unsuccessful mediation, the mediator, who may already have a fair understanding the parties’ concerns, will work closely with the Court to help advance the settlement. For this purpose, the Court may liaise and discuss with the appointed mediator in the absence of the parties prior to and during the MCSC. 

Given the confidential and without-prejudice nature of the process, these discussions cannot be used in later proceedings if no settlement is reached.  Furthermore, CSCs and MCSCs are held in chambers (no open to public). 

Who Should Attend CSCs and MCSCs? 

Attendance at both CSCs and MCSCs is mandatory for the relevant parties. For corporate clients, an authorized representative who is familiar with the case and empowered to settle must attend. This ensures that the parties are ready for direct, face-to-face dialogue to resolve their disputes. Further, the appointed mediator should also attend the MCSCs and be prepared to continue the mediation immediately at the accommodation facilities provided by the Court. 

What is the Role of Legal Representatives? 

Legal representatives have a crucial, yet non-advocacy role in these conferences. Their primary duty is to assist their clients in engaging meaningfully in settlement discussions, narrowing down issues, and advising on settlement terms and potential litigation outcomes. The focus shifts from litigation advocacy to facilitating a constructive settlement process. 

How to Prepare for a Successful Settlement? 

PD 31.1 requires lawyers to prepare and submit a detailed bundle of documents in advance of both CSCs and MCSCs. This includes case summaries, lists of issues, key documents, settlement offers, and a statement of costs. In our experience, these documents are conducive to helping the Court understand the parties’ dynamics and for them to conduct a cost-and-benefit analysis during the process. 

Importantly, lawyers should note that even if a mediation does not immediately result in a settlement, it is not the end of the ADR process. MCSCs serve as a continuous process with the mediation. The parties will lodge with the Court a mediator’s note to be prepared by the appointed mediator, which plays a key role in setting the stage for further settlement efforts. This note will outline the common grounds agreed upon, the remaining disputed issues, and the parties’ concerns, the latest proposals from each party.  

Costs  

Generally, each party will bear its own costs related to the CSCs and MCSCs. However, this is without prejudice to the general power of the Court to award costs against any party having regard to all the circumstances including a party’s conduct at the CSCs or MCSCs. Failure to comply with preparation directions or unreasonable behaviour at the CSCs or MCSCs may lead to cost sanctions. 

Seizing the Opportunity for Efficient Dispute Resolution 

PD 31.1, particularly with the introduction of structured MCSCs, marks a significant step forward in maximising the resources for ADR. As we prepare for the implementation of the new guidelines, it is vital for lawyers to stay informed and make the most of these valuable resources to benefit both their clients and their practice. 

Authors: Simon Wong and Ted Chan

Simon Wong

“Simon is very meticulous and his advocacy is very good. His advice is practical and easy to follow whilst his preparation is unquestionable.” “Excellent communication skills with the ability to articulate arguments in a concise, professional and persuasive manner.”
Legal 500 Asia-Pacific 2025, Commercial Disputes, Labour and Employment — Leading Juniors

Simon is qualified to practise law both in Hong Kong and California USA. He specializes in personal injury litigation and commercial dispute resolution. In his personal injury practice, he has been instructed in more than 500 personal injury and medical negligence cases and has extensive experience in representing claimants as well as defendants.  Simon’s commercial litigation experience includes company matters, shareholders’ disputes, banking disputes, insolvency matter and contract claims.

Visit Simon’s profile for further details.

 

Ted Chan

Ted is a CEDR accredited mediator. He has been regularly engaged to mediate cases of a wide range of areas, including restitution, contract, tort, defamation, matrimonial, taxation, etc. In light of his practice in family law, Ted is regularly instructed to represent parties in judge-led settlement processes such as the CDR and FDR hearings. More details can be found in Ted’s profile.

 

This article was first published on 20 December 2024.

Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photographs which appear in this article are included for decorative purposes only and should not be taken as a depiction of any matter to which the case is related. The views and opinions expressed in this article/material are solely those of the members authoring it and do not necessarily reflect the official policy or position of Denis Chang’s Chambers, or of any other member or members of Denis Chang’s Chambers.