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(b)
Proposal 63: Mandatory mediation by statutory rule
The model envisaged in Proposal 63 is not suitable for general application. It might
arise where, for whatever reasons, there is a demand or perceived need to introduce a
statutory rule which automatically imposes a requirement on parties involved in
particular types of dispute to attempt mediation. Subject to what is said below
concerning statutory adjudication in construction cases, there has been no such
demand or perceived need in Hong Kong.
Additionally, the Proposal 63 model has an important drawback. Where a mediation
requirement is laid down by an inflexible rule, cases which are patently unsuitable for
mediation would inevitably be caught in the net. This would necessitate a procedure
for parties to apply for exemption, with attendant costs and inconvenience. This is
likely to cause resentment where the case is obviously not one which ought to have
been selected for mediation in the first place. Accordingly, the Working Party does
not recommend adoption of Proposal 63.
A number of respondents involved in the construction industry mentioned statutory
adjudication as a mechanism which the Working Party ought to consider in the context
of civil justice reform. The procedures in question originated in the Housing Grants,
Construction and Regeneration Act 1996 in the UK. By section 108 of that Act, a
party to a construction contract is given the right to refer a dispute arising under the
contract for adjudication. The prescribed procedure aims at securing a rapid decision,
usually on the right of a contractor to payment, which decision is "binding until the
dispute is finally determined by legal proceedings, by arbitration ...... or by
agreement." The adjudication is therefore provisionally binding, although the parties
are free to accept the decision as finally determining the dispute. It has been
reported
that a decision is typically made within 4 to 6 weeks and that such
decisions are in most cases accepted as final.
Notes
Anthony Albertini, Adjudication five years on - Is there any need for reform
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