Overcome Deadlocks in Commercial Disputes Mediation

Dear all,

Overcome Deadlocks in Commercial Disputes Mediation

I am Natalia Cheung, a Hong Kong International Arbitration Centre (HKIAC) Accredited Mediator and a practising solicitor in Hong Kong.

I would like to share with you some information on overcoming deadlocks during mediation of commercial disputes.

The following is some common causes of deadlocks in commercial disputes, and the suggested solutions to overcome the deadlocks.

Evidential issue

Cause:

In some cases, representatives of corporate parties at mediation meeting may not be the persons who are directly involve in the dispute. They may then be unfamiliar with or may have little knowledge of the facts or background or the key evidence of the dispute.

This evidential issue may put the parties in a situation where they are not ready or are unwilling to offer or accept settlement proposals.

Solutions:

Parties may be invited to voluntarily disclose the facts and evidence relevant to the dispute during mediation.

 

If such voluntary disclosure is refused, parties can be suggested to adjourn the mediation until further facts or evidence is disclosed through the discovery process or exchange of witness statements under the rules of court.

Legal issue

Cause:

Sometimes when the parties do not have sufficient or proper understanding of their legal rights or positions, they may then become very entrenched in their legal rights and positions. E.g. Parties hold an unrealistic expectation that they would definitely recover all their costs and expenses if they win in the court case. Corporate parties may also overlook the adverse impact that court proceedings may bring to the operation and reputation of their businesses. 

Solutions:

Bring up issues for the parties to discuss with their legal representatives during waiting time.

Suggest parties to seek legal advice so as to enable them to have a more realistic assessment of their legal positions and rights before making any decision on a settlement proposal.

 

Authority issue

Cause:

It is not uncommon that the parties who attend mediation on behalf of their corporations only have limited authority or even no authority to settle the dispute.

 This is particular the case for some large and/or multinational corporations e.g. banks, large insurance companies, listed companies in which their decision making process involve complex and various procedures and personnel.

Solutions:

Ensure corporate parties to attend the mediation with proper and full authority to settle the dispute in full or in part before commencement of mediation e.g. by requesting for board resolution or authorization letter from the corporation.

Suggest parties to seek permission/authority from their corporations to consider and accept/reject a settlement proposal on the mediation spot through email or telephone.

Suggest parties to agree to continue to mediate, and to record within their limited authority to mediate or settle the dispute.

 Adjourn the mediation until the corporation has granted sufficient authority to the attendees of the mediation to mediate and settle the dispute.

Capacity issue

Cause:

Sometimes, corporate parties may have financial difficulty in complying with the settlement proposals eg. payment terms.

Solutions:

Help parties to ascertain their financial capacity and difficulties in fulfilling the settlement proposal. 

Suggest parties to reach consensus on some essential settlement terms first and then discuss the details of the settlement proposal like payment by installment or payment schedule within a reasonable timeframe.

For further information on mediation, please contact Ms. Natalia Cheung 

[(852)-6777 5767]

E-mail: natalia@plaw.hk

 

Natalia Cheung 

HKIAC Accredited Mediator & Hong Kong Solicitor

Pang Kung & Co., HK Solicitors & Notaries & Civil Celebrants of Marriages

   

 

Disclaimer: The above is for your information and reference only. The contents do not constitute legal advice or a substitute for legal advice in individual cases.

 

Understand BATNA and WATNA for Mediation

Dear all,

Understand BATNA and WATNA for Mediation

 

I am Natalia Cheung, a Hong Kong International Arbitration Centre (HKIAC) Accredited Mediator and a practising solicitor in Hong Kong.

I would like to share with you some information on BATNA (Best Alternative to a Negotiated Agreement) and WATNA (Worst Alternative to a Negotiated Agreement) in mediation.

 

In preparing for negotiation and considering settlement proposals in mediation, solicitors and/counsel can help clients to examine and consider their BATNA and WATNA.

 

BATNA

What are the best outcomes for clients or the best circumstances the clients would be put into if they do not settle the dispute with the other side.

 

Clients should be advised to evaluate whether the opposing party has a strong or weak BATNA to enable them to better understand their positions and negotiating strengths.

 

Any settlement proposal which is better than a party’s BATNA should be accepted.

  

WATNA

What are the worst outcomes for clients or the worst circumstances the clients would have to face if they do not settle the dispute with the other side.

Through understanding WATNA, clients’ attention would be more likely to shift from what they have to compromise in the negotiated agreement to what they could benefit from it.

 

This also helps clients to avoid accepting an inadequate settlement offer. Any settlement proposal which is worse than a party’s WATNA should be rejected.

 

For further information on mediation, please contact Ms. Natalia Cheung 

[(852)-6777 5767]

E-mail: natalia@plaw.hk

Natalia Cheung 

HKIAC Accredited Mediator & Hong Kong Solicitor

Pang Kung & Co., HK Solicitors & Notaries & Civil Celebrants of Marriages

 

 

 

 

Disclaimer: The above is for your information and reference only. The contents do not constitute legal advice or a substitute for legal advice in individual cases.

 

Ways To Enhance Negotiating Power In Mediation

Dear all,

Ways To Enhance Negotiating Power In Mediation
 

I am Natalia Cheung, a Hong Kong International Arbitration Centre (HKIAC) Accredited Mediator and a practising solicitor in Hong Kong.

I would like to share with you some information on negotiation in mediation.

 

Mr. Roger Fisher, a co-author of “Getting To Yes: Negotiating Agreement Without Giving In” outlined in his work “Negotiation Power” that the following 6 kinds of power, when properly recognized and utilized, can significantly enhance a party’s negotiating power.

You may therefore consider developing an understanding of these powers and utilizing them for facilitating negotiation process and improving negotiation outcome in mediation.

1^st: Power of Skill & Knowledge

Be familiar with the facts of the disputes, the issues to be negotiated, the rights and interests and the financial, businesses and the personal circumstances of the parties involved in disputes.

 

2^nd: Power of Good Relationship

Establish a well-deserved reputation for honesty and integrity. Attempt the negotiation process in good faith and frankness as gesture to avoid engaging in a hostile relationship with the other side.

 3^rd: Power of Good Alternative To Negotiation

Develop a readily alternative solution to the disputes in case the negotiations fail.

4^th: Power of Elegant Solution

 

Develop as many options as possible, creative options that work for the interests of both parties should be explored and examined.

 

5^th: Power of Legitimacy (Fairness)

 

Develop a set of standards (legal precedent, trade practice or public policy considerations) which demonstrate legitimacy/fairness of any settlement proposal, and communicate such standards to the other side in mediation.

 

6^th: Power of Commitment

 

Formulate an offer which maximize the cumulative impact of each of the above 5 sources of power.

 

Only make a negative commitment (e.g. a threat to leave the negotiation table or indication that no agreement is acceptable) as the last resort.

 

For further information on mediation, please contact Ms. Natalia Cheung 

[(852)-6777 5767]

E-mail: natalia@plaw.hk

 

Natalia Cheung 

HKIAC Accredited Mediator & Hong Kong Solicitor

Pang Kung & Co., HK Solicitors & Notaries & Civil Celebrants of Marriages

   

Disclaimer: The above is for your information and reference only. The contents do not constitute legal advice or a substitute for legal advice in individual cases.

 

Mediation in Personal Injuries in HK

Dear all,

 

Mediation in Personal Injuries Cases in HK

I am Natalia Cheung, an Accredited Mediator of the Hong Kong International Arbitration Centre (HKIAC) and a practising solicitor in Hong Kong.

 

I would like to share with you some information on mediation in personal injuries cases in Hong Kong.

Practice Direction 18.1 (“PD 18.1”) issued by the Chief Justice and the respective Judges in Charge of the Personal Injuries List in the HK High Court and the District Court stipulates that trial in personal injuries disputes should be regarded as the last resort, after alternative dispute resolution procedure (“ADR”) such as mediation or negotiation has failed to achieve a resolution of the disputes.

ADR means a process whereby the parties agree to appoint a 3^rd party to assist them to settle or resolve their disputes. Mediation is a common mode of ADR. Settlement negotiations between the parties do not constitute ADR.

The Court has the duty to encourage and assist the parties to use an ADR to facilitate settlement of disputes if the Court considers appropriate. The parties and their legal representatives have the duty of assisting the Court to discharge such duty.

Pre-Action

Before commencement of proceedings in personal injuries disputes, parties to the disputes should explore settlement by making bona fide attempts to engage in settlement negotiations by without prejudice correspondence, by structured without prejudice face-to-face meeting, or by any other manner agreed by the parties.

If such negotiations fail in achieving any settlement of their disputes after a reasonable time, the parties should proceed to explore ADR by mediation or other mode of ADR.

The claimant’s solicitors should send to the proposed defendant(s) letter of claim in a form prescribed by PD 18.1 to enable the proposed defendant(s)' solicitors or insurer(s) concerned to give a constructive reply to the claim.

The claimant’s solicitors should explain to the claimant on ADR such as mediation as soon as the letter of claim is sent.

Commencement and in the course of proceedings

Mediation Certificate

At the time of the issue of the Writ, the Plaintiff’s solicitors shall file in Court a Mediation Certificate in the form as prescribed in Practice Direction 31 (Practice Direction on Mediation).

 

At the time of the filing of Acknowledgement of Service, the Defendant’s solicitors shall file into Court a Mediation Certificate.

Mediation Notice

After filing the Mediation Certificate, if a party ("the Applicant") wishes to attempt mediation, he should as soon as practicable serve a Mediation Notice on the other party

("the Respondent") in the dispute in the form as prescribed in Practice Direction 31.

Mediation Response

Upon receipt of the Mediation Notice, the Respondent should respond to the Applicant by way of Mediation Response within 14 days (or such other time as the parties may agree or as the Court may direct) in the form as prescribed in Practice Direction 31.

The parties should proceed to engage in mediation in accordance with the stipulated rules and timetable if agreement to mediation has been reached. The parties may also apply to the Court for an interim stay of the proceedings as appropriate.

Without prejudice nature of Mediation

What happens during the mediation process is without prejudice communications and therefore is protected by privilege.

The Court cannot compel the disclosure of or admit materials so long as they are protected by privilege in accordance with legal principles, including legal professional privilege and the privilege protecting without prejudice communications.

Possible adverse costs order for unreasonable failure to engage in mediation

Solicitors should advise their clients that the Court may make an adverse costs order against a party where the party unreasonably fails to engage in mediation if this has been established by admissible materials.

The Court will not make such adverse costs order where:

(1)   The party has engaged in mediation to the minimum participation level agreed to by the parties or as directed by the Court prior to the mediation.

(2)   A party has a reasonable explanation for not engaging in mediation. E.g. active without-prejudice settlement negotiations between the parties are progressing or the parties have actively engaged in other mode of ADR other than mediation in the meantime.

For further information on mediation, please contact Ms. Natalia Cheung 

[(852)-6777 5767]

E-mail: natalia@plaw.hk

 

Natalia Cheung 

HKIAC Accredited Mediator & Hong Kong Solicitor

Pang Kung & Co., HK Solicitors & Notaries & Civil Celebrants of Marriages

    

 

 

Disclaimer: The above is for your information and reference only. The contents do not constitute legal advice or a substitute for legal advice in individual cases.