Practice Direction 31.1
Case Settlement Initiatives in Civil Cases in the District Court
A. Introduction
1. This Practice Direction sets out the practice for Case Settlement Conference (“CSC”) and Mediator-Assisted CSC (“MCSC”) in all civil cases before the District Court (“the Court”) except personal injuries, employees’ compensation, false detention claims against the Government and equal opportunities cases.
B. CSCs
2. Adjudication is not the only means of resolving disputes. One essential aspect of the civil justice reform is the facilitation of settlement through the use of alternative dispute resolution (“ADR”) where there is a reasonable prospect of resolving the case. An unreasonable failure by a party to engage in ADR is a ground for costs sanction.
3. Under the Rules of the District Court (“RDC”), the Court has a duty to proactively manage cases to encourage the parties to co-operate with each other in the conduct of the proceedings, to narrow down the issues in dispute, and to encourage the use of ADR. The parties and their legal representatives are correspondingly under a duty to assist the Court in case management.
4. CSCs, which are attended by the lay parties personally, present a unique opportunity in the legal proceedings for the parties to have a face-to-face dialogue to discuss their case.
C. Setting down a case for CSC
5. Whilst the Court may consider fixing a CSC at any stage of the proceedings, it is usually directed at the stage of Case Management Summons, Case Management Conference, or when a consent summons is submitted under Order 25 of the RDC seeking directions for the further conduct of the case. Alternatively, parties may take the initiative at any stage of the proceedings to seek directions by means of a consent summons for a CSC to be fixed (i.e. party-driven CSC).
6. The Court, in deciding whether or not a case is suitable for setting down for a CSC, will take into consideration all the circumstances, in particular the information provided by the parties. In submitting the Timetabling Questionnaires in accordance with Section C of Practice Direction 5.2, parties may give such information to the Court for consideration, e.g. their wish and reasons for seeking a CSC. Examples of cases where the Court may consider a case not suitable for CSC include:-
(a) Parties provided good reasons showing that their case is not suitable for CSC.
(b) Parties produced a mediation report as per Appendix 1 showing that they have already attended mediation before a professionally accredited mediator which has lasted for a reasonable duration. And they or, in cases where they are legally represented, their solicitors certify that they are still entrenched in their positions with no reasonable prospect to settle and there is no material change of circumstances in the meantime.
7. Once it is decided that CSC is suitable for a particular case, the Court, after consideration of all the information provided by the parties, will decide when it will take place. Some cases may benefit from early settlement discussion prior to substantial costs being incurred and the parties becoming entrenched in their positions. On the other hand, for some other cases, no meaningful settlement discussion could be conducted until the exchange of evidence (including expert evidence) is completed.
8. The CSC will generally be listed for hearing before a master with experience in mediation. Whilst they are not conducting mediation as such, these masters possess the techniques and skills to facilitate constructive dialogue between the parties to explore settlement options and/or to narrow down the issues.
9. The Court will give the necessary and appropriate directions when setting down a case for a CSC. A draft of typical directions is attached for guidance at Appendix 2.
D. MCSCs
10. The Court expects litigants to explore settlement, such as undergoing a process of mediation. If a party wishes to attempt mediation, he or she should follow the procedures set out in Practice Direction 31 in procuring mediation.
11. In some cases, the effectiveness of the mediation process can be enhanced with the assistance of the Court. With synergy facilitated by combining a CSC with mediation, it is more likely to achieve an overall settlement or at least some consensus to enable the remaining issues to be resolved in a more cost effective way.
12. To that end, the Court may direct the parties to consider an MCSC, and with consent of the parties, fix an MCSC at an appropriate stage of the proceedings. Alternatively, the parties may take the initiative at any stage of the proceedings to seek directions by submitting a consent summons for an MCSC to be attended by the parties and their appointed mediator (i.e. party-driven MCSC).
13. As a general rule, an MCSC should only be held after the parties have undergone a mediation session with the appointed mediator. The MCSC shall serve as a continuous process with the mediation.
14. The parties should set out in the preamble of the consent summons:-
(a) the identity of their appointed mediator, together with his/her correspondence address and telephone number;
(b) the date of the mediation that the parties have previously undergone before the appointed mediator and its duration; and
(c) the parties’ agreement that the Court may liaise and discuss with the appointed mediator in the absence of the parties prior to and during the MCSC.
15. Apart from the typical directions set out in Appendix 2, the consent summons should also provide for the lodgment of a mediator’s note to be prepared by the appointed mediator which shall contain:-
(a) the common grounds agreed by the parties;
(b) the remaining issues in dispute; and
(c) in relation to each disputed issue, the concerns and the latest proposal of each party.
16. The Court will give the necessary and appropriate directions when setting down the case for an MCSC after consideration of the mediator’s note and conferring with the appointed mediator if necessary. As a general rule, the MCSC will be listed for hearing before a judge.
17. All communications between the Court and the appointed mediator, including the mediator’s note, shall be confidential and without prejudice in nature. Such communications will not be referred to in later proceedings if the MCSC does not result in any settlement.
18. The Court shall provide accommodation facilities for mediation to be conducted in the context of an MCSC. The judge presiding at the MCSC may adjourn the hearing at any stage if he or she considers that the parties may benefit from continuing with the mediation to be conducted at such accommodation facilities with liberty to the parties and the appointed mediator to re-appear before him or her on the same date after such mediation.
E. Preparation for CSC/MCSC
19. Not later than 7 days before the CSC/MCSC, one of the parties as directed shall apprise the Court of all relevant information including any offers, proposals and responses thereto by delivering an indexed and paginated CSC/MCSC bundle containing all the relevant documents.
20. Subject to the Court’s direction, the CSC bundle should include:-
(a) a one-page summary of each party’s case;
(b) a list of issues;
(c) copies of key documents;
(d) a statement of the parties’ latest offer and counter-offer; and
(e) a copy of the mediation report (if any).
21. Subject to the Court’s direction, the MCSC bundle should include:-
(a) the mediator’s note submitted to the Court under paragraph 15 above;
(b) a one-page summary of each party’s case;
(c) copies of key documents; and
(d) a statement of the parties’ latest offer and counter-offer.
22. The legal representatives (if any) shall also prepare and exchange a statement of costs to give information on:-
(a) their costs incurred up to the CSC/MCSC ; and
(b) their estimated costs up to and including the trial.
Legal representatives (if any) should explain the statements of costs (including those prepared by the opposite party) to their clients before the CSC/MCSC.
F. Attendance of parties at CSC/MCSC
23. The following persons must attend the CSC/MCSC:-
(a) each party who is a natural person;
(b) for a party who is a corporation, an authorized representative of the corporate party (the representative must be familiar with the substance of the litigation and must have authority to settle the case; if the corporation is acting in person, the representative should be the director authorized under Order 5A of the RDC);
(c) the legal representatives (if any) of each party; and
(d) in the case of MCSC, the appointed mediator.
24. It is important that legal representatives are aware of the purposes of CSC/MCSC and are able to fulfil their duties to facilitate settlement. The Court expects the attending legal representatives to be the handling solicitor or someone equipped with adequate knowledge of the case and familiar with its conduct. The legal representatives’ role at a CSC/MCSC is not to act as an advocate in litigation but to support and advise the parties.
G. At the CSC/MCSC
25. CSCs/MCSCs are listed for hearing in chambers (not open to the public).
26. CSCs/MCSCs are conducted on a without prejudice basis.
(a) Evidence of anything said or of any admission made in the course of the CSC/MCSC shall not be admissible in later proceedings (the usual rules on without prejudice negotiation will apply).
(b) Audio recordings and transcripts (if any) will not be allowed to be disclosed unless with consent of the parties and leave of the Court.
27. At the CSC/MCSC hearing:-
(a) The jurisdiction of the judge or master would be limited and only 3 categories of order can be made[1]:-
(i) an order adjourning the CSC/MCSC (including procedural directions and costs of and occasioned by the adjournment);
(ii) a consent order disposing fully or partially of the case (including an order narrowing the issues to be tried); or
(iii) directions to progress the case to the next stage (e.g. Case Management Conference).
(b) The judge or master may assist the parties to achieve a settlement by reviewing and evaluating the process of any without prejudice negotiation (including any sanctioned offers and payments) between the parties and, with the consent of the parties, mediation (if conducted but unsuccessful).
(c) The judge or master will not deal with contested case management issues and no interlocutory applications will be entertained unless they are taken out for the purpose of settlement. Parties should take out interlocutory applications (if any) in the usual way in the chambers list hearings (to be listed before another master) even if there is an on-going CSC/MCSC.
28. As the judge or master is not going to adjudicate on the dispute, it is not necessary for the legal representatives to present and argue their case. Rather, they should attend the hearing with a collaborative mindset and address the Court and provide assistance and advice to their client accordingly.
29. If a situation has arisen where the legal representatives would like to discuss with their client privately, a request may be made to the judge or master for a short break. There will be facilities for the parties to discuss privately with their legal representatives at the CSC/MCSC.
30. If no settlement is reached, the CSC/MCSC bundle will be returned to the parties after the hearing and not retained by the Court, and the judge or master will have no further involvement with the case.
H. General provisions as to costs
31. Generally, each party’s costs of and incidental to the CSC/MCSC are the party’s costs in the cause. This is without prejudice to the general power of the judge or master to award costs against any of the parties having regard to all the circumstances including a party’s conduct at the CSC/MCSC.
32. Default in compliance with the directions for preparation of CSC/MCSC and unreasonable conduct at the CSC/MCSC may result in costs sanction.
I. Commencement Date
33. This Practice Direction, which supersedes the guidance note dated 16 December 2022, shall take effect on 2 January 2025.
Dated this 11th day of December 2024.
| (Andrew Cheung) | |
| Chief Justice |