OpinionMediation wins favour as a way to resolve disputes

A growing number of Hong Kong and Asian companies and individuals are turning to mediation to resolve their disputes rather than pursuing costly litigation through the courts.

The number of mediation and arbitration matters heard in Hong Kong last year jumped 56 per cent to 500 from 2002, according to data from the Hong Kong International Arbitration Centre.

Unlike taking court action, which requires both parties to hire lawyers to present their cases before judges, mediation gives the parties the option of hiring a mediator to hear both sides in a three-way discussion. A successful outcome will typically take about four hours.

If the mediation process fails, the parties can move on to arbitration or litigation. Arbitration is where a dispute is referred to an arbitrator who will hear the case and make a ruling.

Going to court can cost millions of dollars, whereas a standard four-hour mediation session costs between HK$10,000 and HK$12,000. Similar to litigation, the cost of an arbitration varies, depending on the complexity of the case and the length of the hearing, according to Annie Chan Wai-hing, partner and head of forensic and investigation services of accounting firm Mazars, which also provides mediation services.

"Mediation is a cheaper and quicker way to solve disputes," Chan said. "It is suitable for cases such as disputes over contracts, financial or shareholder agreements, tenancy agreements and family disputes, or cases where allegations of criminal activity are not involved. Criminal cases must be handled by the courts."