Law Reform Commission recommends funded arbitration scheme for Hong Kong
Study shows that allowing third parties provide financial backing for cases would help resolve disputes without the need to go to court
Hong Kong’s Law Reform Commission has recommended that a scheme to promote wider use of arbitration be tested for the next three years, in a bid to adopt a “light touch” and settle more disputes out of court.
Government advisers carried out a study of arbitration funded by third parties, which Michelle Ainsworth, the commission’s secretary, said could enable those with a lack of funding to pursue their cases successfully.
However, the commission said that clear standards for third party backers in arbitration cases should be developed.
It recommended that third party funders should be required to comply with a code of practice to be issued by a body authorised under the law and after further consultation with the public.
The code should set out the standards and practices, including that the funding agreements should explain clearly the key features, risks and terms, according to the commission’s report released on Wednesday.