The very first matrimonial financial dispute was resolved recently under the Hong Kong Private Family Adjudication (“PFA”) pilot scheme. Sasha Allison speaks to the two Counsel representing the parties, Ms Mairead Rattigan and Mr Robin Egerton, as to their experience with this alternative dispute resolution scheme.
Sasha Allison: What is PFA and how long has it been available in Hong Kong?
Mairead Rattigan: PFA provides parties going through a divorce with an alternative dispute resolution option for resolving their financial disputes. It was introduced in Hong Kong in 2015 as a pilot scheme by the judiciary through Practice Direction SL9 (“PDSL9”). PFA is akin to arbitration in that the parties will sign an agreement to have the ancillary relief aspect of their divorce proceedings adjudicated by a jointly appointed family specialist practitioner, outside the formal court proceedings. The parties will also agree to be bound by the decision of the adjudicator.
PSSL9 sets out the procedure which parties need to follow if they want their financial dispute decided under PFA.
Robin Egerton: The Family Court still retains overarching supervision of the matter, in that the Court approves the appointment of the adjudicator and once the decision is handed down, the parties need to jointly file a consent summons attaching the draft consent order which embodies the adjudicator’s decision for the Court’s approval.
SA: Can you share a little about your case and how it came about to be dealt with under the PFA?
MR: Although PDSL9 has been available since 2015, there has not been a case prior to ours which has been resolved under the PFA for a variety of reasons. We originally had a 5 day ancillary relief trial fixed in April but because of the General Adjourned Period or GAP which was in place from late January until 4 May 2020, our trial was adjourned, and the earliest date it could have been re-fixed was November 2020. The Children’s aspect of the case had been resolved and our respective clients were keen to move on with their lives. PFA was floated as an option for obtaining a much faster resolution for their financial dispute, and both parties were very keen to proceed by way of PFA.
RE: No one likes being the first or test case for any new procedure. However, our clients were well educated professionals, and their cases were handled by specialist Family Lawyers which helped as it was easier to explain and for the clients to understand the PFA process. Most clients seek closure in a timely manner; PFA provides such timely resolution.
MR: The parties were ready to proceed to trial, in that all the evidence was ready and the bundles were all prepared. Having an adjournment of many months would have meant that the evidence would need to be updated again, new valuations and asset schedules would need to be prepared and this would all add to the costs. Once we learned that the trial was going to be adjourned, the parties agreed to the appointment of a retired Hong Kong judge with experience in Family Law as the adjudicator. He was able to hear the matter in May, and to deliver his decision in July.
SA: From this experience, what would you say are the advantages and disadvantages of PFA?
RE: I found the three main advantages to be that the parties could choose their fact finder and judge. This was particularly attractive in the context of securing an available Family Law specialist quickly, who had experience judging and is trusted by practitioners.
MR: Yes, as an advocate, having a specialist adjudicator to deal with the case was an attractive feature for obvious reasons, the Judge fully appreciated the applicable principles and was therefore able to deal with the matter in a very efficient manner.
RE: The second advantage for PFA was the flexibility of the timetable, which was tailored to suit the adjudicator, the lay clients’ work schedule and counsel. This meant that we were able to sit longer so that the evidence could be adduced and submission made without worrying about having to end the day promptly at 4:30 pm, as is the case when the matter is dealt within the Courts. In addition to which the process started promptly so that the parties had the benefit of a “full day”. Unfortunately, the 9:30 a.m summonses in the Family Court delay the start often reducing the ‘Court day’ by 1 or 2 hours.
The third and important advantage, in my opinion, is the timing for the delivery of the decision. The adjudicator estimated that he would need a month to deliver the decision, and he kept to it. Judges have very heavy caseloads and, therefore, often cannot deliver judgments as promptly as a private adjudicator.
On the other hand, under PFA as the adjudicator is in control of his or her diary and case load, depending on the complexity of the case, the adjudicator can deliver his or her judgment promptly which in turns enables parties to close this chapter of their lives and assists them to move forward.
MR: I agree that there is something to be said about adopting PFA to assist in reducing the caseload of the Family Court which is very overworked. It does not have to be limited to an adjudication of a final ancillary relief dispute, as in our first case, it could be particularly helpful, for example, for applications such as Maintenance Pending Suit (MPS) or MPS for legal costs funding which by their nature are usually urgent applications. Even though they are dealt with on a broad brush basis, they can still take months to come before a judge in the Family Court to be heard substantively, there can then be a further wait for the judgment to be handed down, which for some parties can be quite a financial struggle in those intervening months. Such applications could be easily resolved through PFA, where a decision can be obtained very quickly, also because such decisions are made on a broad brush basis, the Court can still make any necessary adjustments or corrections to the award at the final ancillary relief hearing. PFA could also be used to determine preliminary issues. Such applications could even be handled by the adjudicators by way of paper disposal, as the Family Court has done during GAP.
There is also no reason why PFA cannot be done remotely, for example through Zoom or MS Teams, something that the Courts have unfortunately been unable to do during GAP. It will be of enormous advantage to litigants to have an avenue available to them to be able to resolve their disputes when the Courts are unable to do. During the recent lockdown in the UK there was a significant increase in PFA cases.
RE: As to when PFA may not be suitable or disadvantageous, I think the process would not work if there was a dysfunctional matrix between the lay clients and lawyers or where the litigation is improperly motivated regarding the demarcation of the issues.
SA: PDSL9 currently only applies to financial disputes. What are your views on using PFA for children’s matters?
MR: In England, their Family Arbitration Scheme was successfully launched in February 2012 and that scheme initially dealt with financial disputes only. Owing to the success and reception by practitioners, lay clients and the judiciary for the scheme in determining disputes, the scheme was expanded in July 2016 to also deal with children’s matters.
Although the current pilot scheme in Hong Kong does not extend to children’s matters, I believe that Hong Kong could similarly benefit with the expansion of PFA into children’s cases particularly for example, issues such as access - interim access, holiday access, details around arrangements for access and so on. As all family practitioners have no doubt experienced, there is always a flurry of applications before holidays by parents wanting to make arrangements for holiday access, usually to take their children for overseas trips which could be easily resolved by having the matter adjudicated rather than waiting for available time in the already congested Court diary. The Courts have to expend a great deal of time in dealing with all manner of interim applications like this that could easily be dealt with by way of PFA.
RE: I think that it would be a natural progression for children’s matters to be dealt with by PFA similar to how the Financial Dispute Resolution Scheme (PD15.11) led to the launch of the Children’s Dispute Resolution Scheme (PD15.13). I also think that adjudication of interim access arrangements would provide parties with a structure to move forward, which in many cases is what the family needs to be put in place quickly. Delay in a child case is never in the interest of the child.
Sometimes it is simply not feasible for parents to best work with parental co-ordinators to find a solution as the parental co-ordinators and mediators are only persuasive, providing guidance and reality checking rather adjudicating. PFA would be attractive to those that just want the interim arrangements to be stabilised with certainty and clarity. Since it is only an interim arrangement the court’s jurisdiction is not undermined but at the same time, the family has a structure to move forward.
SA: Under PDSL9, there is no right of appeal of the adjudicator’s decisions. What are your thoughts on this?
MR: While there is no right of appeal provided under PDSL9, it is clear from paragraph 20 that that the Court still retains the final jurisdiction as to whether or not the decision should be made into a Court Order. If a party to the proceedings does not agree that the decision should be made into a court order by consent, then that party will have to apply to the Court for further directions and show cause as to why a consent order should not be made. Furthermore paragraph 21 of PDSL9 emphasises that the Court’s overriding discretion is not affected as to whether, and in what terms to make the relevant orders embodying the decision. This means that if a party is particularly aggrieved with the decision, then following the authorities in England, that party can seek leave from the Court to set aside the decision on the limited grounds that the adjudicator was wrong in law or fact. The authorities emphasise, however, that it will only be in exceptional cases, where there has been an obvious miscarriage of justice that the Court will refrain from making an order.
The lack of an ability to appeal and the limited ability to challenge the adjudicator’s decision will be a very attractive proposition for many litigants in family cases where, all too often, the assets are severely diminished by the legal costs.
SA: Under paragraphs 14 and 15 of PdSL9, the appointment of the adjudicator needs to be approved by the Family Court. Will the Family Court only approve retired family judges to be adjudicators?
MR: In Hong Kong, we have had training of specialist family law practitioners to be accredited adjudicators. These lawyers need to have at least 10 years post qualification experience. The training and accreditation has been set up and provided by the Institute of Private Family Adjudicators (Hong Kong) and recently, the first batch of 24 Hong Kong lawyers seeking accreditation undertook training over 3 days and a decision writing examination. We are still awaiting the results of the examinations, however the website (www.ipfahk.com) for the Institute does provide some useful information regarding PFA.
The Institute has also published its Rules which supplement PDSL9 insofar as providing more details regarding procedure, the powers of the adjudicator and parties’ responsibilities so that there was more clarity as to the process. We hope that having a panel of accredited adjudicators will facilitate a greater uptake of cases to be resolved by PFA in Hong Kong and provide divorcing parties with more options as to how to determine their disputes.