A Speedy and Confidential Resolution of Financial Disputes in Matrimonial and Family Proceedings


On 9 January 2015, the Chief Justice signed the Practice Direction PDSL 9 (“PDSL 9”) for the commencement of a pilot scheme for resolution of financial disputes. This is another alternative dispute resolution in Matrimonial and Family Proceedings called “Private Financial Adjudication” (“PFA”). The pilot scheme commenced on 19 January 2015 for three years and it has been extended for another three years from 19 January 2018 to 18 January 2021. After reviewing the likely use of this method of resolution, the PDSL 9 is now extended for another three years up to 18 January 2024 with some modification at paras 8, 9, 20, and its Appendix 1 at para 5.6.

What is Private Financial Adjudication?

The PFA is another mode of alternative dispute resolution (“ADR”) to further the objective for settlement facilitation provided by the Judiciary in addition to and without affecting the existing modes of ADR provided by the Judiciary for mediation under PD 15.10, financial dispute resolution under PD 15.11 (“FDR”) and children dispute resolution under PD 15.13 (PDSL 9 paras. 3 and 4.) This procedure applies to any application for financial orders and/or financial relief under the Matrimonial Proceedings and Property Ordinance Cap. 192, Guardianship of Minors Ordinance Cap. 13, Separation and Maintenance Orders Ordinance Cap.16 and Inheritance (Provision for Family and Dependants) Ordinance, Cap.481. It also includes any other applications of a financial nature in Matrimonial and Family Proceedings to which the court agrees that the procedures should apply.

As suggested by the title of this mode of ADR, it has nothing to do with children’s custody, care and control, access, education or upbringing. Hopefully, this may be extended to resolving children issues in future.

Before the parties choose to go for PFA, the PD provides that the parties to the application should have considered participating in mediation and FDR. They should also have made financial disclosure by exchanging the parties’ respective Form E (the financial statement) unless there is good reason for taking an exceptional course. There is a discretion for the court to approve a PFA to go ahead without going for mediation or FDR in certain circumstances.

To proceed with PFA, the parties or any other third parties involved (if any), will have to sign a PFA agreement (“PFA Agreement”). The PDSL 9 provides a specimen agreement in its Appendix A. The involved parties can draw up their own PFA agreement, but, under the PDSL 9 it requires to cover the following terms (PDSL 9, para. 14): - 

1. All involved parties have to confirm that they have obtained their own adequate and independent legal advice on the nature, implications, procedures and the issue of confidentiality concerning the PFA. It is expected that all parties are legally represented;

2. The parties must state in the agreement whether they have attended mediation or a FDR hearing. If that is not done, they must state the reason for not doing so. It is not expected that there must be mediation or FDR hearing before the parties can proceed to PFA, the judge in approving the application for PFA will consider the reason for not having done the mediation or the FDR hearing

3. The PFA Agreement should spell out what or which issue of the financial dispute is to be dealt with in the PFA. In other words, it can deal with all issues in the financial disputes or restrict it to certain issues such as maintenance pending suit for spouse or interim maintenance for children. It could also confine it to deal with only preliminary issues involving third party in any beneficial interests of the family assets. This sort of applications may consider as the exception for not having the FDR hearing or perhaps, even before mediation;

4. After signing of the PFA Agreement the parties have to make an application by way of consent summons within 14 days to seek the court’s approval for the appointment of the private adjudicator, as agreed by all parties involved in the PFA, and the commencement of the PFA. The parties should also seek the court’s approval to stay all or part of the proceedings between the parties pending the PFA. This provides a situation where the issues for preliminary issues or interim maintenance are going to be adjudicated by way of PFA, the other matters such as children or discovery of other financial information can be proceeded simultaneously in the court proceedings. This will certainly speed up the whole process of finalizing the divorce proceedings. This is particular so, because at present if there is a preliminary issue, very often the judge in the docket system would prefer to resolve the preliminary issue first which may take a year or more before the parties can have the determination of the preliminary issue;

5. The parties will also confirm in the Agreement that they will follow the appointment of the private adjudicator as approved by the court; 

6. All parties have to accept that the decision(s) of the private adjudicator on procedures in the process of the PFA and the issues he is asked to determine as final and this could only subject to the overriding discretion of the court as provided in paragraph 14(8) of the PDSL 9. This aspect of finality provides parties with a higher level of certainty and allows the parties to get on with their lives, particularly if the parties are keen to resolve matters expeditiously. However, the commitment to finality in the process of PFA may deter many parties from using PFA otherwise it is an efficient and costs effective process. Yet, if the PFA is to deal with interim order such as MPS and interim maintenance, the parties should not be over concern with this commitment for the simple reason that such interim orders are subject to variation on change of circumstances. Practically speaking, this may more be applicable to an ancillary relief claim which is for a “need” case seeking for periodical payments. The fact that there is no right to appeal should not stop parties from committing to the process of PFA for those issues discussed above. If it is for a final ancillary relief issue it would not bring the parties to a position worse than those parties who have obtained an arbitration award; 

7. After the private adjudicator’s decision is provided to the parties, the parties shall within 14 days of receipt of such decision filed a consent summons incorporating the terms of the decision for the court’s approval;

8. The parties should acknowledge that the court retain the overriding discretion as to whether, and in what terms, to the make the order(s) embodying the decision and the parties agree to take all necessary steps to see such orders are made; and

9. It is the responsibility of the party who applies for ancillary relief to submit a PFA report (“PFA Report”) to the court within 14 days after the completion of the PFA process. If both parties in the Matrimonial or Family Proceedings are making the claim, the Petitioner or the Applicant, as the case may be, shall be under the duty to submit the PFA Report.  

The Use of PFA

Arbitration is available to deal with family financial disputes in England & Wales, Australia, Ontario, Canada and Scotland. In England and Wales, there is an organization called Institute of Family Law Arbitrators (“IFLA”) set up eight years ago, as a not-for-profit company, which provides the rules and training scheme for their arbitrators under the scheme. In the past years, the use of arbitration has become increasingly accepted and in July 2016 it has extended to issues concerning children in private cases. It has been reported that “speed, confidentiality and cost-effectiveness” operated under the Finance Scheme to resolve family financial disputes is widely recognized with leading judgment supporting the scheme and various extrajudicial statements of approval at the highest level.

In Hong Kong, the Institute of Private Family Adjudicators (Hong Kong) was set up in 2019 with rules and training scheme for adjudicators to assist the running of PFA. There are 24 Hong Kong lawyers seeking accreditation as PFA adjudicators undertook training and a decision writing examination recently. This Institute’s website is www.ipfahk.com which provides some useful information regarding PFA.

Soon after the introduction of PFA, practitioners have great reservation to recommend it to parties in financial disputes. The main concern is paragraph 14(6) of the PDSL 9, which provides that decision(s) of the private adjudicator whether in terms of procedure or the adjudication shall be final subject only to the overriding discretion of the court.

Sir Bernard Eder commented at the 2014 Mauritius International Arbitration Conference and said that when the parties agree to arbitration they “buy the right to get the wrong answer”. This would mean the grounds to challenge an award are very limited. Mostyn J in agreeing to this comment in DB v DLJ [2016] EWHC 324, gave his views on the traditional grounds for challenging a financial remedy order in family court proceedings i.e., mistake, fraud, non-disclosure and the existence of a supervening event. Under paragraph 20 of the PDSL 9, parties should apply for a consent order within 14 days after the delivery of the adjudicator’s decision. If no consent summons is filed, either party may seek for directions. This could mean an application to show cause why that party should not be bound by the decisions of the adjudicator. The need to show cause is now specifically stated in the amended new version of PDSL 9 which adopts a procedure similar to the one used in Rose v Rose [2002] EWCA Civ 208 and considered in CSFK v HWH [2020] HKLRD 586.

In a recent English case, Hayley v Hayley [2020] EWCA Civ 1369 Lady Justice King have this to say:

“In my view, the logical approach by which to determine whether the court should decline to make an order in the terms of the award, is by reference to the appeal procedure and the approach found in the FPR 2010. In other words, when presented with a refusal on the part of one party to agree to the conversion of an arbitral award into a consent order, the court should, at an initial stage, ‘triage’ the case with the reluctant party having to ‘show cause’ on paper why an order should not be made in the terms of the arbitral award. Such approach would be similar to the permission to appeal filter found at FPR rule 30(7) where the trial has taken place under the MCA 1973. If the judge is of the view that there is a real prospect of the objecting party succeeding in demonstrating that the arbitral award is wrong, then the matter can be set down for a hearing. That hearing will, as with an appeal, be confined to a review and will not be a rehearing, subject to any case management directions which the judge may make in relation to updating or other evidence and subject to, as under FPR 30.12(1)(b), the court considering that “it would be in the interests of justice to hold a re-hearing”.

Australia had extended arbitration to family disputes by way of amendments introduced in the Family Law Act 1975 since 1991, but there was little use for its first decade. Since 2017, lawyers in Australia started to see the benefits of arbitration to resolve family financial dispute. Perhaps, a lesson to learn from Australia is that Family lawyers in Hong Kong should see the virtue of this alternative dispute resolution and make use of it to assist parties who wants to resolve matters expeditiously.

In Hong Kong, the need to go for preliminary issue hearing profound by TL v ML has brought about long delay in resolution of ancillary relief claim. The established procedure to have proper pleadings, disclosure and filing of witness’s statements before the preliminary issues hearing very often take the matter to 6 to 8 months or more before it can be heard by the family judge. Likewise, a simple maintenance pending suit application may take a few months before it can be dealt with by the judge when the applicant could be in desperate need for an appropriate financial support. Such delay could be avoided or for the least shortened if parties are willing to go for PFA. The virtue of PFA is “speed, confidentially and costs-effectiveness”. Hence, family law practitioners should be reminded of the availability of PFA which offers speedy resolution for issues such as preliminary issues and interim maintenance in view of the very often tight schedule of the Family Courts.  

We should note that the scheme for arbitration on children issues are working well in the UK. Basically, children’s matters should be given priority for the simple reason that any delay in dealing with it is against the best interest principle enshrined in the Guardianship of Minor Ordinance, Cap. 13. Hong Kong needs to have an alternative approach to resolve children matters by a judgelike adjudicator speedily. Quite a number of cases on children would take a few months or may be a year before a judge can have the opportunity to deal with the dispute. A relocation application can easily take more than half a year to have the trial dates.


Views have been sought from the Bar Association, the Family Law Committee of the Law Society and the Family Law Association about their position on this PD for financial adjudication, they are all in support of the pilot scheme to give Hong Kong an opportunity to make use of this alternative dispute resolution.

Other dispute resolutions are working well such as mediation and the FDR. However, there is a situation when parties are not able resolve their differences in mediation or a FDR hearing when a stronger party who insists to hold out until the other backs down. By contrast, an adjudicator can deal with the dispute in the same way as a family judge whose decision is expected to be endorsed by the judge.

The first PFA took place in May 2019 and the decision was delivered by the adjudicator in July 2019. The parties in this first PFA agreed to bring their disputes to be adjudicated because of the Covit-19 pandemic which delayed their ancillary relief trial to many months later after having waited for the trial to come round for a long time. The PFA was signed a few months before the actual PFA hearing and the matter was resolved within a few months. If the matter were to be dealt with by the court, it could take a much longer time. Besides, Family Judges have very heavy caseloads, one cannot expect to receive judgments from the court as promptly as a private adjudicator who is paid by the parties. One other big advantage in PFA is confidentiality which allows those public figures to keep their matter away from Courts and subsequent reporting in the judiciary website.

Hence, parties can quickly agree on appointment of an adjudicator and proceed with the hearing within a short period of time. The PFA provides this very virtue to resolve disputes between the parties with its speed, confidentiality and costs-effectiveness way. This is an alternative route for the parties when they are facing long delay for a trial to come through and finalize their divorce proceedings.


Principal Partner, Ho & Ip Solicitors

Dennis is a solicitor, a mediator and a part-time lecturer. He is the Chairman of the Family Law Committee of the Law Society of Hong Kong and he also chaired the Domestic Violence Subcommittee and Enforcement of Maintenance Subcommittee. Dennis is also a member of the Judiciary’s Family Proceedings Court Users’ Committee. He has given lectures and talks on Family Laws for over 15 years to lawyers, social workers and students. He was also a part-time lecturer on Family Laws to Juris Doctorates at the Chinese University of Hong Kong and City University. Dennis was also an adjunct professor at the Hong Kong Shue Yan University from 2010 – 2020 and at City University from 2017 – 2019.