h. Practice Direction 31.1: Case Settlement Initiatives in Civil Cases in the District Court

h. Practice Direction 31.1: Case Settlement Initiatives in Civil Cases in the District Court

The Case Settlement Conference (CSC) and Mediator-assisted Case Settlement Conference (MCSC) are a specific court-based mechanism introduced by the Hong Kong Judiciary to integrate mediation into formal court proceedings. They are governed by Practice Direction 31.1, “Case Settlement Initiatives in Civil Cases in the District Court” (“PD 31.1”), which took effect on 2 January 2025 and provides procedural guidelines for both CSCs and MCSCs. 

PD 31.1 forms part of a broader suite of judicial tools designed to facilitate settlement and reduce the time and costs of litigation. 

Scope of PD 31.1 

PD 31.1 applies to all civil cases before the District Court, except for: 

1. personal injury claims; 
2. employees’ compensation claims; 
3. false detention claims against the Government; and 
4. equal opportunities cases. 

The Case Settlement Conference 

A CSC is a court hearing designed to facilitate settlement by allowing parties to have a face-to-face dialogue about their case. 

It is generally heard by a master with experience in mediation. While they do not act as “mediators” in the formal sense, they use mediation techniques to foster constructive dialogue and help parties explore settlement options. No mediator is present in CSCs. 

CSCs are held in chambers (not open to the public) and conducted on a strictly “without prejudice” basis. Anything said or admitted during the conference cannot be used as evidence in later court proceedings if the case does not settle. 

The Mediator-assisted Case Settlement Conference 

An MCSC is an enhanced version of the settlement conference that integrates the parties’ appointed mediator into the court process. It is designed to combine the benefits of mediation with the support and authority of the court, with the aim of improving the prospects of settlement. 

An MCSC is not intended to be a standalone event. Rather, it functions as a continuation of the mediation process. As a general rule, it should only be convened after the parties have already attended at least one mediation session with their appointed mediator. The MCSC may be fixed with the consent of the parties, or through a party-driven consent summons submitted at an appropriate stage of the proceedings, such as during a Case Management Conference. 

Before an MCSC is set down, a mediator’s note must be lodged. This is a critical prerequisite. The note should identify the common grounds that have been agreed upon, the issues that remain in dispute, and the latest settlement proposals and concerns of each party in relation to those disputed issues. This enables the court to understand the current state of the negotiations and the obstacles to settlement. 

At the MCSC, communications take place between the parties and the court in the presence of the appointed mediator. The mediator attends to work with both the judge and the parties. Since the mediator would usually already have a fair understanding of the parties’ concerns, interests, settlement positions and the history of the mediation, the mediator is able to assist the court in advancing the settlement discussions. 

For this purpose, the court may liaise and discuss matters with the appointed mediator in the absence of the parties, both before and during the MCSC. During the conference, the judge may also adjourn the hearing to allow the parties to use court-provided accommodation to continue their private mediation session. The parties may then be given liberty to reappear before the judge on the same day if further assistance from the court is required. 

The MCSC draws on the combined strengths of the mediator and the court. The mediator contributes facilitative skills, familiarity with the parties’ concerns and knowledge of the mediation history. The judge contributes judicial authority, procedural oversight and the ability to help the parties focus on the practical risks, costs and benefits of continuing with litigation. 

This combined approach is intended to improve the chances of settlement where an earlier mediation has not succeeded. Although the court is involved, the process remains non-adjudicative, confidential and without prejudice. 

Role of the court 

At the heart of PD 31.1 is the court’s facilitation of settlement discussions, rather than adjudication. 

During these sessions, the master or judge will not: 

• adjudicate on the merits of the case; 
• determine contested case management issues; or 
• deal with interlocutory applications, unless such applications are taken out for settlement purposes. 

Instead, the court will address the parties directly, foster constructive dialogue, encourage negotiations, and help the parties explore realistic settlement options. 

CSCs and MCSCs are held in chambers and are not open to the public. 

Attendance requirements 

Under PD 31.1, personal attendance at both CSCs and MCSCs is mandatory for the following persons to ensure meaningful, direct, and face-to-face settlement discussions: 

1. Natural persons: Each individual party must attend personally. 
2. Corporate parties: An authorized representative must attend who is familiar with the substance of the litigation and has authority to settle the case. If the corporation is acting in person, this representative should be the director authorized under Order 5A of the Rules of the District Court (Cap. 336H). 
3. Legal representatives: The Court expects the handling solicitor (or a representative with adequate knowledge of the case) to attend. Their role at these conferences is not to act as advocates in litigation but to support and advise their clients within a collaborative mindset. 
4. Mediators (MCSC only): In an MCSC, the appointed mediator must also attend. 

Confidentiality and statutory protection 

Because MCSCs are designed for non-adjudicative purposes, they fall under the broad definition of “mediation” in the Mediation Ordinance (Cap 620). Consequently, they receive the full protections of the Ordinance. 

Under the Ordinance, the following fall within the statutory definition of “mediation communications”: 

1. Communications between the parties and the Court prior to the MCSC. 
2. Communications between the mediator and the judicial officer prior to the MCSC. 
3. Communications between the parties and the Court in the presence of the mediator during the MCSC. 

All communications between the court and the appointed mediator, including the mandatory mediator’s note, are strictly confidential and without prejudice in nature. This ensures that if the MCSC does not result in a settlement, these discussions cannot be referred to in later proceedings. 

Discussions between the judge and the mediator are treated as internal and should not be disclosed to the parties without the consent of the judge. At the same time, the court is expected to respect the mediator’s discretion as to what information obtained from a party may properly be shared with the Judge, since the mediator remains bound by duties of confidentiality to the parties. 

Role of legal representatives 

Legal representatives play a crucial but non-advocacy role in CSCs and MCSCs. Their primary responsibility is not to argue the case as they would at trial, but to assist their clients in engaging meaningfully in the settlement process. They should help clients understand the issues, evaluate risks, consider settlement options, and engage meaningfully with the Court-assisted process. 

Costs 

As a general rule, each party’s costs of and incidental to a CSC or MCSC are treated as the party’s costs in the cause, meaning they are recoverable by whoever eventually wins the trial. 

However, this is without prejudice to the court’s general power to make costs orders having regard to all the circumstances, including a party’s conduct at the CSC or MCSC. Failure to comply with preparation directions, failure to attend properly, or unreasonable behaviour during the process may result in costs sanctions.