E. Mediation agreements

E. Mediation agreements

A mediation agreement (also known as an agreement to mediate) is a foundational legal document that formally initiates the mediation process and establishes the ground rules under which it will be conducted. In Hong Kong, this agreement is regulated by both statutory law, specifically the Mediation Ordinance (Cap. 620) and various Practice Directions. The agreement provides the framework for how the parties will engage in mediation, how the mediator will be appointed, and what legal protections will apply during the process. 

Statutory definition and requirements 

Under section 2(1) of the Mediation Ordinance, an agreement to mediate is defined as an agreement in writing by two or more persons to submit a dispute between them to mediation.  

This statutory framework specifically applies to facilitative mediation, where a neutral third party assists the parties without adjudicating any aspect of the dispute. 

The agreement may take various forms. It may appear as a mediation clause within a broader substantive contract, designed to apply to future disputes, or it may be a separate agreement entered into after a specific dispute has already arisen. 

The Ordinance makes clear that an agreement to mediate may be entered into either before or after a dispute arises. It remains valid even if no specific mediator has been appointed at the time the agreement is made. 

To be recognized under the Mediation Ordinance, the agreement must be in writing. This requirement is satisfied if the agreement is recorded in electronic form, including emails, provided the information is accessible for future reference. 

Although the agreement must be in writing, the Mediation Ordinance does not strictly require it to be signed in order to be legally valid. In practice, however, signatures are commonly used and may be required under institutional mediation rules or by the parties’ own agreed procedure. 

Typical contents of the agreement 

A well-drafted agreement to mediate usually deals with the practical mechanics of the mediation and the legal protections available to the participants. It typically confirms the role and impartiality of the mediator, making clear that the mediator acts as a neutral facilitator and does not impose a binding decision or provide legal advice to the parties. 

Confidentiality is another central feature. The agreement commonly requires all participants to keep the mediation process, discussions, documents, and related communications confidential, subject only to limited legal exceptions. It also usually states that communications made during the mediation are “without prejudice”, meaning that offers, concessions, and information exchanged in the mediation generally cannot be relied upon as evidence in later litigation or arbitration. 

The agreement often addresses fees and costs by specifying how the mediator’s fees, venue charges, and other mediation expenses are to be shared. In many cases, these costs are divided equally between the parties, while each party remains responsible for its own legal and professional expenses. 

The agreement may also require those attending the mediation to have proper authority to settle the dispute, so that any agreement reached can be final and effective. 

The agreement typically requires the mediator to disclose any prior dealings with the parties or any personal interest in the dispute. The parties, in turn, agree to cooperate in good faith with the mediator and with each other throughout the process in order to conduct the mediation efficiently. 

Termination provisions are also common. These clauses usually allow any party, or the mediator, to withdraw from the mediation at any time, often without having to give reasons.  

In addition, many mediation agreements contain mediator immunity provisions, which seek to protect the mediator from liability arising out of the mediator’s professional conduct during the mediation, except in cases such as fraud or dishonesty. The agreement usually also includes a provision stating that the parties will not call the mediator as a witness or require the mediator to produce notes or records in any future legal proceedings. 

The “Mediation Minute” in court-adjunct mediation 

In civil proceedings before the High Court and District Court, Practice Direction 31 provides a specific procedure for court-adjunct mediation. Where parties propose different mediation arrangements in their Mediation Notice and Mediation Response, they are expected to attempt to resolve those differences. 

If the parties reach agreement on the procedural arrangements for the mediation, that consensus is recorded in a document known as a Mediation Minute. Once signed by the parties or their solicitors, the Mediation Minute serves as the formal record of their agreement to proceed with mediation and must be filed with the court within 3 days of its signing. It records the agreed procedural mechanics, such as the mediation timetable, choice of mediator, and allocation of costs. 

Validity and enforceability 

The enforceability of agreements to mediate has been the subject of significant legal discussion in Hong Kong. As a general principle, a mediation clause or agreement must be sufficiently certain and complete before it will be enforceable.  

A vague promise to negotiate, or a mere “agreement to agree”, is typically not legally enforceable. The clause must commit parties to a defined process rather than leaving the details to be settled by future agreement. 

An effective clause should address the triggering mechanism (how and when the process is initiated), the scope of disputes covered, and a defined procedure for selecting the mediator and conducting the sessions. Incorporating recognized mediation rules (such as HKIAC Mediation Rules) often provides the necessary certainty, as these rules establish the procedures, timeframe, and appointment mechanisms. 

An agreement to mediate may be drafted as a condition precedent to litigation or arbitration. In such a case, the parties agree that they must first attempt mediation before commencing court or arbitral proceedings. However, an agreement cannot permanently prevent a party from exercising the right to sue, because that would unlawfully oust the jurisdiction of the court. 

The decision in Hyundai Engineering & Construction Co Ltd v Vigour Ltd (2005) illustrates this principle. In that case, the Court of Appeal held that the relevant agreement was unenforceable because it lacked sufficient certainty and attempted to restrain the parties permanently from exercising their right to bring legal proceedings. 

Relationship with confidentiality and discovery 

A particularly important point under the Mediation Ordinance is that the agreement to mediate itself is expressly excluded from the definition of a “mediation communication.” As a result, the agreement does not enjoy the same statutory confidentiality protection as communications made during the mediation process. 

This means that the agreement may be produced in court to prove its terms. For example, a party may rely on it to show that there was a contractual obligation to mediate, to establish the agreed procedure for appointing a mediator, or to demonstrate how mediation costs were to be apportioned. If one party attempts to avoid the consequences of the agreement, the other party may rely on the document as a protective measure or as the basis for seeking a stay of proceedings until the agreed mediation process has been followed.