Pilot Scheme for Financial Dispute Resolution in Matrimonial cases

Bar Council's Views on the Pilot
Scheme for

Financial Dispute Resolution in matrimonial cases

The Working Group was formed in the end of 1999.

Generally, it was felt that the existing system practised in the
family court needs reform, especially on cost and time-saving aspects.

The Chairman of the Working Group, Mr. Justice Hartmann, together
with one other member, Judge Carlson, visited a few jurisdictions
including Australia, New Zealand and England in the course of the
last quarter of 1999, with a view to understanding how those systems
approach the question of financial disputes in matrimonial context.

The reports on those visits revealed that the English Pilot Scheme
was the most successful one and the Group appeared to favour devising
a pilot scheme for the Hong Kong family court modelling on the English
Pilot Scheme. The members have been asked to consider and to report
on the next occasion whether it would be appropriate to go along this
line.

[Note: The Scheme is solely concerned with financial dispute resolution
and does not touch on divorce and custody matters.]

Significant aspects of the English Pilot Scheme, on which the Hong
Kong Scheme will be based:-

1. Creation of a Financial Dispute Resolution ("FDR") appointment.
It will be presided by an FDR judge who will be an experienced family
judge. At the appointment, some discovery is supposed to have been
done. All Calderbank offers will be tabled at the appointment. The
FDR judge will play an active role, giving all necessary indications
on the parties' claims, with a view to assisting the parties to reach
a settlement. The FDR judge will not be the trial judge. In case the
parties do not settle at the FDR appointment, directions would be
given for the hearing of the matter before a different judge.

2. Keep in check the amount of evidence. The emphasis is on keeping
the case simple and straightforward. Hartmann J. mentioned the "trendy"
philosophy of moving the case from the lawyers to the court - an active
interventionist approach whereby the court will exercise tight control
over discovery.

3. A continuous emphasis on the impact of costs. The parties are
obliged to prepare a bill of costs at every appointment.

4. A continuous emphasis on the time-table. The court will not allow
the momentum to relax. A date for the next appointment will be fixed
at every appointment.

Members of the judiciary and the Law Society seem to be very keen
on launching a Hong Kong Pilot Scheme which is based on the English
Pilot Scheme.

Bar Council's views:-

1. It is axiomatic that any system of justice (not just the system
for financial relief in matrimonial proceedings) has to be cost effective
and efficient. Accordingly, the Bar Council is for a more efficient
and less costly system. It is the Bar Council's strong view (from
experience therein) that the family court system needs major reform
to bring itself up to date and better serve the community in present
times.

2. This need is all the more pressing in the wake of the looming
reforms on civil procedure that the Bar Council is anticipating. The
Bar Council feels that it is important to establish the "new
and improved" family court system as soon as possible.

3. Central to this reform is case management of which financial dispute
resolution forms an important part, but still merely a part. Implementation
of only FDR without the wider reforms on other procedural aspects
is, in the Bar Council's view, inadequate to address the deficiencies
of the present system.

4. The Bar Council understands that the Law Reform sub-committee
on Guardianship and Custody have made recommendations (in their consultation
paper published in December 1998) on the options for reform of the
dispute resolution process in the context of guardianship and custody
proceedings. A case management scheme has been recommended as part
of those reforms. The Bar Council believes that a case management
scheme should be the main theme for any ancillary relief reforms.

5. The most significant change proposed to be introduced in the pilot
scheme in Hong Kong for ancillary relief reform is the FDR Appointment.

6. It is the Bar Council's view that the key to a successful FDR
Appointment is the judge.

(a) The style, personality, experience, knowledge and quality of
the FDR judge will have a very important bearing on the outcome.

(b) The credibility of the whole FDR process may be dented if say,
the FDR judge were to suggest that one of the parties should settle
on particular terms when the trial judge gives that party much more
or less than what the FDR judge recommended.

(c) The FDR judge must necessarily be someone other than the trial
judge. Thus, a high degree of uniformity must exist between both judges.

(d) The existing system/practice of "staffing" the family
court does NOT give rise to such uniformity.

(e) It is also clear that the existing pool of judges is insufficient
for present purposes. The family court judges are notoriously overloaded
with cases. The pilot scheme will, in the Bar Council's view, further
increase the workload for judges.

7. It may lead to unfairness and injustice especially where one of
the parties is intent on probing the other's case, delaying the case,
testing the other's reaction to an unjust settlement offer, etc. Also,
sometimes it is the litigants who are being "pushed along"
by their lawyers. It is quite pointless to have an FDR Appointment
(and the consequential directions) when the "main track"
litigation is being conducted in a way which is not conducive to settlement.

8. The English socio-economic situation is very different from Hong
Kong. Generally, every member of the Working Group accepts that financial
matters are more complicated in Hong Kong than in England where the
majority of the population are employed at a salary. In particular,
it is doubted whether the efficiency of the English Pilot Scheme,
with its continuous emphasis on simplicity, trimming down of papers,
speedy resolution, would be relevant in Hong Kong. (The Bar Council
does not often come across cases in England where e.g. BVI companies
or a complicated structure of companies form the main backdrop of
the dispute.)

9. The Bar Council also has some reservations on the "active
interventionist" approach proposed to be adopted by the court
particularly on discovery. It is a move away from the adversarial
to the inquisitorial system. She should stress, however, that the
matrimonial field is slightly different from other civil matters in
that the court is enjoined with the power to investigate - r.77(5)
Matrimonial Causes Rules. A balance should be maintained. Further,
it is difficult to see how the court can form any view as to the "appropriate
amount of discovery" without an in depth knowledge of the case.
It appears to be a necessary part of this process that the FDR judge
must take on some of the traditional duties of lawyers as far as discovery
is concerned. This forms part of the increased workload envisaged
by the Bar Council.

CONCLUSION

1. The Bar Council fully endorses the idea of having to introduce
reforms to the present system of ancillary relief litigation.

2. The Bar Council thinks this should be by way of a broader, CASE
MANAGEMENT concept which includes FDR.

3. A "revamping" of the appointment system for family court
judges to ensure a larger than present pool of experienced and specialised
judges is REQUIRED. The existing system of promoting magistrates to
become family judges may have to be reviewed. [The Bar Council is
informed that in London alone, there are 23 family judges to serve
a population which is the same size as that of Hong Kong.]

4. To ensure fairness is achieved, there should be strict compliance
on the requirement to make full and frank disclosure before the parties
sit on the FDR table.

5. Any scheme must be tailored to the Hong Kong situation, with a
particular emphasis on the local language and culture.

Dated 6th March 2000

Hong Kong Bar Association