Hong Kong – Online Dispute Resolution Scheme (ODR).

 

5 May 2020

 

 

Introduction

 

As part of its unprecedented relief package to alleviate the impact of COVID-19, the Hong Kong Government is launching the Online Dispute Resolution (ODR) Scheme (Scheme).

 

What cases will the Scheme cover?

 

The Scheme will cover COVID-19 related disputes with a claim amount of not more than HK$500,000, and aims to provide a quick and cost-effective means to resolve disputes, especially for those involving “micro, small and medium-sized enterprises” that may be adversely affected by COVID-19.   

 

What are the requirements for applicants?

 

(i)	Either party (claimant or respondent) must be a Hong Kong resident or must be in Hong Kong.
(ii)	Each party must pay a HK$200 registration fee.
(iii)	Parties must enter into a written dispute resolution agreement to formalise their consent to the Scheme and its procedures.

 

What are the procedures?

 

The Secretary for Justice describes the Scheme as a “multi-tiered dispute resolution mechanism”. Parties will go through three tiers:

 

(i)	The parties will first attempt to negotiate their disputes.
(ii)	If the negotiation fails, there will be mediation.
(iii)	If mediation fails, there will be arbitration, for a final and binding award.

 

What are the advantages of the Scheme?

 

The Scheme aims to resolve disputes of low value amicably, with the hope of preserving parties’ business relationships.

 

It should be efficient, as each tier of dispute resolution will be conducted and also completed within a limited time prescribed, giving parties the pressure to resolve their dispute.

 

Further, it should be a cost-effective way to resolve such disputes without having to break social distancing measures by meeting and negotiating in person in conference rooms, thereby saving some logistics costs. 

 

What further details do we expect from the Government?

 

(i)	What is the definition of “micro, small and medium-sized enterprises”?
(ii)	To which department can parties apply to join the Scheme?
(iii)	What is the maximum period of time allowed for each tier of dispute resolution? Will there be any exception to allow for more time if parties are close to reaching a resolution?
(iv)	What will be the mechanism for the appointment of mediators and arbitrators if parties are not able to agree this on their own?
(v)	Are legal representatives allowed?

 

As the Government has announced plans for the Scheme to begin in June, it would be helpful for the Government to clarify these issues as soon as possible.