Find out about private family adjudication and the types of matters that would be suitable to be resolved under this scheme.

What is private family adjudication (PFA)?

PFA is a form of alternative dispute resolution which takes place outside the court but within the court sanctioned process. To have a financial issue resolved under PFA, parties enter into an agreement under which they appoint a suitably qualified person (an adjudicator) to decide a dispute concerning finances. The parties agree to be bound by the written decision of the adjudicator (Decision).

How does PFA work?

Parties who wish to adopt PFA to their resolve their financial disputes will need to follow the procedure set out in the Hong Kong Judiciary Practice Direction SL9.

What is IPFA(HK) and the IPFA(HK) Rules?

The Institute of Private Family Adjudicators (Hong Kong) was created by family practitioners in Hong Kong who wished to facilitate the wider use of Practice Direction SL9, through the creation of IPFA(HK) Rules and accreditation of adjudicators.

IPFA(HK) Rules were developed to set out plainly the PFA procedure, adjudicator’s duties and parties’ responsibilities, so that parties had the option of resolving financial disputes in a more expedient and flexible format than through legal proceedings.

Who are the adjudicators?

IPFA(HK) adjudicators are family practitioners, who have no less than 10 years in practising family law and have been accepted onto the IPFA(HK) panel of trained and accredited adjudicators.

Training and qualifying as a family law adjudicator is available only to those who satisfy the conditions established by IPFA(HK) and all IPFA(HK) adjudicators have successfully completed the training course on family adjudication run by IPFA(HK).

A list of IPFA(HK) adjudicators can be found here.

What laws apply to PFA?

The law of Hong Kong SAR applies to all PFA and the parties are not permitted to apply a different law to the adjudication. Any agreement which seeks to apply a different system of law will not be approved by the Family Court.

What areas does PFA cover?

At the moment, PFA covers only financial disputes

(1) An application for ancillary relief, other financial orders and/or financial relief under Part II and Part IIA of the Matrimonial Proceedings and Property Ordinance, Cap.192;

(2) An application for maintenance and/or financial orders under the Guardianship of Minors Ordinance, Cap.13;

(3) An application under s.3 of the Separation and Maintenance Orders Ordinance, Cap.16 for an order for payments under s.5(1)(c), (d), (e) and s.9 of the same ordinance;

(4) An application for financial provision under the Inheritance (Provision for Family and Dependants) Ordinance, Cap.481;

(5) Any other applications of a financial nature in Matrimonial and Family Proceedings to which the court agrees that the procedures should apply; and

(6) An application for costs in respect of any of the above applications or proceedings.

What are the benefits of PFA?

The principal benefits of PFA are:

Speed: The timetable is up to the parties to agree, subject to everyone’s availability. The parties avoid the risk of a case being adjourned or not finished because of pressure on court time or a judge becoming unavailable. Adjudicator is likely to take significantly less time than court proceedings.

Flexibility: The parties defined the scope of adjudication. Furthermore, under the IPFA(HK) Rules the parties and the adjudicator have considerable discretion over the time table, place of hearings and procedures they adopt in order to reach a fair result under Hong Kong SAR Law.

Choice of arbitrator: In the court system, litigating parties do not have the right to choose their judge, but they do have the right under the PFA to select the most appropriate adjudicator for their matter. Knowing that a financial dispute will be resolved by a family law specialist with appropriate experience will be very attractive to many parties and their advisers.

Costs: While the parties have to pay the arbitrator’s fees, the cost of any venue, and transcription service, if required, there may be disputes which are appropriate to be dealt with just on the papers leading to significant costs being saved. If approved by the adjudicator, the parties can be permitted to limit the scope of the dispute and disclosure, which would to a saving on legal costs but distilling the fundamental points to be adjudicated on.

How does PFA fit into the court proceedings?

Parties are expected to have filed financial disclosure (Forms E) prior to adopted PFA, unless there are cogent reasons why it is not appropriate to do so. Parties are also encouraged to have considered mediation or the financial dispute resolution within the court process prior to adopting PFA, although understandably this may not be suitable for all parties or all disputes.

In order for the parties to engage an adjudicator, they will need to sign an agreement (PFA Agreement) in order to obtain the court’s permission to adopt PFA to resolve their disputes, which sets out information that:

• Parties are legally represented and have obtained adequate and independent legal advice on the nature, implications, procedures and the issue of confidentiality concerning the PFA;

• If family mediation or financial dispute resolution has been attended and the reasons why not;

• The scope of the PFA agreed by the parties;

• Name of the adjudicator for the court’s approval and appointment;

• The parties agree to be bound by the decision of the adjudicator, and will provide a consent summons for the court’s approval which sets out the decision of the adjudicator;

• The court retains the overriding discretion to approve and make the order/s embodying the adjudicator’s decision;

Once the court’s approval for a dispute to be resolved by PFA, the court can stay all or part of the proceedings so that parties can focus on resolving their dispute through adjudication.

Do I need a lawyer to represent me?

Under Practice Direction SL9, all parties need to have legal representation prior to signing the PFA Agreement and should have had obtained adequate and independent legal advice on the nature, implications, procedures and the issue of confidentiality concerning the PFA.

Adjudication is an alternative dispute resolution mode within the court proceedings. It is strongly recommended that participant should have specialist family law advice as to their rights and obligations and representation by a lawyer will provide the most effective way to present a case and the legal arguments in support.

What are the powers of the adjudicator?

The adjudicator has powers to make decisions on any case management or substantive issues on which the parties cannot agree, for example:

(i) Decide the scope and ambit of his or her own powers, including interpretation, construction and application of the IPFA(HK) Rules, the PFA Agreement, the Court Order and PDSL9

(ii)Decide the issues to be resolved in the adjudication.

(iii)Decide on the evidence required, the amount of disclosure, written submission and if an oral hearing is required

(iv)Decide on the time table for the filing of evidence and submissions

(v)Permit the parties to adduce expert evidence or appoint single joint expert on any matters in issue, including but not limited to foreign law, valuation, calculations, forensic accounting, in the same manner as the High Court or the Family Court

What are the costs of an adjudication? Who is responsible for the costs?

There are two main types of costs:

(i) The adjudicator’s fees and expenses

The adjudication and the parties will agree the adjudicator’s fees (either on an hourly or daily basis, or for an overall fixed fee) at the outset of the arbitration.

The usual arrangement will be for the parties to pay the adjudicator’s fees and expenses in equal shares. However, under the IPFA(HK) Rules, the adjudicator has the discretion to order a party to pay more than an equal share (even up to the full amount) if that is appropriate because of the conduct of that party in relation to the arbitration.

(ii) The legal or other costs of the parties

Legal costs are those costs incurred by a party in engaging lawyers to prepare for and represent them, as well as such costs of hiring a venue for a hearing.

The costs of a venue (and similar disbursements for the adjudication) will usually be shared equally.

The usual arrangement will be for each party to pay their own legal costs, and not to make any payment towards the other party’s legal costs unless ordered by the adjudicator in the decision. An order for a party to pay part or all of the legal or other costs of another party can arise because of the conduct of that party in relation to the adjudication.

What are the outcomes? How do you enforce a Decision?

At the conclusion of the arbitration the arbitrator will issue a decision which is the equivalent of a final judgment on that issue and is binding on the parties. The parties will then need to prepare a consent summons for the court’s approval, setting out the orders in the same or similar terms of the decision.

Under Practice Direction SL9, the court retains the final discretion to make the decision into enforceable orders and the parties cannot agree to exclude the court’s power. If the parties or one of the parties do not wish to be bound by the adjudicator’s decision, they will need to explain those reasons to the court.

Given that the court has endorse the PFA procedure as an alternative dispute resolution option, it is highly likely that the court will endorse the decision made by an IPFA(HK) adjudicator.