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Mediation is an alternative dispute resolution process with humanistic elements. Beyond the legal frontier, human factors may also have to be considered in the dispute resolution process. To facilitate the communication between the parties in a dispute, an independent and impartial mediator will assist the parties to identify the underlying causes of the conflict and to consider the situation of the other party. With frank exchanges of the parties’ concerns and needs, a pragmatic settlement plan can be developed eventually. As the settlement is co-developed and agreed by the parties, the settlement is thus described as win-win solution.

Below are two successful mediation cases settled with win-win solutions:

Foreign-based Closed-end fund

Mr. Ho subscribed to a U.S.-based closed-end fund through and under the advice of a small-sized asset management company in Hong Kong (“Company A”) when his first child was born 5 years ago. The objective of his investment was to seek moderate capital appreciation within the acceptable risk levels to finance his child to study abroad after high school. However, the fund was wound up five years later when he realized that the risk level of the fund was not as low as what had been described during the selling process. He then lodged a complaint to Company A.

However, Company A was unwilling to settle the dispute with the view that the whole selling process was conducted in a proper manner and all the necessary information about the fund, including the risk level involved, was clearly disclosed and explained. Mr. Ho then lodged an application to the FDRC for mediation.

The mediator assisted Mr. Ho to identify his actual loss in this investment and encouraged both parties to understand their needs and concerns. Through the communication process, Mr. Ho realized that Company A was financially incapable to make any monetary compensation within a short timeframe, whilst Company A understood Mr. Ho’s financial needs for his child’s overseas study plan in the future.

Eventually, the two parties agreed to settle the matter with an option which had considered the financial difficulties of Company A for the time being and the monetary need of Mr. Ho in the later years.

Current Account

Mr. Wong had a dispute with a financial institution regarding his current account. As both parties had very strong views on the circumstances surrounding the cashing of a cheque, the dispute could not be resolved. Mr. Wong filed an application to mediate his case at the FDRC.

During the mediation meeting, the mediator helped parties to bridge the gap by asking the claimant to consider a number of issues including the likely cost for hiring an expert and how his work and financial situation would be affected if he brought the claim to court. Similarly, the bank reconsidered a number of issues including their relationship with Mr. Wong, the time spent on handling the case, and how their customer relationship would be further affected if the case was litigated.

Both parties, taking into account the various considerations, were able to evaluate their available options and were satisfied with the mediator's assistance in helping them make informed decisions.

 

(The case studies above are based on actual FDRC cases. Various information including names of claimant, financial institution and its staff, actual claim and settlement amount and the stories behind have been altered or disguised for confidentiality reasons.)