Leading the Way: Hong Kong's First Private Financial Adjudicators
23 August 2023 | Applicable law: Hong Kong | 5 minute read
Withers is proud to announce that three of our lawyers - Samantha Gershon (Partner), Jocelyn Tsao (Partner) and Philippa Hewitt (Senior Knowledge Lawyer) - have recently passed the Private Financial Adjudication ("PFA") assessment and are able to be accredited as adjudicators for PFA in Hong Kong. They will be part of the very first batch of accredited adjudicators who will be able to accept appointment to adjudicate on family financial matters. PFAs will enable smooth and swift decisions and prevent significant delays in financial proceedings.
What is PFA?
PFA is a form of alternative dispute resolution. It enables families to reach a final settlement other than through court hearings or trials.
Introduced in 2015 in Hong Kong as a pilot scheme, PFA is regulated by Practice Direction – SL9 ("PDSL9"). This sets out procedures in furthering the aim of settlement facilitation in Matrimonial and Family Proceedings. Unlike in England and Wales, PFA is strictly confined to financial disputes. Some of these applicable proceedings include applications for ancillary relief and for maintenance pending suit.
Prior to an adjudication, parties should exchange Form Es, which are financial statements for financial disputes. They are encouraged to consider partaking in Family Mediation and/or Financial Dispute Resolution to further explore their options for settlement.
Legal representation is still recommended in PFA. Parties must engage a private adjudicator and mutually agree on who they will appoint. The adjudicator will be an accredited specialist family practitioner with at least 10 years post qualification experience. Like in arbitration, the decision of the adjudicator appointed is final and binding by the parties' agreement at the outset.
Why use PFA?
There are a number of benefits to using PFA:
Efficiency and flexibility – The adjudicator appointed will be a seasoned family practitioner and is able to understand and apply the relevant principles. He/she will need to deal with the parties' issues efficiently.
PFA is also flexible in accommodating the adjudicator, the client and counsel's availability. In contrast to a court hearing, PFA avoids situations when the case is adjourned or delayed due to the judge's caseload and conflicting schedule. It is a faster process than waiting for a court hearing date and/or Judgment. It in fact eases the Family Court Judges' caseload.
Certainty – Subject to the court's overriding discretion, the adjudicator's decision is final and binding. This guarantees greater certainty and enables parties to resume their ordinary life without further disruption.
Confidentiality – Since PFA will not be conducted in court this protects the client's privacy from the judgment being made public.
Costs – Some disputes in PFA can be dealt entirely on paper, which saves legal costs for the client. In some situations, the parties may be allowed to limit the scope of the dispute if the adjudicator permits. Focusing on the key points of the dispute, PFA can result in considerable costs being saved.
The Institute of Private Family Adjudicators (Hong Kong)
The Institute of Private Family Adjudicators (Hong Kong)("IPFA(HK)") was created by core family practitioners, one of whom is Samantha Gershon who assisted with the founding of the organisation and one of the directors, to support PFA locally. The institution is made up of representatives from the Hong Kong Bar, Law Society and Hong Kong Family Law Associations. Aside from developing its own set of Rules supplementing PDSL9, IPFA(HK) accredits and trains new adjudicators.
Accreditation and Training
IPFA(HK) has set up the accreditation process for qualified and eligible family lawyers to become adjudicators.
Training first began in person in November 2018. With the assistance of pre-eminent practitioners Suzanne Kingston and Rachael Kelsey, participants discussed the operation of PFA in England and how Hong Kong would approach this new procedure locally.
Further training was conducted in April 2020 online during the pandemic. Participants examined a number of issues around PFA – from valuation to expert witnesses, managing an adjudication to information on disclosure. It ended with taking an award writing examination.
With this initial cohort of family practitioners now being able to be accredited as adjudicators, more disputes can be resolved using PFA. In light of this, it seems promising that PDSL9 will be extended beyond 2024 before it expires.