Mediation and Negotiation for cuhk emba 7 July 2012

MEDIATION AND NEGOTIATION FOR CUHK EMBA 7 JULY 2012

Presented by: Mr. Roy Cheng

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Agenda of the Lecture

What is Mediation? The Features, Process, Mediator’s Role, and the Merits of Mediation

Negotiation in Mediation : Interest-Based Negotiation

Mediation Practice-Case Sharing Recent Development of Mediation in Hong Kong

Cost Implication of Court Proceedings

STAGE I: INITIAL STAGE

A. Original Interviews

B. Drafting, Pleadings

C. Collecting Documents

COST IMPLICATION Management Cost Solicitor Fee Counsel Fee

STAGE II: Preparation Stage

D. Witnesses

E. Experts Survey

F. Discovery

G. Interrogatory

H. Motions

I. Pretrial Process

J. Case Review

COST IMPLICATION Witness Fee Expert Fee Solicitor Fee Barrister Fee Disbursement

Cost Implication of Court Proceedings

COST IMPLICATION Barrister Fee Court Fee Claimant Cost Interest

STAGE III: Trial Stage

K. Representation

L. Preparation

M. Trial

N. Court Administration

O. Judgment

Cost Implication of Court Proceedings

A B C D E F G H I J K L M N O

Stage I Stage II Stage III$160

$140

$120

$100

$80

$60

$40

$20$0

[REF: Slaikeu, K.A. & others (1998), Controlling The Costs of Conflict, Jossey Bass Inc. Quoted from Motorola]

CostIn thousand

Attributes

$80KGeneral & Typical case

Motorola Before ADR System

Motorola After ADR System

Cost Implication of Litigation Fortune 1000 Data on a Single Typical Case

Originality of Mediation High cost of court proceedings Overloading of civil cases Court waiting time for civil case from application to

fix date for hearing HK District Court 72 days (2011 figure) HK High Court 231 days (2011 figure)

[SRC: Annual Report 2011, Hong Kong Judiciary]

What’s wrong with our internal complaint system？ Too bad for you.

*NOMMGMNOMMGM*

Sir, I believe you’re eating my bamboo

Case 1: Sexual harassment complaints One female employee of CUHK was suspected of being sexually harassed by her supervisor,

and hence forth suffered from depression, and she ultimately committed suicide. The Coroner’s Court determined the reason for the death to be suicide. The deceased person at

that time had submitted a “verbal” complaint to the University, and the University had then arranged a different job position in a different department to protect the female.

However, the University did not investigate her supervisor because the deceased person did not submit a “complaint in written format” in accordance with the University procedure, and she also requested the University not to disclose the event.

The deceased person had worked in the University for many years and five years in the University’s sexual harassment complaints committee. She should be more familiar with the procedures of handling complaint than many committee members

She did not lodge formal complaint, why?

Case 2: All Lose situation ：The victim was dissatisfied ; The accused was not convinced

In July 2011, a female employee of CUHK submitted a complaint to the University pointing out that she was sexually harassed by a senior level employee, and hence forth she was mentally stressed, and suffered from depression. After investigation, the University had determined that the complaint was valid and decided to issue a warning letter to the senior employee.

The victim criticized the punishment for being too light, and there was no support for the victim. The victim appealed to the media.

However, the senior employee also announced that he did not accept the University’s judgment as he was treated unjustly. Although he would retire within two months, he still decided to take the initiative to resign in order to protest the University’s conclusion.

Case 3: Happened in Poly University The event was about a female student who complained that a

male classmate of the same faculty molest her sexually by touching her chest. After the female student submitted a complaint to the University, the case was transferred to the student disciplinary committee of the University for further action.

Question: What/How will you do, if you were the disciplinary Chair?

Case 3: Happened in Poly UniversityThe University announced: “We believe that the male student likes the female student all along, but his

expression was inappropriate. Moreover, the female student had not been dated before, and may be over reacted. The female student’s action might discourage the male student from getting acquaintance with other girls thereafter.”

After the result was made public, there was a dispute inside the University. Students were dissatisfied with the University’s judgment. Students posted Big Character Poster on Democracy Wall inside the University, and doubted that the event was handle without due care and therefore the judgment was inappropriate.

A third party facilitated negotiation

What is Mediation?

Meaning of mediation

mediation is a structured process comprising one or more sessions in which one or more impartial individuals, without adjudicating a dispute or any aspect of it, assist the parties to the dispute to do any or all of the following---(a) Identify the issues in dispute;(b) Explore and generate options;(c) Communicate with one another;(d) Reach an agreement regarding the resolution of the whole, or part,

of the dispute.

Source: Section 4. Mediation Ordinance. Ordinance No. 15 of 2012

The objects of Mediation Ordinance

(a) To promote, encourage and facilitate the resolution of disputes by mediation; and

(b) To protect the confidential nature of mediation communications

What is Mediation Negotiation (談判 ) Problem-solving (解決問題 ) Neutral Third Party Assistance (中立第三者協助 ) Facilitative (促進式 ) Private and Confidential (保密 ) Voluntary (自願 ) Objective & Structured Process (客觀 ) Without Prejudice to Later Litigation (無損訴訟立場 )

The merits of Mediation

Clarifying State position, Express

view point, perception Preserve relation

Process Content Venue Solutions

Direct Dialogue Self Determination

Communication in mediation Private Flexible Voluntary Confidential Without prejudices Persons with Authority : to attend and to enter settlement Influential persons ???

Comparison Communication in Litigation vs Mediation

LAWYERLAWYER

DISPUTANT DISPUTANT

JUDGE

COURT PROCEDURES

Disputants Hand Off

Comparison Communication in Litigation vs. Mediation

Mediator

Lawyer

Party A

Lawyer

Party B

Features of Mediation

Confidential

Flexibility

Structural process

Voluntary

Without prejudices

Mediation Process

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羅Joint discussion for understanding

Mediation Process

Mediator’s opening Convening

Parties’ opening statement

Mediation processCaucus for reality test

Closure

Negotiation for solutions

Features of Mediation Using Principled Negotiation approach, (aka) Interest-Based

Negotiation (aka) Problem-Solving Negotiation It is a Neutral Third Party assisted Negotiation It is a Private and Confidential process The process is voluntary & non-binding Parties make the decision The contract and agreement entered is binding Objective & Structured Process Information conveyed therein are Without Prejudice to Later Litigation

Interest – Based Negotiation

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Positional Negotiation Features

Bargain over positions Argue over one solution Bottom line preset Win-Lose outcome Concessions made Who’s right or wrong Need little preparation Skill requirement: less

Causes Know and Focus only on wants A Single solution to a problem Fail to explore options Confuse wants with needs Fail to explore real interests Natural Reactions

Striking back Giving in Breaking-off

關注式談判 PRINCIPLED NEGOTIATION**Gettting to Yes, Roger Fisher &William Ury, 1982

Separate the people from the problem 人際關係和事件分開處理

Focus on Interests, not positions集中在實際利益及需求

Invent options for mutual gain創造互惠互利的可行方案

Insist on Objective Criteria堅持用客觀準則

A commercial dispute A public relation firm was appointed to organize an international conference for

a professional society in Hong Kong The professional society refused to pay the outstanding fees (HK$600,00) The P.R. firm initiated legal proceedings which lasted for two years. Lawyer recommended to resolve the case by mediation in 2005 The mediation meeting was scheduled from 2:30p.m. to 7:00p.m. The mediation meeting ended at 4:30 p.m. including the execution of settlement

agreement. And no lawyer was presented.

Question: Why a two year legal proceeding can be settled within two hours. The total mediation fee : HK$16,000 to be shared by the parties

Separate the People from the Problem Negotiators are people first Substance interest and relationship interest People’s issues: perception, emotion,

communication

A dispute among family members During a trip to Yunnan, China. There was a group of three, parents and

a college boy. Mom complained that the two guys seldom eat vegetables at home nor

refill the rice These two guys voluntary took those vegetables and even to refill rice.

They like the food more than at home. Mom was unhappy and felt no face and wishes you to resolve their

conflict. Question: What will you do?

Wants and NeedsThe tip of the iceberg

Atlantic Ocean near Newfoundland

Background of the Hung Hom Peninsula Negotiation Event 1999: The Lands Department announced that it would cooperate with private developer Wai Kee Holdings Ltd to develop the

reclamation land in Hunghom Bay in order for this developer to participate in building Home Ownership Scheme Flats. The auction price was 0. 583 billion. Then, NWS Holdings Ltd under New World Development Co. Ltd. announced that it bought shares of Wai Kee Holdings Ltd.

2003: Because of SARS and economic downturn, Michael Suen Ming Yeung, the then director of Housing, Planning and Lands Bureau announced that the government would stop selling the home ownership scheme (HOS) flats indefinitely, and at the same time, would stop building HOS flats, and also the government would terminate the plan for private developers to participate in building HOS flats.

2004: The government began to negotiate with the developer, and suggested that all the flats could be transferred to private developers for land premium payment. This negotiation outcome was concluded during a mediation meeting.

2008: The related official joined New World immediately after he retired. Citizens and councilors thought that the official was paving the way for his retirement, and hence sold the government land cheaply.

2009/ 6/ 11, That official disclosed the negotiation process when he appeared at a hearing in related to that land selling event in the Legco.

Hung Hum Peninsula Negotiation Process

Reluctantly Deal at $0.86B

Adjourn negotiation

Gov’t valuation

$2.3BFirst offer

$2.5B

New World First offer

$0.6-0.7B Counter offer$0.52B-07.4B Responsive offer

$0.522B Stay firm$0.522B Final offer

$.74B

Market weakening

$1.7BDiscount and

final offer$1.25B

Internal bottom line

$1.15B

AlternativeStatus quo

No Alternative

Dickson construction incident

Mediation Practice-Case Sharing

Dickson construction incident Dickson (D) was the main contractor whilst HK Housing Authority (HKA) was the developer. Three public housing projects were undergoing, two in Fanling and one in Aberdeen. HKA has confidence that D could not complete these projects due to D’s financial problem. Most

of the sub-contractors did not get full payment for the work done. Soon or later HKA has to encounter the crisis when these projects fallen out. Projects in Fanling was just completed foundation work whilst the project in Aberdeen was up to

roofing. On 16th February 2006, HKA announced to take over the construction sites at 10:00 a.m. 17th

2006. This was the first time happened to HKA in Hong Kong. More than 40 sub-contractors had a meeting with the HKA deputy directors to plead HKA not to

take over the sites. They hoped D’s financial condition would turn around later. The meeting lasted from 4:00 p.m. to 6:00 p.m. and no progress. The Deputy Director called for

your help. What and how will you do?

Dickson construction incident Gather information, understand what happen. What are the

impacts? How will the action Yes-No affected each other? Identify people’s issue from substance issue Identify their common interests Setting a neutral and mutual issue statement which has

addressed the concerns of both sides Shift the parties from “I against You” to “We against the

Problem”

A story about a car park space dispute A group of unit owners versus a developer who also owns a substantial units in the building One of the disputes is about the ground floor units including the “approved” allocation of car

park locations. The unit owners alleged that the developer had wrongfully “sold” the car parks as they are not

in line with the plan of Lands Department. During the mediation, it was found out that there is ONE unit owner that if the unit owners win

the case, that Unit Owner ‘s car park space should revert back to common area. The car transaction was completed more than 20 years ago, that Unit Owner can sue the then

lawyer for professional negligence. All people in the meeting room caught by surprised, but they still pursue for legal action.

Question: Why did the Unit Owner agree to continue the legal action rather than work out solution?

Executive misconceptions about mediation Busy to make revenue, no time to save profit Trial lawyer ≠ Mediation lawyer Adverse vs. Problem solving Hand off on the case Genuine on legal cost, conscious on mediation fee Scramble preparation

Executive’s Do Identify an appropriate legal representative Express your business/personal interest Participate to appoint a competent mediator Spend time to save time Prepare the case, before and during mediation Know your Alternatives (BATNA) if the mediation end

with no solution

Recent Development of Mediation in HK Financial Dispute Resolution Centre (19/6/2012) Mediation Bill (15/6/2012) Family Court Practice Direction, PRACTICE DIRECTION - 15.10 (2/5/2012) Mediation for Compulsory Sale Cases Under the Land (Compulsory Sale for Redevelopment)

Ordinance (Cap. 545) (15/2/2012) PRACTICE DIRECTION 3.1 (1/1/2010) PRACTICE DIRECTION 3.3 Voluntary Mediation in Petitions Presented under Sections 168A

and 177(1)(f) of the Companies Ordinance, Cap. 32 (1/1/2012) PRACTICE DIRECTION Construction and Arbitration List in High Court – Sep 2006 CE Policy Address para 85 for 2007/08 HKMC established in 1994 Airport Core Project in 1992

THANK YOU