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Mediation's healing touch in employee injury claims

The Background

Employees suffering from injuries at work often find it difficult to receive speedy recovery of the damages to which they are entitled.

Recovering from injury is hard enough, but maintaining a stable income to continue supporting a family is even harder, not to mention the energy required to prepare and to endure the pressure arising from the compensation-recovery process.

Compensation due to the pain, suffering and loss of amenity can only be recovered after years of civil litigation, a likelihood that is hardly helpful to employees in supporting their families, particularly with the possibility that their earning capacity has been impaired and compromised after the injuries.

As with other civil disputes, the Hong Kong government (under the Civil Justice Reform in 2009) has been encouraging the settlement of personal injury claims by way of mediation.

Implemented on April 2, 2009, the Civil Justice Reform laid the foundation for mediation as a means to resolve disputes.

Since 2010, each party to the dispute is required to file a mediation certificate with the court confirming that it is willing to attempt mediation. Otherwise, the party must explain in detail why it refuses to do so.

The Case for Mediation

The advantages of using mediation to resolve a dispute include its confidentiality, the without-prejudice exchanges between parties, its cost-effectiveness and flexibility, preservation of relationships, and the avoidance of stress and uncertainties.

Launched in 2007, the New Insurance Mediation Pilot Scheme aims at resolving disputes relating to employees' compensation and work-related personal injuries. Under the scheme, the injured are encouraged to settle their disputes with the defendants (mainly insurers on behalf of the employers) by mediation, which is less adversarial, less costly, less time-consuming and less formal. Disputants are also free to determine their most desirable outcomes, whereas in court, the judge will decide for them irrespective of whether they like the decision or not.

Unsurprisingly, when the scheme was assessed in November 2011, it was reported that it had successfully helped resolve 34 disputes cases, 25 through direct negotiation and nine by mediation.

Since then, the use of mediation to resolve these disputes has been more frequently adopted by disputants. Some may say that the disputants now have no option but to at least try to have their disputes mediated, fearing that they may have to shoulder the burden of adverse legal costs for not doing so under the existing legal system.

Be that as it may, mediation does help by putting the claimants and defendants in one room and providing at least a forum for them to talk or, more often, to argue in the presence of an impartial mediator. Hence, mediation is sometimes treated as the final attempt to resolve a dispute prior to embarking upon tedious and painful civil litigation.

Reaping the Benefits

From my experience, construction is undoubtedly an industry more prone to serious personal injuries than others.

Given the daily accidents at construction sites across Hong Kong, the compensation-recovery process has been both time-consuming and complicated, involving the employment of expert medical practitioners and consultants, lawyers with specific knowledge of tort claims, and so on.

Engaging these experts will certainly increase the cost to effect settlement of employees' compensation and work-related injury claims. Since adopting mediation to help resolve these disputes, the backlog of unresolved disputes has fallen substantially and the injured have received their compensation faster than through litigation. Mediation also achieves certainty as disputants are free to decide whether to accept any settlement proposal suggested by either party or even by the mediator.

Both defendants and claimants are now more receptive to the idea of resolving their differences through a neutral third party.

They also appreciate the expediency, savings in legal costs and finality of mediation after the execution of a settlement agreement that documents and formalises the agreement reached to settle their differences.

Claimants no longer have to wait for years before the settlement amounts - if there is still any left after legal and expert costs, among other expenses - could be received from the defendants.

Stanley Lo is vice-chairman of the Construction Mediation Interest Group of the Hong Kong Mediation Council, as well as a chartered quantity surveyor and chartered builder, and a solicitor of the High Court of Hong Kong SAR

The information contained in this article should not be relied on as legal advice and should not be regarded as a substitute for detailed advice in individual cases. If advice concerning individual problems or other expert assistance is required, the service of a competent professional adviser should be sought.