Costs, Judicial Discretion and the Encouragement of ADR in Hong Kong
David Levin QC (2009) July Asian Dispute Review
Court rules across the Common Law world reflect that, until recently, a party rejecting a proposed settlement offer usually bears little risk of an adverse costs order unless the offer exceeds the judgment or award ultimately obtained. Is this a sensible approach? The new court rules in Hong Kong provide an excellent opportunity for courts to follow current English practice and encourage and support the adoption of a sensible negotiating position by parties to litigation. A high-handed rejection of a low but not obviously unreasonable offer which unreasonably stymies further ADR endeavours should put the rejecting party at risk of losing all or part of the costs even if it does ultimately obtain more than the offer.