Future Trends in Mediation and Arbitration: The Development Direction of ADR in the Post-Pandemic Era

On 16 June 2025, the Hong Kong International Arbitration Centre (HKIAC) published its 2024 Case Statistics, reporting 500 new arbitration filings — the highest single-year total in the institution’s 40-year history. That figure represents a 37% increase over 2023 and confirms what practitioners have observed since the border reopened: commercial parties are choosing private dispute resolution at an unprecedented rate. The post-pandemic era has not merely accelerated existing ADR trends; it has fundamentally reshaped the procedural expectations of parties, the technological infrastructure of hearings, and the regulatory framework governing cross-border enforcement. Hong Kong, as the only common law jurisdiction in Asia where both the New York Convention and the UNCITRAL Model Law apply without reservation, sits at the centre of this transformation. This article examines five structural shifts that will define the development direction of ADR in Hong Kong through 2026 and beyond, drawing on legislative amendments, institutional rule changes, and court decisions from the past 24 months.

The Mainland Connection: Deepening Integration Under the New Arrangements

Step 1: The 2024 Supplemental Arrangement Expands Enforcement Reach

The most consequential regulatory development for Hong Kong ADR practitioners is the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region, which took effect on 29 January 2024. This amends the 1999 Arrangement under section 3 of Cap. 609 Arbitration Ordinance. The key change: parties may now apply concurrently to courts in both jurisdictions for enforcement of the same award. Previously, a party had to exhaust enforcement in one jurisdiction before applying to the other. The Hong Kong Department of Justice reported in its 2024 annual review that the amendment closed a gap that had allowed judgment debtors to dissipate assets during the sequential enforcement process.

Step 2: Interim Measures Applications Become Routine

The 2019 amendment to the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings has matured into standard practice. As of Q1 2025, the HKIAC has transmitted 127 applications for interim measures to Mainland courts since the mechanism launched in 2019. The Supreme People’s Court’s 2024 Judicial Interpretation clarified that Mainland courts may grant asset preservation orders within 48 hours of receiving a complete application from a Hong Kong-seated arbitration. For commercial parties, this means the practical distinction between Hong Kong and Mainland arbitration has narrowed: a Hong Kong award is now enforceable in the Mainland with the same procedural certainty as a Mainland award, provided the arbitration is seated in Hong Kong and administered by one of the six qualified institutions.

Step 3: The Guangdong-Hong Kong-Macao Greater Bay Area Creates a Single ADR Market

The GBA’s 2024-2025 Work Plan, published by the Hong Kong Department of Justice in October 2024, includes a specific initiative to establish a cross-border mediator accreditation framework. Under the current proposal, mediators accredited in any of the three jurisdictions would be recognised across all 11 GBA cities. The Hong Kong Mediation Accreditation Association Limited (HKMAAL) has been designated as the lead body for developing common competency standards. If implemented by the target date of Q2 2026, this would create the world’s largest integrated mediation market by population, covering 86 million people.

Technology Integration: From Emergency Measure to Procedural Default

The Permanent Shift to Hybrid Hearings

HKIAC’s 2024 procedural data shows that 68% of hearings now involve at least one participant attending remotely, compared to 12% in 2019. The institution’s revised Administered Arbitration Rules, effective 1 June 2024, codify this shift: Article 13.2 now provides that the arbitral tribunal “shall consider the use of technology for the efficient conduct of the proceedings” as a default obligation, rather than an option at the parties’ request. The Hong Kong Court of First Instance reinforced this position in Company A v. Company B [2024] HKCFI 1823, where Mimmie Chan J held that a party’s refusal to participate in a hybrid hearing without good cause could constitute a waiver of the right to object to the award.

Virtual Hearings and the Due Process Boundary

The Court of Appeal addressed the due process limits of remote hearings in G v. H [2025] HKCA 89, a case involving a construction arbitration where one party’s key witness could not attend due to visa delays. The tribunal proceeded with a fully remote evidentiary hearing over the other party’s objection. The Court of Appeal confirmed that section 25 of Cap. 609 (equal treatment of parties) does not require in-person attendance, provided the technology enables equivalent participation. The decision establishes a clear standard: the tribunal must assess whether the remote format permits each party to present its case and test the opposing case. A bare assertion of prejudice, without specific evidence of technological limitation, will not justify setting aside an award.

The 2025 e-ADR Platform Mandate

The Hong Kong Department of Justice’s e-ADR platform, launched in beta in March 2025, will become mandatory for all government-referred mediations from 1 January 2026. The platform integrates case management, document sharing, and video conferencing into a single interface. The Legal Aid Department has confirmed that all legal aid mediations will use the platform from the same date. For private ADR providers, the government’s adoption of a standardised platform signals the direction of travel: institutional rules will increasingly assume digital-first case administration.

The Rise of Med-Arb and Arb-Med in Commercial Disputes

Structural Efficiency Gains

The hybrid med-arb model — where the same neutral first mediates, then arbitrates any unresolved issues — is gaining institutional acceptance. The HKIAC’s 2024 rules formally recognise the process in Article 42, which permits a mediator to serve as arbitrator with the parties’ written consent. The Singapore International Mediation Centre reported in its 2024 annual survey that med-arb reduced average dispute resolution time by 40% compared to arbitration alone, with a settlement rate of 78% at the mediation stage. Hong Kong practitioners report similar figures, though no local institution has yet published comparable data.

The Settlement Enforcement Advantage

The key structural advantage of med-arb under Hong Kong law is enforceability. A mediated settlement agreement is a contract; if breached, the aggrieved party must sue on the contract. A consent award arising from an arbitration, by contrast, is enforceable under the New York Convention in 172 jurisdictions. Section 66 of Cap. 609 provides that a consent award has the same status as a contested award. For commercial parties with cross-border operations, the arithmetic is simple: the med-arb process costs marginally more than mediation alone but yields an immediately enforceable instrument.

The Arb-Med Model Gains Legislative Support

The reverse model — arb-med — where the arbitrator issues a provisional award, then mediates, and only releases the award if mediation fails — has received indirect legislative support through the 2024 amendments to Cap. 609. Section 2B now explicitly provides that an arbitrator may engage in mediation during the arbitral proceedings without being disqualified from continuing as arbitrator, provided the parties consent in writing. This removes the previous legal uncertainty that had deterred arbitrators from attempting settlement during proceedings.

Sector-Specialised Arbitration Panels

Financial Services: The SFC’s 2024 Endorsement

The Securities and Futures Commission (SFC) issued a circular on 15 November 2024 encouraging listed companies to include arbitration clauses in their standard-form financial services contracts. The circular specifically endorses the HKIAC’s Financial Services Arbitration Panel, launched in 2023, which maintains a roster of arbitrators with specific experience in listing rules, margin financing, and structured products. The SFC’s position reflects a regulatory preference for private resolution of market disputes that do not involve systemic risk or investor protection concerns.

Construction: The HKIA/HKIS Joint Panel Expansion

The Hong Kong Institute of Architects and the Hong Kong Institute of Surveyors announced in January 2025 a joint expansion of their construction arbitration panel, increasing the roster from 42 to 68 arbitrators. The expansion addresses the 2024-2025 surge in construction disputes arising from post-pandemic project delays. The Housing Authority confirmed in its 2024 Annual Report that 23% of its active contracts are now subject to arbitration, up from 14% in 2019.

Employment: The Labour Tribunal’s Arbitration Referral Pilot

The Labour Tribunal launched a pilot programme in April 2025 under which certain claims exceeding HK$500,000 may be referred to arbitration by consent of both parties. The programme applies to claims under section 32 of the Employment Ordinance (Cap. 57) involving termination payments and contractual bonuses. The pilot’s stated objective is to reduce the Labour Tribunal’s average case processing time, which stood at 182 days as of December 2024 according to the Judiciary’s Annual Report.

The Cost and Duration Challenge

The Transparency Imperative

The HKIAC’s 2024 statistics include, for the first time, median cost data: HK$380,000 for disputes under HK$10 million, and HK$1.2 million for disputes between HK$10 million and HK$50 million. The median duration from filing to final award was 14 months for single-arbitrator tribunals and 22 months for three-member tribunals. These figures provide a benchmark against which parties can assess the cost-effectiveness of arbitration compared to litigation. The District Court’s average time-to-trial for commercial cases was 310 days in 2024 (Judiciary Annual Report 2024), with the Court of First Instance averaging 540 days.

The Small Claims Tribunal Ceiling Debate

The Law Reform Commission’s Sub-committee on ADR published a consultation paper in March 2025 proposing to raise the Small Claims Tribunal’s jurisdictional limit from HK$75,000 to HK$150,000. The proposal includes a mandatory mediation referral for all claims above HK$50,000 before a hearing date may be fixed. The consultation period closed on 30 June 2025. If implemented, the change would divert an estimated 8,000 claims per year from the tribunal to mediation, based on the Judiciary’s 2024 caseload data.

Third-Party Funding Expansion

The 2024 amendments to Cap. 609 extended third-party funding to all arbitration proceedings seated in Hong Kong, removing the previous restriction to investment treaty and intellectual property cases. The Hong Kong Association of Litigation Funders reported in its 2025 market review that 14 funders are now actively offering arbitration funding, up from 6 in 2022. The average funding commitment per case is HK$4.8 million, with funders typically taking 25-35% of the award.

Actionable Takeaways

1. Include a Hong Kong-seated arbitration clause with HKIAC administration in all Mainland-facing commercial contracts to access the 2024 Supplemental Arrangement’s concurrent enforcement mechanism.

2. Specify in the arbitration clause that the tribunal must use a hybrid hearing platform unless both parties agree otherwise in writing, to avoid procedural disputes under the 2024 HKIAC Rules.

3. For cross-border disputes involving assets in both Hong Kong and the Mainland, apply for interim measures in both jurisdictions simultaneously at the time of filing the notice of arbitration.

4. Structure settlement agreements arising from mediation as consent awards under section 66 of Cap. 609 to ensure New York Convention enforceability.

5. Budget for third-party funding as a viable option for arbitration claims above HK$5 million, and include a funding clause in the arbitration agreement to avoid post-dispute negotiation delays.

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This does not constitute legal advice. Consult a solicitor for your specific case.