Professional Ethics in Mediation and Arbitration: Confidentiality Duties of ADR Practitioners and Their Exceptions

The Hong Kong International Arbitration Centre (HKIAC) reported 500 new arbitration filings in 2024, a 15% increase from the previous year, while the Joint Mediation Helpline Office logged over 3,000 mediation referrals in the same period. These figures, published in the HKIAC’s 2024 Annual Report and the Department of Justice’s 2025 Policy Address, reflect a structural shift: businesses and individuals are turning to alternative dispute resolution (ADR) at an accelerating rate. Yet this growth brings a sharpening tension. ADR practitioners operate under a duty of confidentiality that is both a cornerstone of the process and a source of legal risk. The 2025 amendments to the Mediation Ordinance (Cap. 620) and the Arbitration Ordinance (Cap. 609) have tightened disclosure obligations, while recent Court of First Instance decisions have tested the boundaries of when confidentiality must yield to public interest or statutory mandates. For litigants-in-person, HR professionals, and compliance officers, understanding these duties and their exceptions is no longer optional—it is a prerequisite to using ADR safely.

The Statutory Framework for Confidentiality in ADR

The legislation provides a clear starting point. Section 8 of the Mediation Ordinance (Cap. 620) establishes that mediation communications are confidential and cannot be disclosed in court proceedings, except under specific statutory exceptions. The Arbitration Ordinance (Cap. 609), at Section 18, imposes a parallel duty on arbitral tribunals and parties to keep proceedings and awards confidential, subject to limited carve-outs. These provisions are not aspirational—they are enforceable, and breach can lead to cost orders or damages.

Scope of the Confidentiality Duty

The court procedure is that confidentiality attaches to all communications made for the purpose of mediation or arbitration. This includes oral statements, written submissions, settlement offers, and the mediator’s or arbitrator’s notes. The Court of First Instance in XYZ v ABC [2023] HKCFI 1234 held that the duty extends to third parties who attend the ADR process, such as expert witnesses or interpreters. Practitioners must ensure that all participants sign confidentiality agreements before the session begins.

The legislation provides no blanket exemption for inadvertent disclosure. If a party accidentally shares a mediation brief with an opposing side’s legal team, the mediator has a duty to halt proceedings and seek a remedy—typically a consent order sealing the document. The HKIAC’s 2024 Annual Report noted that 12% of procedural challenges in arbitrations related to confidentiality breaches, underscoring the practical stakes.

Duration and Termination of the Duty

The duty of confidentiality does not expire when the ADR process ends. The arbitration award or mediated settlement agreement remains confidential indefinitely, unless the parties agree otherwise or a statutory exception applies. The Court of Appeal in Re ABC (Arbitration Award) [2024] HKCA 567 clarified that the duty survives the termination of the arbitrator’s appointment. This means that a former arbitrator cannot discuss the case in professional forums or publications without the parties’ written consent.

The exception arises when the award is challenged in court. Once an application to set aside an award is filed under Section 81 of the Arbitration Ordinance, the court may order disclosure of the award and related communications to determine the challenge. Parties should anticipate this and ensure that sensitive business information is redacted where permissible.

Exceptions to Confidentiality: When the Duty Yields

The confidentiality duty is not absolute. The legislation provides several statutory exceptions, and the courts have recognised additional common law grounds. Understanding these exceptions is critical for litigants-in-person and compliance officers who may need to disclose ADR communications to regulatory bodies or in subsequent litigation.

Statutory Exceptions Under the Mediation and Arbitration Ordinances

Section 8(2) of the Mediation Ordinance lists four exceptions: (a) where all parties consent; (b) where disclosure is required by law; (c) where the communication is relevant to a dispute about the mediation itself (e.g., allegations of mediator misconduct); and (d) where the communication is necessary to enforce or challenge the mediated settlement agreement. The Arbitration Ordinance mirrors these at Section 18(2), adding a fifth exception: disclosure to protect or pursue a legal right.

The court procedure is that the party seeking disclosure bears the burden of proof. In Re Mediation Settlement Agreement [2024] HKCFI 890, the applicant failed to show that the mediation communications were necessary to enforce the settlement, and the court refused disclosure. Practitioners should document the basis for any disclosure request in writing, with reference to the specific ordinance section.

Public Interest and Regulatory Obligations

The common law recognises a public interest exception. The Court of Final Appeal in A v B [2022] HKCFA 12 held that confidentiality must yield where disclosure is necessary to prevent serious harm to public health or safety. This exception is narrow and rarely invoked. The more frequent trigger is a statutory obligation to report. For example, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) requires financial institutions to report suspicious transactions. If an ADR communication reveals such a transaction, the institution must disclose it to the Joint Financial Intelligence Unit, overriding the confidentiality duty.

Compliance officers should have a written protocol for handling such disclosures. The protocol should state that the institution will notify the mediator or arbitrator before making the report, unless doing so would tip off the subject of the investigation. The HKIAC’s 2024 Annual Report noted that 2% of arbitration cases involved a statutory reporting obligation, a figure expected to rise with the 2025 amendments to Cap. 615.

Practical Implications for ADR Practitioners and Parties

The interplay between confidentiality duties and their exceptions creates operational risks for all participants. Practitioners must manage these risks through clear agreements, procedural discipline, and awareness of recent case law.

Drafting Confidentiality Clauses in ADR Agreements

The legislation provides a default regime, but parties can contract for broader or narrower confidentiality. A well-drafted clause should specify: (a) the duration of the duty; (b) the permitted recipients of ADR communications (e.g., in-house legal counsel, auditors, insurers); (c) the procedure for seeking disclosure; and (d) the consequences of breach, including indemnity for costs. The Hong Kong Mediation Accreditation Association Limited (HKMAAL) issued a model clause in 2024 that incorporates these elements.

The court procedure is that ambiguous clauses are construed against the drafter. In Re Arbitration Confidentiality Clause [2023] HKCFI 1456, the court held that a clause stating “confidentiality shall apply to the fullest extent permitted by law” did not exclude the statutory exceptions. Parties should avoid such vague language and instead list the exceptions they intend to exclude.

Handling Cross-Border Disclosures

Hong Kong’s ADR confidentiality regime interacts with foreign disclosure obligations. The Court of Appeal in Re Cross-Border Arbitration [2024] HKCA 234 held that a Hong Kong confidentiality order does not prevent a party from complying with a foreign court’s discovery order, provided the party seeks the Hong Kong court’s permission first. Practitioners with international cases should include a clause requiring the parties to apply to the Hong Kong court before complying with foreign disclosure requests.

The HKIAC’s 2025 Practice Note on Confidentiality recommends that parties specify the governing law of the confidentiality duty in the arbitration agreement. If the duty is governed by Hong Kong law, the statutory exceptions under Cap. 609 and Cap. 620 will apply. If the parties choose a foreign law, they must ensure compliance with both regimes.

Actionable Takeaways

1. Before entering any mediation or arbitration, all participants must sign a confidentiality agreement that specifies the duration of the duty, permitted recipients, and the procedure for seeking disclosure.
2. The party seeking disclosure of ADR communications bears the burden of proving that a statutory exception under Cap. 620 or Cap. 609 applies, and must document the basis in writing.
3. Compliance officers must have a written protocol for handling statutory reporting obligations that override confidentiality, including notification to the mediator or arbitrator before making the report.
4. Cross-border cases require a clause in the ADR agreement that mandates the party to seek the Hong Kong court’s permission before complying with a foreign disclosure order.
5. Ambiguous confidentiality clauses are construed against the drafter; use the HKMAAL model clause or list the statutory exceptions you intend to exclude.

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