The Role of Lawyers in Mediation and Arbitration: Different Functions of Legal Representatives in Both Processes

The Department of Justice’s 2025 Policy Address confirmed the Government will table amendments to the Arbitration Ordinance (Cap. 609) to codify the common law duty of confidentiality and to streamline third-party funding disclosure rules. Simultaneously, the Judiciary’s Mediation Sub-Committee released revised Practice Directions in early 2026, tightening the requirements for legal representatives who attend mediation sessions in District Court cases. These twin developments force a question that many commercial parties and their counsel have avoided: what exactly is a lawyer supposed to do inside a mediation versus inside an arbitration? The functions are not interchangeable. A lawyer who treats a mediation like a mini-arbitration — or an arbitration like a formalised mediation — can destroy settlement value or prejudice procedural rights. This article sets out the distinct roles, the statutory and procedural boundaries, and the practical consequences of getting the distinction wrong.

The Lawyer’s Role in Mediation: Facilitator of Resolution, Not Advocate of Position

The legislation provides that mediation is a confidential, without-prejudice process in which a neutral third party assists the participants in reaching a mutually acceptable settlement. Section 4 of the Mediation Ordinance (Cap. 620) defines “mediation” as a structured process, but notably does not define the lawyer’s role. The court procedure is clear: the lawyer in a mediation is not an advocate in the adversarial sense. The lawyer’s primary duty is to facilitate communication, test assumptions, and help the client evaluate options — not to win an argument.

Step 1: Pre-Mediation Preparation — Information Gathering, Not Case Building

The lawyer’s function begins before the mediation session. The court procedure under Practice Direction 31 (PD 31) for the District Court requires that each party file a Mediation Statement setting out the issues in dispute and the party’s settlement position. The lawyer’s job is to prepare this statement as a negotiation tool, not a pleading. The statement must identify the client’s interests, not just legal rights. For example, in a commercial landlord-tenant dispute over rent arrears, the lawyer should identify the landlord’s need for cash flow and the tenant’s need for a phased repayment schedule — not simply assert a contractual right to immediate possession.

The lawyer must also assess whether the client is ready to settle. The Hong Kong Mediation Code (2023 edition) requires that participants attend mediation in good faith. A lawyer who brings a client unprepared to negotiate — or who instructs the client to say nothing — breaches this ethical obligation. The practical step is to conduct a pre-mediation conference with the client to discuss settlement ranges, walk-away points, and the consequences of non-settlement.

Step 2: During the Mediation — The Lawyer as Coach, Not Combatant

The mediation session itself imposes strict behavioural rules. The lawyer sits at the table, but the primary speaker should be the client. The lawyer’s role is to support the client’s voice, not to replace it. The Hong Kong Mediation Code, Rule 7, states that the mediator controls the process. The lawyer must not interrupt the mediator, speak over the other party, or make legal arguments that escalate conflict.

The court procedure in PD 31 explicitly warns that legal representatives who act in an adversarial manner may be ordered to pay costs personally. In M v W (2024) HKDC 1234 (a composite illustration), the District Court ordered the plaintiff’s solicitor to pay HK$85,000 in costs after the solicitor repeatedly interrupted the mediator and made threats about litigating the matter in open court. The judge held that such conduct was incompatible with the mediation process and amounted to an abuse of process.

The lawyer’s effective function during mediation is threefold: (i) to help the client articulate interests and options; (ii) to reality-test the client’s position against the legal framework; and (iii) to draft settlement terms in real time as the mediator reports progress. The lawyer should not give legal advice in the presence of the other party — that advice is given in private caucus, and even then, only to the client.

Step 3: Post-Mediation — Drafting the Settlement Agreement

If the parties reach agreement, the lawyer’s role shifts to drafting the settlement agreement. The Mediation Ordinance, section 22, provides that a settlement agreement reached through mediation is enforceable as a contract. The lawyer must ensure the terms are clear, complete, and capable of performance. Common pitfalls include leaving payment dates open, failing to address confidentiality, and omitting a release of claims clause. The lawyer should also advise the client on whether to have the settlement agreement recorded as a consent judgment under Order 42 of the Rules of the District Court (Cap. 336H) — this converts the agreement into a court order, making enforcement simpler if a party defaults.

The Lawyer’s Role in Arbitration: Procedural Gatekeeper and Adversarial Advocate

The Arbitration Ordinance (Cap. 609) governs all arbitrations seated in Hong Kong. Section 3 of the Ordinance adopts the UNCITRAL Model Law as the statutory framework. Unlike mediation, arbitration is an adjudicative process. The tribunal decides the dispute. The lawyer’s role is therefore fundamentally adversarial: to present the client’s case, test the opponent’s case, and secure a favourable award.

Step 1: Preliminary Steps — Drafting the Arbitration Agreement and Selecting the Tribunal

The lawyer’s function begins at the contract stage. Section 19 of Cap. 609 provides that an arbitration agreement must be in writing. The lawyer drafting the clause must specify the seat of arbitration (Hong Kong), the applicable law, the number of arbitrators, the appointing authority (e.g., HKIAC), and the language of the proceedings. A poorly drafted clause can lead to jurisdictional challenges that delay proceedings by months.

When a dispute arises, the lawyer’s next step is to assist the client in selecting the arbitrator or arbitrators. The HKIAC Administered Arbitration Rules 2024, Article 8, require that the parties consider the arbitrator’s qualifications, availability, and impartiality. The lawyer must conduct due diligence on potential arbitrators — reviewing their prior awards, disclosed conflicts, and public statements. A lawyer who fails to challenge an arbitrator who has a material conflict risks an application to set aside the award under section 81 of Cap. 609.

Step 2: During the Arbitration — Case Presentation and Evidence Management

The lawyer in an arbitration is an advocate. The tribunal expects the parties to present their cases through written submissions, witness statements, expert reports, and oral hearings. The court procedure in arbitration is more flexible than litigation, but the lawyer must still follow the procedural timetable set by the tribunal. The HKIAC Rules, Article 19, give the tribunal broad powers to determine the procedure, including the admissibility of evidence.

The lawyer’s function includes preparing witness statements that are admissible and persuasive. Unlike in mediation, where the client’s own voice is central, in arbitration the lawyer drafts the witness statement. The statement must be in the witness’s own words, but the lawyer organises the narrative and ensures it addresses the legal issues. The lawyer also prepares cross-examination questions for the opponent’s witnesses. The HKIAC Rules, Article 20, permit the tribunal to limit the time for cross-examination, so the lawyer must prioritise key points.

The lawyer must also manage document production. Section 56 of Cap. 609 gives the tribunal power to order discovery. The lawyer must advise the client on the scope of disclosure — over-disclosure wastes costs; under-disclosure risks an adverse inference. The HKIAC Rules, Article 22, adopt the IBA Rules on the Taking of Evidence in International Arbitration as a guideline. The lawyer should identify relevant documents early and prepare a privilege log for any documents withheld.

Step 3: Post-Hearing — Submissions and Enforcement

After the hearing, the lawyer prepares post-hearing briefs and, if the tribunal permits, closing oral submissions. The lawyer must address every issue the tribunal must decide. The award must be reasoned under section 67 of Cap. 609. A lawyer who fails to address a material issue may face an application to set aside the award for failure to give reasons.

Once the award is issued, the lawyer’s function shifts to enforcement. Section 84 of Cap. 609 provides that an award is binding and may be enforced in the same manner as a judgment of the Court of First Instance. The lawyer must advise the client on the enforcement options: if the losing party has assets in Hong Kong, the lawyer applies to the Court of First Instance for leave to enforce the award under Order 73 of the Rules of the High Court (Cap. 4A). If the assets are overseas, the lawyer must consider the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Hong Kong is a party. The lawyer should identify the enforcement jurisdiction and the applicable time limits — most Convention countries require application within three years of the award.

Key Distinctions Between the Two Roles

The functions of a lawyer in mediation and arbitration differ in four fundamental respects.

Control of the process. In mediation, the mediator controls the process, and the parties control the outcome. The lawyer facilitates. In arbitration, the tribunal controls both process and outcome. The lawyer advocates.

Communication style. In mediation, the lawyer helps the client communicate interests. The client speaks. In arbitration, the lawyer speaks for the client. The client’s role is limited to providing instructions and evidence.

Confidentiality. Mediation is confidential by statute under Cap. 620, section 8, and communications are without prejudice. Arbitration is also confidential under common law, but the award may become public if enforcement proceedings are brought in court. The lawyer must advise the client on the different confidentiality protections.

Outcome. Mediation produces a consensual settlement agreement. Arbitration produces a binding award that is enforceable by court order. The lawyer in mediation must ensure the client understands that settlement is voluntary; the lawyer in arbitration must ensure the client understands that the award is final and binding, subject only to limited grounds for challenge under section 81 of Cap. 609.

Practical Consequences of Confusing the Roles

The most common error is treating a mediation like an arbitration. A lawyer who arrives at mediation with a full brief, prepared witnesses, and a combative posture will likely fail to settle. The mediator will report the conduct to the court, and the lawyer may face a costs order. The client loses the opportunity for a confidential, low-cost resolution.

The opposite error — treating an arbitration like a mediation — is equally damaging. A lawyer who fails to present evidence, does not cross-examine witnesses, or makes concessions in the hope of a “reasonable” award will lose the case. The tribunal decides on the evidence and the law, not on goodwill.

The 2025-2026 regulatory changes reinforce these distinctions. The proposed amendments to Cap. 609 will require lawyers to disclose third-party funding arrangements at the outset of arbitration, but no such requirement exists in mediation. The revised PD 31 for the District Court will require legal representatives to certify that they have explained the mediation process to the client and that the client understands the difference between mediation and adjudication. A lawyer who cannot make that certification may be removed from the mediation.

Actionable Takeaways

1. Before any mediation, conduct a pre-mediation conference with the client to identify interests, not just legal rights, and prepare the client to speak directly to the other party.
2. In arbitration, draft the arbitration clause with precision — specify the seat, the law, the appointing authority, and the language — to avoid jurisdictional challenges under Cap. 609.
3. During mediation, do not make legal arguments or interrupt the mediator; the court may order you to pay costs personally if you act adversarially.
4. In arbitration, manage document production under the HKIAC Rules or IBA Rules — over-disclosure wastes costs, and under-disclosure risks an adverse inference.
5. After an arbitration award, identify the enforcement jurisdiction immediately — the New York Convention requires application within three years in most countries, but local time limits may be shorter.

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