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Result of consultancy review on Pilot Mediation Scheme released

The Development Bureau today (October 8) announced the results and recommendations of the consultancy review on the Pilot Mediation Scheme in Support of Property Owners Affected by Compulsory Sale under the Land (Compulsory Sale for Redevelopment) Ordinance carried out by Versitech Limited of the University of Hong Kong. Following the recommendations in the consultant's report, the Pilot Mediation Scheme will be wound down.

Under the Pilot Mediation Scheme, both minority owners and majority owners involved in compulsory sale applications to the Lands Tribunal can seek mediation service under the Scheme at a fee. Elderly minority owners who pass a means test will also be eligible for financial subsidy for their share of the mediator fee under the Scheme.

In March 2013, after a pilot run for more than two years, the bureau commissioned Versitech Limited to conduct a comprehensive review of the Scheme to ascertain the suitability of the scope of service, its effectiveness and the way forward.

The following are the major findings and conclusions of the consultancy review:
 
(a) Historical mission served: The Scheme has served its historical mission in better informing the public, in particular the affected minority owners, on mediation as an alternative dispute resolution mechanism to hearings at the Lands Tribunal for settling disputes in compulsory sale cases.

(b) The Scheme is no longer cost-effective due to changing circumstances: The Scheme was introduced at a time when there was an upsurge in compulsory sale applications in 2011. Given the change in circumstances, to carry on the Scheme in its present form might not be cost-effective. Both the information cost and the operational cost of mediation have become lower in recent years.

(c) Mediation helps facilitate negotiation but may not be the most effective means in settling disputes in compulsory sale: Most cases are withdrawn or discontinued due to the majority owners' successful negotiations with the minority owners after the submission of compulsory sale applications, likely with revised acquisition price offers.

(d) Low incentive to engage in mediation: Unlike parties engaged in mediation of another nature, minority owners in a compulsory sale case have no motivation to maintain a continuous relationship with the majority owners. The absence of this social incentive has made successful mediation more difficult. As reflected in the statistics of mediation attempts reported to the Lands Tribunal, only a small percentage of owners had made use of the mediation service under the Scheme.

(e) Mediation service can continue to be provided by the Joint Mediation Helpline Office: The Joint Mediation Helpline Office, which has been commissioned to operate the scheme administration and consultancy service of the Pilot Mediation Scheme since 2011, is capable of continuing the mediation service for compulsory sale cases outside the framework of the Scheme.

(f) Low utilisation of financial assistance to eligible elderly minority owners: The number of affected elderly minority owners who applied for financial assistance under the Scheme was small. Some majority owners were found to be prepared to provide financial subsidy to the minority owners, regardless of their age and means.

(g) Availability of mediators: With training courses organised over the past three years, there are now 225 mediators who are trained to mediate in compulsory sale cases.

(h) Focused publicity and public education: The Government has a role to continue to educate minority owners on mediation in compulsory sale. Instead of general publicity, the future publicity and public education should be more focused in identifying and approaching the minority owners.

Based on the above findings and conclusions, the consultancy has made the following three recommendations:

(a) Government funding for the provision of administration and consultancy service for mediation in compulsory sale cases as well as financial assistance to eligible elderly minority owners should no longer be necessary;

(b) Government funding for the training and accreditation of mediators should no longer be necessary; and

(c) Government funding for publicity and public education should continue and should be subject to better performance monitoring.

"We are pleased to note that the consultancy has affirmed the contribution of the Pilot Mediation Scheme and its service provider, the Joint Mediation Helpline Office, in better informing the public on mediation as an alternative dispute resolution mechanism in compulsory sale over the past three years," a spokesman for the bureau said.

"In the light of the findings of the consultancy, we agree that the Scheme has served its historical mission. We have decided to wind down the Scheme but will continue to provide financial support to eligible elderly minority owners and continue with a publicity and public education programme on mediation in compulsory sale cases in a more focused manner," the spokesman continued.

Upon the discontinuation of the Pilot Mediation Scheme, the Joint Mediation Helpline Office, which has been commissioned as the service provider for the Pilot Mediation Scheme in the past three years, will continue to provide mediation information, co-ordination and referral services for compulsory sale cases in its own capacity as an umbrella organisation comprising membership of the eight leading professional institutions providing mediation service in Hong Kong. Mediation service is also available from accredited mediators in the open market.

Despite the low utilisation of financial assistance to eligible elderly minority owners, the bureau will carry on with the provision of financial assistance for another year through the Senior Citizen Home Safety Association, which is providing outreach support service to elderly owners under another current support programme targeted at elderly owners affected by compulsory sale. The bureau will review the publicity and public education arrangements for mediation in compulsory sale cases and adopt a more focused approach.

In January 2011, with a view to enhancing support for minority owners who are affected by compulsory sale of their properties under the Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545) and the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage Order) Notice, the bureau commissioned the Joint Mediation Helpline Office to operate a Pilot Mediation Scheme to assist minority owners in engaging in mediation to settle their disputes with the majority owners arising from compulsory sale prior to hearings at the Lands Tribunal. As part of the Pilot Mediation Scheme, the Joint Mediation Helpline Office also ran related publicity, public education and training programmes.

The Joint Mediation Helpline Office was jointly founded by the Hong Kong Mediation Council, the Hong Kong Bar Association, the Law Society of Hong Kong, the Chartered Institute of Arbitrators (East Asia Branch), the Hong Kong Institute of Arbitrators, the Hong Kong Institute of Architects, the Hong Kong Institute of Surveyors and the Hong Kong Mediation Centre in 2010. It was set up as a non-profit-making organisation with a view to promoting the use of mediation as a means of dispute resolution in Hong Kong.

The Final Report and the Working Paper of the Consultancy Review on the Pilot Mediation Scheme in Support of Property Owners Affected by Compulsory Sale under the Land (Compulsory Sale for Redevelopment) Ordinance are available on the website of the Development Bureau (http://www.devb.gov.hk/en/issues_in_focus/urban_renewal/index.html).


Ends/Wednesday, October 8, 2014
Issued at HKT 15:00

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