Private Family Adjudication (“PFA”) is a form of alternative dispute resolution which takes place outside the court but within the court sanctioned process. To have a financial issue resolved under PFA, parties enter into an agreement under which they appoint a suitably qualified person (an adjudicator) to decide a dispute concerning finances. The parties agree to be bound by the written decision of the adjudicator (Decision).
At the moment, PFA only applies to financial disputes.
Parties who wish to adopt PFA to their resolve their financial disputes will need to follow the procedure set out in the Hong Kong Judiciary Practice Direction SL9.
The law of Hong Kong SAR applies to all PFA and the parties are not permitted to apply a different law to the adjudication. Any agreement which seeks to apply a different system of law will not be approved by the Family Court
In Hong Kong, the Institute of Private Family Adjudicators (HK) was created to support PFA. The Institute has a list of adjudicators who have been trained and have passed the accreditation process. https://www.ipfahk.com/
Like many of the other forms of alternative dispute resolution, PFA offers the benefit of speed, flexibility, and permits the parties to choose their preferred decision maker. This naturally can lead to an increase in costs for the parties and parties will need to consider this against the other benefits that PFA can bring.
The adjudicator has powers to make decisions on any case management or substantive issues on which the parties cannot agree, such as:
(i) the scope and ambit of the adjudicators powers, including interpretation, construction and application of the IPFA(HK) Rules, the PFA Agreement, the Court Order and PDSL9
(ii) Decide the issues to be resolved in the adjudication.
(iii) Decide on the evidence required, the amount of disclosure, written submission and if an oral hearing is required
(iv) Decide on the time table for the filing of evidence and submissions
(v) Permit the parties to adduce expert evidence or appoint single joint expert on any matters in issue, including but not limited to foreign law, valuation, calculations, forensic accounting, in the same manner as the High Court or the Family Court
At the conclusion of the arbitration the arbitrator will issue a decision which is the equivalent of a final judgment on that issue. The Decision is binding on the parties. The parties will then need to prepare a consent summons for the court’s approval, setting out the orders in the same or similar terms of the decision.
If the parties or one of the parties do not wish to be bound by the Decision, they will need to explain those reasons to the court.
The court retains the final discretion to make the decision into enforceable orders and the parties cannot agree to exclude the court’s power. Since the court has endorsed the PFA procedure as an alternative dispute resolution option, it is highly likely that the court will endorse the decision made by the adjudicator.