Alternative Dispute Resolution in Financial Markets ― Some More Equal than Others: Hong Kong’s Proposed Financial Dispute Resolution Centre in the Context of Experience in the UK, US, Australia and Singapore

Abstract

Financial dispute resolution centers currently operate in most major financial centers throughout the world. As such centers expand and develop to address a growing number of financial related disputes, they must inevitably address the question of their role and function in financial market regulation. Such questions are rooted in the larger socio-legal dispute processing debate examining how institutional dispute resolution mechanisms effectively regulate the “repeat player” knowledge/power gap through appropriate policies and procedures. Using the example of Hong Kong in comparison with financial dispute resolution models currently in existence in the United Kingdom, Australia, Singapore and the United States, this study finds that the appropriateness of a dispute resolution method is arguably informed by whether it takes on a regulatory or non-regulatory role ― regulatory dispute resolution modes taking on inquisitorial elements may be preferred when displacing the judicial function as they incorporate safeguards for disputants against the discretion of the third party intervener. But even for non-regulatory schemes, inquisitorial elements aimed at addressing the power/knowledge gap including suggesting the provision of information regarding relevant standards and rules, at least as touchstones, may still be incorporated into consensual models of dispute resolution, which aim to ensure a de minimis level of equity and confidence in the process.

Keywords: Financial Dispute Resolution, Comparative Law, Law and Development, ADR, Mediation, Arbitration, Ombuds, Financial Regulation