Case Studies

Humanistic approach creates pragmatic settlement

Mediation is an alternative dispute resolution process with humanistic elements. Beyond the legal frontier, human factors may also have to be considered in the dispute resolution process. An independent and impartial mediator assists the involved parties to identify the underlying causes of the conflict and to consider the situation of the other party. With frank exchanges of the parties’ concerns and needs, a pragmatic settlement plan can be came up eventually.

Quite often, a party in dispute refusing to budge an inch may not be purely on the basis of grounds, but on some other reasons behind …

Foreign based Closed-end fund

Mr. Ho subscribed to an U.S.-based closed-end fund through and under the advice of a small-sized asset management company in Hong Kong (“Company B”) when his first child was born 5 years ago. The objective of his investment was to seek moderate capital appreciation within the acceptable risk levels to finance his child’s study abroad after high school. However, the fund was wound up five years later when he realized that the risk level of the fund was not as low as what had been described during the selling process. He then lodged a complaint to Company B.

However, Company B was unwilling to settle the dispute with the view that the whole selling process was conducted in a proper manner and all the necessary information about the fund, including the risk level involved, was clearly disclosed and explained. Mr. Ho then lodged an application to FDRC for mediation.

The mediator assisted Mr. Ho to identify his actual loss in this investment and encouraged both parties to understand their needs and concerns.  Through the communication process, Mr. Ho realized that Company B was financially incapable to make any monetary compensation within a short timeframe, whilst Company B understood Mr. Ho’s financial needs for his child’s overseas study plan in the future.

Eventually, the two parties agreed to settle the matter with an option which had considered the financial difficulties of Company B for the time being and the monetary need of Mr. Ho in the later years.  Both parties appreciated the efforts of mediator and recognized mediation as an effective way in resolving their dispute.

 

(The case study above is based on an actual FDRC case. Various information including names of claimant, financial institution and its staff, actual claim and settlement amount have been altered to protect confidentiality.)

 

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