Developing LawTech in line with APEC’s objective

The Chief Executive outlined the development of LawTech in her 2018 Policy Address. In my speech delivered at the Ceremonial Opening of the Legal Year 2019, I also highlighted that the use of technology in the provision of legal services is an important area of development. Further to the establishment of the “LawTech Fund” and the “COVID-19 Online Dispute Resolution (ODR) Scheme” under the Anti-epidemic Fund, the Department of Justice (DoJ) is going to actively explore the development of the “Hong Kong Legal Cloud” to enhance the capability of the profession to harness modern technology in the provision of legal dispute resolution services as announced in this year’s Policy Address.

We share the same objective with international bodies on the promotion of the use of LawTech. At the global level, we are fully aware that a number of international and regional organisations have already been putting forth and adopting ODR service. As pointed out by the United Nations General Assembly in 2016, ODR “can assist the parties in resolving the dispute in a simple, fast, flexible, and secure manner, without the need for physical presence at a meeting or hearing".

According to a recent study by the Asia-Pacific Economic Cooperation (APEC) Business Advisory Council, 94% of micro-, small- and medium-enterprises (MSMEs) reported that dispute resolution was one of the greatest challenges they face when trading across borders. Since 2017, the APEC’s Economic Committee has been looking into the issues and put forward a work plan for developing a cooperative ODR framework.

Against this background, APEC’s Economic Committee, chaired by a DOJ counsel, endorsed the APEC Collaborative Framework for Online Dispute Resolution of Cross Border Business-to-Business Disputes (APEC ODR Framework) in August 2019 to encourage MSMEs in tapping ODR for negotiation, mediation and arbitration for business-to-business disputes. The ultimate goal is to develop an online platform to resolve low-value disputes across borders, which will be vital for MSMEs.

The outbreak of the pandemic has caused significant disruptions to the international supply chain. Loss of business due to social distancing and other anti-pandemic measures would lead to serious cashflow issues if MSMEs are withheld payment due to disputes, endangering their survival. When face-to-face dispute resolution has been rendered ineffective under the pandemic, there is a pressing need for MSMEs to resolve disputes in a time-efficient and cost-efficient manner. An ODR platform will overcome geographical barriers and save huge amounts of time and costs.

In April, Hong Kong has opted into the APEC ODR Framework, joined by more and more APEC economies. The APEC Economic Leaders jointly issued a declaration on 20 November 2020 that, “we recognise the need for continued structural reforms to improve the ways of doing business and unleash economic prosperity for our people, including accelerating cooperation on digital literacy and skills development to harness technological transformation, and encouraging the use of digital technology to resolve cross-border business-to-business disputes.” In line with the APEC ODR Framework, we launched the COVID-19 ODR Scheme back in June.

The DoJ will continue to explore measures to further promote the use of LawTech. The suggestion of developing the Hong Kong Legal Cloud aims to provide secure, reliable and affordable data storage services for the local legal and dispute resolution sector, in collaboration with an efficient and cost-effective platform to resolve disputes for MSMEs, with a view to keeping pace with global changes and manifesting Hong Kong’s capacity in the area of LawTech.

December 2, 2020