Effect of apologies on insurance cover Insurance policies often contain clauses prohibiting the admission of fault by an insured without the insurer’s consent. In practice, to date, insurers in Hong Kong tend to agree apologies only in limited circumstances (for example where there has been a clear breach). In complex claims in particular, insurers are likely to counsel against (early) “without prejudice” apologies. The fear that making an apology would adversely affect the apology maker’s insurance cover was identified by the Steering Committee as a real and significant barrier to apologies in Hong Kong. Clause 10 of the Apology Law removes this barrier by providing that an apology will not void or affect insurance cover, compensation or other benefit for any person in connection with the insurance. It matters not if the policy in question is governed by another law: if Hong Kong is the place of the litigation, tribunal or regulatory proceedings, the apology will be protected and insurance cover will not be affected. This again highlights the desire of the legislature to make Hong Kong a popular venue for dispute resolution. Insurance companies, regardless of the substantive law covering their contracts of insurance/indemnity, should take clause 10 on board. Effect of apologies on limitation periods Under the Limitation Ordinance (Cap 347), certain rights of action relating to land, personal property, and debts are deemed to accrue on the date of acknowledgment. Clause 9 of the Apology Law states that apologies will not constitute acknowledgements of rights of action for tolling purposes under the Limitation Ordinance (Cap 347). Again, parties and lawyers should be cognisant of this development. In keeping with other provisions, it focuses on reducing perceived disincentives to offering apologies, by extending time for limitation purposes. In Canada, detailed legislation was required to address tolling for the purposes of its apology laws and it will be interesting to see whether this light touch amendment causes any issues in practice or results in satellite litigation. Interplay with mediation and without prejudice negotiation The Apology Law forms part of the government’s policy to encourage the wider use of mediation to resolve disputes. The law does not directly impact mediation, where apologies, admissions and all other statements are already protected from admissibility in other proceedings by confidentiality provisions under the Mediation Ordinance (Cap 620). This is reinforced by the common law doctrine of without prejudice privilege, which protects mediation and without prejudice negotiations. The Apology Law is really of most relevance outside of the mediation/without prejudice negotiation context in that it makes otherwise open and admissible statements automatically inadmissible. It is possible that, in making such an apology, the parties proceed on a more conciliatory footing rendering them amenable to mediation. It will certainly be interesting to see whether there is an uptick in mediation in light of the Apology Law. Conclusion In becoming the first jurisdiction in Asia to enact apology legislation, the law may help to further enhance Hong Kong’s position as a centre for international dispute resolution in the Asia Pacific region. Apologies certainly can enhance the chances of settlement, when made in the right circumstances and at an appropriate time. Research showing the efficacy of apologies in reducing subsequent legal suits is most prevalent in healthcare and personal injury disputes. The challenge for Hong Kong will be to ensure that this potentially powerful law (particularly for defendants) is adequately promoted and understood by all stakeholders to the dispute resolution community. The government is planning certain education activities in this regard.