Ian Cocking is a “very well-regarded lawyer” who excels in a range of high-value contractual and contentious issues across the construction sector. – Who’s Who Legal: Thought Leaders Hong Kong 2020
It has been noted that mediation is increasingly being used to resolve construction disputes. Why do you think this is the case?
Hong Kong was an early adopter of mediation in construction contracts, following its use in the new airport projects in the 1990s. It initially met with some notable successes, but over time its effectiveness and, therefore, popularity seemed to wear off markedly, despite the fact that mediation was eventually included in every major standard form of contract, sometimes even as a condition precedent to arbitration. My sense, though, is that mediation is going through a renaissance. The reasons are the same as ever: namely, that a settlement reached through a successful mediation is infinitely preferable to the time and costs involved in a major construction arbitration (of which there are always plenty of bad examples), and better for repeat relationships between the clients and contractors. However modern construction mediation requires careful preparation. Above all it must be set up to succeed by building sufficient trust in the process to persuade the parties to invest serious time and money in a timetable for exchanging detailed technical information, which is far longer than the mediation period envisaged by the contract.
What would you say is driving the current uptick in PPPs in Hong Kong? What impact will this have on the construction industry?
After the early tunnel projects, PPP struggled to establish itself as a procurement method in Hong Kong, due largely to the wealth of the government. However in recent times we have seen an uptick – for example, the $32 billion Kai Tak Sports Park project is a 25-year design, build and operate contract, which incorporates a 50,000-seat stadium. I was legal adviser to the government and the key issue was not the initial construction finance, which was provided by the government, but the operational expertise to ensure the long-term success and vibrancy of the project. Several PPP projects are now in progress or planned, for example, by West Kowloon Cultural District Authority. Again, operational experience will be a key component.
You recently established your own boutique firm. Why did you decide to do this? How did the experience meet your expectations?
We saw a real opportunity in the market for an independent firm specialised in construction. Up to now construction expertise has largely been the province of big international firms. We aim to offer the same services to quality clients, with far more flexibility and an eye to deeper, longer-term relationships. Our clients have found us efficient and responsive, and there is a strong element of personal service that is disappearing from corporate firms. We have managed to attract some leading contractors and sub-contractors on the contentious side, and a number of employers on the project side. Significantly, we have also managed to attract good young lawyers who are starting to see strong career potential, a good working environment and greater autonomy.
What impact has the political situation in Hong Kong had on the market and your practice?
The primary impact has been in relation to filibustering in the Legislative Council, as a result of which more than 90 projects dating back several years are still awaiting financial approval. If there is insufficient public work, the construction industry will hit serious issues. The government needs to start a “new ideal”-style infrastructure programme as one of its main responses to the economic downturn.
How have you managed to retain international construction and dispute resolution work being a boutique firm?
In fact we owe a lot to our professional colleagues in other firms and around the region for their kind references and referrals, as well as our good reputation in the market. In particular, large firms with conflict issues have been able to recommend us for referrals in Hong Kong, and Chinese firms have been keen to discuss how we can assist their clients with Hong Kong projects and international arbitration disputes for Chinese contractors seated in Hong Kong.
What does the future of Hong Kong’s construction landscape look like with the government seeking to rebuild Hong Kong’s image as a travel destination?
We remain confident that a likely response to the economic downturn will be major public works and infrastructure. The third-runway project is virtually doubling the size of the airport. Hong Kong’s infrastructure is famed the world over, but there is no redundancy left, and some areas are significantly stretched. For example, most road tunnels are only dualcarriageway and traffic generally is a major concern; parts of the mass transit railway (MTR) are at capacity, and four new lines are being planned by the MTR. Significant hospital and housing work is under way.
What impact has the Commission of Inquiry in Hong Kong had on your practice and the market?
The Commission of Inquiry has fuelled a large number of enquiries from clients who are concerned about regulatory issues in general, as well as increased problems obtaining statutory approvals. The level of conservatism has markedly increased and public agencies have become even more reluctant to accept innovation.
To what extent will Hong Kong continue to thrive as an attractive jurisdiction for legal work?
Hong Kong as a commercial arbitration centre will continue to thrive. On the construction side, virtually all domestic construction disputes have now been resolved by arbitration. Over time our work on international projects/disputes has steadily grown, and this is bound to continue considering that most projects still use standard-form contracts that are ideally suited to English/Hong Kong law.