Hong Kong’s Legislative Council recently passed a bill that encourages the use of apologies as a means of settling disputes. Under the bill an apology does not constitute an admission of fault or liability and is not admissible in evidence, but can still provide a cost-efficient way to ease tensions and resolve disputes for parties to a construction dispute.
Apology laws have been enacted in more than 50 jurisdictions, including Canada, England and Wales, the US and Australia, although the extent of protection that the apology law provides varies between jurisdictions.
In New South Wales the apology regime “applies to civil liability of any kind” with the exception of some civil liabilities such as intentional acts done with the intent of causing injury or death. In the Northern Territory on the other hand, the apology law is confined to civil actions for personal injury. In a construction context this could mean that under Northern Territory law an apology for negligence in design work would only be protected and excluded from evidence if the negligence had resulted in personal injury.
Apology laws also vary in the extent to which they protect admissions of fact. This will affect, for example, whether an entire letter of apology is excluded from evidence, or whether certain parts of the letter are found to be admissible because they constitute admissions of fact.
Under the Hong Kong bill for example the definition of “apology” includes “a statement of fact in connection with the matter”, so the protection will cover statements of fact. However, the bill also contains an exception stating that “if in particular applicable proceedings there is an exceptional case (for example, where there is no other evidence available for determining an issue), the decision maker may exercise a discretion to admit a statement of fact contained in an apology as evidence in the proceedings, but only if the decision maker is satisfied that it is just and equitable to do so, having regard to all the relevant circumstances.”
Finally, insurance contracts often include a clause that prohibits an admission of fault by the insured party without the insurer’s consent. To overcome this, the Hong Kong bill says that an apology “does not void or otherwise affect any insurance cover, compensation or other form of benefit”. Similar protection does not exist under the Australian apology laws.
Research has shown that apologies can alter perceptions of the dispute and the disputants, improve expectations of future conduct and the relationship between the parties, change negotiation aspirations and fairness judgments, decrease negative emotion and increase willingness to accept an offer of settlement.
Even in a sector like the construction industry, driven by the bottom line, feelings of injustice and anguish often cause people to want to bring proceedings, despite it not being the best economic decision. An apology can help achieve settlement more quickly and amicably because, while a monetary payment in damages can compensate for financial losses, it cannot compensate for feelings of injustice. Particularly, where settlement becomes more likely an apology may push parties closer to accepting a compromise in circumstances where they would not otherwise.