Prevention, Management & Resolution of Disputes: Resolution (Part 2)
Dispute resolution is often a multistep process that can start with negotiation, move on to mediation, and, if necessary, end in arbitration or litigation. In fact most legal processes these days will include a component of mediation in the early stages of the claim or alternatively the parties may be required to sign an undertaking that they have used reasonable endeavours to resolve the matter prior to commencing the proceedings.
Using a progressive approach to dispute resolution allows parties to start off with less-expensive, less-formal procedures before making bigger commitments of money, effort and time.
Still, there may be situations in which it may be better (or you may have no option such as an impending statute of limitations) to litigate first and then aim for a settlement, rather than starting with a more collegial process.
Sander and Rozdeiczer suggest choosing the right dispute resolution method by answering the following three questions about the situation you are faced with.
QUESTION 1: “What are my goals?”
Simply knowing what you want to get out of the process can help you decide where to start. Begin by prioritizing your goals.
For example, if a person wished to reach a custody agreement with their former spouse as quickly and inexpensively as possible but ensure they both abide by the agreement, it would be wise that they decide the final outcome together. Given these goals, mediation may be the best choice for this dispute. Mediation is typically faster and cheaper than arbitration or litigation, and mediation also gives parties the greatest degree of control over the final outcome.
By contrast, if a person who feels that they are the victim of age discrimination by their former employer and they have the primary goal of obtaining a large financial settlement it may be wise to start with arbitration. However, if they also want to set a legal precedent that could benefit others in their situation, they may litigate instead. In both instances, this person would do well to listen closely to their lawyer’s assessment of their prospects of success and the likely outcomes that they may be able to achieve.
QUESTION 2: “Which process will capitalize on the best features of the dispute?”
Every dispute has features that can help you reach a beneficial outcome. Which process will best trigger the strengths of the case?
Typically, the feature of a dispute that lend themselves well to mediation include
a good relationship between parties and their lawyers or representatives,
opportunities for creative problem solving, the willingness of one or both sides to apologise for any mistakes or wrongdoing,
eagerness to settle quickly, and
the presence of multiple issues that might lead to trade offs.
If your dispute has one or more of these characteristics, mediation may be the best choice for you.
By contrast, if you would benefit from formal protections, such as enforcement of key decisions, then arbitration or litigation might be a more fitting option.
Suppose that Company A believes Company B is guilty of infringing on one of its patents. Even if mediation resulted in Company B agreeing to stop manufacturing the product in question, Company A might not have confidence that Company B would abide by the decision. Because it believes it has a strong case, Company A may decide to bypass mediation and arbitration and go straight to litigation.
QUESTION 3: “Which process will best overcome barriers to resolution?”
As you try to answer this final question, you should keep in mind that both sides to a dispute often prefer a settlement to an arbitrator, judge, or jury’s binding win-lose decision. Thus, it helps to focus on the ability of the three different dispute resolution methods to help you overcome barriers to settlement.
In particular, when parties are having trouble communicating and have a strong desire to air their feelings, mediation is often the best choice.
However, when parties have different opinions regarding the law affecting their case, an arbitrator’s or a judge's expertise may ultimately be needed.
The low-risk and relatively low cost nature of mediation can make it a highly attractive options for most disputes. Mediation allows negotiators to work together toward maximizing their outcomes under the guidance of an expert, rather than handing over their dilemma for someone else to resolve on their behalf. Mediation can also be a beneficial choice when negotiators need to work with each other in the future.
If a mediator is unable to help you and the other side reach agreement, you may still need to turn to litigation or arbitration, but you will do so with a better understanding of your case and the issues at stake.
We have years of experience in helping businesses avoid, manage, and negotiating their way through disputes and if necessary mediating or litigating them. We specialise in providing clarity and confidence to business operators. If you have a dispute or a negotiation you need assistance with contact us and benefit from our knowledge and experience.
 Harvard Negotiation Law Review, Spring 2006. Article: Matching Cases And Dispute Resolution Procedures: Detailed Analysis Leading To A Mediation-Centered Approach Frank E. A. Sander, Lukasz Rozdeiczer