DISPUTE RESOLUTION

Managers must be aware of their own needs

and constraints to choose the best alternative
to litigation.

2
There are two fundamental types of formal
third-party interventions:
 Arbitration
 Mediation

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 Mediation

is an informal process in
which a third-party
assists others to reach a
negotiated settlement.
 NO POWER

The mediator has

no power to decide
the dispute
 Two Key Ideas
about Mediation

1) Focus on Interests
not positions

2) Improve the
communication
Josh Stulberg’s Mediation Model

B egin the discussion

A ccumulate information
D evelop the agenda & discussion strategies
G enerate movement (options)
E scape to private meeting(s)
R esolve the conflict
 ADVANTAGES

* faster than litigation

* less expensive than litigation
* informal compared to litigation
* parties select the neutral
* parties determine the outcome
* non-binding until agreement is reached
* opportunity to vent emotions
* creative solutions are possible
* private
* confidential
* parties decide who participates
 DISADVANTAGES

* one party can refuse to mediate

* can't make legal precedent
* discovery is non-existent or
limited
* may still need adjudication
* difficult if there is a power
imbalance
When to use mediation
 The parties need to be open to receiving help—a
phenomenon known as ripeness
 The parties participate voluntarily—they are not
forced to enter into the process
 The mediator must be acceptable to all the
parties to the dispute

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Three general stages:
◦ Prevention of conflict
 Intervention prevents conflict from occurring
◦ Resolving conflict
 Conflicts that have emerged are managed
◦ Containing conflict
 Ongoing conflicts that are a challenge to resolve
are contained

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 Arbitration resolves a disagreement by having a
neutral third party impose a decision
 There are several forms of arbitration
◦ Voluntary arbitration –parties are not required to
comply with the decision
◦ Binding arbitration—parties are required to comply
with the decision
◦ Interest arbitration—a new contract is submitted
◦ Grievance arbitration—refers to decisions about the
interpretation of existing contracts

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 finaland binding
 formal than mediation
 faster than mediation
 hearing are private
 awards are confidential
 remedies are fixed by law
 very limited appeal rights
 one party wins; one party loses
 unlikely to reach creative
solutions
 Some of the decisions are not justifiable and
one of the parties is not happy with the
outcome of the judgement.
 The parties may also stipulate the following
matter in the arbitration clause:
1. the place of arbitration and hearing
2. the language of the arbitration
3. the number of arbitrations
4. the nationality of arbitrators
5. the method of selection of arbitrators
6. the applicable law of the contract
7. the application of ordinary procedure or
summary procedure.