conflicts, disputes & adr · the nature of disputes a dispute is a class or kind of conflict...
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Conflicts, Disputes & ADR
Financial Ombudsman Institute:
Increasing Public Confidence
and Enhancing Financial Mediation
Norair Babadjanian
Erebouni Hall
Yerevan
ARMENIA
8 April 2010
The Nature of Conflicts
Uncontained conflict may manifest itself in verbal and behavioural disagreements and ultimately in violence;
Because of the potential violence in uncontained conflict it is often condemned;
Conflict is an integral part of human behaviour, and there could be no change or movement without it;
Decision-making necessarily contains an element of conflict;
Exchange of ideas involve conflict; Any democratic process is built on the basis
of the normalcy of a conflict of ideas and interests
The Nature of Disputes
A dispute is a class or kind of conflict which manifests itself in distinct and justiciable issues;
It involves disagreement over issues capable of resolution by negotiation, mediation, litigation, or third party adjudication;
The question of “dispute” is relevant, e.g., where an arbitration or other dispute resolution provision in a K provides that “disputes” are to be referred to arbitration or any other stipulated process;
If no dispute exists, then a party wishing to enforce any aspect of the K may do so through the courts; if a dispute does exist then the specified process must be followed;
Nota Bene: If a party to an arbitration agreement commences legal proceedings through the court against any other party to that agreement in respect of any matter agreed to be referred to arbitration, the latter may apply to the court proceedings (in that event the court is required to stay the proceedings unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed)
Classification of Disputes International – including matters of public law; Constitutional, administrative and fiscal – involving
issues relating to citizenship and status rights, local authorities, governmental and quasi-governmental bodies, planning permission, taxation, and social security;
Organisational – including issues arising within organisations involving management, structures and procedures, and intra-organisational disputes;
Employment – including pay claims and industrial disputes;
Corporate – including disputes between s/h, and issues relating to liquidation and receivership;
Commercial – very wide and includes K’ual disputes, issues arising in commercial relationships such as partnerships, JV’s and others (to include banking, shipping, commodities, IP, construction and many others);
Classification of Disputes
Consumer – between supplier and consumer;
Property – landlord/tenant, or joint tenants, rent reviews, boundary disputes, etc.;
Tort – including negligence and failure of duties, to include insurance claims;
Separation and divorce – children, property, and all related financial matters;
Trusts – issues between trustees and beneficiaries;
Neighbourhood, community, gender, race, and ethnic issues;
Interpersonal disputes arising between individuals
Nature of Issues
Disputes may relate to money and be quantifiable, or may relate to rights, status, reputation or any other aspect of commercial or personal behaviour, and may involve various kinds of issues, including:
1. Issues of fact;
2. Issues of law;
3. Technical differences experts on each side;
4. Differences of perception of fairness, concepts of justice and morality, culture, values, and attitudes
ADR
Alternative Dispute Resolution or “ADR” is a range of procedures that
serve as options to litigation through the courts for the
resolution of disputes generally involving the intercession and
assistance of a neutral and impartial third party
Dispute Resolution Outline
It was a precept of Roman Law that it was in the interest of the state to see an end to litigation;
ADR processes preserve or enhance personal relationships that might otherwise be damaged by the adversarial process;
Parties using ADR processes tend to arrive at settlements that are more creative, satisfactory, and lasting than those imposed by the court;
ADR can be used simply to establish a deal that eludes the parties in bilateral negotiations either in person or through their lawyers
Dispute Resolution Procedures
The dispute resolution processes (traditional and alternative) can be divided into three primary categories:
1. Negotiation (process in which a party has the most personal power and decision-making authority with regard to the terms on which the dispute is resolved);
2. Mediation;
3. Adjudication (process in which a party has the least personal power and decision-making authority with regards to the terms on which the dispute is resolved, inasmuch as the determination of the dispute is placed in the hands of a third party, who makes the binding decision)
All dispute resolution processes, both traditional and ADR, fall somewhere within the following continuum, -
Dispute Resolution Procedures The three primary processes and their “hybrid”
combinations can probably be divided into two main categories:
Adjudicatory processes (where the third party neutral makes a binding determination of the issues);
Consensual processes (where the parties retain the power to control the outcome and any terms of resolution);
Within the consensual category, parties may be assisted in arriving at an agreed resolution in various ways, - some purely facilitative, others may involve the neutral in helping the parties to evaluate the issues or the proposed terms of settlement;
The main dispute resolution processes (both traditional and ADR) would broadly fall as follows, starting from the processes offering least control to the parties and moving to those which offer greatest control, -
Dispute Resolution Procedures Litigation: the neutral is a judge, district judge, master or other
official appointed by the court to make a binding determination (parties have least control + third party neutral has most power + procedural rules are prescribed);
Private judging: where this procedure has been adopted, the court refers the case to a referee chosen by the parties to decide some or all of the issues, or to establish any facts (similar to litigation + parties can choose the neutral + can agree to simplify procedures);
Arbitration: the neutral privately chosen and paid by the disputants, makes a binding determination, with procedural rules may be statutory or imposed by an arbitral organisation (similar to litigation, but parties have more say in agreeing choice of third party neutral and procedural rules);
Contractual adjudication: in some industries, such as construction, a neutral adjudicator is required by K or by statute to make summary binding decisions on K’ual disputes without following litigation or arbitration procedures (similar to arbitration, but procedure and neutral’s decision may be more summary)
Dispute Resolution Procedures
Administrative or statutory tribunals: binding adjudication based on statutory requirements, such as establishing rent levels, compensation awards or social security benefits through tribunals and appeal tribunals (as for litigation, but the procedures are supposed to be more informal);
Expert determination: parties appoint expert to consider issues and make a binding decision or appraisal without necessarily having to conduct an enquiry following adjudicatory rules (as for arbitration, but procedure accords with K’ual instructions given by the parties to the expert);
Med-Arb: neutral acts as mediator, and if the parties cannot agree, becomes an arbitrator to make a binding determination, with variations giving parties rights to opt out of this process in some versions (as for mediation during the first stage, but if parties are bound to the arbitration phase then the next stage may be viewed as for arbitration + in some versions a different person may arbitrate in the second stage)
Dispute Resolution Procedures Court-annexed arbitration: in some jurisdictions this arbitration is not
binding, but may become binding if neither party appeals, in other jurisdictions arbitration through the court is immediately binding (where the award is not initially binding but may become so, this is almost a half-way process between binding and non-binding processes, but where it is binding right away, it is the same as arbitration);
Neutral fact-finding expert: neutral expert is appointed by the parties to investigate issues of fact, technicality, or law, produces a report, helps toward settlement, and if agreed, the report may be used in adjudication (if the neutral’s role is to produce a report that all parties accept, this gives neutral great power, but if, more commonly, the report is non-binding, then it still has authority + the neutral may also be given a mediatory role);
Ombudsman: independent neutral deals with public complaints against maladministration; also used in certain sectors such as legal and financial services; can investigate, criticise and publicise, and sometimes can award compensation (degree of party control depends on terms of reference of individual ombudsman; usually power is in the hands of the neutral; sometimes compensation award allows one party freedom to choose acceptance or not)
Dispute Resolution Procedures Evaluation: independent neutral makes an evaluation of the case,
usually its merits or some aspect, which is not binding on the parties but helps them in their decision-making (this falls into the category of non-binding evaluative processes; power remains with the parties, but neutral can influence them by evaluating);
Early neutral evaluation (ENE): a form of evaluation in which neutral evaluator makes an early assessment of the merits to help parties narrow and define issues, and helps promote settlement efforts (as for evaluation);
Mini-trial (Executive Tribunal): lawyers for the parties present their cases to a panel comprising the parties and a neutral, with latter helping to clarify the issues and evaluate the merits, and who may also have a mediatory role; no binding determination is made, but the process helps the parties evaluate their cases more realistically (as for ENE, but here the parties form part of the evaluating panel and have slightly more control);
Summary jury trial: this is a US adaptation of mini-trial; instead of a single neutral, the case is presented to a mock jury which makes a mock (non-binding) determination (as for ENE, but there is no single expert to influence the parties, rather a mock jury panel to give them guidance how a real jury might decide the case)
Dispute Resolution Procedures Negotiation through representatives: no neutral involved;
representatives of each party negotiate with one another with the parties retaining power (parties retain control over outcome but little control over process, which is in hands of representatives);
Mediation with evaluation: neutral has no authority to make any decisions, uses skills to assist parties to negotiate settlement terms and arrive at their own resolution; evaluative element means neutral and may express some view on merits of issues (as for evaluation, but neutral’s primary role as facilitator means that any evaluation is less likely to diminish parties’ control);
Mediation (facilitative): as for evaluative mediation save that neutral does not evaluate (parties retain power, not directly influenced by neutral in decision-making);
Negotiation (by parties personally): no neutral involved; parties negotiate directly with each other (parties have control over process and outcome; maximum power)
Ombudsman
Originally established in Sweden in early 19th century;
An independent person whose role is to deal with public complaints against administrative injustice and maladministration, with the power to investigate, criticise and make issues public;
Has no power to alter a decision when a complaint is found to be justified, but may persuade the relevant department or authority to alter its decision or pay compensation to the complainant
Ombudsman
Does not fall strictly within the ADR ambit, b/c deals with examination of grievances rather than the resolution of disputes;
Since the role includes investigative and mediatory functions it may properly be included under the broad heading of ADR
