Chapter 4 Chapter Business & Consumer Law

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Marketing and Consumer Studies
MCS 3040
Joseph Radocchia

Chapter 4 Dispute Resolution Resolving Disputes through negotiations Clarification of the situation  First step managers must take with a conflict is to investigate situation to determine the nature & extent of the dispute  Manager should contact individuals involved in his own organization and the appropriate people on the other side of the dispute t clarify the situation before making a resolution Negotiation: A process of deliberation and discussion used to reach a mutually acceptable resolution to a dispute  Goal is to reach a fair and acceptable outcome without having to use more formal processes  Would not be proper method in some cases such as when insurance covers the risk that is the subject of the dispute. Any attempt by the business to negotiate privately may jeopardize the coverage  Many provinces have passed “apology legislation” where apologies cannot be used in court as admission of fault o liability or to impair insurance coverage The negotiation process Whether negotiations succeed depends on numerous items such as…  The willingness of the parties to compromise or negotiate w/ good faith  The nature/significance of the dispute  The priority the parties give to its resolution  The effectiveness o those involved in the negotiations When Negotiations Fail  In majority of disputes, parties reach settlement informally, often without involvement of lawyers  When this happens, business scan either cut its losses or risk expenditure o time & money on litigation Alternative Dispute Resolution Alternative Dispute Resolution (ADR): A range of options for resolving disputes as an alternative to litigation How ADR Works  Every dispute is theoretically able to be resolved through 1 or more forms of ADR but depends on nature of relationship between the involved and the particular circumstances Most likely to be successful when…  The parties both want to reach compromise and settle dispute  Both parties want to maintain relationship  The parties need a quick resolution of minor problems as they arise in an ongoing action  The dispute is complicated therefore litigation would be expensive  The dispute involves emotionally charged issues that parties with to keep private  ADR is suitable for any type of law and has worked effectively in types of legal disputes such as commercial or contract matters, personal injuries, real estate, franchise, employment matters etc. ADR Sources  Businesses should anticipate the possibility of a dispute arising and may include dispute resolution process as part of their agreements for the purpose of diverting these potential disputes away from litigation  If parties don’t agree in advance on ADR, they can do so later on  Some industries have recognized that they need to provide customers with a means of submitting and resolving complaints about the quality of goods and services provided Some Negatives…  Process doesn’t always produce a resolution so time & money invested is wasted and will still have to proceed to litigation  Long term concern that widespread use of ADR will lead to diminished openness and accountability of the legal system. B/c of ADRS emphasis on avoiding litigation it has resulted in fewer trials and even a loss of support skills by lawyers. The Litigation Process  Litigation should not be undertaken without an understanding of its potentially adverse consequences  Court backlogs have made system slower to access and can seriously harm commercial relationships by prolonging disputes for years  Litigation is a slow, expensive & risk ridden process and should only be deployed when all other feasible options have failed and the claim cannot realistically be abandoned  A crucial set of rules affects litigation in each province by establishing specific time periods for commencing legal action Class Actions: A lawsuit launched by one person who represents a larger group of people whose members have similar claims against the same defendant Limitation Period: The time period specified by legislation for commencing legal action  Vary widely, depending on the nature of the lawsuit and the province in which the litigation will occur  Ontario has recently set a basic limitation period of 2 years for civil litigation  Some provinces have exceptions to proceed after limitation period if good explanation of delay but standard rule is that right to sue is lost after certain period of time  Commercial litigation (private or civil litigation) costs of bringing matter to court is borne by the litigants (accusers) while any recovery of compensation comes from losing par
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