Resolving Dispute through Negotiation
Clarification of the Situation
Negotiation: A process of deliberation and discussion used to reach a mutually acceptable
resolution to a dispute.
When insurance covers the risk that is the subject of dispute, the business is required to
allow the insurer to conduct settlement negotiations.
The Negotiation Process
Whether the negotiations will succeed depends on a number of factors, including the
The willingness of the parties to compromise and negotiate in good faith.
The nature and significance of the dispute.
The priority the parties give to its resolution.
The effectiveness of those involved in the negotiations.
Business Applications of the Law
To proceed or not to proceed with a legal dispute
What further steps are available and how long will they take?
Can the business devote the resources necessary to proceed with the dispute, in terms of
both the commitment and the time of business personnel?
Will a lengthy dispute affect the public profile and reputation of the business?
Is the relationship with the other side valuable?
Will the relationship be harmed, whatever the outcome?
What is the likely cost in terms of legal fees and company time?
Are there worthwhile principles at stake that go beyond the particular dispute?
If the dispute goes to court, what are the chances of winning?
If the court decides in favour of the business, does the other side have the assets to pay the
Alternative Dispute Resolution
Alternative dispute resolution (ADR): A range of options for resolving disputes as an alternative
How ADR Works
Most common forms:
Mediator: A person who helps the parties to a dispute reach a compromise.
Arbitrator: A person who listens to both sides of a dispute and makes a ruling that is
usually binding on the parties.
Binding: Final and enforceable in the courts.
Is in accordance with the Arbitration Act in the relative jurisdiction.
When ADR Works Likely to be successful when:
The parties are interested in considering each other's position with the goal of
achieving a compromise and settling the dispute.
The parties wish to maintain their commercial relationship.
The parties need a quick resolution of minor problems as they arise in an ongoing
The dispute is complicated, meaning the litigation is likely to be costly.
The dispute involves sensitive or emotionally charged issues that the parties wish to
keep private or confidential.
Has worked effectively in these types of legal disputes:
Commercial or contract matters (disputes about payment for goods or the quality
Personal injuries (claims by a customer who slips and falls or who is injured by a
Employment matters (claims of improper dismissal or discrimination)
Environmental protection (application of waste storage regulations)
Trade matters (difficulty with import documentation)
Intellectual property (claims of patent infringement)
Professional/client matters (an accountant's difficulty collecting fees or a client's
complaint about the quality of service)
Partnerships (disagreement by partners on contributions of work or compensati