Dispute Resolution Methods

Study Notes

Dispute and Dispute Resolution

A dispute arises when there's a conflict relating to the benefit of the parties, resulting from a breach of contractual obligations and disagreement on the breach.
Dispute resolution methods include negotiation, mediation/conciliation, arbitration, and court/litigation.

Why Alternative Dispute Resolution (ADR)?

ADR is cheaper and quicker than going to court.
Many people fear the court process, including giving evidence, the risk of losing, long duration, and taking place in public.

Roles of 3rd Party

In negotiation, no third-party involvement occurs, and both parties directly communicate with each other.
In mediation and conciliation, a third party helps facilitate the discussion and transmission of proposals.
In arbitration, a third party makes a binding decision.

Negotiation

Features of negotiation include:
- Low cost (no need to pay for a third party)
- Speed of resolution (both parties know the situation and concentrate on the problem)
- Confidentiality
- Flexibility (time, place, and no formal procedure)
- Fairness (win-win situation)
- Ability to allow the parties' business relationship to continue

Documents in a Claim

A complaint letter includes:
- Name and address of the parties to the dispute
- Objects of the claim (contract no., order no., B/L no., etc.)
- Specific matters requested to be settled
Evidence, such as pre-claim letters, may be necessary.

Mediation/Conciliation

Mediation involves a third party transmitting and interpreting proposals between the disputing parties.
Conciliation is similar, but the conciliator sometimes advances independent proposals.
Mediation and conciliation aim to help parties come to their own conclusion/agreement.
Mediation vs. Conciliation: in mediation, the solution is reached and agreed upon by the parties, while in conciliation, the conciliator proposes solutions.

Mediation/Conciliation Limitations

Mediation/conciliation is not applicable when:
- Both parties are not willing to mediate/conciliate
- Parties do not need to continue their relationship
- There is a great imbalance of power between parties
- Overwhelming emotions control
- There is a previous history of broken promises

Mediation/Conciliation Benefits

Maintains and restores business relationships
Resolves disputes cost-efficiently
Provides party autonomy and flexibility
Is a private and confidential process

Description

This quiz covers the basics of disputes, including the definition of a dispute, the conditions for a dispute to arise, and the different methods of dispute resolution such as negotiation, mediation, arbitration, and court litigation.