Among the dozens of dispute resolution processes that exist today, there are a number of relatively new pre-dispute and pre-escalation processes that can be used to prevent disputes before they become so intractable that they have to be dealt with through traditional ‘resolution’ processes. These processes are most effective when instituted proactively, at or near the beginning of a relationship.
The philosophy behind these processes can be illustrated by the following expressions: “It usually costs less to avoid getting into trouble than to pay for getting out of trouble” (Professor Lewis Brown, 1950). “An ounce of prevention is worth a pound of cure”. “A stitch in time saves nine”. “Fortune favours the prepared mind”. “Fix the problem, not the blame”. “Be prepared”. “Be proactive, not reactive”. “The highest and best form of dispute resolution is dispute prevention”.
These processes are all practical, common-sense practices and techniques, invented by users of dispute resolution services. They acknowledge that problems and unexpected events are likely to occur in any relationship, and they are based on such principles as mutual cooperation, collaboration, early attention to problems as soon as they develop, prompt action to deal with problems on a ‘real time’ basis, avoidance of adversarial attitudes, reliance on pre-selected experts, participation in reaching solutions to problems and disputes, and direct party control over the outcome of a dispute.
Here is a list of some typical pre-dispute and pre-escalation processes:
- Realistic allocation of risks, the practice of assigning each risk to the party who is best able to manage, control or insure against the risk.
- Providing incentives to encourage cooperation, to encourage parties to act cooperatively and focus on achieving legitimate joint goals.
- Identifying potential causes of disputes, so the parties can select appropriate processes for preventing, controlling and de-escalating the development of disputes.
- Partnering, a team-building effort to establish cooperative working relationships.
- Direct negotiations and step negotiations, whereby the parties themselves deal directly with each other to solve problems.
- Ombuds, an individual appointed to investigate complaints by employees, clients or constituents, independently and impartially.
- Standing neutrals and dispute review boards: A jointly-appointed trusted neutral person or group of individuals, selected by the parties to assist them with problems throughout their relationship, who can, if necessary, achieve a ‘real time’ resolution of any problems or disputes that occur.
Categories of prevention processes
Pre-dispute and pre-escalation processes can be grouped under the following two broad categories, 1. prevention and cooperation techniques that help to avoid problems and disputes; and 2. dispute de-escalation, control, and ‘real time’ resolution techniques to prevent disputes.
Prevention and cooperation techniques that help to avoid problems and disputes.
Realistic Allocation of Risks
Realistic allocation of risks is the practice of balancing the obligations of parties to a relationship by assigning each risk to the party who is best able to manage, control or insure against the risk. If a party to a relationship is saddled with a risk that it cannot handle, this creates resentment and adversarial relationships, and sows the seeds of countless potential disputes. Therefore many problems can be avoided by following this practice.
Providing Incentives to Encourage Cooperation
The practice of providing incentives to encourage cooperation among parties to a relationship helps to prevent disputes from arising. If a party to a relationship has a financial incentive to act cooperatively it is more likely to work in a collaborative way. An example of such an incentive is a ‘bonus pool’ which will be divided among all the participants in a business venture provided they all meet certain defined goals of cooperation and teamwork. The bonus is payable either to everyone or to no one, thus encouraging the participants to support and assist each other by focusing on legitimate joint goals, and subordinating selfish interests for the ultimate benefit of all participants.
Analysis of Potential Sources of Disputes
A joint effort by parties who are about to enter into a relationship to identify likely sources of potential disputes can motivate the parties to develop ways of preventing and controlling disputes. The process involves investigating the kinds of disputes that have been shown to arise typically in similar relationships, analysing the prospective relationship to identify sources of disputes, and considering ways in which to prevent and control those potential disputes.
Partnering is a team-building effort in which the parties, with the assistance of an expert facilitator, commit to achieve mutual goals and objectives and resolve potential problems by establishing cooperative working relationships. It is customarily implemented at the beginning of the relationship by holding a retreat among the key stakeholders in the relationship, establishing a ‘partnering charter’, and periodically renewing the partnering effort with further refresher retreats.
Dispute de-escalation, control, and ‘real time’ resolution techniques to prevent disputes.
Negotiation is a voluntary and usually informal process in which parties identify issues of concern, explore options for the resolution of the issues, and search for a mutually acceptable agreement to resolve the issues raised. Negotiation is different from mediation in that there is no neutral individual to assist the parties negotiate. Negotiation can be a useful adjunct to any other dispute resolution process
Step Negotiations/Issue Elevation
Step negotiations, sometimes called ‘issue elevation’ is a variation of traditional negotiation, using successive levels of negotiation to encourage agreement. The negotiation process is structured so that if the individuals from each party who are most directly involved in a dispute are not able to resolve a problem promptly at their level, their immediate superiors, who are not as closely identified with the problem, are asked to resolve the problem. If they fail, the problem will be passed up to higher management of both parties. Because of an intermediate manager’s interest in keeping messy problems from reaching the desks of upper level managers, and interest in demonstrating to higher management the intermediate manager’s ability to solve problems, there is a built-in incentive to resolve disputes before they reach the highest level.
An ombuds is a third party individual selected by an institution – for example, a university, hospital or governmental agency – to investigate complaints by employees, clients or constituents. The ombuds works within the institution to investigate the complaints independently and impartially. The process is voluntary, private and non-binding.
Standing Neutrals and Dispute Review Boards
A standing neutral is a trusted neutral person or group of individuals appointed by the parties to a relationship, at the beginning of their relationship, to be available to assist the parties throughout their relationship in the ‘real time’ resolution of any problems that occur during the relationship.
The neutral should be known to and respected by the parties, and be in a position to be available on reasonable short notice to provide prompt objective advice to the parties whenever they cannot agree among themselves how to solve a problem. The availability of a respected expert who can administer a ‘dose of reality’ when needed can have a therapeutic effect upon the relationship between the parties.
The mere existence of such a respected person encourages the parties to deal realistically with each other and resolve problems themselves without referring them to the neutral. Experience has shown that when the neutral is required to give advice, the parties, guided by that advice, are usually able to reach a consensual solution to the problem without having to resort to any formal dispute resolution process.
Standing neutrals are known by various names, such as ‘wise person’, ‘mutual friend’, ‘referee’, or ‘interim dispute resolver’, and can come in different forms, such as a ‘dispute review board’ consisting of three neutrals, an ‘initial decision maker’ who closely monitors a relationship, or a ‘standing mediator’, or ‘standing arbitrator’, depending upon the needs of the parties.
Further detailed information about pre-dispute and pre-escalation processes can be found in publications of the Construction Industry Institute, the International Institute for Conflict Prevention and Resolution, The Dispute Review Board Foundation, and the International Association for Commercial and Contract Management.
By James P. Groton, recovering lawyer, arbitrator, and dispute prevention and resolution scholar; Cathy Shanks, ADR professional: and Christi Underwood, former construction contractor, lawyer and arbitrator, now a Florida Circuit Court Judge.