The Ladder of Dispute Resolution

I had the pleasure of speaking to American University's Intro to Law Class recently, led by Professor Matthew Pascocello.  As an icebreaker, we began with three role play exercises. Sandy and Al have broken up and they need to divide up their stuff, including a TV and DVD deck. Eight student volunteers participated (three Sandys, three Als, an arbitrator, and a mediator). The first role play was a negotiation with no third party, the second was an arbitration with the addition of an arbitrator, and the third was a mediation with the addition of a mediator. The purpose of the role plays is not to teach the students how to negotiate, arbitrate, or mediate, but rather to experience the differences and to understand that each process can produce a different outcome.
 
I also discuss in my remarks the differences between negotiation, mediation, arbitration, collaborative law, and litigation, as well as how to address emotion in cases that are highly charged. Last, I talk about the importance of being prepared in advance for a dispute that may arise by thinking about what method of dispute resolution should be used. Put specific language in business and employment contracts and prevent disputes from escalating by the use of interest based negotiation. Should a dispute intensify, I recommend that mediation be used to resolve and settle the dispute rather than adversarial methods.

Here is a summary of what I like to call the ladder of dispute resolution:

Mediation

• Confidential and voluntary
• A neutral mediator facilitates communication
• Use of interest-based negotiation (Fisher and Ury) includes: (1) separate the people from the problem, (2) focus on interests, not positions, (3) invent options for mutual gain,  (4) insist on objective criteria, and know your BATNA (Best Alternative to a Negotiated Agreement)
• The parties are empowered throughout the process to control the outcome
• Each party identifies the issues, brainstorms solutions to each issue, and evaluates each solution
• Assemble team of advisors to help as needed, such as a financial neutral/analyst, therapist, real estate appraiser, accountant, lawyer, health insurance broker
• Joint decisions are reached on each issue
• The mediator drafts an agreement based on these joint decisions
• Each party has a right to consult with an attorney throughout the process and to review the agreement
• Once signed, the agreement is binding
• Emotions are acknowledged and validated
• $-$$

 
Arbitration

• Arbitrator is an expert in a field/industry
• Parties choose an arbitrator
• Traditional courtroom rules of evidence do not apply
• Determine the rules of the arbitration
• Arbitrator makes a final binding decision
• After each party presents his/her case, arbitrator writes opinion/award
• No appeal right, even when the arbitrator makes a mistake (custody exception)
• Parties have no control over process/outcome
• $$-$$$

 
Collaborative Law

• Each party hires an attorney trained in collaborative practice
• Attorney advice is transparent
• Attorneys and clients meet all together
• Parties agree to no litigation
• Attorneys are disqualified from future litigation in this case
• Possible team with other collaborative professionals (mental health professional/financial neutral)
• Full disclosure
• Clients decide outcomes
• $$$-$$$$

Litigation

• Parties hire litigation attorneys
• Interim issues are decided in court
• Trial dates are set
• Formal discovery/expert witnesses/deadlines and cutoffs
• Rules of evidence apply
• Adversarial process
• Public (unless in Juvenile Court)
• Parties have no control over the process/outcome
• Judge makes decision/enters order
• Less detail than a negotiated settlement
• Appealable
• High psychological cost
• Can take months/years
• Use of adversarial/competitive negotiation tactics include: (1) use of threats and ultimatums, (2) apply time pressure, (3) flinch at proposals, (4) ask for more than you expect to get, and (5) provide distorted facts that are beneficial to competitor
• $$$$-$$$$$