When disagreements arise, regardless of whether it is in a business, family, civil, or otherwise, the law provides all parties with ways of settling the issue, both in and outside of the court in order to spend less time, money, and energy on the matter, and avail the parties of undue stress.
In this blog, we explore the four main methods of dispute resolution, namely: litigation, arbitration, mediation, and negotiation. We will evaluate the strengths and weaknesses of each approach, and assist you to make the right decision on which approach suits you best.
The law provides for dispute resolution by way of litigation. In civil law, matters typically proceed without a jury, and instead with parties providing written submissions and arguing the matter in court. A judge, or in rare cases a jury, hears both arguments and then makes a ruling in accordance with the applicable law. This process starts when one party, with a complaint against another, starts an action in the relevant court. In what is referred to as the discovery phase both parties investigate, collect facts and submit their material to the court. This then leads to a trial where each party speaks as to their case and submitted materials. Lastly, a master, judge, or justice will assess the submissions of the parties and make a ruling on the case..
A benefit of Litigation is that decisions reached in a court of law rely on legal precedents. This means that if there is a prior case with a similar fact pattern, the court will be expected to rely on the decision established in the prior case. However, while there is an expectation, this does not absolutely bind the courts from deviating from precedent depending on the facts of the case, the law, and equity.
It is worth noting that the Provincial Court of British Columbia has a mandatory pre-trial conference for certain types of cases, such as family and small claims matters, to allow the parties to attempt to resolve their matter without the need for a trial. Similarly, the Supreme Court of British Columbia can also require pre-trial conferences or case planning conferences, at the discretion of the court.
Legal actions and decisions rendered therein are also normally public, and open to the general populace, allowing for transparency. However litigation is often very costly, involving significant legal fees, court fees, and other expenses associated with the trial. It is also a gradual process that may at times span for months or even years before any resolution is reached. The costly and adversarial nature of the process can further develop conflicts or aggravate existing conflicts.
These factors often mean that other methods of resolution are necessary. Arbitration is where an independent third party who is appointed by the parties in a dispute, listens to both sides and makes a final decision. In such settings the parties typically agree to be bound by the decision of the arbitrator before the process starts. An arbitrator is then chosen, being neutral, and with specific knowledge of the relevant area . The arbitrator will preside over a hearing with the parties where the parties produce their evidence and make their cases. Last but not least, the arbitrator pronounces the final, non-appealable decision.
Arbitration in most cases takes less time compared to litigation; it also awards the benefit of privacy, in that, the process, as well as the results are not made public. Arbitrators usually possess specialized knowledge, and as such may be less prone to bias. It should be noted that arbitration costs can still be significant, although generally less than the cost of litigation.
Mediation, on the other hand, is when a neutral third party assists the two disputing parties to reach a mutually acceptable resolution. The process starts first by choosing a mediator who will help in conducting the meeting. The key component during mediation is that the parties have to find common ground and try to find a resolution. It should be noted however that any agreement reached in mediation is not inherently binding, and must be expressed in a contract, signed by the parties.
An advantage of mediation is that the parties control the resolutions to their issues. It is also less expensive in comparison with litigation and arbitration. However, any suggestions put forth by the mediator depend on the mutual consent of the parties. Mediation can still fail in achieving a resolution, in which case the parties can proceed with arbitration, or litigation.
Negotiation is the process in which the parties in the dispute arrive at a resolution directly without any help of a third party. This process consists of negotiations in which proposals/counter proposals are made either directly by the parties, or through their lawyers.
Negotiation comes with the advantage of full control to the two parties, and the process and the result can be tailored by way of compromises, to fit a particular agreement between the two parties. It is also financially efficient as there are no third-party expenses or expensive legal proceedings. However, power imbalances, or greater access to resources by one party may derail the negotiation process and one side may end up overpowering the other. Negotiation can also be unstructured and of low quality due to its informality, in comparison with the other methods of dispute resolution. Also the absence of a presiding third party can delay and hinder results.
In conclusion the four forms of dispute resolution namely litigation, arbitration, mediation and negotiation each has its advantages and disadvantages. Litigation provides fair judged trials that are compulsory and clear, but in return, can take a long time, are costly, and take ownership of the matter away from the parties, in favour of the court.
Arbitration is cheaper, private in nature, the process is shorter. However the main disadvantage is that it is also relatively costly and generally not subject to appeal.
Mediation enables the parties to solve their disputes in a co-operative way and is significantly more cost effective than the other methods, but this form of the resolution depends on the parties’ readiness to compromise.
Negotiation allows a certain level of power and free will yet it is influenced by power inequalities and does not include an impartial view.
The particular circumstances of the dispute decide what method is going to be best suited. Some of these include; the cost of the whole process, how long it will take to complete, the existing relationship between the parties, and whether the solution should be legally binding. Familiarizing yourself with these methods will enable the development of a sound decision making process together with the provision of efficient means of solving conflicts. All the above methods of dispute resolution have been applied and practiced at Sodagar & Co. Whether you’re seeking litigation or arbitration, mediation or a simple negotiation, our professional staff will assist you through the whole procedure and reach the most favorable result for you.
