Disputes affect all our lives, and the commercial field is one that seeds a wide variety from minor technical differences to major litigation. In many instances, disputes tend to initiate from relatively minor misunderstandings that grow to become inflated expectation gaps. Very rarely does a party enter a contract with the intention of subsequent disputation.
Mediation or Expert Determination should always be considered in the first instance, so as to avoid the time, ’resource sink’, and cost issues of arbitration or litigation.
Various forms of Alternative Dispute Resolution (ADR) are available as a means to expedite resolution of disputes in a prompt and low-cost manner. Most importantly, when disputes are solved using Mediation, the parties to the dispute are able to resolve the matter(s) face-to-face, and in many cases the relationship between the parties is subsequently enhanced. That contrasts markedly to litigation, (legal and court proceedings), whereby the end result is generally bitterness and destruction of relationships.
Dr Bruce Atkinson is a Nationally Accredited Mediator (NMAS) and on the Immediation Panel. Immediation provides an online platform to solve disputes rapidly and cheaply.
With more than 35 years of engineering, technical, management, commercial and contract experience, Bruce provides a sound means by which to resolve disputes promptly, at low cost and with amiable outcomes.
Bruce Atkinson offers Mediation and Expert Determination - refer Engineering Contracts Mediation.
Supply and/or construction contracts tend to include dispute resolution clauses that typically ‘escalate’ along the following path:
The parties rarely pay sufficient attention to dispute resolution aspects when establishing a new contract, since all parties to the contract are normally positive and optimistic about its expected outcomes. The more critical issues to consider are:
When a formal dispute arises, it normally follows direct contract negotiations between the parties by correspondence or meetings. Rarely will a further in-person meeting between the parties alone resolve the issues, as each party has normally established their ‘position’ by that stage, and human nature is for them to hold that ground as best they can.
The options for ADR include:
Anecdotally, arbitration and litigation are both very expensive courses of action and they are both adversarial, whereby each party states their case to an independent umpire (judge or arbitrator), and the umpire makes his or her ruling. Either approach may take a long duration (potentially years), consumes extensive resources from within each party, and incurs very significant legal expense. The outcome may vary from 100% in favour of one party, to some proportionate outcome. Even when one party ‘wins’, they will never recoup all of the costs invested in the dispute.
Formal disputes consume a huge amount of time in preparing and reviewing documentation, preparing affidavits, attending meetings with lawyers, and attending hearings, thus taking company personnel away from their otherwise productive activities. Significant collateral expense is frequently incurred for the engagement of expert witnesses.
In establishing new contracts, and during the early phases of managing disputes, personnel need to be cognisant of the variety of dispute resolution options that are available and which may resolve their dispute in the shortest time, at the smallest cost, and with the lowest possible amount of disruption to their business and its reputation.
In drafting contracts, and more specifically in addressing disputes at an early stage, the parties should be mindful of mechanisms available that will minimise effort, cost and time, maintain privacy, and at the very least, minimise the number of specific matters which may proceed further to arbitration or litigation.
Mediation or Expert Determination should always be considered in the first instance.