Disputes: escalate or resolve?
Disputes come in all sorts of shapes and sizes. They could be arguments about the charges on recent utilities bills, challenges over the quality service delivery or clashes with contractors over variations.
They generally arise when there are two opposing points of view between two parties, and can easily escalate into major conflict if neither party ‘backs down’ or moves from their individual entrenched positions.
Each party to a dispute has the ability to influence its direction by the way they act and react. Aggressive actions will no doubt escalate, whereas conciliatory actions stand a good chance of resolving, or at least defusing, the situation. Both parties have the choice of taking one or other of these approaches.
The conscious or subconscious decision on how a dispute progresses will result from many factors, including personality, the perceived strength of each party’s position and prevailing personal or corporate circumstances.
Disputes involve interests that are negotiable. This means that it is possible to arrive at a solution that partially meets the needs of both parties; i.e. a compromise or middle ground. Otherwise, it is possible for the dispute to escalate into a conflict in which positions become entrenched and much more difficult to negotiate.
At every point in the exchange of communication during a dispute there is an opportunity to resolve it. Such an intervention can be made by either party, but this will be dependent upon many factors, which range from those previously listed to the quality of communication and the state of the relationship between the parties.
So, when we find ourselves in a dispute situation, we have the option to either resolve it ourselves or, if the relationship has degenerated too far, refer the matter to a third party.
All too often the first resort in a ‘stalemate’ situation is for one of the parties to involve their lawyer, commence legal proceedings and take the other party to court. However, a route that is becoming more common is Alternative Dispute Resolution (ADR).
Court proceedings can be lengthy, stressful and very costly, but in a large number of cases an ADR approach can be taken. In fact, it is becoming more common for courts to refer cases to ADR before they contemplate taking them to full proceedings.
What is ADR?
‘Alternative Dispute Resolution or ADR is usually an umbrella term for processes, other than judicial determination, in which an impartial person (an ADR practitioner) assists those in a dispute to resolve the issues between them.’
‘Alternative dispute resolution (ADR) refers to a range of techniques for resolving disputes without seeking redress from the courts.’ 
One of the key requirements for ADR is that both parties must agree and be willing to participate. Once it is clear that the parties cannot come to a resolution between themselves, they can consider the intervention of an external third party to facilitate an outcome.
Disputing parties have the option of voluntarily securing services from an independent qualified person or through one of the many bodies that offer a range of ADR services, such as the Royal Institution of Chartered Surveyors (RICS) and the Resolution Institute.
“Mediation is a ‘voluntary, private and non-binding dispute resolution process in which a neutral person helps the parties to reach a negotiated settlement’.
Organisations such as these also maintain panels of experts from which an independent third party can be selected to ensure that they have the appropriate ADR skills and experience in the area of the dispute.
Agreement to adopt an ADR approach can be made at the time the dispute arises. Such early intervention increases the chances of the relationship surviving after resolution.
However, the agreement can also be made in advance of any dispute arising. This is generally achieved through the inclusion of relevant clauses in the contractual agreement between the parties.
All contracts should include a clause with the heading ‘Dispute Resolution’ or something similar. Such clauses describe an agreed process of escalating a dispute through various mechanisms that culminate in legal proceedings. Standard contract clauses can be obtained from RICS and the Resolution Institute.
ADR comprises a range of techniques that progressively become more costly, more time consuming and take the decision further out of the hands of the parties. These are: negotiation, mediation, conciliation and arbitration.
Negotiation is the process where the two parties in a dispute each set out what they want and try to reach agreement. This can be done in writing or by talking to each other and it can be achieved directly between the two parties or with the involvement of a facilitator.
Negotiation is a skill that can be developed, but not one that everyone has. It is essentially a process in which the parties have predetermined positions of what they will agree to and beyond which they will not move. The process involves a gradual shift by both parties towards a compromise position that falls within the respective parties’ tolerances.
While there are many reasons for negotiation failures, difficulties arise when the parties’ positions do not overlap and agreement cannot therefore be reached.
Negotiation is the most cost-effective and timely method of resolving a dispute, but may not always bring the best result.
The next step after negotiation is the most rapidly growing form of ADR, mediation. Mediation is a ‘voluntary, private and non-binding dispute resolution process in which a neutral person helps the parties to reach a negotiated settlement’.
There are various forms of mediation that range from facilitative mediation in which the mediator simply manages the process to evaluative mediation in which the mediator has a much higher level of intervention. Mediation has a success rate of 67 percent on the immediate conclusion of the mediation session and a further 17 percent within three weeks, where success is measured in the form of a legally binding agreement between the parties.
The main difference between mediation and conciliation is that the conciliator plays a much more direct role in achieving a resolution and makes proposals for settlement.
The conciliator meets the parties separately with a view to resolving their issues. The conciliator may have an advisory role on the content of the dispute or the outcome of its resolution, but not a determinative role. However, the conciliator may explore potential solutions, give expert advice on likely settlement terms, and may actively encourage the participants to reach an agreement.
Where conciliation adopts a formal process, it is very similar to mediation, but has the added step of a joint exploratory session. However, conciliation can equally be facilitated in a variety of traditional negotiation formats.
Conciliation can be considered as preventative as soon as an issue surfaces, whereas mediation is more about intervention once the dispute escalates.
Unlike the preceding approaches, arbitration involves a third party making a legally binding decision on the outcome of the dispute. This effectively takes the decision out of the hands of the parties, limiting their influence to the quality of the evidence presented.
The arbitrator is an independent person who will make a determination on the dispute. In many respects the arbitrator is like a judge in a court of law; however, the parties are able to select the arbitrator.
Arbitration has the advantages of speed and cost over taking the matter to the courts, but has limited avenues of appeal and a lack of transparency.
If all else fails
If all else fails, parties can resort to the court system, a costly and time consuming outcome. It is in everyone’s best interests, however, if such a recourse can be avoided.
ADR offers parties a range of options that can be very effective, take up less time and money, and have a far greater chance of the relationship surviving after the dispute has been resolved.
The next time you find yourself facing a dispute, take time to consider:
- the impact of your actions or inactions in escalating or resolving the issue and the associated risks
- the value of maintaining the relationship, and
- initiating an early intervention to minimise stress and financial cost.
In support of this consideration, it is well worth undertaking a full assessment of the risks associated with either resolving or escalating the dispute.
This article has introduced ADR at a very superficial level; therefore, anyone interested in any of the approaches to settle a dispute should undertake further research and consult the relevant experts before deciding on the most appropriate option for their given circumstances.
The author, Martin Leitch FBIFM MRICS, workplace management consultant at FM Scope, is a workplace management professional with in excess of 30 years’ experience in delivering a wide range of facilities management consultancy and education services in the UK and Australia.
 1 Resolution Institute, http://www.iama.org.au/what-we-do/what-adr
 Royal Institution of Chartered Surveyors (RICS), http://www.rics.org/au/knowledge/glossary/alternative-dispute-resolution/