Collaboration for Efficient Dispute Resolution

By Madeline Kimei ~ Founder & Principal Director – iResolve™ Limited on 21 Apr 2020Insight

“……the old-fashioned art of conversation - and collaboration - are still your best options to innovate”. – Tim Cummings

There is every reason to agree that collaboration is the best way forward. But many may find that challenging. Ideally, time is value for money, which in simplest form represents the opportunity cost of investing the money in an earning asset during the period when it is in hands of a disputing obligor. With business leaders focusing on cost reduction in the year ahead, alternative dispute resolution (ADR) processes that often produce better results more quickly and at less cost, could have appeal.

There are many ways to resolve disputes. Litigation is the traditional legal approach and takes an adversarial process based on asserted legal rights. But a highly adversarial stance before trial can work against efficient resolution during difficult and uncertain times. You may estimate the average time to be taken under ADR and that which is taken under normal court process in Tanzania (Case Analysis), the difference, may be around 3 years, this being the time lost, and for a 100/= debt at a risk-free interest (if invested in a govt bond) may be about 15% p.a and for 3 years it will be more than 52/= compounded. In opting to litigate, although a winner is declared and a decision is rendered, the dispute may not be resolved, and the losing interests may redirect their efforts to block decisions.

Alternatively, the parties can deploy dispute resolution mechanisms and subject matter experts in a timely and cost efficiently collaborative manner, rather than effectively waste these costly resources in combative and destructive litigation.

Collaborative dispute resolution and mediation processes are committed to the voluntary and free exchange of information and a focus on a respectful and fair resolution that addresses the needs of both parties and sometimes the process may include an independent third-party facilitator or mediator to manage this process and constructively move it forward. In current times to curb health risks posed by COVID-19, the process can also be carried out using various means of distance communication (by video- or teleconference, or even in writing online) instead of face-to-face negotiations. For collaboration to be effective there is need for a willingness to trust and openly listen to alternative ideas and views is essential for collaboration to be successful. Sometimes it is helpful to

Within the term “collaborative” different strands may be identified;

   a “principled” strategy tries to achieve an outcome that is objectively fair against some external authoritative norm, for example based on the view of an agreed expert. This principle is well explained in “Getting to Yes: Negotiating Agreements Without Giving In” by Roger Fisher and William Ury; and

   a “problem-solving” strategy which focuses on both parties’ real needs and interests and tries to get practical solutions without building costs as set out by Carrie Menkel-Meadow in her paper “Towards another view of legal negotiations: The structure of problem solving” (1984) UCLA Law Review.

Collaboration is further described as being a win/win agreement because both parties come out of the engagement completely satisfied with the resolution or outcome. It is an integrative process which may involve a synergy of ideas, beliefs, and feelings resulting in an optimal outcome. Stephen Covey, in his highly acclaimed book The 7 Habits of Highly Effective People, describes win/win as a "frame of mind and heart that constantly seeks mutual benefit in all human interactions. Win/Win means agreements or solutions are mutually beneficial, mutually satisfying. With a Win/Win solution, all parties feel good about the decision and feel committed to the action plan. Win/Win sees life as a cooperative, not a competitive arena”.

The collaborative process is designed to deal more effectively with potential problems, while maintaining the same commitment to reaching a settlement. Each party has immediate access to well-qualified legal advice that is built into the process. Even when one side or the other lacks negotiating skill or financial understanding, or is emotionally upset or angry, the playing field is leveled by the use of the collaborative team - lawyers, experts and financial advisors).

In utilizing collaborative methods in dispute resolution frequently results in growth in knowledge, respect, and understanding between the parties involved. Sometimes the synergy from shared investment creates outcomes that are better than either party would have achieved via other methods of conflict resolution.

When there is mutual satisfaction with both the process and the outcome the likelihood of productive implementation of decisions and plans is greatly increased. However, keep in mind that collaboration is not the best approach to solving all types of problems. Ensure that the situation at hand is important enough to warrant the investment that is required for the use of collaboration. When it is, go for the win/win!

We can agree, consensus -building approaches are not replacements for the traditional methods of resolving disputes. They are not winner-takes all situations, but consensus-based negotiations in which the agreements must satisfy all participant’s interests. While collaboration is a desirable goal and has many positive aspects, it may not always be the best approach to achieving desired outcomes. Understanding the role of collaboration in resolving problems can help to determine when to use this particular approach.

Now then, in difficult times such as now it may be particularly useful where the parties will have an on-going relationship. I would encourage business leaders to adopt internal mechanisms and policies that would ensure efficient dispute resolution is appropriately used as it can be a very effective tool for addressing tough problems. Although dispute resolution is by no means a panacea, these techniques can result in significant savings in time, expense and relationships. Even when dispute resolution is used and full agreement is not reached, the issues demanding resolution are usually more clearly understood and outlined and the relationship between the parties has usually improved, thus easing resolution though another, more traditional channel.

By Madeline Kimei ~ Founder & Principal Director of iResolve™ Limited