There will always be disputes
No matter where it is that people interact at some point there will always be disagreements and disputes.
It isn’t inevitable that these disputes turn into conflict. Often people use the words dispute and conflict interchangeably but we see a distinction between the two.
You can have a dispute with someone about something but still have a largely functional relationship. Separated parents who are working together for the benefit of their child but unable to reach agreement about a property settlement would be an example of people who have a dispute.
Another set of parents who are constantly fighting with each other, even in front of the children without worrying about the consequences on their child would be in conflict with each other. The desire to punish or to win at all costs is common when people (or countries) get in conflict with each other.
The next step is war where combatants approach to human rights, decency and the sanctity of life become more flexible and they excuse themselves to behave in ways that they would not consider acceptable if they were at peace.
It is believed that people have an inherent suspicion of those who are different to them but that evolutionary legacy is easily overcome through understanding and acceptance of difference.
It is also very common for people to compete with others in order to get what they want in life as well as be defensive about their rights, space, things, resources and opportunities. We also make decisions based on our emotions that at times are not the most rational causing problems in relationships or leading to disputes.
One of the common drivers for people is a sense of fairness. High emotion and a sense of what is fair often sees people going to a lawyer and ending up in court with little or no real consideration of other options to resolve the dispute or conflict without resorting to asking a judge to resolve the dispute for them.
Competitive sport, adversarial political systems and other social constructs all contribute to the belief that some hold that the only way to resolve a dispute is to get a judge to make a judgement.
If you are considering going to court do you secretly think it will be like going to Judge Judy’s court room. You get to tell the judge what a terrible person the other person is, the judge will tell them off and then find in your favour. It isn’t like that.
The high cost of the adversarial solution
Going to court with legal representation will cost tens of thousands of dollars or more. In most parts of Australia you willl need to show a lawyer that you have the funds available to fight a legal battle by putting $10,000 to $15,000 in their trust fund to get started with a court action.
This will not be enough to see you through in most cases unless the lawyers are able to negotiate a resolution early in the process.
Going to court should not be the first option that you try. There are dispute resolution professionals available who can assist you through alternative dispute resolution (ADR) to solve problems, resolve disputes and reach an acceptable agreement that you can both live with.
Sometimes people get so caught up in the emotion of the battle with their former partner, former business partner, neighbour or whoever it is that they are in conflict that they seem to stop considering alternatives. They don’t seem to realise that no “win” that they might get will possibly justify the time and money spent in it’s pursuit. In the civil courts especially the “win” is often not very satisfying to either or if substantially what one side wants the other will often not comply. This leaves them throwing away more money that they can no longer afford to waste trying to get the court to make someone do something that they don’t want to do.
In the family courts of Australia only about 15% of cases make it to a final trial. The rest drop out of the system when all the money is spent or they find a solution to the dispute themselves through the process, sometimes with the help of interim orders.
Why don’t more people save themselves the heart ache and use ADR instead?
We tried it and it failed.
In Australia there are government funded services but the amount of time that is allocated to each case is limited and often people are screened out of the process because their dispute has escalated to a point where there have been incidents of abuse or violence.
In my private Family Dispute Resolution practice I often had clients come to me after they had been turned away from one of the government funded services. Giving them a little more time and trusting my clients to be able to work out a solution to the dispute that is affecting their lives often saw them ending up with a good solution that they were able to implement and get on with.
I now do my work with clients through the not-for-profit I co-founded, Interact Support. At Interact I have the opportunity to work with higher conflict clients who would not be suitable for mediation with a different type of process.
We do all our high conflict work as co-mediators and via video mediation or mediator negotiation. Mediation is a process where you have to be calm enough to think and work your way through the various options available to you until you find the best solution for your specific problem. Putting people in situations where they are stressed (like court or going to the same location as a spouse who has hurt them) doesn’t help them to be in a mental and emotional state to think clearly, so we don’t do that.
One of the biggest problems for people considering ADR is that they think that the other person is too unreasonable to be able to reach agreement with them.
That is why you should use a professional to help. In Australia if they are a NMAS Accredited Mediator or a Family Dispute Resolution Practitioner it means that they are trained and accreditated in creating the right environment and providing the right support to give you a very good opportunity to reach agreement.
People who just say they are a mediator but have not bothered to become accredited may not be using an appropriate process and may not facilitate a fair process.
Alternative dispute resolution
“Alternative dispute resolution” is an umbrella term used to describe a variety of less formal dispute resolution processes that are used in place of going to court. Mediation or in the family law context, Family Dispute Resolution, are the most common forms of alternative dispute resolution used in Australia.
In ADR, the people who have the dispute meet with a professional third party, outside of court, who will facilitate the ADR process. Although ADR is much less formal than court and the parties to the dispute have the final say (in all forms of ADR except for Arbitration) they do still follow a structured process.
This diagram shows the typical mediation process when agreement has been reached.
Each type of ADR has its own process but the overall advantages are similar.
With the court systems clogged and in the case of Family Law taking between one and two years or even more for a final resolution ADR is a faster way of resolving disputes that is also cost-effective and highly successful.
The Department of Justice in the United States found that voluntary ADR helped resolve 75% of disputes in 2016, while court ordered proceedings only resolved 56%. We haven’t been able to locate a similar study from Australia but expect that the results would be similar.
In the study they found that ADR was much less expensive. An overall spend of $2,677,811 overall, compared to $70,610,263 for litigation and took significantly less time and ADR saved 2,733 Months of litigation overall.
A major contributor of the success of Mediation and ADR processes is that they collaborative in nature. That means that they encourage people in conflict to listen to each other, helps them to understand each other’s perspective and with an understanding of what really matters opens up the way for more creative solutions.
ADR also allows flexibility in problem solving. Resolutions can be more creative than courts are legally allowed to enforce. The judges have laws they have to enforce even if the range of options isn’t want the people involved in the litigation don’t want.
ADR is a confidential process, so those who use ADR to resolve their dispute do not have to be concerned about their discussion becoming public record. This makes ADR a good option in situations where sensitive matters like trade secrets or divorce need to be discussed in an open court.
When To Use ADR
ADR is useful for almost any type of dispute, whether individual or corporate. However, the type of dispute will inform the type of ADR used. If you have already engaged a lawyer and they have not mentioned ADR as an approach you can be pro-active in asking them about the alternatives in your area or make your own enquiries with a professional mediator or other ADR professional.
Although ADR is usually voluntary, some courts mandate disputants attempt ADR before taking their case to court. This is beneficial for both the overextended court system and the disputants. Family Law matters related to children is an example of where parties are required to attempt FDR before going to court unless a specified exemption applies.
In this post I will briefly explain the four main types of ADR used in Australia.
Definition of Negotiation
Negotiation is a form of ADR where two or more people or their representatives make and consider proposals to resolve a dispute or difference.
In negotiation there is no independent third party and if there is a large imbalance of power between the parties the negotiation can become coercive.
The negotiation process can be formally defined as a negotiation with an exchange of documents and offers such as a property settlement negotiation or it can be informal and comprised of offers and counter offers such as negotiating a pay rise.
In negotiation there is often a low level of trust, a reluctance to share information about needs and wants and what the bottom line for each party is.
Mediation and Family Dispute Resolution (Family Law Mediation)
Mediation is a form of ADR where a professional and neutral third party, the mediator, helps two or more people who have a dispute to collaboratively resolve their issues and work towards an agreement.
The role of the mediator is not to make decisions for their clients. Their role is to facilitate a structured but flexible process which makes sure that all parties have equal opportunity to explain their perspectives and express their concerns and then once a mutual understsanding of the issues is reached to explore options and consider proposals.
Mediation is based on restoring communication and creating the right environment for collaborative problem solving.
Mediation is typically a less formal process than conciliation or arbitration. The discussions should take place in a neutral location and be facilitated by a mediator who does not have a conflict of interest. A conflict of interest would be any condition which would make it likely that the mediators facilitation of the process could be biased by a personal gain, allegiance or any other factor.
It is always the right of a party to decline the used of a specific mediator if they do not feel that they are impartial. We also encourage people to only work with qualified and accredited mediators or family dispute resolution practitioners and not allow a work colleague, HR representative or lawyer to attempt to facilitate a “mediation” when they are unqualified or biased
Mediation is scheduled in consultation with those in dispute and unless using a service with a waiting list issues can be resolved in a matter of days rather than the months or years that it may take for a resolution through court.
There are various ways that the mediation process is represented. Mediation Institute teaches a three stage, 9 step process in our Mediation Training.
Each mediation session begins with opening remarks by the mediator who confirms the process and behavioural ground rules before inviting the parties to make their opening statements regarding why they are there and what they would like to achieve from the mediation session.
Each party will be given a chance to speak without interruptions other than by the mediator who will ask clarifying questions and use summaries to confirm their understanding of what is being said. This is not a chance to find “the truth” instead it is an opportunity for each party to identify the issues from their perspective and to let the other party know what they would like to resolve.
During the parties opening statements the mediator will not drill down too deeply. Their role is by asking clarifying questions to help the flow of information and to ensure that they understand.
Once both parties have identified the issues from their own point of view the mediator will develop an agenda for the mediation session which takes into account both parties perspectives and the issues they feel need to be resolved.
After the agenda is agreed and the parties decide the order in which they want to speak about the issues the exploration stage begins.
In a standard mediation where the parties are in the same room this stage provides an opportunity for both parties to understand each others point of view about the issue. Sometimes misunderstandings and knowledge gaps are identified and a method to resolve them is agreed upon. In other situations this stage provides the opportunity for greater understanding of each other.
The central part of the mediation process is more fluid in that sometimes the steps are followed in sequence and other times they follow a different sequence. The skill of the mediator is to determine what is the appropriate approach as the meeting progresses.
At some point they will help the parties to generate and consider options for the resolution of the issues they have identified. They will also usually have a private session with each of the parties to check in with them confidentially to make sure that there are no issues that they feel unable to discuss openly, to help them to consider the alternatives to reaching an agreement in mediation, to prepare proposals or whatever else is needed.
You will notice that negotiation is a step in the mediation process (step 7). This is because Mediation is a facilitated negotiation process. The difference between mediation and simply negotiating directly is that the preliminary stages of mediation create the right environment for collaborative negotiation.
Collaborative Negotiation is a process of exploring not only proposals but doing so from an understanding of each others interests. Interests mean what matters to each party. Unlike the traditional positional negotiation where proposals are made without any clarity about what the other person really wants, their bottom line and even why they want it, Collaborative Negotiation takes place in an environment where more information about these things is known.
That makes it possible for more creative solutions as when you know what the other person really wants and they know what you want it is easier to develop a resolution that is acceptable to you both. The role of the mediator during the negotiation stage is to help the parties to consider contingencies, what if’s and to play the devils advocate so that the agreements that they reach are as strong and appropriate as they can make them.
If agreement is reached that will lead to a resolution of all of the issues the mediator will document this and discuss with the parties whether they need the agreement to be legally binding and if so how that can occur. If not all issues are resolved the mediator will discuss with the parties the option of further mediation sessions or other processes if progress is not being made.
The final step is to clarify what will happen after the mediation session. This may be booking in for the next session, confirming how any action steps or agreements will be provided to the parties or any other actions to occur following the mediation session.
While the above describes the basic structure of facilitative mediation where the parties are responsible for reaching their own agreement and the mediator is responsible for facilitating the process that gives them the best chance of achieving that goal.
Other forms of mediation are:
This style of mediation focuses more on outcome and less on the individual interests (what really matters to them) of the disputants. This style is sometimes preferred by lawyers and may be offered in a lawyer inclusive model where both parties are legally represented. In this style of mediation the lawyers may speak for the parties and they may spend most of the mediation session in separate rooms from each other with very little direct communication.
Evaluative mediation may be appropriate if there is a very large power difference between the parties and they don’t expect to have to continue to work together in the future. It is less suited to situations where re-establishing communication between the parties is going to be important.
It also tends to be more expensive than faciliative mediation due to the involvement of lawyers during the process and often the mediators are also lawyers and charge hourly or day rates in line with their usual billable hour rates.
If an evaluative mediator is legally trained or has specialist qualifications related to the issues in dispute they may provide general legal or professional advice but because the role of the mediator is as a neutral independent they can not provide independent legal advice.
This is a relatively new style of mediation focused on creating a new story to reshape the conflict. The parties opening statements and exploration stage of this style of mediation is often more extensive and the focus is much more on creating a new, mutually acceptable or at least mutually understood story than on any specific terms of agreement.
The issues that people use narrative mediation for a most often interpersonal issues either between individuals, groups or communities.
Traditional mediation used in indigenous and other traditional communities and community group conferencing often use a narrative style mediation rather than the more problem solving, resolution focused faciliative and evaluative styles.
This is another new addition, primarily focused on rebuilding the relationship. More time is given to understanding the emotional impact of the dispute than other forms of mediation although in all other forms of mediation, with the possible exception of evaluative mediation, the emotional impact of the dispute can often be an item on the agenda.
Transformative Mediation is generally chosen when there is the need for an ongoing relationship between parties such as in the workplace or as co-parents following separation. Mediators who favour transformative and narrative mediation are much more likely to have a social sciences or mental health background than a legal background.
Does Mediation Work?
Mediation has been proven to deliver results. Settlement rates, which are usually measured by how many cases are resolved without the need to escalate to legal action, vary depending on the style of mediation but in general rates vary between 75 to 95%.
The evaluative style, especially that used in court diversion programs, tends to have a higher “success rate” in part due to the very close and looming threat of an expensive court case, the fact that parties are often required to sign binding agreements on the day of the mediation if a settlement can be reached and the more evaluative style of mediation where the mediator and/or legal representatives evaluate the strength of the parties case and urge them to settle when they believe they will not do better in court.
The more narrative and transformative styles of mediation do not focus so strongly (or at all) on settlement rates as they are focused on improving relationships and may not even result in a formal agreement at all. Frequently a “trial agreement” is used to give the parties an opportunity to rebuild their relationship and see if the proposals agreed to in mediation will work for them.
Beyond the style of mediation it is important to look for a mediator who has helped people with similar issues to yours. For example, if you are looking for a mediator to help your family to make decisions about the best way to care for an elderly family member a mediator who has experience in elder mediation would be best. They will be aware of the issues you face, the services and resources they could refer you to and will be more helpful than someone without any understanding of the issues you face.
Likewise if you are separating in Australia then you should only work with a Family Dispute Resolution Practitioner (Family Law Mediator) as they have post-graduate training in the family law system and the issues related to parenting plans and property settlements. A mediator who has only go NMAS Accreditation, even if they are a lawyer, will not have this post graduate level knowledge.
Despite the good likelihood of success from mediation, much lower cost and duration of the process going to court is the first choice for dispute resolution for many people. More and more countries are beginning to recognise the benefits of mediation and other forms of ADR and are making it a mandatory part of the litigation process for civil matters. In other words parties have to show that they have attempted to resolve the issue through ADR before they can go to court or before they are able to go to trial.
In Australia and in countries like Brazil, Canada, France, Germany, Belgium, the Netherlands, Poland, Portugal, Kenya and the United States have instituted mandatory or quasi-mandatory mediation in at least some regions. Though the exact regulations vary from country to country in many parts of the world courts now use mediation to help parties settle disputes. Depending on the location, these may be state sanctioned mediators, or 3rd party referrals.
Even if attempting mediation first isn’t mandatory, the numerous benefits of mediation, maintaining control over the outcome, saving money, and saving time make mediation a logical first step in dispute resolution.
Conciliation is an alternative dispute resolution process in which the conciliator, who is an independent third party, facilitates a dispute resolution process similar to evaluative mediation in which the conciliator facilitates the exchange of settlement offers. The conciliator may make suggestions about the strength of each parties cases, their offers or make suggestions regarding settlement offers but they do not have the power to impose a resolution.
Conciliation is most frequently used in cases where the “facts” can be clearly exchanged and there is a formula of some type to evaluate the relative positions against such as family law property disputes and some industrial disputes.
In Australia conciliation is generally a court ordered process where the court orders a matter to conciliation before being willing to set a date for a trial.
In the conciliation there is a more formal exchange of information such as financial statements or statements of claim before the conciliation session. It is highly recommended that parties are legally represented during the conciliation process and that they are prepared with a good understanding of what the likely best and worst case scenario’s are if they can’t resolve the issue in conciliation.
During a Conciliation meeting there is often a brief time where the parties are in the same room and their formal opening statements are made. They then adjourn to separate rooms with their legal representatives and the Conciliator moves from room to room to help them to develop, exchange and put settlement proposals.
This negotiation continues until a settlement agreement is reached or the Conciliator decided that the parties are too far apart and calls an end to the process.
There is often an administrative hearing with the judge for their case on the same day or shortly after a failed conciliation and the next step in the litigation process is determined.
If agreement is reached it is generally written up into Court Orders for signing on the day, resolving the matter and ending the court case. As parties are legally represented in most Conciliation meetings they have on the spot legal advice and so there is no delay between reaching a settlement agreement.
Conciliation can be a high pressure situation with a focus on the settlement agreement which can lead to people agreeing to settlements they later regret but as it is usually a binding agreement on the day it is too late to change it after the event.
For this reason mediation is a more appropriate process if you want to retain control and make a calmer, more controlled and considered decision about your settlement.
Like mediation and conciliation, arbitration is a method of dispute resolution that involves an impartial third party (the arbitrator) to avoid the cost and slowness of the litigation process.
While usually significantly more expensive than mediation and not always requiring the initiation of a court case such as with conciliation the benefits of arbitration are similar to the other two processes. The people in dispute are able to avoid the expense, delays, and adversarial nature of litigation by in effect appointing a private judge to determine their case.
The difference between arbitration and mediation or conciliation is that the parties contract the arbitrator to determine the outcome of their case. Unless a mistake in law has been made by the arbitrator their decision is binding and final.
The process usually starts when one party, the claimant or initiator, sends a notice of arbitration to the other party.
Arbitration is a more formal process than mediation and so rather than attending multiple sessions, there is one arbitration hearing where evidence and witnesses are presented, after which, the arbitrator or panel of arbitrators will deliver the decision.
The process is conducted in a similar way to a court hearing with the arbitrator acting as a private judge. Sometimes people decide to use arbitration instead of going to court and in other matters they may be sent to arbitration by the court.
Depending on the type of matter to be arbitrated there may be a single arbitrator or a panel of arbitrators hearing the case.
Does Arbitration Work?
Arbitration has traditionally been a popular method of dispute resolution in workplace, construction, business disputes and securities regulation, but is gaining traction in other areas such as Family Law.
The popularity of arbitration can be attributed to it being mandated in some cases but also to the relatively short amount of time it takes compared to going to court for a trial.
For example according to this article from the US, from the time of filing to decision, arbitration takes an average of 475 days, while similar cases can take up to three years in court.
And although it costs roughly $3,000 to $4,000 per day plus legal representation and preparation which will also be costly, the time saved on the numerous interim hearings, reports and the trial in a litigation case will usually result in an overall saving in cost as well as time with arbitration compared to litigation.
Because of it’s advantages as a viable alternative to court, some arbitration proceedings are mandatory, while others are independently enforced by contract.
Other countries around the world are also recognizing the potential of arbitration. In Europe, arbitration has become the default for international disputes, and countries like Canada, Brazil, and Australia have shown increases in commercial arbitration, with strong government support.
The worldwide movement to embrace arbitration is a clear indicator that the process works.
Choosing between Mediation, Conciliation or Arbitration
Mediation, conciliation and arbitration are all forms of ADR where a neutral third party is tasked with helping disputants resolve their differences.
The benefits of each are similar when comparing them with going to trial. They are faster, less expensive, and less adversarial than litigation.
All of these methods also have support from the Australian governments in the form of mandatory participation in certain circumstances and in certain regions.
However, there are vital differences between the three processes.
All processes can be legally binding, but it is more common to apply mediation in a non-binding way.
Conciliation generally takes place as part of a court process and the court will turn any settlement reached into Orders by Consent.
Awards made in arbitration is always binding. Arbitration acts as a simplified, but still legally enforced, replacement for litigation.
Mediation generally requires specific legislation to make a mediated agreement legally binding, such as Farm Debt Mediation where the mediated agreement is signed on the day and legally enforceable. In the majority of cases mediated agreements need to be formalised as Court Orders through an application process or turned into a contract if court orders are not appropriate.
Because of this difference, there is also a difference in the power of the arbitrator and the mediator and conciliator.
Arbitrators have full power to decide the outcome of the settlement, but during mediation and conciliation, the power to make decisions lies with the disputants. The mediator or conciliator can’t force the parties to settle.
The number of people involved is also usually different. Arbitration may involve a panel of arbitrators who discuss the evidence and make a joint decision although in the Family Law context is it more common to contract a single arbitrator.
Conciliation is generally conducted by a single court appointed conciliator.
Mediation often involves a single mediator but some services or situations use a co-mediation model with two mediators who work together to facilitate the process.
Overall, arbitration is a more formal and controlled process that acts as a kind of private court proceeding, conciliation is a court diversion process to try and resolve the matter early in the court process and mediation is more informal process which can take into account what matters to the parties and not just what the relevant legislation says. The process used in mediation can vary depending on the needs of the disputants and the style of the mediator.
All three options will save time and money over litigation, but mediation is the least expensive and most empowering of the three processes.
The more directive style of ADR conciliation is used when parties have not been able to reach agreement in mediation or have bypassed mediation and gone straight to court.
Arbitration takes the decision out of the hands of the disputants and is used when they are positional in their arguments and will not work together towards a collaborative win/win outcome.
Disputes are an inevitable aspect of human life. There have always been disputes in all societies throughout history and will most likely continue to be disputes.
In the past, and unfortunately still in many parts of the world, disputes frequently escalated into war and people and countries fought to the death to try and win their conflict.
On a brighter note in civil society dispute resolution has evolved to provide people with a number of forms of Alternative Dispute Resolution to help them to resolve their disputes when direct negotiation hasn’t worked for them.
As you have seen ADR is the general term for a variety of processes ranging from the informality of mediation through to the private court of Arbitration which have in common the intervention by a neutral third party to facilitate the process. Mediation is one of the most common forms of ADR, due to it’s high success rate (86% by some measures) and relatively low cost.
Mediation is all about facilitating communication and gives the control of the resolution to the disputants.
Conciliation is often a last ditch effort to avoid a trial and the focus is on making and considering settlement offers and the recommendations of the conciliator. The final decision about accepting an offer is up to the parties as they can’t be forced to agree in conciliation.
Arbitration is unlike mediation, disputants give control of the settlement outcome to the arbitrator or arbitrators who review the facts and evidence and decide on a legally enforceable decision.
Arbitration saves time and money over litigation, but mediation is the most cost-effective solution.
Use the comments to tell us about your experiences with ADR.